20090616Prehearing Brief.pdf

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360networks
867 Coal Creek Circle
Suite 160
Louisville, Colorado
80027
(t) 3038545000
(f) 303,854.5100
www360.net
June 15, 2009
Jean O. Jewell
Idaho Public Utilities Commission
472 West Washington Street
Boise, 10 83702
Re: Prehearing Brief in Case No. QWE-T-08-07
Attention Ms. Jewell:
360networks (USA) inc. and Integra Telecom, Inc. hereby submit an original
and seven copies of their Prehearing Brief in Case No. QWE-T-08-07.
If you have any questions regarding this submittal, you may contact Michel
Singer Nelson at 303-854-5513.
Respectfully,
c" N-
Charles Forst
360networks (USA) inc.
..' --
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION RECEIVED
101' JUN l 6 AM 9: 1.6
IDAHO PUBLIC
UTlUTlES COMMISSION
IN THE MATTER OF QWEST )
CORPORATION'S PETITION FOR )
APPROVAL OF NON-IMPAIRED ) CASE NO. QWE-T-08-07
WIRE CENTER LISTS PURSUANT TO )
THE TRIENNIA REVIEW REMAD )ORDER )
PREHEARG BRIEF OF 360NETWORK (USA) INC. AN INTEGRA
TELECOM, INC.
360 Networks (USA) inc. ("360") and Integra Telecom, Inc. ("Integra")
(collectively, the "CLECs"), hereby submit their Prehearng Brief in this proceeding.
I. INTRODUCTION
Ths case pertains to, whether, and to what extent, unbundled access to dedicated
interoffce transport and unbundled loops "UNEs" will be available in specific Idaho wire
centers going forward. Ths case, then, identifies the non-impaired wire centers that wil
impact all competitive local exchange carrers ("CLECs") and the development of
competition, as well as the policy decisions as to how to interret the TROITRRO
impairment policies and rules on a going forward basis. i Whle the TRRO established
the methodology and crtera for deterining whether a wire center is non-impaired, its
implementation - and the establishment of the list of non-impaied wire centers - has
been implemented in state regulatory proceedings, with incumbent local exchange
1 In the Matter of
Review of Unbundled Access to Network Elements, Review of Section 251 Unbundling
Obligations of Incumbent Local Exchange Carrers, Order on Remand, CC Docket No. 01-338, WC
Docket No. 04-313,20 FCC Rcd 2533 (2004) ("TRO"); Review of the Section 251 Unbundling
Obligations of Incumbent Local Exchange Carrers, Implementation of the Local Competition Provisions of
the Telecommunications Act of 1996, Deployment of Wire line Services offering Advanced
Telecommunjcations Capabilty, CC Docket Nos. 01-338,96-98,98-147, Report and Order and Order on
Remand and Furer Notice of Proposed Rulemakng, 19 FCC Rcd 16978, 17145 (2003) ("TRO").
.
carers ("ILECs") and requesting carers oftentimes disagreeing on how the TRRO
directed business lines and fiber-based collocators are to be counted.
Once a finding of non-impairment at a wire center is approved by the
Commission, CLECs would be forever (or until a change in law) prohibited from
purchasing certain UNEs for any "non-impaired" wire centers. It is important to stress
that once a wire center is classified as non-impaired, this classification is irreversible.2
As such, the Commission, the requesting carers, and Idaho consumers would be bound
by that decision based on the Commission's designation and review process going
forward. Therefore, given the immediate and substantial impact on competition that will
result from the Commission's decisions in ths docket, the Commission should take
special care to ensure that Qwests data, and its asserons related to business line counts
and fiber-based collocators are accurate, reasonable and substantiated.
Finally, while the immediate question in ths case is whether the two wire centers
named in Qwests filing are non-impaied with respect to unbundled transport and the
one wire center is impaired with regard to unbundled loops, the decisions that the
Commission will make in this case wil also affect future potential designations of wire
centers with respect to both unbundled interoffce transport and high-capacity unbundled
loops. Ths consequence follows from the fact that the Federal Communications
Commission's ("FCC") framework for determining non-impairment for both unbundled
interoffce transport and high-capacity unbundled loops is based on the same crtera -
i.e., counts of fiber-based collocators and switched business lines.
2 CFR §51.19(a)(4)(i), §51.319(a)(5)(i), §51.19(e)(3)(i) and §51.19(e)(3)(ii).
2
.
Ths Commission need only decide whether Qwest has properly supported the
classification of the Boise Main and Boise West wire centers. Qwest has requested that
with regard to DS 1 and DS3 Transport and Dark Fiber Boise Main be classified as Tier 13
and with regard to DS3 Transport and Dark Fiber, that Boise West be classified is Tier 2.4
In addition, Qwest has requested that DS3 loops be classified as non-impaired in the
Boise Main wire center.
5 Qwest is also asking the Commssion to adopt cerain
procedures for determining wire center non-impaired designation - procedures that were
contained in a settlement between Qwest and a group of CLECs in several other states.
6
II. ARGUMENT
Although the unbundling framework is a relatively straightforward process
involving counting business lines and fiber-based collocators, disagreements between
ILECs and CLECs have often arose related to the ILEC's interretation of the FCC's
framework used to count business lines and fiber-based collocators, and the resulting
ILEC proposed classification of the wire centers. Hence, understanding the intent of the
FCC's rules and framework wil assist the Commission in determining which pary's
interretation (and proposed counts of business lines and fiber-based collocators) is
correct.
The FCC explained that its intent was to identify geographic markets with
suffcient actual or potential competition in high-capacity transport serces, or markets
3 See Qwest's Filing for Commssion Approval of Non Impaied Wire Center Designations with
Supportg Data, dated 6/27/08.4 Id.
S Albersheim Direct, p. 31, lines 11-13.
6 "Five State Settlement Agreement," Qwest Exhbit 4.
3
where competition is suffcient to make facilities-based entr economicaL. Ths intent is
stated in the following passages from the TRRO:
By using our section 251 unbundling authority in a more targeted maner,
this Order imposes unbundling obligations only in those situations where
we fid that carer genuinely are impaired without access to paricular
network elements and where unbundling does not frstrate sustainable.
facilities-based competition. Ths approach satisfies the guidance of cours
to weigh the costs of unbundling, and ensures that our rules provide the
right incentives for both incumbent and competitive LECs to invest
rationally in the telecommuncations market in the way that best allows for
innovation and sustainable competition.7
Thrd, in applying our impairment test, we draw reasonable inferences
regarding the prospects for competition in one geographic market based on
the state of competition in other, similar markets.
8
As descrbed below, the record shows a correlation between the number of
business lines and/or fiber collocations in a wire center and a revenue
opportty suffcient to lead to facilities duplication in the geographic
area sered via that wire center. In light of these correlations, we draw
inferences, based on competitive deployment in cerain markets, regarding
the likelihood of competitive entr in other markets exhbiting simlar
characterstics. We believe it is reasonable to expect that competitive
LECs can most economically deploy dedicated tranport facilities and
high-capacity loops in those geographic markets where revenue
opportties are highest. which is confirmed by the evidence of actual
deployment found in the record.
9
Thus, the purpose of the FCC unbundling framework was to use the data on
business lines and fiber-based collocators as evidence about revenue opportties and
the state of competition in a paricular wire center. The FCC reasoned that if revenue
opportties are suffciently high, as evidenced by a large number of business lines and
the presence of a cerain number of fiber-based collocators, requesting carers should not
7 TRRO, ,\2 (emphasis added).
8 Id., '\ 5 (emphasis added).
9 Id., '\43 (emphasis added)(footnotes omittd).
4
be impaired without unbundled access to high capacity transport because competitive
facilties-based deployment is likely to be economically feasible.
The FCC's unbundling framework for dedicated transport involves counting two
crtera meant to sere as a proxy for measurig the potential level of competition (or
availability of non-UNE alteratives) in the paricular market in question (in this case, a
wire center): (1) business lines, and (2) fiber-based collocators. Relative to deterining
high capacity unbundled dedicated transport (DS 1, DS3 and dark fiber dedicated
transport), the impairment analysis for each wire center is based on a thee (3) tier
classification system, which classifies each wire center by Tier based on the number of
business lines served by the wire center or the number of fiber-based collocators in the
wire center, and then deternes impairent for dedicated transport based on the tier
classification of the wire center at the endpoints of the transport circuit. With regard to
unbundled DS3 loops, a wire center is considered non-impaired if it has 4 or more fiber-
based collocators and at least 38,000 switched business lines.
10 The actual number of
business line counts and fiber-based collocators that must be present in each circumstance
is not at issue in this proceeding. Rather, the issue is Qwests interretation ofthe FCC's
impairent crtera with respect to business lines ii and fiber-based collocators.12
10 TRO, Executive Summar, para. 5 and para. 174.
11 "Business line" is defied in 47 CFR §51.5 as follows:
Business line. A business lie is an incumbent LEC-owned switched access line used to serve a
business customer, whether by the incumbent LEC itself or by a competitive LEC tht leases the
line from the incumbent LEC. The numer of business lies in a wie center shall equal the sum of
al incumbent LEC business switched access lines, plus the sum of all UN loops connected to
tht wire center, includig UN loops provisioned in combintion with other unbundled elements.
Among these requirements, business line talies (1) shall include only those access lies
connecting end-user customers with incumbent LEC end-offces for switched servces, (2) shal
not include non-switched special access lines, (3) shall account for ISDN and other digital access
5
The FCC's unbundling framework for dedicated transport relies on a wire center
tier strctue that groups wire centers into Tier 1, Tier 2, and Tier 3 wire centers,
according to business line counts or fiber-based collocator counts. Once wire centers are
given a tier designation, impairment for dedicated transport wil depend on the tier
designation of the wire centers on the endpoints of the requested circuit. 47 C.F.R.
§ 51.319( e )(3) defines the wire center tier strctue as follows:
Wire center tier strcture. For purposes of this section, incumbent LEC
wire centers shall be classified into thee tiers, defined as follows:
(i) Tier 1 wire centers are those incumbent LEC wire centers that contain
at least four fiber-based collocators, at least 38,000 business lines, or both.
Tier 1 wire centers also are those incumbent LEC tandem switchig
locations that have no line-side switchig facilities, but neverteless serve
as a point of traffic aggregation accessible by competitive LECs. Once a
wire center is deterined to be a Tier 1 wire center, that wire center is not
subject to later reclassification as a Tier 2 or Tier 3 wire center.
(ii) Tier 2 wire centers are those incumbent LEC wire centers that are not
Tier 1 wire centers, but contain at least 3 fiber-based collocators, at least
24,000 business lines, or both. Once a wie center is deterined to be a
Tier 2 wire center, that wire center is not subject to later reclassification as
a Tier 3 wire center.
lines by counting each 64 kbps-equivalent as one line. For example, a DS11ine corresponds to 24
64 kbps-equivalents, and therefore to 24 "business lies."
12 "Fiber-based collocatot' is derIDed in 47 CFR §51.5 as follows:
Fiber-based collocator. A fiber-based collocator is any carer, unliated with the incumbent
LEC, that maintains a collocation arangement in an incumbent LEC wie cente, with active
electrcal power supply, and operates a fiber-optic cable or comparble tranmission facility tht
(1) termates at a collocation arangement with the wie center; (2) leaves the incumbent LEC
wire center premises; and (3) is owned by a par other th the incumbent LEC or any affliate of
the incumbent LEC, except as set fort in ths paragraph. Dark fiber obtained from an incumbent
LEC on an indefeasible right of use basis sha be treated as non-incumbent LEC fiber-optic cable.
Two or more affliated fiber-based collocators in a single wire center shall collectively be counted
as a single fiber-based collocator. For puroses of ths paragraph, the term affliate is derIDed by
47 U.S.C. § 153(1) and any relevant interpretation in ths Title.
6
(iii) Tier 3 wire centers are those incumbent LEC wire center that do not
meet the critera for Tier I or Tier 2 wire centers.
The tier classifications for the wire center on the endpoints of the dedicated
transport routel3 wil deterine whether the dedicated transport circuit must be
unbundled by the ILEC. The specific thresholds for DS 1, DS3 and dark fiber transport
are sumarzed as follows:
. DSI Transport:14 ILECs must unbundle DS1 transport where the wire centers
at either end of the route are non-Tier 1 wie centers.15 Or, in other words, if
either wire center at the end of a requested route is a Tier 2 or Tier 3 wire
center, then the ILEC must unbundle DS 1 transport.
. DS3 Transport:16 ILECs must unbundle DS3 transport where a wire center on
either end of the requested route is a Tier 3 wie center.
17
. Dark Fiber Transport: As in the case of DS3 Transport, ILECs must unbundle
dark fiber dedicated transport where a wie center on either end of the
requested route is a Tier 3 wire center.
18
The specific theshold for DS3 Unbundled Loop is sumarzed as follows:
. DS3 UNE Loop. ILECs must unbundled DS3 Loops unless the wire center
has 4 or more fiber based collocators and at least 38,000 switched business
lines.
13 "Route" is defined in 47 CFR 51.319(e) as "a trmission path between one of an incumbent LEC's
wie centers or switches and another of the incumbent LEC's wie centers or switches. A route between
two points (e.g., wie center or switch "A" and wie center or switch "Z") may pass though one or more
intermediate wie centers or switches (e.g., wie center or switch "X"). Tranmission paths between
identical end points (e.g., wie center or switch "A" and wie center or switch "Z") are the same "route,"
irespective of whether they pass through the same intermediate wie centers or switches, if any."
1447 C.F.R. §51.19(e)(2)(ü)(B) caps the number of unbundled DSI dedicated trport ciruits on each
route at 10.
1547 C.F.R. §51.19(e)(2)(ii)(A).
1647 C.F.R. §51.19(e)(2)(iii)(B) caps the number of unbundled DS3 dedicated tranport circuits on each
route at 12.
1747 C.F.R. §51.19(e)(2)(üi)(A).
1847 C.F.R. § 51.19(e)(2)(iv)(A).
7
A. QWEST'S BUSINESS LIN COUNT IMPROPERLY INCLUDES RESIDENTIAL
LINES, NON-SWITCHED LINES, AND UNUSED CAPACITY.
The interretation of the business line rules has played out before varous state
public utility commissions. Whle Qwest wil be able to cite to several such proceedings
that interreted the business line rules consistent with its position, other proceedings such
as in Colorado and Nort Carolina favored the CLECs' interretation. It is important to
note, however, that while those authorities may be persuasive, they are not binding on the
Commssion's decision in this case. Rather, only decisions by the United States Supreme
Cour interreting federal law are binding on state cours, or in ths case, a state
administrative agency.
19 Likewise, agencies are not bound by other agencies in their
findings and decisions.2o Thus, this Commission has the authority to interret the federal
rules underlying the impairent of wire centers.
As argued below, and consistent with a proper interretation of the federal
impairment rules, the Commission should adjust the business line count to remove
residential customers, spare capacity, and non-switched lines.
1. Qwest improperly includes lies used to serve residential customers in its
business lie counts.
Qwest improperly inflates the line count by ignorig the plain meang of the
FCC definition. Including residential lines within the business line count is improper
19 In the Matter of the Joint Competitive Local Exchange Carrers' Request Regarding the Status of
Impairment in Qwest Corporation's Wire Centers and the Applicabilty of the Federal Communications
Commission's Triennial Review Remand Order, Colorado Public Utilities Commssion, 2008 Colo. PUC
LEXIS 999 ("Colorado Wire Center Decision") (citig Brotman v. Lake Creek Ranch. LLP. 31 P 3d 886.
894 (Colo. 2001).20 Colorado Wire Center Decision, 2008 PUC LEXIS at *7-8 (citing Cornelius v. NAACP Legal Defènse
and Educational Fund, Inc.. 473 U.S. 788. 809 (1985); Underwood v. Shalala. 985 F.Supp. 970. 978
CD.Col0. 1997).
8
because the purpose of the TRRO's line count measure is to size the business (not
residential) market. The concept is clear from the first sentence of the FCC's business
line defiition, which is as follows:
A business line is an incumbent LEC-owned switched access lie used
to serve a business customer, whether by the incumbent LEC itself or
by a competitive LEC that leases the lie from the incumbent LEC. The
number of business lines in a wire center shall equal the sum of all
incumbent LEC business switched access lines, plus the sum of all UNE
loops connected to that wire center, including UNE loops provisioned in
combination with other unbundled elements. Among these requirements,
business line tallies (l) shall include only those access lines connecting
end-user customers with incumbent LEC end-offces for switched
serces, (2) shall not include non-switched special access lines, (3) shall
account for ISDN and other digital access lines by counting each 64 kbps-
equivalent as one line. For example, a DS1 line corresponds to 24 64
kbps-equivalents, and therefore to 24 ''business lines.,,21
Qwest s methodology isolates the second sentence of the above rue from the rest of the
definition to include CLEC residential and non-switched lines (served via Qwest UNE
loops) in the switched business line count. As correctly obsered by the AU in the
Colorado Wire Center Case (and ultimately the Colorado Commission), while on the
surace the second sentence may suggest counting all UNE loops, a complete reading of
ths rue indicates the exact opposite. The Colorado Commssion explained:
According to the ALJ's reasoning, to include residential loops in the cour
of business lines in a wire center would impermissibly conflct with the
first sentence and would not give meaning to the entire rule.
Consequently, the AU deterined that the term ''business lines" in the
second sentence must restrct the subsequent phrase "such that all UNE
loops must be confined within the scope of business line as defined in the
first sentence of the paragraph."... As such, the ALJ concluded that given
the plain language of 47 C.F.R. § 51.5, it is ilogical to conclude that a
residential line is a business line. A non-switched UNE loop providing
serice to a residential customer conflcts with both the first sentence of
the rule, as well as the third sentence; therefore, the UNE loop component
2147 C.F.R. § 51.5 Terms and Defitions, Business Line. (emphasis added).
9
of the business line calculation by wire center, is to be modified to exclude
residential and non-switched lines. 22
The FCC's rule requires that the business line counts include only lines used to serve
business customers that are switched. In contrast, Qwest s business line count
methodology includes lines used to serice residential customer as well as lines that are
not switched. Qwest s claim that a residential or non-switched line should be counted as
a switched business line simply does not comport to the FCC's definition. Moreover,
Qwest canot claim that it is unable to differentiate between residential and business
lines. The evidence wil show that when a CLEC orders a loop from Qwest there is a
mandatory field on the Local Serce Request ("LSR") where the CLEC indicates
whether the loop wil be used to sere a business, residence or goverent customer.
Thus, Qwest has the necessar information in its possession to remove residential loops
from the switched business line counts.
2. Qwest improperly includes spare capacity and non-switched lies in its
business lie counts.
Qwest improperly counts all UNE-L at their maximum potential capacity and
assumes that the full capacity is dedicated to sere voice switched demand. Therefore,
Qwest counts all high-capacity/digital DS1 UNE-L as 24 individua business switched
lines. That approach, however, inappropriately counts chanels on the high-
capacity/digital UNEs that do not provide switched business servces - a prerequisite to a
line being counted as a business line. This method inappropriately assumes that ever
22 Exbit 202 to Joint CLEC Testiony, Colorado Decision, p. 3 (footnote referencing the specific
paragraph of the ALJ Recommended Decision is omitted). The Nort Carolin Commssion made a simar
finding distinguishig residential and business customers. See In the Matter of Proceedings to Consider
Amendments to Interconnection Agreements Between BellSouth Telecommunications, Inc. and Competing
Local Providers Due to Changes in Law, 2006 N.C. PUC LEXIS 732.
10
available chanel on an unbundled high-capacity loop (or its equivalent digital capacity)
is being used to support switched business services, when in fact, much of that capacity
might not be used at all (vacant), and some portion of that capacity in most circumstance
wil almost cerainly be used for data servces.
The lines that go into the business line count must comply with the entire
definition of business line, which means that these lines must be: (1) used to sere a
business customer; and (2) used to provide switched serces (i.e., voice); and to the
extent consistent with these requirements, (3) each 64 kbps chanel should be evaluated
as one line. In addition, as discussed above, whether a line would be counted as a
business line should not depend upon whether the customer is sered by Qwest or the
CLEC.23 Qwest must use the same methodology for counting CLEC lines as it does in
counting its own business lines.
Qwests application of the FCC definition is based on reading isolated
components of the definition of business line in a way that conflicts with other
provisions: First, Qwest places great emphasis on the second sentence of the definition
which, when read in isolation, states:
The number of business lines in a wire center shall equal the sum of all
incumbent LEC business switched access lines, plus the sum of all UNE
loops connected to that wire center, including UNE loops provisioned in
combination with other unbundled elements.
23 This party requiement is contaed withn the first sentence of the business line defition: "an
incumbent LEC-owned switched access lines used to serve a business customer, whether by the incumbent
LEC itself or by a competitive LEC that leases the lie from the incumbent LEC."
11
Qwest claims that the sentence perts it to count all UNE- L, without regard to whether
the lines satisfy any of the requirements to be considered a ''business line."
Second, Qwest exploits an example in the defition as an unconditional directive
that the maximum potential capacity of high-speed digital services should be counted,
again without regard to whether any of the theshold requirements to be counted as a
business line are being satisfied. Importantly, however, there are no absolute instrctions
in the definition that require that all UNE loops - much less every 64 kbps chanel - be
counted as a business line, whether or not they otherise meet the requirements of the
defition. As explained above, the definition applies additional requirements to both
UNE loop arangements and Qwest s retail lines that also must be satisfied before "a
line" can be counted as a ''business line." This is tre for individual analog lines, as well
as each digital line to which Qwest has counted at its maximum, theoretical capacity.
Qwest counts ever high capacity/digital UNE loop assumg that the maximum
potential capacity is used to provide switched business line servce, when it understands
fully, that such a circumstance is by far the exception, as opposed to the rule, in today's
marketplace. Qwest appear to base its view on its selective reading of the final
instrction, which indicates that the business line count:
...shall account for ISDN and other digital access lines by counting
each 64 kbps-equivalent as one line. For example, a DS1 line
corresponds to 24 64 kbps-equivalents, and therefore to 24
''business lines."
Importantly, a proper reading of the above instrction does not direct Qwest to count
each chanel in a high capacity circuit as a ''business line." The crtical sentence in the
quote cited above is that Qwest "shall account for ISDN and other digital access lines by
12
counting each 64 kbps-equivalent as one line" (emphasis added). This requirement,
however, does nothng more than what it plainly states, i.e., that each 64 kbps-equivalent
should be considered "one line." Whether or not these lines should be counted as
business lines, however, depends upon whether the remaining requirements of the FCC
definition are satisfied.
The fact that the defition provides an example of how the analysis might count a
DS 1, does not require that Qwest, or the Commssion, ignore situtions in which a similar
DS 1 might provide ver little switched business serice. The FCC was perectly capable
of declarng all high capacity serces and circuits as business lines and it could have
easily simplified the definition for such a mandate. However, the FCC directed that each
64-kbps equivalent be considered one line, and then directed that other crtera - most
specifically, that the line also be used to provide switched access line servce to a
business customer (i.e., voice serce) - be used to deterine whether each "line" should
be considered a business line.
The TRO origially instituted an unbundling regime wherein different unbundling
obligations were imposed on the ILEC depending on whether the UNE (i.e., unbundled
local switching) was used by the requesting carrer to serve the mass market versus the
enterrise market. In doing so, the FCC entrsted the state commissions with
establishing a "DSO crossover" - or a cerai number of DSO lines that seres as
distinguishing mass market customers (i.e., below ths crossover is the mass market) from
enterprise customers (i.e., above the crossover is the enterrise market). As the FCC
explained
13
At some point, (mass market) customers takng a sufficient number of
multiple DSO loops could be sered in a maner similar to that described
above for enterrise customers-that is, voice serces provided over one
or several DS 1 s, including the same variety and quality of serices and
customer care that enterrise customers receive. Therefore, as par of the
economic and operational analysis discussed below, a state must
deterine the appropriate cut-off for multi-line DSO customers as par of
its more granular review. This cross over point may be the point where it
makes economic sense for a multi-line customer to be sered via a DS1
loop.24
Not surrisingly, ILECs argued for relatively low cross over points when ths issue was
addressed in state reguatory cases designed to implement the FCC's (now defunct) rues.
For example, in the Californa PUC's case implementing the TRO rules, R.95-04-
043/1.95-04-044, AT&T argued for a low crossover point to distinguish the mass market
from the enterrise market. AT&T's witness stated:
SBC California proposes a DSO cut-off of 4 DSOs, meanng that a
customer with 4 or more DSOs at a location would be in the enterrise
market, while a customer with 3 or fewer DSOs would be in the mass-
market. ,,25
AT&T also crticized the higher crossover points proposed by CLECs. AT&T based its
proposed crossover point largely on evidence showing the revenue opportties
available to CLECs providing voice and data serces over a high capacity DS 1 line
though integrated access products. AT&T testified that under the CLECs' DS1-based
integrated access products ''bandwidth can then be divided in 64 Kbps segments to
pmvide up to 24 voice lines, or, if the end user only needs a few voice lines, the
remaining bandwidth can be used for data serices.,,26 AT&T fuer provided numerous
24 TRO ~ 497 (emphasis added).
25 Reply Testimony of Curs L. Hopfmger on behalf of SBC Californa Regardig Mass Market Switchig,
CPUC R.95-04-043/I.95-04-044 at 8 (Januar 16, 2004) ("Hopfmger Reply").
26Id. (citig Hopfiger Direct at 29-30).
14
examples of the integrated access retail products CLECs were providing over DS 1 UNE-
L.
Thus, ILECs understand that CLECs do not use high capacity UNE- L at their
maximum potential capacity for puroses of providing exclusively switched business
serices. First, without exception, the examples of CLECs providing serce over DS 1
loops shows that they provide sophisticated data services (e.g., high speed interet access,
web hosting, IP address, DNS, email serces) over these loops. These serces, while
utilizing bandwidth (or 64 kbps chanels) on the CLEC's DS 1 loop, are not business
serices, and should therefore not be included in the count of business lines.
Complying with the FCC's full and complete definition of ''business line" is not
optional, and that definition makes clear that only switched business lines are to be
counted - not the maximum potential capacity which would include empty circuits and
data circuits. Hence, even if Qwest does not know the utilization rate of CLEC UNE- L
for switched business lines, Qwest canot simply toss out par of the FCC's definition
and count all UNE- Ls at their maximum potential capacity regardless of whether they
meet the other applicable crtera.
The Commission should adopt a good faith estimate, or proxy, to remove UNE
loop capacity that is empty capacity or capacity used for data serices. In other words,
for each DS1 UNE-L loop or EEL, Qwest should be required to count no more than 12
business access lines (50% of its total 64 kbps equivalency). This proposal strkes a fair
balance between the FCC's goal to accurately count multiple business lines provided over
digita1lgh capacity loops and Qwest s attempt to inappropriately count each UNE- L to
their maximum potential capacity.
15
3. Integra cannot verify Qwest's loop counts in Boise Main and Boise
West.
The evidence will show that Integra, which attempted to validate Qwest s CLEC
specific loop counts, was ultimately unable to do SO?7 Attempting to validate ths
information is a time consuming, labor intensive endeavor. Business data storage
practices were generally developed for different puroses and not with the non-
impairment designations in mind. Integra's interal data is typically stored by customer,
not by the Qwest loop facility upon which that customer's serice rides and contains
information regarding the collocation in which the customer's service is connected, but
not the Qwest wire center in which the customer actually resides.
Qwest s loop count data for Integra in the Boise Main and Boise West wire
centers was diffcult to validate. For example, Qwest shows a signficant number of EEL
circuits associated with these wire centers. However, Integra was unable to find a single
EEL circuit associated with a customer that resides in those wire centers. In addition,
Integra identified significantly more DS 1 loop and 2-wire loop circuits than what Qwest
counted for Integra in these wire centers. The Joint CLEC testimony contains a Table
showing the percentage of Qwest s Integra Loop counts validated by Integra for both
2007 and 2008. For Boise Mai, Integra was only able to verfy 43.2% (2007) and 51.7%
(2008) of the line counts that Qwest has used to support its petition. F or Boise West,
Integra was only able to verfy 28.2% (2007) and 71.2% (2008). The Commission should
not presume that Qwest s numbers are correct when the CLEC data on which it relies
canot be validated by the CLEC.
27 See Joint CLEC Testiony ofD. Denney at pages 33-35.
16
4. Qwest should use the most recent data available when makig a new
non-impairment claim.
Despite Qwest s stated desire to use the provisions of the Five-State Settlement
Agreement in Idaho, Qwest ignored the provision of the Agreement that would have
required Qwest to use the most recent line count data available when making a new non-
impairment claim. That Five-State Settlement Agreement provision states, "Qwest may
request addition of Non-Impaired Wire Centers based in whole or par upon line counts at
any time up to July 1 of each year, based on prior year line count data.,,28 Qwest did not
request non-impaired status for DS3 loops in Boise Mai until April 17,2009. However,
Qwest relied upon line count data from December 2007 rather than December 2008.
The issue of the appropriate time period to review both the switched business line
count and the fiber-based collocation data is crucial as updates are made to Qwest sWire
Center List. Ths Commssion should make clear that, as Qwest makes updates to its list,
Qwest should use data that is contemporaneous with Qwests claim for "non-impaired"
status. First, Qwest should not be allowed to go fishing back though time in attempts to
classify wire centers as non-impaired that do not curently meet the non-impairment
status. As described above, it is diffcult for CLECs to validate Qwest s line count data.
It becomes exponentially more difficult the older the data becomes. Second, Qwest
should not be allowed to select one set of data from one time perod and another set of
data from a different time perod and then yet another time perod to actually make its
claim for non-impairment. For example, suppose there exists a wire center today that has
four fiber-based collocators, but fewer than 60,000 lines. Suppose that the wire center
surasses 60,000 lines in the future, but by ths time there are only three fiber-based
28 Five State Settlement Agreement, Qwest Exhbit 4, Section VLA.2.
17
collocators. Qwest should not be allowed to choose line counts from the present and
fiber-based collocators from the past. The deternation of "non-impaied" status should
be made at the point in time that Qwest is claiming an offce is "non-impaired," not from
a combination of counts from different time perods that best advantages Qwest.
Allowing Qwest to selectively choose the time perod and data upon which it
chooses to rely would put CLECs at a fuher substantial disadvantage regarding
validation of Qwest s data. It would also disadvantage CLEC business planng as to
when and how to expand its presence in Idaho since it would have to take into account
not only the current conditions of the market, but also the conditions as they existed in
the past.
By makng the changes descrbed above to the CLEC loop count data, Boise Main
does not meet the 38,000 line count theshold to be classified as non-impaired for DS3
loops. In addition, the Boise West Tier 2 designation is not supported by line counts and
it is unclear whether the Boise Main Tier 1 designation is supported by line counts.
Change 1: Remove residential loops from the CLEC loop counts
Change 2: Remove disputed circuit counts from the CLEC loop counts. Ths can
be accomplished by applying the Integra disputed circuit percent (one minus the
validated percent) to all CLEC loop countS.29
29 Integra hopes to narrow ths dispute thoughout the course of ths case. However, a subset of
CLECs should not be punshed by being forced to rely upon CLEC loop counts for CLECs tht
failed to underte a review of their own data. Until such tie that disputes can be resolved
(and in all cases thus far they have been resolved), disputes should be applied to all CLECs not
only the CLECs disputing their counts.
18
Change 3: Remove non-switched capacity from the loop capacity counts. Ths
can be accomplished by applyig the Integra ALE to capacity percent to the
existing CLEC loop capacity counts.
Change 4: For DS3 loops in Boise Main, rely upon December 2008 line count
data consistent with the time period in which Qwest made its request for non-
impairment.
B. QWEST IMPROPERLY COUNTS THE NUMBER ~F FIBER-BASED COLLOCATORS.
The number of fiber-based collocators in each Qwest wire center plays a crcial
role in determinig a wire center's "non-impairment" status. If a wire center has thee
fiber-based collocators, then that wire center is automatically classified as Tier 2, and the
presence of four fiber-based collocators automatically classifies a wire center as Tier 1.30
Wire centers with four fiber-based collocators and the requisite number of switched
business lines (60,000 for DS1 loops and 38,000 for DS3 loops) are classified as "non-
impaired" with respect to DS1 and/or DS3 UNE IOOpS.31 Both the Tier 1 status for Boise
Main and the Tier 2 status for Boise West curently appear to be supported by the number
of fiber-based collocations in those offces.
Based upon a review of the fiber-based collocation data provided by Qwest, it
curently appears that Qwest has at least four fiber-based collocators in Boise Main and at
30 TRRO at '66. The Tier status determes the avaiability of DS1, DS3 and Dark Fiber UN
tranport. DSI UN trport is not available between Tier 1 wie centers. DS3 and Dark Fiber
UN tranport is not avaiable between wie centers designated as Tier 1 and/or Tier 2. Line
counts can also playa role in determg the Tier status of a wie center and did so for most of
the wire centers on Qwests list. Offces with more than 38,000 switch business lines are
classified as Tier 1 and offces with between 24,000 and 38,000 business lines are classified as
Tier 2.
TRRO at '146.31
19
least three in Boise West, which would support Qwest s request for Tier 1 and Tier 2
status transport respectively.
1. Qwest inadequately verifes the status of fiber-based collocators.
Nonetheless, the Joint CLECs have a number of concers relating to Qwests
process for designating wire centers as non-impaired under the TRO/TRRO crtera.
First, the evidence wil show that Qwest sent a letter to carer that Qwest stated it
believed were fiber-based collocators and asked the carers to verfy whether or not the
carer is a fiber-based collocator.32 Qwest counted a carer as a fiber-based collocator
even if the carer failed to confi33 ths status. Qwest provides non-confidential
information that only one of the six carers responded to Qwests letter. Though Ms.
Torrence indicates that Qwest regrets that "CLECs appear reluctant to respond," it shows
no indication of any action taken by Qwest to obtain a response. It is also unclear how
Qwest chooses the company representative to whom to send its letter. The letter seres
little purose if it is not reaching the intended individuals at the CLECs who could
provide a substantive response to Qwests claims.
Second, the evidence will show that Qwest attempted a field verfication of the
fiber-based collocations in question. To do this, Qwest asked its Central Offce
Techncians and State Interconnection Manager to verfy the fiber-based collocations.34
32
33
Torrence Direct, p. 18, lies 6 - 11.
Torrence Direct, p. 18, lines 13 - 14.
Torrence Direct p. 17, lines 10-16.34
20
The letter Qwest sent was wrtten in a way that encouraged Qwest employees to err on
the side of fiding fiber-based collocations.35
Ths letter casts doubt on whether Qwest s verification process was perormed in
an objective maner. The evidence will show that in a wire center in Colorado, Qwests
field verfication confirmed there was fiber, confied the fiber left the Qwest central
offce and confirmed the carer had power. However, this carer disputed its status as a
fiber-based collocator explaining that it had copper, not fiber. Upon a fuer field
verification, Qwest agreed that this carer should not be counted. Though Qwest
eventually correctly designated ths carer in Colorado, it does not change the fact that
the initial field verfication found fiber where none existed.
Another example that casts doubt on Qwest s field verfications occured in
Minnesota durng the first round of requests for non-impaied status. The evidence will
show that at the time Qwest claimed its initial list of fiber-based collocators represented
carers "operating from December 2003 through Februar 2005,,,36 but an example
involving Eschelon proves that this was not the case. For two wire centers in Minnesota,
Qwest counted Eschelon as a fiber-based collocator even though Eschelon did not have
power connected to its equipment on March 11, 2005. Eschelon was in the process of
establishing the collocations as fiber-based collocations but the collocation sites were not
fiber-based collocations "from December 2003 though Februar 2005" nor was
Eschelon a fiber-based collocator on March 11,2005. Despite communcating this fact to
Qwest, Qwest continued to count Eschelon as a fiber-based collocator.
35 Qwest has treated the actu letter as confdential and did not provide it as par of its filing in
Idao, though it ha been provided in other states.
Exhbit 203, Qwest Responses to Joint CLEC Data Requests in Arona, JCDR 01-032.36
21
In some states, Qwest continues to count carers as fiber-based collocators even
when the verfication worksheets indicate otherise. In Arzona, Qwest counted carers
as fiber-based collocators even though Qwest was unable to verfy the carer had power
at the Batter Distrbution Fuse Bay ("BDFB"). Qwest stated that the purose of the
spreadsheet was to verfy varous aspects of the collocation including an inspection of the
name, power, and fiber facilities.
In some states, Qwest clarfied that it did not count any CLEC-to-CLEC
connections as par of its fiber-based collocations.37 However, contrar to the TRRO,
Qwest counted such an arangement in a wire center in Colorado. When one carrer
simply relies upon the fiber of another fiber-based collocator, it is inappropriate to count
both carers as fiber-based collocators. Counting both carers amounts to double
counting. Qwest should expressly confinn that it did not count carers involved in a
CLEC-to-CLEC connection and, in any event, ths issue could playa role in the future as
Qwest updates the list.
47 C.F.R § 51.5 defines a fiber-based collocator as follows:
A fiber-based collocator is any carer, unaffiliated with the
incumbent LEC, that maintains a collocation arangement in an
incumbent LEC wire center, with active electrcal power supply,
and operates a fiber-optic cable or comparable transmission facilty
that (l) terminates at a collocation arangement withn the wie
center; (2) leaves the incumbent LEC wire center premises; and (3)
is owned by a pary other than the incumbent LEC or any affiliate
of the incumbent LEC, except as set fort in this paragraph. Dark
fiber obtaied from an incumbent LEC on an indefeasible right of
use basis shall be treated as non-incumbent LEC fiber-optic cable.
Two or more affiliated fiber-based collocators in a single wire
center shall collectively be counted as a single fiber-based
37 Exhbit 203, Qwest Responses to Joint CLEC Data Requests in Arona, JCDR 01-033.
22
collocator. For purposes of this paragraph, the ter affliate is
defined by 47 U.S.C. § 153(1) and any relevant interretation in
ths Title.
Paragraphs 93 though 102 of the TRRO explain the FCC's rationale for ths
definition. Paragraph 95 states, "Ou fiber-based collocation test captures interodal
competitors' transport facilities..." Paragraph 101 states, "Additionally, we find that
fiber-based collocation provides a reasonable proxy for where significant revenue
opportities exist for competitive LECs. .." In paragraph 102, the FCC first defines
fiber-based collocators. Footnote 292 to this paragraph clarfies the conditions that must
exist in order for a carer to be considered a fiber-based collocator: "We fid that when a
company has collocation facilities connected to fiber transmission facilities obtained on
an indefeasible right of use (IRU) basis from another carer, including the incumbent
LEC, these facilties shall be counted for puroses of this analysis and shall be treated as
non-incumbent LEC fiber facilities." A CLEC-to-CLEC connection is not an IRU and
thus does not fall withn the FCC's definition of a fiber-based collocator, and should not
be counted as separate fiber-based collocations.
2. The Five-State Settlement Agreement's provision for "express fiber"
does not support a fmdig that power is not required to establish the
presence of a fiber-based collocator for purposes of the FCC's
impairment analysis.
In Section C of ths brief, the Joint CLECs request that the Commission reject
Qwests use of the Five-State Settlement Agreement as evidence to support the resolution
of any issue in ths docket, If, however, the Commission reaches the issue of the Five-
State Settlement Agreement over CLEC objection, the Five-State Settlement Agreement
contains a provision regarding Express Fiber that is not in the FCC rules and which
should be removed. Ths provision reads, "Express fiber wil be counted as a fuctional
23
fiber facility for purposes of identifyng a fiber-based collocator, if it meets the definition
of fiber-based collocator in 47 C.F.R. §51.5 (as reflected in paragraph B(1) and subpars
above). The Joint CLECs agree not to raise the lack of Qwest provided power when
there is traffic over the express fiber as the sole basis to dispute whether express fiber can
be counted as a functional fiber facility for puroses of identifyng a fiber-based
collocator. For the puroses of ths Settlement Agreement, 'express fiber' means a
CLEC-owned fiber placed to the collocation by Qwest that terinates at CLEC-owned
equipment in a collocation and draws power from a remote location.,,38 These statements
in the Settlement Agreement do not clarfy the application of the fiber-based collocation
rule. Nor does Qwests testimony provide any support for ths provision, other than the
fact that it is in the Five-State Settlement Agreement (i.e., an impermissible use of the
agreement as evidence and precedent). Ths provision should be not be adopted here in
Idaho.
c. THE SETTLEMENT REACHED BY QWEST IN OTHER STATES is OF No
RELEVANCE IN THIS PROCEEDING.
With respect to several issues in ths proceeding, Qwest suggests that rather than
look at the evidence specific to ths case, or to the unque facts in Idaho, that the
Commission should instead simply use the settlement attached as to its testimony as a
''template.'' It is clear, however, from the language of the settlement itself, from the law,
and from the facts surrounding the settlement that it not only should not be considered a
''template,'' it should be ignored in this proceeding.
Under Rule 408 of the Idaho Rules of Evidence, evidence of settlement
negotiations or results is typically inadmissible. The rule flatly prohibits the use of
38 Five State Settlement Agreement, Qwest Exhbit 4, Section V.B.3.
24
settlement negotiations to prove, "liability for, invalidity of, or amount of' a claim.
39
This limitation has long existed in Idaho law.4o It is intended to promote settlements, a
public policy endorsed by the Idaho Supreme COur.41 Here, in the unque sitution
where the settlement has been made public in several other states a tre evidentiar
exclusion may make little sense. The policy behind Rule 408 nonetheless remains quite
valid: the settlement ters involve unique trade-offs for the purose of ending the
dispute. It is not an adjudication of what represents the right outcome, either for the
paries or under the law, and it is not applicable without the entire package of
compromises that were involved. Rather than settle, the CLECs in Idaho have chosen to
contest Qwests request for non-impairment fidings and conversion charges as improper
and harful to competition. A settlement - that did not occur in Idaho, and did not
include all of the CLECs in the present case - canot be relevant to the right outcome in a
fully litigated case. The text of the settlement itself could not be clearer on ths point.
Section VII.B. expressly provides that
No precedent is established by ths Settlement Agreement, whether or not
approved by Commssions. Ths Settlement Agreement is made only for
settlement puroses and does not represent that any Part would take if
ths matter is not resolved by agreement. Ths Settlement Agreement may
not be used as evidence or for impeachment in any futue proceeding
before a Commission or any other adinistrative or judicial body. . .
Qwest is, in fact, in violation of its own agreement by Qwest's use of it in this docket. It
is also dear from the Settlement Agreement that it is a compromise that may not even
comport with the law - that is, the result may not be lawful without a mutual agreement
among the paries. The initial sentence of Section III states that the ultimate results
39 Ru1e 408, Idao Rules of Evidence.
40 See Whitney v. Cleveland, 13 Idao 558, 91 P. 176 (1907).
41 See Quick v. Crane, 111 Idao 759, 727 P.2d 1187 (1986).
25
agreed to are "notwithstanding anything that may be to the contrar in the Defiitions set
forth in Section I and the Methodology set forth in Section V" - sections that both
incorporate many of the concepts from the FCC rules. A good example is the design
change charge, which is purely a negotiated figue in the settlement agreement. No
witness has claimed that is a cost-based rate, or that it has any rational basis at alL. Yet,
Qwest suggests the Commssion should simply adopt the "settlement rate" for no other
reason than that it is in the settlement. Because the settlement canot, by its own ters,
be substantial evidence, if that is all the support Qwest has for its proposed charge,
adopting Qwests proposal would violate Rule 408.
Not only does Qwest inappropriately present the settlement as evidence, Qwest
compounds the error by misrepresenting the Settlement Agreement. Moreover, it is not as
though the settlement has found universal support: even with the pares in agreement, the
Colorado Commission rejected the settlement. The settlement itself proves nothng
except that in some other states certain paries decided that a compromise to avoid
litigation made more sense than the costs of litigation. CLECs in Idaho made different
choices and those choices should be respected. This case will generate its own record
and its own evidence. If Qwest fails to meet its evidentiar burden without improper
reliance on the Settlement Agreement, then Qwest should not prevaiL. The settlement --
by its own ters, by Idaho law, and by a common sense obseration of the fact that the
circumstances and trade-offs were different than they are in ths contested case - should
be disregarded as irrelevant to this proceeding.
D. THE COMMISSION SHOULD REJECT QWEST'S PROCESSES
FOR UNE CONVRSIONS.
26
A conversion happens when a circuit that was formerly available as a UNE must
be convered to a non-UNE alterative arangement, as the result of a fiding of "non-
impairment." By definition, conversions wil tae place on live circuits that are up and
rung and curently supporting servce to End User Customers. Therefore, a seamless
and error free conversion is crcial because, if problems arse durg the conversion, the
likelihood that a CLEC customer wil be placed "out of serce" is high.
Furher, it is importt to note the "conversions" discussed in this testimony
involve only changig the rate charged for the facilty and, in the vast majority of
circumstances, the CLEC and its End User Customer should be using the same facility
that was used prior to the conversion. These conversions are required solely for puroses
of implementing a regulatory constrct and have nothig to do with improving or
otherse managing the customer's service - in essence, the conversion is intended to re-
label as somethg different what was before a UNE. These facts reinforce the need for
conversions to be transparent to the CLEC's End User Customers, as any disruption in
serce would be completely unexpected and diffcult to explain. In other words, even
though these conversions are being underaken to effectuate Qwest s reduced legal
obligations relative to UNEs, it is the CLEC who bears all the risk of failure. The Joint
CLECs, therefore, are highy motivated to ensure that conversions can be accomplished
seamlessly, reliably, efficiently and cost-effectively.
The Joint CLECs propose that, for a conversion from a UNE to a non-UNE
product or servce offered by Qwest, the circuit identification ("circuit il") will not
change. In addition, the Joint CLECs propose that, when Qwest convers a facilty to an
analogous or alternative servce arangement as a result of a non-impairment finding, the
27
conversion wil be in the maner of a price change on the existing records and not a
physical converion. Finally, the Joint CLECs propose that the rate Qwest charges the
CLEC to conver a UNE to a higher priced analogous or alterative serice be set to zero.
1. The Commssion should adopt processes that allow conversions to
occur seamlessly, reliably, efficiently and cost effectively.
Ths dispute applies to conversions from a UNE facilty to an analogous or
alterative serce arangement. These conversions would occur when there is
agreement, or it is deterined in dispute resolution, that the UNE is impacted by a
finding of non-impairment. Analogous or alterative servce arangements include
access products purchased from Qwests access tarff. For instace, a UNE DS1 loop
could be convered to a DS 1 special access circuit if it is deterined that the applicable
non-impairment thesholds are met for a particular wire center (see 47 CFR §
S1.319(a)(4)).
The FCC found that "as contemplated in the Act, individual carers wil have the
opportty to negotiate specific ters and conditions necessary to translate our rules into
the commercial environment, and to resolve disputes over any new contract language
arsing from differing interretations of our rules.,,42 Similarly, Qwest recently
challenged the Washington Utilities and Transportation Commssion ("WUTC") decision
in the Eschelon/Qwest arbitration 43 regarding ths very issue, UNE Conversions. The
WUTCfound,
42 TRO,'7.
In the Matter of the Petition of: QWEST CORPORATION and ESCHELON TELECOM, INC.
Pursuant to 47 U.S.C. Section 252(b), Docket No. UT-063061, see Exhbit 204.
43
28
As in our Final Order, we reject Qwests contention that we exceeded our
authority under Section 252 to address these issues. In that Order, we
followed the FCC's specific guidance to carers and state commissions to
address, through the Section 252 process, the transition from UNE
serces to non-UNE serices and establish any rates, ters, and
conditions necessar to implement the changes prescrbed by the FCC. As
envisioned by the FCC, we appropriately exercised our jursdiction to
provide CLECs a reasonable transition process away from UNEs and
ensure a seamless effect on serces provided to their end-users.
We believe that Qwest continues to exaggerate the distinction between
UNE and non-UNE ters and conditions. We reiterate the FCC's
conclusion, and our own, that the primar difference between the two is
the rate at which Qwest is entitled to bil for serices; a rate which was
formerly limited by TELRIC pricing. By overstating the distinction
between UNE and non-UNE ters and conditions, Qwest misinterrets
the basis and scope of our authority.44
Similarly, in a Minnesota docket regarding terms and conditions surounding UNE
Conversions the Commission found,
After briefing by all parties, the Administrative Law Judge found that this
Commission had jurisdiction in both cases. On the conversion issue, she
found as follows:
The Administrative Law Judge has concluded, based on the
provisions of the TRO and the TRRO, that the FCC has
expressly directed the negotiation of rates, terms, and
conditions relating to converion processes il
interconnection agreements, and consequently the
Commission has legal authority under § 252 to address
these issues in this docket.
The Commission has carefully examined the
Administrative Law Judge's recommended order and the
record on which it is based. Her recommended order is
44 Exhbit 204, WUC Order No. 19, Order on Reconsideration in the Eschelon/Qwest Arbitration,
Janua 30,2009, iM 20 - 21.
29
closely reasoned in its analysis and compellng in its
conclusions; the Commission wil accept and adopt it.45
When it has been deterined that a UNE facility needs to be convered to an
analogous or alterative servce arangement, CLEC and its End User Customer should
continue to use the same physical facility.46 Therefore, the change requied to effectuate
the FCC's regulatory requirements can be accomplished with a record-only change (i.e.,
changing the price of the UNE facility being convered to a non-UNE).
The conversions at issue are conversions from UNE to non-Section 251
alternative/analogous serice (e.g., access product). The "conversion" in this instace is
really a conversion from cost-based UNE prices (i.e., TELRIC based prices) to special
access prices (e.g., conversion from UNE rates for DS1 loop to access rates for DS1
special access circuit). However, since the physical facilty otherise remains unchanged
- indeed, the end user should not even know that it has been "converted" - no other
changes should be requied for conversion. Given that this re-pricing should not affect
the operation of the facility itself, Qwest should not be allowed to change the facility
curently being provided.
45 In the Matter of Qwest Corporation's Converion of UNs to Non-UN Es and In the Matter of
Qwest Corporation's Arangements for Commgled Elements, ORDER ADOPTING
ADMISTRATIVE LAW JUGE'S RECOMMENDED ORDER ON MOTION FOR
SUMARY DISPOSITION, Docket Nos. P-421/07-370 & P-421/07-371, March 23,2009, pp.
2-3. See Exhbit 20S.
Ms. Huncutt apparently agrees that the conversion process should be tranparent to the
customer. See Hunicutt Direct, p. 17, lines I-S.
46
30
The FCC addressed the issue of conversions in the TR047 and found that
conversions should be seamless from the end user's perspective, and should involve only
biling changes from Qwests perspective. At paragraph 586 of the TRO, the FCC
discussed the seamlessness of conversions:
Converting between wholesale serices and UNEs or UNE
combinations should be a seamess process that does not affect the
customer's perception of serce quality.
The FCC codified the requirement that conversions should be seamless from the
perspective ofthe CLEC's end user in 47 CFR §51.316(a) as follows:
(b) An incumbent LEC shall perform any conversion from a
wholesale serice or group of wholesale serces to an unbundled
network element or combination of unbundled network elements
without adversely affecting the serce quality perceived by the
requesting telecommuncations carer's end-user customer.
And at paragraph 588 of the TRO, the FCC addressed the notion that conversions are
biling changes:
588. We conclude that conversions should be performed in an
expeditious maner in order to miimie the risk of incorrect
payments. We expect carers to establish any necessar
timeframes to perorm conversions in their interconnection
agreements or other contracts. We decline to adopt AL TS' s
suggestion to require the completion of all necessar biling
changes with ten days of a request to perorm a conversion
because such time frames are better established though
negotiations between incumbent LECs and requesting carers. We
recognize. however. that convertg between wholesale servces
and UNEs (or UNE combinations) is largely a bilg function.
We therefore expect carriers to establish appropriate
mechanisms to remit the correct payment after the conversion
request, such as providing that any pricing changes star the next
biling cycle following the conversion request.
47 The TRO addressed conversions from UNs to wholesale servces and from wholesale services
to UNs.
31
It is clear from the languge above that the FCC's concer was directed at ensurng
proper payment for the facility, depending on whether it is a Section 251 UNE or a
wholesale serice (e.g., access product), and did not envision work or physical changes
on the ILEC's par leading to the potential for customer disruption.48
A circuit ID is just that, a number or code that identifies a specific circuit,
generally by defining its two end points - referred to as the "A" and "Z" location. Both
CLEC and Qwest use ths circuit ID thoughout their operational support systems to
identify that circuit for numerous activities including biling and repair matters. In the
vast majority of circumstances in which CLECs wil be required to conver an existing
circuit from a UNE to an alterative servce arangement, the physical facility need not
(and should not) change. As such, the circuit ID need not (and should not) change either.
This is important from Integra's perspective because Integra specifically tracks that
paricular facility and the customer it serves via the circuit ID. Numerous Integra
systems rely on that circuit ID in providing ongoing biling and customer serice to the
customer. To the extent Qwest is allowed to (a) unecessarly change the underlying
facility simply to effectuate what should be accomplished by a biling change and then
(b) assign a new circuit ID to the same arangement, Integra's systems wil be
substantially, adversely, and unnecessarly affected. Ths wil be accompaned by notable
cost and inconvenience. Likewise, unnecessarly re-aranging facilities puts the customer
48 The FCC did mention in paragrph 586 of the TRO that there may be an increase in the risk of
customer disruption caused by CLECs grooming inter-exchage traffic in order to comply with
the eligibilty criteria. However, ths potential for disruption stems from decisions made by the
CLECs, not Qwest. The fact that the FCC mentioned the potential for End User Customer
disruption caused by CLEC groomig, yet did not mention the possibilty for disruption caused
by Qwest (and indeed requires conversions to be seamess), indicates that the FCC never
envisioned the potential for Qwest-caused customer disruption because from Qwests
perspective, the conversion involves simply chaging the rate tht applies to the facility.
32
at risk of losing serice - a customer who never asked to be convered and should not
even realize that it happened.
Changing the circuit ID for a circuit that is already in place and working well for a
customer in connection with "converting" the circuit from a UNE to an alterative
arangement, signficantly increases the risk of customer disruption. For instance, Qwest
processes circuit ID changes using "disconnect" and "new" serce order. A simple
tying eror in an order could send the order to Qwest facilities assignent with a
"disconnect" on the order, and the customer wil be eroneously disconnected and put out
of serice. In addition, if records are not correctly and timely updated to show new
circuit IDs in either Qwest or CLEC systems, problems are likely to arise in the areas of
maintenance and repair. For example, if six months after the conversion, the end user
notifies the CLEC that its circuit is in need of repair, but the circuit ID is incorrectly
stored in either the CLEC or Qwest systems as a result of an unnecessar physical
conversion, it is likely that the CLEC and Qwest wil be unable to effectively open a
trouble-ticket. As a result, the repair fuction wil be delayed and is likely to require
substantial additional resources to resolve, as compared to a normal repair ticket. All of
ths can be avoided by makg sure that Qwest does not change circuit IDs for
conversions. When Qwest first convered special access circuits to UNEs, the original
circuit IDs did not change. To date Qwest has been unable to explain why the circuit ID
must be changed in the curent situation when no such change was required in previous
conversions.
33
Qwest contends that 47 C.F.R. § 32.12(b) and (c) requires Qwest to change the
circuit identifier.49 Ms. Hunicutt opines that "(iJn order to suffciently maintain its
subsidiar records to support its accounting for UNE serces versus its Private Line
serices, Qwest must maintain accurate circuit IDs that properly track circuits
separately." 50
However, the FCC provisions cited only require Qwest to maintain orderly
records with sufficient detaiL. The FCC does not prescrbe how Qwest is to use circuit
identifiers to maintain orderly records. Huncutt's conclusory statement that accurate
accounting and reporting requires changing circuit identifiers begs the question of
whether changing the circuit identifier is necessar. Presumably Qwest is able to
maintain orderly records for its QPP products without changing the circuit identifier of
the underlying line. As previously stated, prior to April 2005, Qwest did not require a
change to the circuit IDs when a CLEC requested a conversion from Private Line/Special
Access to an EEL. When Qwest implemented its new process to change the circuit ID,
CLECs were given the opportty to opt out of the changes to their embedded base of
circuits.51 When given this opportty all CLECs chose to opt out of this chage in
circuit ID, 52 because no CLEC wants to put its end user customers at risk, especially
when there is no change in the fuctionality of the circuit.
49
50
51
Huncutt Direct, p. 16, lies 3-S.
Huncutt Direct, p. 16, lines 22-2S.
See Exhbit 203, Qwest Response to Joint CLEC Data Request 01-022 in Arzona Wire Center
Proceeding.
See Exhbit 203, Qwest Response to Joint CLEC Data Request 01-023 in Arona Wire Center
Proceedig.
52
34
Conversions only apply to the facilities used by CLECs, and not facilties used by
Qwest, and therefore, Qwest s retail customers would face none of the risks that are
inherent in Qwests proposal to change circuit IDs durng conversions. The FCC
recognzed this ver point when addressing conversion charges in paragraph 587 of the
TRO:
Because incumbent LECs are never required to perorm a
conversion in order to continue serng their own customers, we
conclude that such charges are inconsistent with an incumbent
LEC's duty to provide nondiscrminatory access to UNEs and
UNE combinations on just, reasonable, and nondiscriminatory
rates, ters, and conditions.
The FCC was speakg to conversion charges that ILECs may attempt to assess,
but the same reasoning holds tre with respect to circuit ID changes. Qwest is never
required to perform a conversion in order to continue serg its own customers, and
therefore, Qwest s proposal to change circuit IDs for conversions to CLEC circuits:
increases the risk for CLEC customer (not Qwest customer) disruption; underines the
FCC's requirements for seamess conversions; and fails to comply with Qwest's
obligation to provide access to UNEs on just, reasonable, and nondiscriminatory rates,
ters and conditions.
If Qwest changes circuit IDs for conversions, the Joint CLECs wil be forced to
modify its systems and its records to account for the new circuit ID. Qwest complains
about purorted costs that it would incur to leave the circuit ID unchanged, but ignores
the costs imposed on CLECs by changing the circuit ID for the same facility.
2. The 90-day transition period to convert from UNEs to an alternative
facilty is not suffcient.
35
Until the Commission issues its order, the non-impairment designation of a wie
center and effective date can not be known with cerinty. It would be inefficient and
potentially costly for CLECs to begin transition plans for wire centers that may not end
up being classified as non-impaired. Once a designation has been ordered, then impacted
circuits must be identified. The task of identifyng impacted circuits can be diffcult and
time consuming for both Qwest and CLECs.53 For example, in Arzona, on multiple
occasions, Qwest sent Integra a list of what it claimed were non-impaired circuits that
contained hundreds of erors.
Once circuits are identified, the CLEC needs to put together a plan for
transitionig away from UNEs that are no longer available. Ths may involve a transition
of convering circuits to an alterative serce or product offered by Qwest. When
placing a large number of orders involving Qwest circuits, CLECs coordinate the project
with Qwest. Given resource availability and the tye of conversion, there may be limts
to the number of circuits that are processed in a given day. Typically, in Integra's
experience, no more than 20 circuits can be converted in a given day. Both CLEC and
Qwest resource limitations can delay the time that it takes to complete a conversion.
Conversions may also be more complex than switching to another Qwest product.
The CLEC may deterine that adding equipment to an existing collocation wil allow the
CLEC to sere existing customers in an alterative maner. New equipment needs to be
purchased, instaled and tested before orders can even be placed to convert circuits to use
the new equipment.
53 See the discussion above regardig diffculties in validating Qwests non-impaired circuit list.
36
The CLEC may deterine that installation of a new collocation is waranted to
deal with impacted circuits. A new collocation can eliminate the need for EEL transport.
Qwest takes up to 125 days to install a new collocation for a CLEC.54 Collocations do
not come with working equipment. In addition to waiting for Qwest to install the
collocation, the CLEC needs to purchase, install and test equipment that will be put into
the collocation to sere customers. Once the new collocation is working with CLEC
installed equipment, the CLEC can sta placing orders to conver circuits to use the new
collocation space.
For the reasons outlined above, for single wie centers, ths Commission should
establish a transition perod of a year, or at least six months as was used by the FCC in
the Omaha Forbearance Order.
55 When multiple wire centers are involved (impacting
multiple high capacity transport routes or high capacity loop circuits in multiple offces),
a one year transition perod, as was used by the FCC in the TRRO 56 would be more
practical.
3. Qwest should not charge CLECs to convert UNEs to higher priced
alternative facilties sold by Qwest.
Qwest s petition in this case seeks to invoke a signficant benefit for Qwest:
fuer deregulation of two wire centers in Idaho. Such a deregulation removes cerain
54 See Qwests Servce Interval Guide, p. 43
(http://ww.gwest.com/wholesale/downoads/2009/090413/InterconnSIG PV95.doc).
Omaha Forbearance Order (Memorandum Opinon and Order FCC 05-170, WC Docket No. 04-
233, September 26, 2005), , 74.
TRRO, , 5. Note that the FCC set an 18-month trition period for Dark Fiber Tranport. In
the Omaha Forbearance Order (Memorandum Opinon and Order FCC 05-170, WC Docket No.
04-233, September 26, 2005) the FCC established a six-month transition period for carers to
establish alterntive arangements.
55
56
37
protections and rights afforded to CLECs under the Act. Qwest now seeks to add insult
to that injur by charging CLECs a fee for losing those protections.
Qwest has failed, however, to provide any substantial evidence in support of its
fee. Nowhere does a single Qwest witness provide any support for the $25 per circuit
charge other than to point to a tarffed rate for a different product, the design change
charge. Any rates established before the Commission must be just and reasonable and
clearly there has not been such a demonstration of serice costs. There canot be an
assumption that Qwest has met, or even proffered, cost analyses it alleges competitors
must pay. Furher, ths Commission should not be expected to guess about such a
signficant impact effecting customers, simply because Qwest assers there is was a
settlement in some other jursdiction. This Commission shoUld not accept Qwest
unsupported assertions which are not tied to the facts and circumstances in Idaho.
Qwest is clearly the cost-causer for the conversion of Qwest s circuits. Qwest has
asked for a finding that cerain wire-centers are non-impaired. Such a ruling would
perit Qwest to stop offerng cerain facilities as UNEs, but it would not require Qwest
to do so or to make any other changes to pricing or availability to CLECs. The
"conversion" is entirely interal to Qwest - it is a change from one biling system to
another. The FCC has already wared against ''wastefu and unecessar charges"
assessed by the ILECs as competition develops. Similarly, the Colorado Commission
found that Qwest was the cost-causer of any such charges and that they should not be
assessed on CLECs.57
Paricularly in light of Qwests failure to provide substantial evidence for any
paricular rate (much less $25 per conversion), and because the charge is optional for
57 See Exhbit 202.
38
Qwest, this charge - a pure windfall for Qwest, on top of the benefits it would already
derive from the dereguation -- falls squarely withn the admonition of the Eighth Circuit
Cour of Appeals when it provided guidance on how utility commissions should interpret
the Act:
It is undisputed that Congress passed the Act with the intention of
eliminating monopolies and fosterg competition. . . . ths general
intent should guide our consideration of competing interretations
of the Act. Such guidance suggest that we should be wary of
interpretations that simultaneously expand costs for competitors
(such as a requirement for direct connections) and limit burdens
on incumbents (such as a limitation of dialing party to local
exchange boundares). If a cost is imposed on a competitor, it
becomes a barrier to entr and rewards the company who
previously benefited/rom monopoly protection.58
The conversion charge Qwest is proposing is expressly precluded by ths gudance: it
expands costs for competitors to the benefit of the incumbent. The Commission should
adopt this gudance, and as Qwest has presented no compellng case to the contrar,
should find that no conversion charge is appropriate on ths record.
The Californa Public Utilities Commssion found many of the concers
mentioned suffcient to prohibit the ILEC from assessing charges for converting UNE
circuits to special access. The California Commssion explained:
We concur with the FCC's finding in ir 587 of the TRO . . . that
because ILECs are never required to pedorm converions in order
to continue sering their own customers, such charges are
inconsistent with Section 202 of the Act, which prohibits carers
from subjecting any person or class of persons to any undue or
uneasonable prejudice or disadvantage. In the following
paragraph, the FCC also reiterates that the conversions between
wholesale serces and UNEs are 'largely a biling fuction.'
Given the FCC's fiding cited above, it is inappropriate to charge a
nonrecurng charge for record changes. Therefore, we conclude
58 WWC License v Boyle, 459 F. 3d 880,891 (8th Cir. 2006) (emphasis added).
39
that no charges are warranted for conversions and transitions
that to not involve physical work. . . . 59
The Colorado Commission also found, citing the ALJ's conclusions below, that Qwest
canot charge for conversion ofUNEs to private lines.6o
A well-recognzed regulatory principle is that the cost causer
should be required to bear the resultig cost. If cost causation is
impossible to deterine, then costs should be borne by the
beneficiar. There has been no showing that CLECs caused any
required change to continue their existing serice and that no direct
benefit wil be derved by any change required. Rather, the
conversion of serices exposes only CLEC customers to potential
risk of servce disruptions durng transition. The evidence is
unebutted that Qwest, at least initially, is the beneficiar of lesser
regulation from the FCC's deterination that a marketplace is non-
impaired. It is also unebutted that a non-impairment
deterination wil signficantly increase Qwest competitors'
recurng charges. It has not been shown that Qwest s initially
increased revenue from ths extraordinar event wil not recover
transition costs.
Qwest has not demonstrated that the NRC should be recoverable
from CLECs or that costs must be recovered from a conversion
charge. Because UNE-P conversions are caused by Qwest, or the
FCC to the benefit of Qwest, to the detrment of CLECs, it is just
and reasonable that Qwest bear the cost of transitioning in the most
effcient means. In any event, Qwest has not justified imposition
of the NRC as a direct conversion cost. 61
D. MISCELLANEOUS ISSUES RELATING TO PROCESSES FOR
FUTURE NON-IMPAIRMENT DESIGNATIONS.
59 Application of Pacifc Bell Telephone Company, d/b/a SBC California for Generic Proceeding
to Implement Changes in Federal Unbundling Rules Under Sections 251 and 252 of the
Telecommunications Act of 1996, Decision Adoptig Amendment to Existing Interconnection
Agreement (Jan. 26, 2006) (CA Arbitration Decision) at 35 (emphasis added).
Colorado Order on Exceptions, , 62, fmding, "we agree with the ALI's reasonig on ths issue.
A non-impaient determination will aleady signficantly increase the recurng chages paid
by CLECs to the benefit of Qwest. We fid no reason to requie an additiona non-recurg
chage." Exhbit 202.
Colorado ALJ Order in TRRO Docket 06M-080T, Decision No. R08-0164, " 116-117 Exhbit
202.
60
61
40
1. Qwest should provide information to CLECs about wire centers that are
near non-impairment status.
Because Qwest is reviewing its own data on at least an anual basis to deterine
whether additional wire center meet the FCC's non-impaient thresholds, Qwest
should provide information to CLECs regarding wire centers that are near a non-impaired
theshold. Qwest should notify CLECs anually of all wire centers with 5,000 business
lines of 24,000, 38,000 or 60,000 switched business lines. In addition, Qwest should
notify CLECs of wire centers when they are within one fiber-based collocation of
reaching Tier 2 statu. By providing this information, both Qwest and CLECs wil have
access to similar market information regarding the potential for futue non-impairment
determinations and CLECs wil be able to take ths information into account when
formulating their business plans, as Qwest can do today.
Qwest has historically provided CLECs with notice and the opportty to
dispute, when Qwest plans to request a change to a wire center non-impairment
designation based upon a CLEC has a fiber-based collocation.62 The Joint CLECs
propose steps to be included in Qwest s process to ensure that the notice and opportty
to dispute serves its purose. First, Qwest should ensure that the proper individuals at a
CLEC are informed of Qwests reliance on the CLEC's collocation. Ths can be done by
sending the notice to at least those persons identified by a CLEC to receive
interconnection agreement notices. Second, Qwest should not only inform CLECs of its
reliance upon their collocation but also when it intends to rely upon CLEC switched
business lines as par of a request for a change in non-impairment designation. In so
62 Though ths is a term of the Five-State Settlement Agreement, Qwest provided ths notice with its
intial non-impaired wie center lists in 2005, before the agreement. In addition, Qwest provided
notice as par of ths case in Idao (see Torrence Direct, p. 16, lies 6-11).
41
doing, Qwest should include the specific line counts on which it relies. Ths wil help
ensure that CLECs are informed of Qwest s reliance on their data and increase the
likelihood that a CLEC wil have the opportnity to review and validate its own data
upon which Qwest relies.
The Colorado Commission upheld its ALl finding that Qwest should provide
notice to CLECs as wire centers near a non-impairment theshold.63 The ALl in
Colorado found,
Changes in costs wil affect CLECs' business plans. Collocation
builds are expensive and time consuming. The expected retu
from a collocation will be dramatically lower if high-capacity
loops, UNEs, or UNE transport were suddenly to become
unavailable. Uncerainty as to futue UNE availabilty wil also
affect CLEC investment in facilities. Providing CLECs with
information on the statu of wire centers with respect to business
access lines and fiber-based numbers wil allow them the
maximum opportty to rationally plan futue investment. 64
2. Qwest should provide notice to CLECs that it plans to rely on that
CLEC's data.
Providing CLECs with an opportty to review, and either confirm or dispute
their status as a fiber-based collocator is crcial in the process for deterining futue non-
impaired wire center designations. Based on responses provided by CLECs in other
states, Qwest has revised its fiber-based collocation count.65 Providing a CLEC with
notice that its data is being relied upon is important. Ths gives CLECs an incentive to
paricipate in the case, understand that their customer may be impacted by a change in a
63
64
6S
Exhbit 202, Colorado Wire Center Docket, Colorado Order on Exceptions, ir 66.
Id., Colorado Wire Center Docket, Recommended Order of the AU, ir 121.
The specifc responses are confdentiaL.
42
wie centers non-impaient designation, and potentially provide information that can
narow disputes regarding future designations. The Joint CLEC concers about the
process had to do with Qwest s lack of effort in solicitig a response, rather than with the
concept of providing notification. In response to the issues identified, the Joint CLECs
recommend (1) that Qwest expand the list of individuals at a company to whom it
provides notice that it intends to rely upon a CLEC's fiber-based collocation by including
at least the contacts identified by each carer for interconnection agreement notices and
those on the service list in wire center proceedings if a proceeding is pending; and (2)
Qwest send a follow up notice to the CLEC if it fails to receive a response verfying or
disputing that it is a fiber-based collocator.
As with the fiber-based collocation notice, notifyng CLECs that Qwest intends to
rely upon their business line counts may encourage CLEC paricipation and help narow
future disputes. For example, each CLEC only has the ability to review Qwests count of
its own business line count data. CLECs are not provided with the names of other
carers doing business in a wire center. Allowing other CLECs to know that their
information is being relied upon and specifically what information is being relied upon
(i.e. that CLECs specific line counts) may facilitate review of Qwests data and lead to
fewer disputes and quicker resolution of Qwests futue requests for non-impairment
designations.
III. CONCLUSION
The Joint CLECs intend to present testimony consistent with the views expressed
herein and wil request that the Commission issue an Order:
43
1. Rejecting Qwests request to change the impairment status of
Boise Main with regard to DS3 Loops;
2. Reject Qwests request to adopt the ters of the Five-State
Settlement Agreement with regard to the resolution of issues and
ongoing processes for implementing the TRO and TRRO decisions
with regard to impairment findings;
3. Reject Qwests proposal to change the circuit il from a UNE to an
alterative Qwest serice;
4. Reject Qwests proposal for a 90-day trsition perod for
conversions from UNEs to alterative Qwest serices;
5. Reject Qwests proposal for a $25 per circuit non recurrng
conversion charge;
6. Require Qwest to provide information to CLECs going forward
about wire centers that are nearng non-impairment status and
effectively to inform CLECs that the CLECs information will be
relied on by Qwest for a non-impairment petition; and
7. Such additional relief that it appropriate based on the law and the
evidence presented at the hearng in ths matter.
44
Dated ths 15th day of June 2009.Respectfuly Submitted,
360networks (USA) inc.
By
Michel Singer Nelson
Integra Telecom, Inc.
By
45
CERTIFICATE OF SERVICE
I do hereby certify that a tre and correct copy of the foregoing 6 r ie.;f
the \ S"Òday of :SVo-.. , 2009 on the following individuas:
was sered on
Jean D. Jewell
Idaho Public Utilties Commssion
472 West Washigton Street
P.O. Box 83720
Boise, il 83702
Telephone [phone]
Facsimle: [phone]
jj ewelltIuc.state.id. us
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U. S. Mail
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Facsimle
-l Email
Weldon Stutzan
Deputy Attorney General
Idaho Public Utilities Commssion
472 W. Washigton
PO Box 83720
Boise, ID 83720-0074
Email: Weldon.StutzmantIuc.dao.gov
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U. S. Mail
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ï7 Emal
Douglas K. Denney
Director, Costs & Policy
Suite 900
730 Second Avenue South
Minneapolis, MN 55402
E-mail: dkdeneyßintegratelecom.com
-i
:=
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Email
Mar S. Hobson (ISH. No. 2142)
999 Main, Suite 1103
Boise, il 83702
Tel: [phone]
mar.hobsonßYqwest.com
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iZ Email
Alex Duare
Corporate Counsel, Qwest
421 Sw Oak St, 810
Portland, OR 97204
Tel: [phone]
Alex.DuareßYqwest.com
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46
· j , l'
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