20021018Lafferty Rebuttal.pdf

Page 1 of 36BEFORE THE IDAHO PUBLIC UTILITIES COMMISSIONIDAHO TELEPHONE ASSOCIATIONC I T I ZEN S TEL E CO MMUN I CAT ION SCOMPANY OF IDAHO , CENTURY TEL OFIDAHO, CENTURY TEL OF THE GEMSTATE, POTLATCH TELEPHONE COMPANYand ILLUMINET , INC.CASE NO. QWE-T-02-Complainantsvs.QWEST COMMUNICATIONS , INC.Respondent.
Ci tizens
Rebuttal Testimony of
F. Wayne Lafferty
on Behal f 0
Telecommunications Company of
Electric Lightwave
Idaho Telephone Association
III uminet , Inc.
October 18 , 2002
Idaho
IDENTIFICATION AND QUALIFICATION OF WITNESS
WHAT IS YOUR NAME AND BUSINESS ADDRESS?
My name is F. Wayne Lafferty and my business address is 2940
Cedar Ridge Drive , McKinney, Texas 75070.
ARE YOU THE SAME WAYNE LAFFERTY WHO FI LED DIRECT
TESTIMONY IN THIS PROCEEDING?
Yes.
fit e: / / A: \Rebuttal Lafferty. asc 10/23/2002
Page 2 of 36PURPOSE OF REBUTTAL TESTIMONYMR. LAFFERTY , WHAT IS THE PURPOSE OF YOUR REBUTTALTESTIMONY?My rebuttal testimony is intended to provide the response ofCi tizens Telecommunications Company Idaho CTC-ID") ,Electric Lightwave Inc.ELI") ,the Idaho TelephoneAssociationITA"and Illuminet Inc.( " I 11 umi net" collectively known as "Complainants ) 1 to several theissues raised in the testimonies of Qwest wi tnesses Scott Mcintyre and Joseph P. Craig.The Qwest testimony hasconfusedthe issues in this case to divert the Commission Iattentionawayfromthe actual concerns raised theComplainantsto issues which Qwest presumably believes are
more favorable to its posi tion.My rebuttal testimony will
refocus on the Complainants I actual concerns and respond
the inaccuracies introduced by the Qwest wi tnesses.
SUMMARY
PLEASE SUMMARIZE YOUR REBUTTAL TESTIMONY.
Unfortunately, Qwest I s testimony avoids answerlng some of
the Complainants I cri tical concerns and instead attempts to
shift the focus away from the cri tical public policy issues
at the center of this case.Qwest has turned a simple case
about violating public policy into a complicated proceeding
about complex network and pricing issues that have li ttle
relevance to the complaint.While the Complainants , in its
Direct Testimony, raised several cri tical policy and
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 3 of 36interconnection issues for the Commission to addressQwest I s Direct Testimony misdirects the Commission wi th thefalse claims that SS7 messages are not part of a call andthat certain of the Complainants , through their agentIlluminet( a s we 11 a s Ill umi net its elf), have t a kenadvantage of a mythical pricing loophole to avoid paying forSS 7 services.In addition , it is possible that theunbundling of SS7 message signaling from intrastate accesscharges may have produced a revenue windfall for Qwest.In the instances where the Qwest wi tnesses have attempted toaddress the Complainants I concerns , their testimony inconsistent wi th existing regulatory policy, industrypractices and approved interconnection arrangements.Qwest I s wi tnesses suggest Qwest can arbi trarily change long-
standing state and federal regulatory policies and even the
intent of the Uni ted states Congress in passing the
Telecommunications Act of 1996 ( " 1 9 9 6 Ac t "
) .
Howeve r ,
the Complainants have testified , SS7 messages are clearly
inseparable parts of the underlying end user calls.The
compensation for local/EAS calls between Qwest and ILECs has
long been handled through a "bill and keep " arrangement
uniformly recognized by the Idaho Commission.For local
calls between Qwest and CLECs , the transport and termination
provisions in the interconnection agreements ( " I CAs
" )
approved by this Commission , not an access tariff , applies.
Most of the LEC Complainants have chosen to contract wi th an
agent such as Illuminet for SS7 network services.As its
agent Illuminet represents its carrier customers in all
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 4 of 36matters regarding SS7 , but it is their customers whoul timately pay Qwest I s new SS7 charges.Exi stingcompensation mechanisms adequately address the exchange ofend-user traffic among LECs including Qwest.In the case ofELI, an ICA is in place to address all network andcompensation matters between the two companies.If Qwestbelieves SS7 charges have not been addressed adequately inthis agreement , they are free to request negotiations enact changes.Qwest has not done so.The Qwest wi tnesses introduced the importance of linkingcost causation and cost recovery, but then completely failedto identify the true cost causer In many cases.They neveraddressed the significant shift of cost recovery from Qwestand IXCs to other LECs that , in some cases , are Qwest Idirect competitors.The Complainants do not dispute the
burden of cost recovery should be borne by the cost causer
where possible.However , they do not agree that other LECs
should pay for costs created by Qwest or IXC end-user
customers that should be recovered through other rates.
In its efforts to divert the Commission I s attention away
from the simple policy and economic issues raised by the
Complainants in this case , the Qwest wi tnesses have tried
misdirect the Commission I s attention by discussing:
The complicated structure of Qwest I S SS7 network and the
alleged distinctions between SS7 messages and end-user calls on
the public swi tched telephone network ("PSTN") in-stead of the
critical SS7 signaling functionality required to deliver products
to end-user customers.
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Incorrectly redefining the cost causer for SS7 messages in-stead of the long-standing state and federal public policiesstatutes and industry practices used in Idaho (and other states)to properly match cost recovery wi th the cost causer.An alleged pricing loophole in-stead of the new subsidies toQwest and its end-user customers as well as IXCs and theircustomers.The evolution and defini tion of Access in-stead of themisapplication of Qwest I s Southern Idaho Access Services Catalog.A misunderstanding of the role of Letters of AuthorizationLOAs) and Illuminet I s standing as a third-party non-commoncarrler (or non-telecommunications carrier) in-stead ofIlluminet I S commonly accepted role as a vendor or agent.The Commission should focus on the Complainants I issues andignore the Qwest wi tnesses I attempts to confuse this case.WHAT ARE THE MAJOR POLI CY CONCERNS RAI SED BY THE
COMPLAINANTS?
Speci fically,fourComplainants raised the followingthe
public policy lssues:
1 )Should Qwest be allowed to assess SS7 charges on other
ILECs for the origination and termination of EAS calls
which have previously been handled on a "bill and keep
basis?same issue would apply to intraMTAThe calls
exchanged wi th CMRS providers.
2 )be permitted to lmpose new messageShouldSS7Qwest
signaling charges the exchange local calls
between wi thou (and other CLECs)and QwestELI
following its ICA negotiated wi th ELI under the rules
established by the 1996 Telecommunications Act 1996
Act"
fit e: I I A: \Rebuttal Lafferty. asc
Page 5 of 36
10/23/2002
Page 6 of 363 )Should Qwest be allowed to charge the terminating LECSS7signalingmessages required for intraLATA tollcalls originated by Qwest?4 )Should Qwest allowed to cha rge other LECs SS7messagesignaling charges required for the originationand termination of long distance calls carried by third-party IXCs tha t are handled on a meet poin t billingMPB") basis?The answer to each of these questions is clearly no.TheCommission should fully investigate the implications of eachof these proposed changes on customers in Idaho.While bothQwestwi tnesses McIntyre and Craig allege thatjurisdictional classifications like "local"and toll"not apply to SS7 messages , their testimony is irrelevantCommission policies , industry practices and ICAs do considertheseclassifications differently for end-user calls , which
inherently incl ude SS7 signaling as a cri tical componen t
necessary for completing such end-user calls.Absent
specific change in policy by this Commission , Qwest cannot
apply the new SS7 charges to local/EAS calls between LECs
intraMTA calls to/ from CMRS carrlers intraLATA calls
originated by Qwest and third-party IXC carried toll calls.
DOES THE QWEST WITNESSES TESTIMONY ACCURATELY ADDRESS THESE
CONCERNS?
No.The testimony of the Qwest wi tnesses has largely
ignored these cri tical public policy issues and in-stead
focused on several technical , and often complex , aspects of
network design and prlclng.In doing so , Qwest Wi tness
McIntyre incorrectly concludes that this case is about an
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 7 of 36alleged prlclng loophole and the resul ting avoidance ofcharges.However , no such loophole exists nor was it evenraised as an lssue by the Complainants.Unfortunately, byattempting to shift the Commission I s focus , Qwest has itselfintroduced unnecessary complexities.However , the bottomline in this case is to what extent this Commission shouldallow Qwest to change existing regulatory policies and otherindustry practices in Idaho.SS7 MESSAGES ARE A CRITICAL COMPONENT OF A CALLQWEST WITNESS MCINTYRE , BEGINNING ON PAGE 14 , LINE 12 OF HISTESTIMONY ALLEGES THE COMPLAINANTS HAVE CONFUSED SS7ME S SAGE S AND CALLS.I S HE CORRE CT?No.The Qwest Witness is attempting to divert theCommission I S attention by introducing irrelevant complicated
technical network issues.The Complainants understand the
functional role and network requirements of SS7 messages in
the process of originating, transporting and terminating an
end-user call.Both Mr. McIntyre and Qwest Wi tness Craig
rely on the premise that SS7 messages are totally distinct
from end-user calls or traffic.However , the exact opposi
is true.SS7 message is an inseparable component of
interoffice calls developed specifically for completing such
end-user calls.SS7 is a unlque technology, but a critical
function in the set up, delivery and tear down of an end-
user call.Qwest is incorrectly applying the new SS7
charges as though the SS7 message has no relationship to the
underlying end-user call.
WOULD THE EXISTENCE OF A PHYSICAL SS7 NETWORK SEPARATE FROM
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 8 of 36THE VOICE/DATA NETWORK HAVE ANY BEARING ON THE FUNCTIONALITYOF THE SS7 MESSAGE IN THE END-USER CALL PROCESS?No.A separate SS7 network is not the issue.This caseaddresses the proper application of regulatory policies indetermining which party (s) should bear the costs of SS7messages.The role of the SS7 messages in the end-user callorigination process lS no different than the role of dialtone or the digi ts dialed , two components of the callprocess mentioned by Qwest Wi tness Craig on pages 5 and 6 ofhis testimony.All of these functions are criticalcomponents of the end-user call.Wi thout all of thesecomponents working together , including SS7 messages , mostend-user calls would not be completed.BEGINNING ON PAGE 4 , LINE 19 OF HIS TESTIMONY , QWEST WITNESS
MCINTYRE MAKES A DISTINCTION BETWEEN ACCESSING AND UTILIZING
QWEST I S SS 7 NETWORK.ARE BOTH OF THESE FUNCTIONS REQUIRED
FOR MOST END-USER CALLS TO BE COMPLETED?
Yes.The carrier (and its customer) originating a call
creates the need to both access and utilize the SS7 network.
Both of these functions must occur for most end-user calls
to be completed.
BEGINNING ON PAGE 5 , LINE 23 OF HIS TESTIMONY , QWEST WITNESS
CRAIG TALKS ABOUT THE ROLE OF SS7 MESSAGES IN THE "OFF HOOK"
AND HOOK" ACT IONS.COULD YOU PLEASE COMMENT THIS
RELATIONSHI P?
Yes.From both customer and network tandpoin t the
physical action of taking the phone "off hook" begins a call
and placing the phone "on hook" ends a call.These are also
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 9 of 36actions that trigger the SS7 messages that establish routeanddisconnect a circuit for an end-user call.Wi thou t theSS7messagetheend-user call would not occur.QwestWi tness McIntyre confirms the linkage when he states:Signaling System 7 is an out-of-band (separate)signaling network that uses separate swi tches andnetwork connections to perform the signalingfunctions associated wi th placing telephonecalls. "(emphasis added)Qwest Witness Craig also addresses this linkage:" . . the originating customer picks up the phoneand dials the telephone number of the person theywant to talk to , or the terminating customer. Theoriginating end office swi tch sends an Ini tialAddress Message (" IAM") to its local SignalingTransport Point ("STP") and reserves the voicetrunk to be used for the call. This messageidentifies to the STP the destination of themessage. The STP then routes the IAM to theappropriate destination or the terminating endoffice. Once the terminating end office swi tchreceives the IAM it reserves the same trunk andthe terminating line is checked to establish itsavailabili ty. I f the line is available the swi tchwill establish power ringing to the terminating
customer I s line , or rings the phone." 3 (emphasis
added)
Though SS7 messages may travel over separate physical
network functions in the customer I s call process the
SS7 message is inseparable from the call itself.
HAS THE FCC ADDRESSED THE CLASSIFICATION OF SS7 INVESTMENT
AND COSTS?
Yes.The FCC determined that SS7 was a "general network
upg rade
" ,
not separate network.Therefore unde r the
FCC I S Part 32 accounting rules , SS7 investment and expenses
are booked the same accounts used for other network
components.addi tion , as discussed later FCC rules
allocate these expenses between the interstate and
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 10 of 36intrastate jurisdictions in the same manner as other aspectsof the network.WHEN ESTABLISHING RATE S ,HAS THE IDAHO COMMI S S IONESTABLISHEDSE PARATE COST ALLOCATION PROCESSES FOR SS7COSTS?No.The SS7 costs allocated to the intrastate jurisdictionhavebeenincluded wi th other network costs for prlclngpurposes.DOES QWEST SEPARATE THE SS7 MESSAGE FROM THE END-USER CALLIN ITS DESIGN AND PRICING OF BASIC LOCAL SERVICES?No.The end-user call and the SS7 message are bundled.Qwest I end-user customers do not order local servlce andSS7messagesseparately.The customer originatinginterofficelocalcallcreatesboththecalland the
associated SS7 messages required complete the call.
Qwest charges the cost causer , its end-user customer
single rate for the complete local call including the SS7
message.
DOES THE ELI - QWEST ICA ADDRESS THE SIGNALING REQUIREMENTS
FOR LOCAL INTERCONNECTION TRUNKS?
Yes.Where possible the trunks used for transport and
termination by both parties will be equipped wi th SS7.
Section (C) 2.5 of the ICA includes the following:
The Parties will provide Common Channel Signaling
(CCS) to one another in conj unction wi th all LIS
trunk circui ts , except as provided below.
The Parties agree that an all SS7 network beneficial to end users and Co-Providers and
therefore will provision all trunking using
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 11 of 36SS7/CCS capabilities.(emphasis added)The ICA clearly indicates that SS7 will be provided as partof the standard terms of the interconnection arrangement forthe transport and termination facili ties.Therefore , SS7 isclearly considered an inseparable part of the traffic on theinterconnection trunks.E .PUBLIC POLICY HAS ESTABLISHED THE PROPER LINKAGEBETWEEN COST RECOVERY AND COST CAUSATIONQWE S T WITNESS MCINTYRE , ON PAGE LINES 10-HISTESTIMONY, CLAIMS THAT "QWEST ABIDED BY ALL COMMISSION RULESAND REGULATIONS.I S HE CORRE CT?Not really.Mr. McIntyre has largely ignored the actualpolicylssues the Complainants raised and focused in-steadQwest I development of unbundled SS7 rates whi ch areconsistentbetween the interstate and state jurisdictions.
While the Complainants have not taken a posi tion on the rate
consistency issue , as Mr. McIntyre himself correctly points
out page 3 , line 4 of his testimony, this complaint
really about Qwest I S "application of the ra tes
. "
Qwest I misapplication the SS7 rates resul ting
lmproper billing of SS7 charges that violation
Commission rules and other public policies.In many cases
Qwest is incorrectly charging LECs for SS7 costs that should
already have been recovered in other rates.
DOES MR.MCINTYRE I S TESTIMONY PAGE LINES
ACCURATELY REFLECT THE FCC I S INTENT REGARDING UNBUNDLING
SS7 CHARGES FROM SWITCHED ACCESS RATES?
No.Mr. McIntyre has selectively chosen parts of the FCC I
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 12 of 36orderapprovlngQwest'(then US West'tariff filing.Howeve r ,has ignored the explici t directions regardingSS7unbundlingprovided by the FCC in the generlc accessreformorder.In the generic order , the FCC speci ficallyin tended that the unbundl ed SS7 per call chargesassessedIXCs for all calls handed off the IXC' spoint of presence (POP). "The FCC also made it clear thatILECs doing such unbundling could only do so after preparlngtheirmeasurement and billing systems to produce accura teandaccountable bills. 6 Mr. McIntyre is correct that theFCCwasaddressing the problems associated wi th recoverlngSS7costs on a per minute basis.However , it is clear thattheFCCdidnot intend for Qwest to assess the unbundl edcharges on other LECs as Qwest has now done in Idaho.
PAGE LINES 12-14 OF HIS TESTIMONY QWE S T WITNESS
MCINTYRE INDICATES THAT QWE S T HAS MADE SYSTEMS INVESTMENTS
ALLOW IT TO ASSESS SIGNALING COSTS BASED ON A CUSTOMER'
ACTUAL USAGE.HAS QWEST FULLY MET THE FCC'REQUIREMENTS
FOR SYSTEM MODIFICATIONS?
No.response to Complainant's Request No.042 Qwest
stated as follows:
The measurement equipment purchased by Qwest fromAgilent Technologies is technically capable of
distinguishing between long distance traffic apartfrom local EAS and/ or CMRS intraLATA traffic.
However the billing methodology and system
programming Qwest implemented using this equipmentdoes not retain and process all the requiredfields to determine the jurisdiction of each
Ini tial Address Message (" IAM"based on the
associated call. In designing the billingmethodology and system programming, this
functionali ty could not be accommodated wi thin
reasonable timeframe and budget.
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 13 of 36SinceregulatorypoliciesICAsandotherindustryarrangementsrequire Qwest (and other ILECs) to treat theend-user traffic (incl uding SS7 messages)differentlydependingthe jurisdiction of the underlying calldoesnotappearQwest's systems and processes have beenmodified as directed by the FCC.BEGINNING PAGE LINE 14 OF HIS TESTIMONY QWE S TWITNESSMCINTYREINDICATES THAT THE COMPLAINANTS MAINTAINTHATSIGNALINGCHARGES SHOULD APPLY ONLY ORI GINATINGINTRASTATE TOLL TRAFFI C. "DO YOU AGREE?No.Qwest is distorting the Complainant's posi tion.TheComplainants' posi tion , consistent wi th existing regulatorypoliciesstatutes and industry practices , is that LECshouldonly be responsible for paying SS7 message signalingchargesfor intra LATA toll calls originated by the LEC and
terminated to Qwest.However , Qwest is free to assess SS7
message signaling charges on other cost causers such as IXCs
Qwest customers , subj ect to Commission approval and the
terms of its approved ICAs.
WHO ULTIMATELY PAYS FOR CALLS?
End-user customers of LECs , CMRS providers or IXCs are the
real payers (and cost causers) To ensure end-user rates
both local and toll) remain reasonable the Commission
should ensure that all costs involved in the call process
incl uding SS7 charges are assessed accordance with
Commission policies on the carrier (and its customer)that
creates the call
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 14 of 36PAGELINES 21-22 OF HIS TESTIMONY QWE S T WITNESSMCINTYRE CLAIMS THAT QWEST' S NEW SS7 CHARGES "PROVIDE A FAIRAND EQUITABLE MECHANISM FOR COST RECOVERY.DO YOU AGREE?Not really.appears Mr. McIntyre is focusing theleveland flat rate design of the charges in-stead themisapplication of the rates.Where possible , prlces shouldset to recover the costs of a service (or any element a service)from the actual cost causer.The Complainants donot disagree wi th the concept of per message charges for SS7messages.However , in many cases Qwest' s misapplicationthe SS7 rates does not match the cost recovery wi th the costcauser.The cost causer for a specific telephone callthe carrier originating the call (and its customer)THERE A DISTINCTION BETWEEN THE COST CAUSER FOR INTER-COMPANY COMPENSAT I ON AND THE COST CAUSER FOR RETAIL LEC
SERVICES?
Yes.The end-user customer is the cost causer from the
tandpoin t of the LEC , IXC or CMRS provider selling retail
servlces the end-user customer.Retail services like
basic local servlce calling features and toll have
underlying costs that include the operations of the carrler
servlng the end-user customer plus any costs paid such
carrler other telecommunications providers for use
other providers ' networks.For inter-company compensation
purposes , the LEC , IXC or CMRS provider serving the end-user
customer who places a call which creates costs for another
carrler the cost causer in the eyes that other
carrler.
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 15 of 36THE CASE OF LOCAL/EAS CALLS , WHO IS THE COST CAUSER FORSS7 MESSAGES?The LEC whose end-user customer makes the call.The ratespaid by the end-user customer to Qwest , or any other LEC andnot a competing carrier should cover this expense.QWEST WITNESS MCINTYRE ALLEGES BEGINNING ON PAGE 9 , LINEHISTESTIMONY, THAT THE EAS REGIONS IN IDAHO ARE NOTIMPACTED BY THE NEW SS7 CHARGES.DO YOU AGREE?No.Mr. McIntyre is again avoiding one of the maJ or lssuesthis case.This Commission has worked wi th the industryto implement EAS regions to expand the local calling optionsfortheresidentsand businesses in Idaho.One theunderlyingpremlses of the EAS regions was the abili tyILECsterminatecalls wi thout incurring any charges.Qwest's misapplication of its SS7 charges to the origination
and termination of EAS calls by other ILECs sabotages the
Commission efforts.When the Commission established the
EAS reglons , it focused on the abili ty of customers to make
local calls wi thout incurring toll charges and the abili ty
of the individual ILECs to originate and terminate the calls
wi thou lncurrlng any addi tional charges.Since few EAS
calls would completed wi thou the underlying SS7
messages SS7 messages are a cri tical componen t EAS
calls.By imposing SS7 message charges on ILECs directly or
vla their third-party SS7 network providers Qwest has
imposed fees on EAS calls.
THE CASE QWE S T ORIGINATED INTRALATA TOLL CAL L S
TERMINATED OTHER LECS , WHO IS THE COST CAUSER FOR SS7
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 16 of 36MESSAGES?Qwest.Since its end-user toll customer places the callQwest (or its customer) is the cost causer.The terminatingcarrler, either directly or via its third party SS7 networkprovider creates no cost and should not be assessed any SS7signaling charges.HAVE THE APPROVED TARI FFS FOR THE ORIGINATION ANDTERMINATION OF LEC CARRIED INTRALATA TOLL CALLS HISTORICALLYIMPOSED CHARGES ON THE TERMINATING LEC?No.Until now , the originating LEC has paid access chargestheterminating LEC , but has never assessed any accesschargeson the terminating carrier.Thus , in the caseQwestoriglnatedintraLATA end-user calls terminatedanotherLECtheterminatingLECnotQwestwould theonlycarrlerenti tled compensation for the call.This
process ensures the cost recovery for terminating the call
including any costs associated wi th SS7 , is assessed on the
real cost causer , the originating carrier.
THE CASE OF TOLL CALLS CARRIED BY THIRD-PARTY IXCs WHO
IS THE COST CAUSER?
The IXC (or its customer) who initiates the toll call.The
originating and terminating LECs (and their third-party SS7
network providers) create no cost and should not be assessed
any charges for such calls.The IXC' s customer creates the
toll call and the associated SS7 messages and pays toll
rate the IXC from which the IXC pays its costs
complete the toll call.
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 17 of 36HAVE ACCESS CHARGES EVER BEEN IMPOSED ON THE ORIGINATINGTERMINATING LEC FOR TOLL CALLS ORIGINATED AND TERMINATEDTHIRD-PARTY IXCS AS QWEST IS NOW DOING?No.LECs (including Qwest) have always applied rates fromtheir access tariffs to the IXC carrying the call.Industrystandardmeet point billing MPB"arrangements allow allLECsinvolved in the origination and termination thesecallscompensated from their own access tariffs.Since the IXC (and its customer) was the party causing thecostsassociatedwithoriginatingandterminatingtollcallsthisprocessmadeeconomlcsense.Qwest'misapplication of SS7 charges has now incorrectly made theoriginatingandterminating LECs liable for some thecosts being created by third-party IXCs.HAS THE INTRODUCTION OF COMPETITION CHANGED THE IDENTITY
THE COST CAUSER?
No.The same end-user customers still make calls and create
the need for SS7 messages.The onl y change a s a re ul t
local competi tion was the need for two LECs serving the same
local area to exchange local calls (and the associated SS7
signaling messages) However , interconnection requirements
were included in the 1996 Act and subsequent FCC rules
addre s this process.The transport and termination
provlslons approved ICAs , such as the ELI-Qwest ICA
address the compensation for exchanging local calls (and the
associated SS7 messages) The ELI-Qwest ICA makes
mention of separate charges for transporting and terminating
SS 7 messages.
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 18 of 36DOESTHE ELI - QWEST ICA ADDRESS THE COMPENSATION FOR LOCALTRAFFIC EXCHANGED BETWEEN THE COMPANIES?Yes.The ICA approved this Commission includesreciprocalcompensation mechanism for the transport andtermination of local end-user traffic.Therefore inasmuchothermechani sms governlng the termination oneanothers local traffic are already in place , Qwest may notattemptrecoverany of its call setup,swi tchingtransport costs for local calls through application itsSS7messagesignaling charges.Wi thou t the SS7 messagethe re would be no traffic to transport or terminate.Thusthereciprocalcompensation provisions in the ICA fullycompensatebothQwest and ELI for ALL costs invol vedexchanging local traffic including the SS7 messages.DOES QWEST'S APPLICATION OF THE NEW CHARGES ON LOCAL CAL L S
ORIGINATED QWE S T AND TERMINATED OTHER LECS ALSO
VIOLATE THE 1996 ACT?
Yes.order comply wi th the mutual compensation
requirements Section 251 (b)( 5 )the 1996 Act
compensation arrangements must allow the party terminating
the traffic cha rge the originating party.The
originating party does not charge the terminating party for
such traffic. Furthermore , FCC rules prohibi t an ILEC such
Qwest from charging another LEC for the termination
end-user calls originating the ILEC' s network. Qwest'
SS7 charges are clearly a violation of both the 1996 Act and
FCC rules.
IS QWEST' S PROPOSED TREATMENT OF SS7 CHARGES ASSOCIATED WITH
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 19 of 36TOLLCALLS CARRIED BY THIRD-PARTY IXCS CONSISTENT WITH THEELI - QWEST ICA?No.Section (C) 2.1 of the ICA includes the following:Where ei ther Party interconnects and deliverstraffic to the other from third parties eachParty shall bill such third parties theappropriate charges pursuant to its respectiveTariffs or contractual offerings for such thirdparty terminations.iemphasis addedJThe ICA clearly follows the industry standard MPB guidelinesforallcharges associated wi th toll calls originated andterminatedthird-party IXCs.Since wi thou the SS7messages there would be no call , any associated SS7 chargesshouldassessedtheIXCconsistentwithMPBguidelines.HAS QWEST PROPOSED RENEGOTIATING THE ICA?No.Qwest appears to believe that it can change the terms
of the ICA wi thout renegotiating.
PAGE 5 OF HIS TESTIMONY , QWEST WITNESS MCINTYRE SUGGESTS
THAT THE ADVENT OF COMPETITION HAS INCREASED THE USAGE
QWEST'S SS 7 NETWORK.HE ALSO SUGGESTS THIRD-PARTY SIGNALING
PROVIDERS LIKE ILLUMINET "BEGAN ACCESSING AND UTILI ZING"
QWEST'SS7 NETWORK COMPETITION DEVELOPED.COULD YOU
PLEASE COMMENT ON THESE CONCEPTS?
Competi tion may have contributed to the increased number
enti ties accesslng Qwest's SS7 network but did not
create significantly more SS7 messages.Technology and
innova ti ve uses of the Public Swi tched Telephone Network
PSTN"have increased the number of SS7 messages.For
example the movement from MF signaling SS7 signaling
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 20 of 36increased SS7 messages as did the explosion of data trafficon the PSTN.QWEST'S IMPLEMENTATION OF ITS SS7CHARGES HAS CREATED NEW SUBSIDIESPAGE 4 , LINE 11 OF HIS TESTIMONY , QWEST WITNESS MCINTYRECLAIMSTHATTHECOMPLAINANTS ARE UPSET ABOUT PRI CINGLOOPHOLE" THAT HAS BEEN CLOSED.ARE YOU AWARE 0 ANY SUCHPRI CING LOOPHOLE?No.Nei ther Illuminet nor the Complainants utilizingIlluminethave historically received something for nothingbypassed any charges.This Commission has ensured thatQwest'retail and wholesale rates were designed properlyandapplied in accordance wi th existing regulatory policiesandindustry practices.Compensation for the transport andterminationof traffic , including underlying SS7 messages
has been addressed by ICAs approved by this Commission.
Thus Mr. McIntyre s claim about a loophole appears
nothing more than smoke and mlrrors shi ft the
Commission s focus to a mythical pricing anomaly instead
focusing on the significant new subsidies created by Qwest' s
application of its new SS7 charges.
BEGINNING ON PAGE 7 , LINE 20 OF HIS TESTIMONY , QWEST WITNESS
MCINTYRE ALLEGES CLECS , ILECS AND WIRELESS COMPANIES HAVE
NOT BEEN PAYING THEIR "FAIR SHARE" OF SS7 COSTS.
CORRECT?
No.Both the need for access and the use of the SS7 network
are directly related to the underlying end-user call.Prior
the implementation of Qwest' s new SS7 charges , the cost
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 21 of 36causerfor the underlying call was properly paying for allaspectsthe call.Subsequent to Qwest' s misapplicationits new SS7 charges , other carriers are subsidizing theactual cost causers.DID THIRD-PARTY SS7 PROVIDERS HAVE A COMPETITIVE ADVANTAGEPRIORTO THE UNBUNDLING OF SS7 CHARGES AS ALLEGED BY QWE S TWITNESSMCINTYREBEGINNING ON PAGE LINE HISTESTIMONY?No.Third-party SS7 providers have always paid for therequi red SS7 network connection serVlces.The combinationend-user customer rates and the inter-companycompensationarrangements followed by this Commission havefairlycompensated Qwest and other carriers for the usethe SS7 network.
DOES QWEST' S MISAPPLICATION OF ITS UNBUNDLED SS7 CHARGES NOW
PROVIDE ANY CARRIER (S) A COMPETITIVE ADVANTAGE?
Yes.IXCs now enJ oy lower access rates even though their
customers still create all of the SS7 costs associated with
calls made by the IXCs ' toll customers.By assessing SS7
charges for Qwest originated end-user calls or other calls
whi ch should be handled under existing ICAs on other LECs
incl uding its competi tors , even directly or via third-party
SS7 providers Qwest glvlng itself competi ti ve
advantage.
ARE THE "UNBUNDLED SS7 RATES" THE ISSUE IN THIS CASE?
No.The Qwest wi tnesses appear to be trying to shift the
Commission focus to a non issue.Though the Complainants
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 22 of 36arenotconvinced Qwest' s SS7 rates actually cover theirIdaho costs , the level and structure of intrastate SS7 ratesnotdispute.The manner whi ch Qwest hasimplementedthe unbundled rates is at the center thiscase.addi tion , Qwest' s reductions to swi tched accessratesrequired to make the new SS7 rates allegedly reven ueneutral may not have been calculated appropriately.HAS QWE S T SHOWN THAT ITS SS7 RATES ARE BASED ON ITS IDAHOCOSTS?No.On page 21 , lines 5-11 Qwest Witness McIntyre testifiesthat the Idaho intrastate SS7 rates were "set equal to thoseexisting in Qwest' s interstate access tariff.Furthermorethecostusti fica tion provided the FCC for theinterstaterates was an Ameri tech cost study.Thus Qwesthasprovided no evidence that the intrastate SS7 rates are
based its Idaho costs.It is possible that Idaho
subsidizing other states or other states are subsidizing
Idaho.
ARE OTHER NEW SUBSIDIES CREATED BY QWEST' S SS7 CHARGES?
Yes. Qwest' s misapplication of the SS7 charges introduces
least three other new subsidies.First addi tion
being violation of existing ICAs and other regulatory
policies the new SS7 charges on local/EAS calls requl re
another LEC to pay Qwest for SS7 costs created when Qwest
customer places a call.Basic local service gives end-user
customers the abili ty to make and recel ve local calls
regardless of the LEC serving the customer at the other end
the call.SS7 messages are clearly a part of the local
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 23 of call that should be covered by the rate charged the end-userfor the call.Second , SS7 charges on the terminating carrler for intraLATAtoll calls require the terminating carrler to pay Qwest forQwest'SS7 signaling costs incurred when Qwest' s customerplacesintraLATAtollcall.The terminating carrlercreatescostsandshouldnotpay.Qwest' s toll ratesareshould be , designed to fully compensate Qwest forthese costs.Third for toll calls carried by third-party IXCsassesslngthe unbundled SS7 charges on the originating andterminatingLECs and the IXC in-stead of on just the IXCtheLECsare subsidizing the IXC whose customer makes thetollcall, creating the need for the SS7 messages and pays
the toll charges.all these cases Qwest'
misapplication of its SS7 charges provides an uneconomic and
unnecessary subsidy the cost causer and possibly
windfall to Qwest itself.
ON PAGE 30 , LINES 13-14 OF HIS TESTIMONY , QWEST WITNESS
MCINTYRE CLAIMS THAT QWEST' S "REVENUE STREAM WAS HELD
NE UT RAL. "DO YOU AGREE?
Not necessarily.For certain calls , more than one SS 7
message may be used by Qwest.However , Qwest has not shown
that all the types of SS7 messages , which are now being
assessed the unbundled SS7 charges , were included in the
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 24 of 36development of the rates and the calculation of thereductions to swi tched access rates to make the new SS7rates revenue neutral.Qwest has not provided anyconvincing documentation that the correct demand was used calculate the SS7 message signaling rates and the reductionsto swi tched access rates.Furthermore , even if all the correct SS7 messages wereincluded in the demand , Qwest has not shown that theimplementation of the unbundled SS7 rates was revenueneutral to Qwest in the state of Idaho.Qwest has merelyadopted in Idaho its interstate rates , which were not basedon Idaho specific costs or demand.Howeve r , Qwe s t neve shows that actual Idaho SS7 demand was used to calculate the
amount of required reductions to intrastate Idaho swi tched
access rates.Thus , this Commission cannot ensure that
Qwe s t is not receiving a windfall in the ta te 0 f Idaho.
QWEST FOCUSES ON THE CLASSIFICATION OF ITS UNBUNDLED
SS7 CHARGES IN ITS ACCESS CATALOG AS OPPOSED TO THE
MISAPPLICATION OF THAT CATALOG
PAGE 20 OF HIS TESTIMONY , QWEST WITNESS MCINTYRE CLAIMS
APPROPRIATE FOR SS7 CHARGES TO AP PEAR QWEST'
ACCESS CATALOG.IS THERE ANY RELEVANCE TO QWEST INCLUDING
THE SS7 CHARGES IN ITS ACCESS CATALOG?
No.Once again , Mr. McIntyre is not addressing the actual
complaint.is asking the Commission focus the
design of its Access Catalog in-stead of the misapplication
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 25 of 36the ra tes in tha t Ca talog The Complainants agree withtheconceptof "paying for what you use " espoused Mr.McIntyre on page 20 , line However , the Complainantsnotag ree that Illuminet or its carrier customers createmostof the calls and the need for most of the SS7 messagesfor which Qwest is misapplying its access catalog.PAGE 20 OF HIS TESTIMONY MR. MCINTYRE MENTIONS THE FCCDEFINEDSS7AS ACCESS IN ITS PART 69 RULES.WHAT THESIGNIFICANCE OF THE FCC'S PART 69 RULES?Mr. McIntyre appears to use the FCC's Part 69 defini tionSS7access" to j usti fy placing the SS 7 message serviceitsSouthern Idaho Access Catalog.Howeve r , the FCC'Part Rules address the design and pricing of interstateaccesscharges.Thus , the FCC's designation of SS7Access" service merely allows the interstate portion of SS7
costs recovered in interstate access charges.The
NECA9 Guide to Telephone Regulation describes the FCC's Part
69 Rules as follows:
Part 69 of Ti tle 47 of the Code of FederalRegulations contains rules governing interstate
access charges.These charges are assessed both
on end-users , and on interexchange carriers (IXCs)using incumbent local exchange carriers ' (ILECsfacili ties to originate and terminate long-distance calls. 10&11
The Part 69 rules do not specify how the Idaho (or any other
state) Commission should design or price intrastate
servlces.Mr. McIntyre has confused Qwest' s decision to
place its unbundled SS7 message service in its interstate
access tariff wi th the proper assignment of costs under FCC
and Idaho rate making practices.
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 26 of DO OTHER FCC RULES PROVIDE ANY GUIDANCE ON THE RECOVERY OFSS7 COSTS?Yes.Since SS7 was determined by the FCC to be a "generalnetwork upgrade " SS7 expenses and investment should followthe same rules as other similar network expenses.Unde rPart 32 of the FCC's Rules , ILEC SS7 expenses are generallybooked in accounts 6530 , Network Expense , or 6540 , AccessExpense.The expenses in these accounts are ei ther directlyassigned to the state or interstate jurisdiction orallocated based on the assignment of the underlyinginvestments(e . g ., local swi tching) SS7 investment boo ked ma i n 1 y t 0 a c c 0 un t s 2 2 12 , Dig ita 1 wi t chi n g , and 2 2 3 2 ,
Transmission , which are allocated to the interstate and
state jurisdictions based on dial equipment minutes or some
other measure of relative use.Therefore following these
rules , a portion of SS7 investment and expenses fall under
the FCC's rate-making jurisdiction and a portion falls under
the states ' authori ty.
While Qwest is correct that the cost recovery for the
interstate portion of SS7 expenses has been through access
charges , the Idaho Commission has been able to spread the
recovery for SS7 expenses across all intrastate services
including basic local rates , intraLATA toll , enhanced
features and intrastate access in the same manner as
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 27 of 36swi tching and transmission expenses.This Commission , likemany other states , did not assign SS7 expenses to anyspecific service , but followed a residual pricing processfor all intrastate services.Therefore , for state ratemaking purposes , SS7 investment and expenses havehistorically been covered by many intrastate services , notjust access as suggested by Mr. McIntyre.Moreover , nei therthe FCC nor this Commission has made a specific decision change the process of recovering the expenses associatedwi th SS7 messages.H. QWEST HAS MISCONSTRUED THE AGENCY ROLE OF ILLUMINET
QWE S T WITNESS MCINTYRE ON PAGES 26-OF HIS TESTIMONY AND
QWE S T WITNESS CRAI G PAGE OF HIS TESTIMONY SUGGEST
THE AGENCY RELATIONSHI P BETWEEN CTC-ID / ELI AND ILLUMINET
IS LIMITED TO THE UTILIZATION OF POINT CODES.ARE THEY
CORRECT?
No.Once agaln the Qwest Wi tnesses appear to be
misconstruing the issues in this case.They work for Qwest
and not Illuminet , CTC-ID or ELI and should not be expected
to understand the full scope of the agency relationship
between Illuminet and its customers.The Complainants do
not dispute that Qwest needs to receive an LOA to provide
authorization for Illuminet to establish a carrier s point
code on Qwest' s network.However , the agency relationship
goes beyond the verification of point codes.Illuminet
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 28 of 36conducts all negotiations and issues all orders for theserVlces required from other parties to provide SS7 serVlcesfor its customers such as CTC-ID and ELI.Where necessary,Illuminet purchases facili ties on behalf of specificcustomers like CTC-ID and ELI.Illuminet also builds orlease its own facili ties for the benefi t of severalcustomers.Thus , the agency relationship involves much morethan point code utilization.DOES THE LOA AND AGENCY RELATIONSHIP AUTHORIZE QWEST TO BILLILLUMINET SS7 MESSAGE CHARGES?No.Nei ther the LOA nor the agency relationship provides
Qwest any authority to bill Illuminet for most SS7 messages.
Nowhere in the LOA is billing mentioned.To the extent any
SS7 message costs are created by end-user calls made by any
of Illuminet' s customers , existing compensation
arrangements , regulatory policies and statutes should apply.
IS IT RELEVANT THAT ILLUMINET IS NOT A TELECOMMUNICATIONS
CARRIER AS QWEST WITNESS MCINTYRE SUGGESTS ON PAGE 24 OF HIS
TESTIMONY?
No.Here agaln the Qwest witnesses are diverting attention
away from the actual concerns raised in the complaint.
Illuminet's customers are telecommunications carriers
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 29 of interconnected wi th Qwest for the purpose of deliveringservices to end-user customers.Illuminet acts on theirbehalf and has no reason to be a telecommunications carrieritself.WHO OWNS THE POINT CODES USED BY ILLUMINET?Illuminet's carrler customers such as CTC-ID and ELI.Illuminet acts on behalf of its customers to carry SS7messages to/from point codes associated with their switchesand Qwest' s swi tches.However , its customers own the pointcodes that identify the network locations for handing offSS7 messages , and its customers provide telecommunications
servlces to their end-user customers who make and receive
calls to and from Qwest end-users.
DOES ILLUMINET MAKE THE CALLS WHICH CREATE THE NEED FOR SS7
MESSAGES?
No.Calls are placed and received by end-user customers of
various IXCs , LECs (some of which are Illuminet' s carrier
customers) and Qwest itself.Illuminet does not serve the
end-user customers.The carrier serving the end-user
customer has its own interconnection , tariff or other
arrangements wi th Qwest for exchanging end-user calls (and
any required SS7 message) and compensation for those calls
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 30 of 36(and any required SS7 messages) DOES ILLUMINET ITSELF NEED AN INTERCONNECTION AGREEMENT?No.Illuminet's customers already have the necessary ICAsor other compensation mechanisms in place to handlecompensation wi th Qwest.DOES THE ELI-QWEST ICA ADDRESS THE POTENTIAL FOR ELI TO BEREPRESENTED BY AGENTS OR VENDORS SUCH AS ILLUMINET?
Yes.In several places in the ICA , the agents as well
employees and contractors of ELI (and Qwest) are given the
same status as ELI itself.One example is the
Responsibili ty of Each Party " outlined in section (A)
of the ICA which reads as follows:
Each Party is an independent contractor , and has
and hereby retains the right to exercise full
control of and supervision over its own
performance of its obligations under this
Agreement and retains full control over the
employment , direction , compensation and discharge
of all employees assisting in the performance of
such obligations. Each Party will be solely
responsible for all matters relating to payment of
such employees , including compliance wi th social
securi ty taxes , wi thholding taxes and all other
regulations governing such matters. Each Party
will be solely responsible for proper handling,
storage , transport and disposal at its own expense
of all (i) substances or materials that it or its
contractors or agents bring to , create or assume
control over at work locations or (ii) waste
resul ting therefrom or otherwise generated in
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 31 of 36connection wi th its or its contractors ' or agentsacti vi ties a t the work loca tions Subj ect to thelimi tations on liabili ty and except as otherwiseprovided in this Agreement , each Party shall beresponsible for (i) its own acts and performanceof all obligations imposed by applicable law inconnection with its activities , legal status andproperty, real or personal and (ii) the acts ofits own affiliates , employees , agents andcontractors during the performance of that Partyobligations hereunder. (emphasis added)Qwest's SGAT also has similar references.It is a commonpractice for ELI (or Qwest) to be represented by agents inimplementing the terms of the ICA.Furthermore , the ICAclearly establishes the liabili ty of ELI for the actions ofits agents.
ARE AGENCY RELATIONSHIPS COMMON IN THE TELECOMMUNICATIONS
INDUSTRY?
Yes.Many LECs , including ELI , CTC-ID and Qwest , use agents
or vendors for services such as billing, directory
publication , real estate and database services.For
example , All tel Information Services issues end-user bills
on behalf of CTC-ID and Verizon Supply handles all supply
warehouse functions for CTC-ID.Some CLECs , including ELI
use agents or consul tants to handle a variety of
interconnection negotiation and arbi tration matters.These
age n t s ac t on C T C - I D's and ELI s b e h a 1 f jus t 1 i k e I 11 umi net.
BEGINNING ON PAGE 11 , LINE 4 , QWEST WITNESS MCINTYRE LISTS
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 32 of 36VARIOUSOPTIONSALLEGEDLYAVAILABLEINTERCONNECTINGCARRIERS FOR THE PURCHASE OF SS7.ARE THESE OPTIONS REALLYRELEVANT TO THIS COMPLAINT?No.Here again , the Qwest wi tness is focusing on the wronglssue.This case concerns Qwest' s misapplication of the SS7chargesin its Access Catalog, regardless of how carrlerdecides to meet its SS7 network requirements.EVEN THE OPTIONS WERE RELEVANT , ARE ALL THE OPTIONSOUTLINED BY MR. MCINTYRE REALLY VIABLE FOR SMALLER CARRIERS?No.Illuminet'carrler customers have already madearrangements for SS7 network serVlces.Therefore , they haveuseforQwest's tariffed service , UNE arrangementsinfrastructuresharingarrangements.Once agaln Mr.McIntyre appears be raising a smoke screen avoiddealingwi th their misapplication of SS7 charges.Qwest'
contention that can merely replace Illuminet the
provider of SS7 serVlces is not an appropriate defense
ralse when Qwest accused of misapplying its Access
Catalog.
Many smaller LECs have already chosen a third-party provider
for their SS7 needs. The third-party provider acts as these
LECs agent buy components from Qwest (and other
carriers)whe re necessary provide its customers
in teg ra ted SS7 solution.Some LECs also have operations
outside Qwest' s fourteen state reglon whe re the tariffed
servlce UNEs from Qwest might not be available.The
economles of scale associated wi th uslng a third-party SS7
provider help smaller LECs and CMRS providers control costs
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 33 of 36which in turn keeps customer rates reasonable.IS THERE ANY RELEVANCE TO UNES FOR THE PURPOSE OF PURCHASINGSS7 MESSAGE SERVICES BY CLECS OR CMRS PROVIDERS?No.Qwest Wi tness McIntyre has attempted createdistinctionwhe re none really exists.Most CLECswirelessproviders have ICAs wi th Qwest which addre s thetransportandtermination of traffic.inseparablepartof the end-user call , SS7 messages are already coveredthetransport and termination mechanisms in the I CAs.Thus nei ther Illuminet nor any its CLEC customersrequire UNEs for the formulation , access or transport of SS7messages.
I .CONCLUSION
PLEASE SUMMARIZE YOUR CONCERNS WITH THE QWE S T WITNESSES'
TESTIMONY.
The Qwest wi tnesses have avoided answerlng many the
pertinent lssues the Complainants have raised in this case
attempting to shift the Commission s focus away from the
cri tical policy lssues.This case is not about prlclng
loopholes but about change s several long-standing
regulatory policies and industry practices as a resul t
the misapplication of Qwest' s new SS7 charges.SS7
cri tical technology used in the transport and termination of
interoffice calls making SS7 messages inseparable from the
calls themselves.Introducing SS7 charges local/EAS
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 34 of 36callsbetweenILECsoverturns the historical Commissionpracticefollowingbillandkeepcompensationmechani sm for these calls.Onl y the terminating LECenti tled compensation for SS7 messages for LEC carriedintra LATA toll calls.Most of the traffic exchanged betweenQwestandcompeting LECs is properly addressed unde r thetermsthe1996 Act through negotiated I CAs not theAccessCatalog.FCC rules explici tly prevent theoriginatingcarrlerfromassesslnganychargestheterminatingcarrler for local traffic Qwest has done.Calls carried by third-party IXCs , including the requi redSS7messagesare best handled by existing MPB practices(and approved ICAs) The terms of ICAs , regulatory policiesandindustry practices have been designed to try and bestmatchcostrecoverywiththecostcauser.The
implementation of Qwest' s new SS7 charges does exactly the
opposi te and , in the process , creates a subsidy flow from
other LECs to Qwest itself and IXCs.Many smaller carriers
have chosen to use an agent such as Illuminet for their SS7
servlces.Qwest attempts to ignore this relationship and
its ICA wi th ELI by assessing the new SS7 charges on LECs
through third-party SS7 providers such Illuminet.The
use of agents or vendors in the telecommunications industry
nothing new and should be respected Qwest.The
Complainants urge the Commission to focus on the real issues
raised in this complaint and ignore the subterfuge Qwest has
introduced.
DOES THIS CONCLUDE YOUR DIRECT TESTIMONY?
Yes , it does.
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
CERTIFICATE OF SERVICE Page 35 of 36I HEREBY CERTIFY that on the 18th day of October , 2002I caused a true and correct copy of the foregoing REBUTTALTESTIMONY OF F. WAYNE LAFFERTY ON BEHALF OF CITIZENSTELECOMMUNICATIONS COMPANY OF IDAHO , ELECTRIC LIGHTWAVE , IDAHOTELEPHONE ASSOCIATION , AND ILLUMINET , INC. to be served by themethod indicated below , and addressed to the following:Mary S. HobsonStoel Rives LLP101 S. Capitol Blvd., Suite1900Boise, ID 83702-5958Stephanie Boyett-ColganQwest Services Corp.1801 California st., 47th FloorDenver, CO 80202Conley WardGivens Pursley LLPPost Office Box 2720Boise, ID 83701Clay SturgisSenior ManagerMoss Adams LLP601 W. Riverside , Suite 1800Spokane, WA 99201-0663Lance A. Tade , ManagerState Government AffairsCitizens Telecommunications of
Idaho
4 Triad Center , Suite 200
S a 1 t La k e C i t Y ,UT 8 4 1 8 0
Thomas J. Moorman
Kraskin , Lesse & Cosson
2120 L st. NW , Suite 520
Washington , D.C. 20037
Richard Wolf , Director
Contracts & Regulatory
III uminet , Inc.
Post Office Box 2909
Olympia , WA 98507
F. Wayne Lafferty
Lykam Services , Inc.
2940 Cedar Ridge Dr.
McKinney, TX 75070
) U. S. Mail , Postage) Hand Delivered) Overnight Mail) Facsimile) U. S. Mail , Postage) Hand Delivered) Overnight Mail) Facsimile) U. S. Mail , Postage) Hand Delivered) Overnight Mail) Facsimile) U. S. Mail , Postage) Hand Delivered) Overnight Mail) Facsimile) U. S. Mail , Postage) Hand Delivered) Overnight Mail
) Facsimile
) U. S. Mail , Postage
) Hand Delivered
) Overnight Mail
) Facsimile
) U. S. Mail , Postage
) Hand Delivered
) Overnight Mail
) Facsimile
) U. S. Mail , Postage
) Hand Delivered
) Overnight Mail
) Facsimile
Mo rg an W. Ri cha rds
PrepaidPrepaidPrepaidPrepaidPrepaid
Prepaid
Prepaid
Prepaid
1 CTC-ID , ELI and the ITA will be collectively referred
as the "LEC Complainants.
2 McIntyre Testimony, page 7 lines 6-8. (emphasis added)
Craig Testimony, page 14 , line 1 7 - page 15 , line
4 FCC R c d No., par a 7 0 , C C Doc k e t No.8 6 - 1 0 , Ap r i 1 2 1 ,
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002
Page 36 of 361989.5 First Report and Order in the Matter of Access ChargeRef 0 rm , 12 FCC R c d 1 5 9 8 2 , 1 6 0 4 2 par a. 1 3 8) (1 9 9 7 Id. at para. 253 (". we will permi t incumbent LECs toadopt unbundled signaling rate structures at their discretion andacquire the appropriate measuring equipment as needed implement such a plan.7 See (252 (d) (2) (A) (i) J "For the purposes 0 f compliance byi n c umb e n t 1 0 c al e x c h a n g e car r i e r wit h s e c t ion 2 5 1 (b) (5), aState commission shall not consider the terms and condi tions forreciprocal compensation to be just and reasonable unless (i)such terms and condi tions provide for the mutual and reciprocalrecovery by each carrier of costs associated wi th the transportand termination on each carrier s network facili ties of callsthat originate on the network facilities of the other carrier;(emphasis added)8 See 47 C.R. Section 51.703 (b)9 The National Exchange Carrier Association (NECA) wascreated by the FCC to prepare and file access charge tariffs onbehalf of all telephone companies that do not file separatetariffs.10 NECA Guide to Telephone Regulation , Part 69 , page 1August 20 , 2000.11 It is interesting to note that NECA' s description does notinclude anything about assessing charges on other LECs.
fit e: I I A: \Rebuttal Lafferty. asc 10/23/2002