20011130Proposed Order.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE JOINT PETITION OF ROBERT RYDER, DBA RADIO PAGING SERVICE, JOSEPH MCNEAL, DBA PAGEDATA AND INTERPAGE OF IDAHO, FOR A DECLARATORY ORDER AND RECOVERY OF OVERCHARGES FROM U S WEST COMMUNICATIONS, INC. ))))))) CASE NO. USW-T-99-24

HEARING EXAMINER’S PROPOSED ORDER

Currently before the Hearing Examiner is the determination of the amount of credits due to petitioners in these proceedings for amounts that the Idaho Public Utilities Commission found to be improperly charged by Qwest (“respondent”) for facilities and services acquired under retail tariff prior to the effective date of interconnection agreements under the Telecommunications Act of 1996.

PROCEDURAL BACKGROUND

The current phase of these proceedings arises pursuant to this Commission’s December 20, 2000 Order No. 28601 under this case number. Order No. 28601 held that the petitioners are entitled to recovery for facilities that should have been provided free of charge under the authority of the FCC’s TSR Wireless Order. The initial petitioners were: (a) Robert Ryder d/b/a Radio Paging Service (“Radio Paging”) and (b) Joseph McNeil d/b/a Page Data and Interpage of Idaho (“PageData,” “Interpage,” or “PageData/Interpage”). They were joined by Tel-Car, Inc. (“Tel-Car”), whose intervention the Commission allowed by Order No. 28282 on February 9, 2000.

The charges for which the petitioners sought reimbursement include the following specific items under the U S WEST Exchange and Network Services Tariff, Section 20. Facilities for Radio Carriers:

Dedicated transport and channel facilities under Section 20.1.D.4.a(1)
Dedicated transport under Section 20.1D.4.b
Channel performance under Section 20.1D.4.c
Connectivity under Section 20.1.D.4.d
Dial outpulsing under Section 20.1.D.4.e

This Commission ruled in Order No. 28601 that certain reimbursement was required under the law as interpreted by the U. S. Federal Communications Commission (“FCC”) in the TSR Wireless Order. This Commission cited the following specific provision of the TSR Wireless Order as supporting recovery by the petitioners:

Since the [local] traffic must be delivered over facilities, charging [paging] carriers for facilities used to deliver [local] traffic results in those carriers paying for LEC-originated traffic and would be inconsistent with the rules. Moreover, the [Local Competition Order] requires a carrier to pay for dedicated facilities only to the extent it uses those facilities to deliver traffic that it originates.

Relying upon the provisions of Idaho Code § 61-642, which limit recovery to three years, the Commission concluded in Order No. 28601 that petitioners’ recovery period could not extend back more beyond September 24, 1996, or three years prior to the September 24, 1999 initiation of the action seeking relief. The Commission further concluded that Tel-Car and Interpage, which never entered interconnection agreements with Qwest, would be entitled to recover through the September 24, 1999 date of the complaint filing. However, Radio Paging’s recovery period would end on the date on which its interconnection agreement with Qwest was approved, which was May 13, 1999. Page Data’s recovery period would end on September 10, 1999, which is the effective date of its interconnection agreement. The operations of Page Data and Interpage were merged and both operated under the September 10, 1999 interconnection agreement. Interpage’s recovery end date was later changed by Commission Order No. 28626 (February 5, 2001) to match the September 10, 1999 recovery-period end date for Page Data. Order No. 28626 also required that interest be applied to the amounts to be credited, at the rate of 6 percent for credits accumulated for 1996 and 1997 and at the rate of 5 percent for credits accumulated during 1998 and 1999.

On March 29, 2001, the Commission issued Order No. 28683, appointing the undersigned as Hearing Examiner for the purpose of deciding the remaining issue in this case, which is the amount of credits due to petitioners. Pursuant to a June 1, 2001 Notice of Hearing, a procedural schedule was set, and hearings were held on July 24 and 25, 2001. Shortly after the filing of briefs, respondent’s counsel advised that the FCC had very recently issued a supplemental order related to the TSR Wireless decision, and that this supplemental order addressed legal issues relevant to deciding this case. The parties were given until October 22, 2001 to brief those issues. This Proposed Order addresses the amount of credits that Qwest should apply for the benefit of the petitioners.

Questions Presented

The evidence and argument of the parties present the following questions to be answered in deciding the amount of credits to which the petitioners are entitled:

On what date do the petitioners’ entitlements to credits begin?

For what facilities or services are petitioners entitled to receive credits?

Is PageData/Interpage entitled to reimbursement for frame-relay facilities that it ordered in response to reliability problems it was having in serving customers during the recovery period?

Is it proper for Qwest to exclude from credits charges that apply to transit traffic, which consists of traffic that originates on networks other than its own, but that Qwest’s network delivers to the networks of the petitioners?

If transit-traffic charges are proper, what is the proper measure of the amount of such traffic?

What amounts have petitioners been billed and what amounts have they paid for services for which credits are properly due?

Do petitioners have a right to a single point of connection with Qwest under conditions that require the refund of historical charges related to facilities in excess of the 20 miles in length that Qwest used as a proxy for toll-buy-down facilities?

What interest rate(s) should apply to the credits due to petitioners?

Summary of this Proposed Order

This proposed order recommends that the Commission answer the material questions in the following fashion, in resolving the issue of the amount of credits due petitioners.

Petitioners’ recovery period should begin on November 1, 1996, which is the effective date of the FCC’s First Report and Order. The TSR Wireless Order confirms that it was this order that gave rise to the credit obligation. Before that date, the retail tariffs under which petitioners acquired the facilities or services at issue were the determinant of the propriety of charges made.

Petitioners are entitled to receive credits for charges made in connection with facilities and services necessary for interconnection, which excludes charges for retail services for other purposes, such as two-way voice lines and 800 numbers. The petitioners who alleged that none of their reimbursable payments to Qwest were for services other than interconnection failed to support those claims beyond bare mere assertions as to their nature. They failed as well to provide substantial evidence to show that all charges for which they sought reimbursement were for dedicated transport and channel facilities under Section 20.1.D.4.a(1), dedicated transport under Section 20.1D.4.b, channel performance under Section 20.1D.4.c, connectivity under Section 20.1.D.4.d, or dial outpulsing under Section 20.1.D.4.c of the U S WEST Exchange and Network Services Tariff, Section 20. Facilities for Radio Carriers. Moreover, the evidence of record regarding the nature of petitioners’ operations and networks and the billing information maintained and recapitulated in exhibits presented by Qwest adequately demonstrates that Qwest did make charges during the petitioners’ recovery periods for facilities and services associated with uses not necessary for traffic delivery, but also useful for other purposes, and therefore not subject to crediting obligations.

The evidence shows that PageData/Interpage ordered a frame-relay system to transfer to Qwest maintenance responsibility that the petitioner found unduly burdensome to meet under the terms and conditions pursuant to which it had acquired certain leased facilities under retail tariffs. The evidence also showed that the frame-relay system was intended to serve petitioner purposes not necessary for interconnection. It would not be appropriate for petitioners retroactively to redefine their historical interconnections with Qwest as if they were made under requirements existing after the FCC’s First Report and Order interpreting and imposing ILEC obligations applicable to interconnection with other carriers of local traffic. The Petitioner also did not establish that the frame-relay system acquisition violated Qwest’s retail tariff or that it was unnecessary but for improper conduct by Qwest.

There is no doubt that the FCC allows charges for transit traffic as Qwest defined it in its credit calculations. Qwest established that it does not receive compensation from others for the facilities in question; moreover, it should not bear the sole burden or risk of locating, billing, and collecting from initiating carriers, such as those here, who use its system for transit for the benefit of petitioners, whose networks lie at either end of Qwest’s delivery facilities and who gain the economic advantages that arise from such traffic.

Qwest’s substantial and credible evidence supported the reasonableness of the estimate of the magnitude of transit traffic on which it based its credit calculations. Petitioners’ objections to Qwest’s evidence sprang from an incorrect definition of such traffic for current purposes and they failed to present their own credible evidence of the amount of such traffic. Moreover, the FCC has specifically authorized the very method used by Qwest here to estimate and to bill for such traffic in calculating refunds to paging companies for delivery of transit traffic.

Qwest provided the more credible evidence of the amounts billed to and paid by petitioners. Qwest’s billing and payment evidence: (a) came with support for its sources, (which are the systems it routinely uses to measure, bill, and credit customers), (b) was carefully prepared, (c) was adjusted as Qwest developed more information to make appropriate calculations, (d) was made available in sufficient detail to allow petitioners to contest any billing element for any month in the recovery period, and (e) applied a series of explained and proper methods. Petitioners’ evidence of billing and payment, which was not well supported or capable of similar levels of verification, was not sufficient to demonstrate its reliability, when contrasted with Qwest’s evidence. However, Qwest failed to match the billing and credit periods precisely, which requires a pro rata adjustment to increase its credit calculations.

The TSR Wireless Order did not conclude that past billings should be credited as if interconnection had existed in some form other than it actually did. It only said that the delivery of one-way traffic to paging companies does not require separate compensation. What hypothetically might have been interconnection points in the past under other forms of interconnection, whether otherwise allowable or required or not, have no bearing on the issue of credits for past charges. As the FCC has specifically allowed, Qwest proposed not to credit charges associated with such toll buy-down efforts, from which Petitioners benefited by producing reductions in the charges of those who placed calls to Petitioners’ paging customers. Qwest’s unrebutted evidence adequately demonstrated that 20 miles represents a reasonable break point for determining the boundaries of local calling areas across its 14-state system. The record does not show that the 20-mile factor matches Idaho circumstances; however, it is reasonable to apply the factor here to determine which facilities should be considered as those used to avoid toll charges, to the benefit of petitioners’ businesses, in light of two conclusions supported by the record: (a) petitioners made no attempt to challenge it, and (b) because Qwest faced the need to negotiate with carriers across its entire region, administrative efficiency supports the use of a region-wide factor in the absence of petitioner challenge.

The Commission has already determined that the applicable interest rate is 6 percent for amounts that accrued during 1996 and 1997 and that 5 percent is the applicable rate for amounts that accrued during 1998 and 1999. The amounts credited with the higher rate accrued for a longer period, which makes a simple average rate inappropriate. Qwest should accrue the credits in equal monthly amounts and apply interest on them (at the correct rate for the time period involved) for each month from accrual to the date when Qwest applies credits to petitioners’ accounts.

SUMMARY OF THE EVIDENCE

Billing and Payment Evidence

Radio Paging Service
Robert Ryder, the owner, testified that the business operates from 506 South Fifth Street in Boise, and that it provides service in Southern Idaho and Southeastern Oregon. (Transcript page 99) Qwest interconnects with Radio Paging at the Fifth Street office. From the terminal on Radio Paging’s side of the connection point with Qwest, the paging business broadcasts signals for receipt by the devices used by paging customers. (Transcript page 100-1) Mr. Ryder testified that Radio Paging’s serving area goes as far east as Burley, but not quite to Idaho Falls, and that he has another terminal in Twin Falls.

This petitioner is seeking recovery from the period of September 24, 1996 through May 13, 1999. Mr. Ryder objected to Qwest’s use of November 1999 as the first month for which billings were recalculated. (Transcript page 102). The witness tabulated billings from Qwest, which may be found in Petitioners’ Exhibit 103. During the recovery period, Mr. Ryder testified, Radio Paging’s billings from Qwest were a uniform $1,811.67 per month, all of which petitioner paid to Qwest. Multiplying the monthly amount by the 33-month recovery period would produce a total of $59,785.11. He seeks recovery of that entire amount. (Transcript pages 103 and 104)

Mr. Ryder testified that he stopped paying all bills to Qwest, but did not know when he did so. (Transcript page 120). He testified that he also stopped paying for his ordinary business telephone lines. He said that he has difficulty in determining what portion of his total bills from Qwest represented transport charges, because they varied over time. (Transcript page 121)

Tel-Car, Inc.
The business owner, Arden G. Casper, testified that Tel-Car provides paging, cellular, and two-way answering-service communications, serving Southern Idaho and interconnecting with Qwest at Meridian, Twin Falls, and Pocatello. (Transcript pages 131 and 132) Mr. Casper testified that he was largely in agreement with the billing amounts shown on Exhibit 104, which provide Qwest’s calculations of amounts billed, paid, and to be credited. He would, however, add to Qwest’s amount another $5,000 to 6,000 that Qwest deducted as relating to facilities in excess of 20 miles (see the toll buy-down issue addressed later in this proposed order). He also objected to Qwest’s credit-period start date of November 1996; he said that the use of a more appropriate September 24, 1996 start date would make it necessary to add two monthly bills (for September and October of 1996), which he said were $992.30 each. (Transcript pages 133 through 135). He presented Exhibits 104 and 105, which he said came to him from Qwest. The first shows billed amounts of $68,833 and the second shows $56,885. He was concerned about what to make of the discrepancy in these amounts. (Transcript pages 137 and 138)

PageData/Interpage
Joseph McNeal, the owner, testified that his business carries paging traffic, signal traffic, e-mail, data, and Internet traffic, all of which goes over the facilities that he says should be available for no separate charge. (Transcript page 199) Already the owner and operator of PageData, he acquired Interpage’s paging-service accounts with Qwest. The operations of the companies were then merged. (Transcript page 150) The purpose for buying Interpage was to get the credits due for transport charges that he knew were coming from Qwest. “Otherwise, it [the purchase] wasn’t a good deal,” as he put it. (Transcript page 218)

Petitioner’s Exhibit 109 presents a list, which his accountant assembled, of accounts to be credited. Mr. McNeal testified that the exhibit includes accounts paid to Qwest by PageData and Interpage. (Transcript pages 152 and 153) The exhibit shows a line called “Other Accounts” “Approx Amount paid by PageData,” which lists an entry of $60,000. The amounts listed above this entry on Exhibit 109 represent the Interpage accounts. This list was prepared as a starting point for negotiations with Qwest about credits under the TSR Wireless Order. (Transcript pages 153 and 154) He testified that his business later provided Qwest with a more precise list of charges billed to PageData; i.e., $52,282.47, if, as he put it, “I am not mistaken.” No documents were provided as part of his direct testimony to support this revised amount. (Transcript page 154)

Mr. McNeal did not provide a responsive answer to a question about how he established that his Exhibit 109 list of billed amounts were all actually paid. He said that he did not use canceled checks to create the list, but testified when first asked about them that he could probably get them. (Transcript pages 200 and 201) He testified that his reason for knowing that the payments were made is because his accountant, on whom he depends, gave him the information that is shown in Exhibit 109. He further testified that he would be guessing to say what backup information supports the entries on Exhibit 109. (220) He also testified that he did not get access to bank accounts because of lawsuits involving the former owners of Interpage. When asked again about the canceled checks, he agreed to look for them, but he said that he doubted that he would be able to find the bank records of payment. (Transcript page 222) On the second day of hearings, Mr. McNeal introduced an exhibit consisting of a number of data runs from the accounting systems of the two businesses. However, he testified that he had no access to the Interpage canceled checks that would demonstrate payment to Qwest. (Transcript page 550)

Qwest
Qwest witness Sheryl Fraser presented Qwest’s evidence of billings to Radio Paging as part of Respondent’s Exhibit 201. Qwest prepared analyses of its billings to all paging carriers in its 14-state region, in order to support negotiations over the transport charges to be credited under the TSR Wireless Order. (Transcript page 317). Qwest provided its calculations for the petitioners in these proceedings as:

Exhibit 201 (Radio Paging)
Exhibit 202 (Tel-Car)
Exhibit 203 (PageData/Interpage).

Qwest started its credit recalculations from November 1996, in order to make the recovery period consistent with the effective date of the FCC’s 1996 First Report and Order addressing interconnection obligations under the Telecommunications Act of 1996. (Transcript page 318)

Exhibit 201, which addresses the recalculations for Radio Paging, exemplifies the method that Qwest applied to all the petitioners. Qwest demonstrated in all three exhibits that it used a consistent approach and evidence in support of its calculated credits for each petitioner. The following discussion, while focusing on Exhibit 201, is equally applicable in the cases of Exhibits 202 and 203 in terms of the kinds of information extracted and provided, and in terms of the calculations performed by Qwest.

The first page of Exhibit 201 sums the billings for the customer involved, commencing with November 1996 and ending with the termination of the recovery period (e.g., when an interconnection agreement became effective). The periods covered also reflect whether billing was made in advance or not, in order to match credits to the period for which they were due. (Transcript page 320) The credit and billing periods, however, do not necessarily match to the day. For example, in the case of Radio Paging, Qwest used the customer’s billing date of the 10th of the month. Therefore, the start date for Qwest’s calculations was November 10, 1966, not the November 1, 1996 effective date of the FCC’s order. The end date of the billing period used by Qwest for Radio Paging on Exhibit 201was May 9, 1996, because Qwest used the April 10 Radio Paging bill, which covered the period through May 9, 1996. Radio Paging’s Interconnection Agreement became effective on May 12, 1999. (Transcript pages 320 and 321)

The billing information shown in Qwest Exhibits 201 through 203 comes from IABS, except for certain PageData/Interpage information. IABS is the system that Qwest uses to bill wholesale customers; retail customer accounts reside in a different system. (Transcript page 321) As noted below, except for a portion of the PageData/Interpage billings, IABS is the relevant system for the petitioners. The first set of billing entries on the first page of Exhibit 201 breaks out the local and non-local facilities (based on the 20 mile break-point discussed under the toll buy-down issue below). The Qwest recalculations treated facilities of over 20 miles in length as toll-buy-down facilities, which Qwest did not qualify for crediting. The second group of entries include among other things amounts billed for DID number activation and credits given after the FCC determined that such billings were not appropriate. The fourth and fifth columns show the taxes and late payment charges billed; Qwest’s calculations credited those charges as well. Each of the three exhibits includes a multi-page list of each individual billing element to which Qwest applied a rate for each month during the credit period. These entries form the elements of the billings for local and non-local interconnection facilities shown on the first page of the exhibit. (See, for example, pages 2 through 7 of Exhibit 201 and transcript page 329) From these detailed entries, a customer can look at billing information on a very detailed basis. The entries are in essence the building blocks from which bills are routinely formed for these and other Qwest customers. Qwest also used them to calculate credits.

The exhibits also contain an informational page that shows the customer invoice numbers, bill dates, bill charges, late payment charges, payment dates and amounts, and billing adjustments. (Page 8 of Exhibit 201 and transcript page 330). This information would allow the petitioners to cross check their billing and payment records against Qwest’s on the same monthly basis on which the petitioners were billed.

The exhibits also contain a page showing all of the applicable taxes; this detailed information comprises the “Total Taxes” column of the first exhibit page. (Exhibit 201 page 9 and transcript page 330). The exhibits also contain a page showing the detailed components of the late charges (“LPC”) column of the first page. This page also shows the detailed payment information used to show net amounts owing after recalculating bills. (Exhibit 201 page 10 and transcript pages 330 and 331) This information also came from the company’s normal billing systems. (Transcript page 332)
The payment for the first month of the recalculation period was excluded from the total of payments made, on the logical assumption that it was for services in October, which predates the credit period as Qwest determined it (based on the effective date of the TSR Wireless Order). However, the same logic compels the addition of payments for the first month after the end of the period, which Qwest did not do. (Transcript page 331) Qwest’s witness Fraser conceded the need to consider additional payments after the end of the crediting period. She noted, however, that in the case of Tel-Car there was no such payment the next month. (Transcript page 344) She later confirmed that Qwest did inappropriately fail to consider additional payments for Radio Paging, which would increase to $52,429.30 the total payment amount (of $50,034) shown in the “Rerate Information” section of the first page of Exhibit 201. This more appropriate payment amount is reflected on page 8 of Exhibit 201. (Transcript page 349) She testified that there need be no additional payments considered in the case of PageData/Interpage, because they had stopped making payments to Qwest by the end of their credit period. (Transcript pages 363 and 364)

The exhibits also contained worksheets (Pages 11 and 12 of Exhibit 201 and transcript pages 331 and 332) showing and accounting for all billing adjustments during the credit period. This information came from the company’s normal billing systems. (Transcript page 332)

The exhibits also contained worksheets showing the recalculation of each petitioner’s billings by billing element (corresponding to the same elements month by month for which Qwest had billed as shown earlier in the exhibit), listing the amounts actually billed, the amounts that should have been billed, and the difference, which represents a credit to be given. Those pages contain separate calculations for two different groups of facilities that have different billing bases: (a) those for which charges are not mileage sensitive and (b) those whose charges are mileage sensitive. These calculations also break out billing amounts between recurring and nonrecurring charges. The sum of the billing-element-by-billing-element differences (or credits) were themselves summed for inclusion as the “Rerate Credit” amount on the first page of the three relevant exhibits. That Rerate Credit amount consists of the addition of four totals from these worksheets: (a) the difference to credit nonrecurring, non-mileage-sensitive charges, (b) the difference to credit recurring, non-mileage sensitive charges, (c) the difference to credit non-recurring, mileage-sensitive charges, and (d) the difference to credit recurring, mileage-sensitive charges. (Exhibit 201 pages 13 through 20 and transcript pages 332 and 333)

Tel-Car, unlike Radio Paging and PageData/Interpage, did not enter into an interconnection agreement with Qwest prior to the commencement of this action before the Commission. Therefore, Qwest recalculated its charges through July of 2000, because Qwest believed that system-wide changes it made served to bill correctly in the first place from that point forward. (Transcript page 335) Some of the petitioners, such as Tel-Car, had other accounts; e.g., for mobile service. Qwest’s exhibits provided worksheets listing the billing details of those accounts, which Qwest excluded from the crediting process, as well. (Exhibit 202 pages 13 and 24 through 27 and transcript pages 338 and 342) This separate listing would allow petitioners to match their records of billings and payments for these other billing elements, in order to verify that Qwest properly excluded non-interconnection facilities and services from the recalculation process.

Qwest billed PageData/Interpage for a number of services other than interconnection; those services include two-way mobile service, private lines, and POTS lines. In addition, unlike the other two petitioners, they were billed for a portion of the credit period from the business portion of the retail unit, which meant that the billing system that housed their account information was CRIS, rather than IABS. Qwest used IABS to manage the account information of the other petitioners and wholesale purchasers in general; CRIS was the system generally used for retail customers. The crediting for PageData included records taken from IABS and CRIS. (Transcript page 352)

Ms. Fraser testified that it took a substantial amount of manual work to process the PageData/Interpage information, because Qwest transferred their accounts from the retail system (CRIS) to the wholesale system (IABS). (Transcript page 364) Qwest also could not perform a mechanized rerating for the retail accounts, whose information was housed in CRIS. Therefore, testified Ms. Fraser, Qwest calculated the credits for the CRIS accounts by applying the same ratio (61 percent) that resulted from the mechanized calculations on the IABS accounts. (Transcript page 365) Exhibit 203 did provide a listing of account details for the accounts (e.g., mobile service) not subject to the recalculation effort. (Transcript page 370)

Discussion
Qwest made a reasonably complete and thorough effort to identify the amounts billed and paid for the credit periods at issue in these proceedings. Qwest has taken the relevant information from the systems it routinely uses to record and bill for services. It has presented that information in a manner that would allow petitioners and others to inquire fully into the details of its calculations and to identify the support for the information on which those calculations were based. This information has been available for a number of months to petitioners. The questions raised about the calculations during the hearings had the effect of corroborating the thoroughness and carefulness of Qwest’s calculations. Qwest was obliged to establish a method for crediting paging customers across 14 states. It corrected its methods and calculations as it proceeded through that development.

Petitioners did not provide credible, contrary evidence of their bills and payments. The most extensive attempt to do so was by PageData. However, the evidence made clear that PageData offered its information not for the purpose of generating a complete and accurate list of the information in question, but, in effect, to bring Qwest to the table to respond to it. The evidence further shows that PageData’s very reason for purchasing Interpage, whose credits for interconnection facilities formed the very reason that made that acquisition valuable to PageData. PageData was unable to provide direct proof of payment, but submitted a number of documents that its accountants prepared and with which the witness was not very familiar.

As a general proposition, we believe that information shown to come from systems routinely used for many years by utilities to bill and credit customer accounts should be entitled to significant weight. Certainly, customers should be permitted an opportunity to show error or incompleteness in their billed and paid amounts. We conclude that petitioners here have failed to make such a showing; the best evidence of record addressing the credit calculation process and billing and payment components may be found in respondent’s Exhibit 201 (for Radio Paging), Exhibit 202 (for Tel-Car), and Exhibit 203 (for InterPage/PageData).

The details of the methods used by Qwest in those exhibits were, however, defective in two respects: (a) the mismatching of the periods during which credits were due and (b) the failure in the case of Tel-Car to add payments made after the end of the credit period, but relating to services during the credit period.

Excluded Facilities Evidence

Petitioners
Mr. Casper testified that some of the circuits at issue here carry not only paging traffic, but also some of the two-way traffic generated by Tel-Car customers. (Transcript page 147)

Mr. McNeal testified that the POTS lines included in his accounting were for paging service, saying that “They’re dedicated facilities to connect the paging together.” (Transcript page 498) He also said that, while he secured approximately five hundred “800” lines from Qwest under representations that there would only be a one-time charge, he has had to pay recurring charges for them. He said that he secured them for use to “deliver traffic back in the LATA.” (Transcript page 500)

Qwest
Qwest’s witness Fraser expressed the opinion that it was proper for Qwest to exclude facilities such as POTS lines from those for which credits should be issued under the TSR Wireless Order. She testified that such facilities are not within the scope of the credits that are relevant here. Clearly, she said, petitioners have some need for telephone service beyond interconnection for the purpose of allowing Qwest to deliver paging traffic to them. (Transcript page 461)

Discussion
Qwest correctly eliminated from credit calculations those charges for services (e.g., POTS lines) that the petitioners did not show to be purchased for interconnection. Petitioners bear the burden of proof that the services or facilities were acquired under the U S WEST Exchange and Network Services Tariff, Section 20. and were used for interconnection and not for other purposes. They failed to do so. Petitioners also failed to address at all the basis, with respect to Section 20, on which the facilities or services excluded by Qwest were purchased. The petitioners provide their customers with more than paging services; those services include Internet access, cellular services, and long distance, for example. They have provided no evidence about the configuration of the network on their side of the point(s) of connection with Qwest, or about how facilities that carry paging traffic from Qwest are, if at all, isolated from traffic related to the other services that they provide. Petitioners offered virtually no evidence about how they use their networks for the other services that they offer to customers over them, despite substantial evidence from Qwest demonstrating and isolating tariff purchases for those other purposes. Moreover, petitioners have admitted that facilities secured from Qwest under tariff: (a) may be used for any relevant line of business, suggesting that such use would not be material to claims for credits or (b) have been used for purposes other than mere interconnection (e.g., toll buy-down).

Under the evidence presented, we conclude that Qwest has made a reasonable effort to isolate for crediting purposes those facilities properly subject to the TSR Wireless Order. The facilities that it excluded from crediting are, under the evidence available are not necessary for interconnection, were purchased for reasons beyond just interconnection, and served purposes other than interconnection.

Petitioners presented scant evidence to support their claim that all their bills from Qwest were for interconnection for the purpose of receiving one-way paging traffic from Qwest. Bare assertions about their bills were not credible given the other kinds of businesses they operate across the same networks (some of which were for two-way traffic), nor was it credible to believe that they had no business operations needs for other telecommunications services from Qwest. Qwest’s exhibits, in contrast, took each billing element and assigned it to interconnection or other types of service based on logical categorizations. Moreover, months before hearings, Qwest provided the detailed billing elements for each month of the reimbursement period involved. Petitioners, who are not only in the telecommunications business themselves, but also retained the services of a telecommunications expert for these proceedings, made no effort to show that the specific billing elements detailed for them by Qwest and included in Exhibits 201, 202, and 203 was incorrectly assigned to non-interconnection use. Qwest, however, was able to show that a number of billing items included in one petitioner’s claimed reimbursement appeared to fall into other categories, such as long distance or 800 numbers. We conclude that Qwest made a credible and essentially unrebutted effort to determine all the charges associated with its delivery of traffic to petitioners and associated only with that function.

With respect to this service-type categorization effort, with respect to transiting traffic, and with respect to toll buy-down issue, Qwest acted in full accord with the FCC’s requirements and with our own view of what properly constitutes the body of charges relevant here, which are the charges for delivering to one-way paging networks traffic originated on Qwest’s network.

Transit Traffic Evidence

Petitioners
Petitioners presented the testimony of Victor Jackson, who has many years of experience in the telecommunications industry, much of it specifically relevant to paging company operations. He testified that a signaling system known as SS7 has the capability to provide Calling Number Identification (CNID) that would identify the originator of calls that represent transit traffic to Qwest. He testified that, while Qwest has this system, petitioners do not. Petitioners use multifrequency signaling (MFS). Therefore, according to Mr. Jackson, Qwest could tell petitioners the number where transit calls originated, which would be required to allow billing of the originating carrier, but petitioners cannot identify that number themselves. (Transcript pages 242 through 244)

Mr. Jackson distinguished between what he called “sent paid” traffic, under which the initiating caller already pays for the call, including for transit charges, and “non-sent paid” traffic. (Transcript pages 244 and 245) He explained how one could interpret footnote 70 of the TSR Wireless Order, which addresses the ability of Qwest to charge for transit traffic in the following language:

Complainants are required to pay for transiting traffic; that is traffic that originates from a carrier other than the interconnecting LEC but nonetheless is carried over the LEC network to the paging carrier’s network.”

Mr. Jackson testified that there were two possible explanations that would rationalize this FCC statement and petitioners’ claim that Qwest should not be able to exclude transit traffic charges from credit calculations in these proceedings:

The holding was illogical and should be give no effect here in the first place because the supporting reference for the footnote does not even deal with wireline to wireless traffic, which is what is at issue in this case
The FCC simply forgot to add “nonsent paid” to its order to modify “transiting traffic.” (Transcript pages 284 and 285)

Mr. Jackson’s responses to a question posed to him suggested that he was not in a position to disagree with the proposition that the applicable cost studies for sent-paid calls exclude the facilities relevant here; i.e., those that transport traffic from the Qwest end-office switch to the pager’s point of connection. (Transcript pages 269 through 272 and pages 290 through 292). Mr. Jackson conceded that Qwest would bear costs in providing SS7 CNID info to other carriers, but asserted the originating caller has already paid for such use of the signaling system in the case of what he termed as sent paid calls. (Transcript pages 279 and 280) Mr. Jackson did not consider Qwest’s 24 percent transit traffic figure to be well supported. However, he said that Qwest’s estimate was “within the realm of possibility.” (Transcript page 294) He also said, “I would say that 24 may be a reasonable figure.” (Transcript page 295)

Mr. Casper, who did not address the issue of transit traffic on direct, testified on rebuttal that he had in fact studied the issue on multiple prior occasions. He said that he has conducted three surveys of transit traffic over the past 18 months; his efforts produced transit factors of between five and eight percent. (Transcript pages 552 and 553) His study efforts covered 3 of the 15 trunks that he uses for paging. (Transcript page 558) He first testified that he kept records of these surveys, but did not know if he could retrieve them now. (Transcript pages 555 and 556) However, when later asked about searching for these records, he testified that he was sure he did not have them, and indicated that he did not keep records at all, by saying, “ I probably should have kept records of it. I could redo it again.” (Transcript page 558)

On rebuttal, Victor Jackson defined the term “origination” as referring to the direction of traffic, not to the initiator. In other words, according to him, Qwest could be deemed as the originator of all paging traffic that it delivers to the petitioners, even if the call did not begin on Qwest’s network. (Transcript page 561) However, on direct, he had previously agreed with the Qwest definition, also used by the FCC, that origination meant the first carrier network to take up the call, not the last network before it reached the paging company’s point of connection (Transcript pages 241 and 242).

Qwest
Qwest’s recalculations allowed for charges for transit traffic, for which it applied a 24 percent factor, and for facilities that “buy down” toll charges (i.e., allow those who call pager numbers to avoid toll charges). (Transcript page at 318) Qwest witness Fraser testified that, for CLECs, cellular carriers, and IXCs with which Qwest is connected, there are provisions for transit traffic charges. Those provisions are designed to recover transport costs to the Qwest serving wire center or end office, but not for the costs of the connection between the Qwest end office and pagers’ points of connection. Qwest’s testimony was that it is not recovering any costs for those facilities. (Transcript pages 309 through 311) Ms. Fraser also testified that a national carrier group, the Ordering and Billing Forum, is yet examining transit traffic billing issues, including responsibility for providing Calling Number Identification and charging for it. (Transcript pages 311 and 312)

Ms. Fraser also testified that Qwest performed a 1998 study of cellular traffic, capturing call information from SS7 trunks. She said that the company could not undertake a study of calls to pagers, because nearly all pagers interconnected with Qwest generally do not use SS7. She testified that the study of cellular transit traffic encompassed eight or nine states. Qwest considers cellular phone traffic comparable to pager traffic in expected levels of transit traffic. She could not be certain that the cellular study included Idaho data. The study showed a transit traffic figure of 24 percent. She testified that Qwest performed a more recent study on Idaho cellular usage (covering the period from December 1999 through July 2000). Ms. Fraser testified that this later study showed a factor of 35 percent. She said that she brought a copy of the study with her to the hearing room; the petitioners did not request access to it on the record. (Transcript pages 314 through 316)

Qwest’s witness Fraser took issue with Mr. Jackson’s testimony that Qwest could measure transit traffic bound for pagers. She testified that Qwest cannot measure paging traffic except for those carriers who use SS7 signaling across Type 2 trunks. Only one paging carrier qualifies, which is why Qwest used the cellular group, which commonly has the necessary signaling capability, as a proxy. (Transcript page 388) She testified that Qwest’s study of that one paging carrier, which was performed roughly two years ago, showed a transit factor of 27 percent. (Transcript Page 389)

Discussion
Qwest adopted an appropriate definition of transit traffic for purposes of its calculations of credits in these proceedings. The owners of the petitioners who testified on direct demonstrated a lack of understanding of the definition of that term in context that is appropriate here. Petitioner’s expert witness adopted one definition of transit traffic under the TSR Wireless Order in his direct testimony (the correct one), but contradicted it in his rebuttal. Qwest presented substantial evidence to support its transit traffic percentage of 24 percent. That factor was supported by studies of the closest analogue for which substantial data is available, which is cellular service. The failure of Qwest to offer a study of Idaho paging traffic was adequately explained. The study offered by one of the petitioners supporting a much lower percentage was not credible. His first mention of the performance of a study was on rebuttal. The study was not structured in any case and he gave contradictory statements about his retention of notes about the study. No study documentation was provided.

The FCC has just issued an order on questions of damages resulting from the TSR Wireless Order. At page 3 of that order, the FCC said:

In the Liability Order, we found that LECs may not charge one-way paging carriers for the delivery of intra-MTA LEC-originated traffic to the paging carrier’s point of interconnection…But we did not find that all charges imposed by the LECs on paging carriers were illegal. Rather, we held that LECs may charge for a number of services, including (1) “Wide area calling” services, …(3) the delivery of “transiting” traffic, that is, traffic that originates from a carrier other than the interconnecting LEC but nonetheless is carried over the LEC’s network to that of the paging carrier… [Footnotes omitted]

The liability order referred to is the TSR Wireless order.

At page 4 of the order, the FCC said that it has unambiguously permitted LECs to charge paging carriers for transit traffic. The FCC also said that:

The Liability order explicitly states that “Complainants are required to pay for ‘transiting traffic,’ that is, traffic that originates from a carrier other then the interconnecting LEC but nonetheless is carried over the LEC network to the paging carrier’s network.

At page 5, this FCC order specifically accepts the same method used by Qwest here, which is to multiply the total interconnection-related payments by a percentage considered to represent the proportion of traffic (26 percent in that case) deemed to be transiting traffic. Moreover, in the case of one of the two defendants, the FCC accepted a transiting factor that was an average of the factors from a number of states in which the defendant operated.

Petitioners’ argument that Qwest’s failure to provide them with information about the origin of transit traffic was not persuasive. The evidence did not support a conclusion that Qwest has the capability. Even were the record otherwise, it is not clear that Qwest, as opposed to the petitioners, bears sole, or even primary responsibility for such identification. Qwest’s responsibility is to accept traffic from the originator and to deliver it to the paging company involved. Qwest is entitled to compensation for its services, which include that intermediate transport function. Petitioners presented no evidence that they asked Qwest for billing information that would permit them to bill originating carriers, or that they stood ready to compensate Qwest for the provision of such information, let alone that Qwest refused to support efforts by the petitioners to make a full identification of the participants in calls to the petitioners end users. We find that the principal burden to pursue the identification of the originators of calls lies with petitioners. While Qwest should have the burden to support those efforts if its support is requested and if it is compensated for doing so, there is no reason from this record to conclude that Qwest was ever asked or refused to provide such support.

Frame Relay System Evidence

Petitioners
Mr. McNeal testified that, after buying Interpage, he began to discuss with Qwest the ability to consolidate the Page Data/Interpage network interfaces with Qwest, in order to secure a single point of connection (in Boise) in the LATA. His goal was to be able to eliminate his paging terminals in Idaho Falls, Pocatello, and Rexburg, which would in turn avoid the need to pay for facilities for transporting his business’s traffic back to Boise. He testified that Qwest refused, stating that the Telecommunications Act of 1996 did not require it to do so. (Transcript page 163) He said that he began his discussions with Qwest through a September 1998 letter, and he testified to a refusal by Qwest to provision ten T1s, which he wanted to have installed to consolidate his interconnection points with Qwest. (Transcript pages 164ff)

Mr. McNeal testified that he got Qwest to install, at his expense, a frame-relay system to replace a number of leased lines, which he said were not reliable and too burdensome for his business to maintain. He said that he would not have had to agree to that solution, had Qwest given him a single point of connection for the whole LATA. He noted that the frame relay system is located entirely within the LATA. He discussed the problems he was having with his leased lines used to transport his business’s traffic. Reliability problems with the leased lines caused him to seek ways to have Qwest to transport the traffic back to Boise, rather than continuing to do so himself through the leased lines. (Transcript page 195)

Mr. Jackson said that, “PageData had a problem with getting traffic from one point in [PAUSE] from one point to another, and the only alternative was the frame relay.” (Transcript page 287) Mr. Jackson testified that paging carriers may select a single point of connection per LATA. Were a frame relay system used to funnel traffic to that point, PageData should not have to pay for it, because it would be on Qwest’s side of the connection point. Qwest should pay for all facilities on its side of that point. Because such facilities were not part of the PageData network, the customer should not have had to pay for them. (Transcript pages 248 and 1249) Mr. Jackson said that a paging carrier has the right to order whatever facilities it takes for traffic that it has or anticipates having. He testified that there is no obligation for petitioners to pay for those facilities on the LEC’s side of the POI. (Transcript pages 286 and 287)

Qwest
With respect to the T1s, Qwest’s witness testified that the company could find no PageData or Interpage orders that were left unfilled. Ms. Fraser also took issue with the contention that she did not respond to a memo that PageData sent to her to address the T1s. According to her, Qwest communicated that PageData needed to work through its account manager, which was not she. (Transcript pages 392 through 395) Ms. Fraser also said that a single point of connection per LATA to deliver all traffic is only available in a Type 2 connection (all the petitioners here use a Type 1 connection), and even the Type 2 single point connection has only been available since late in 2000. A Type 2 connection takes place at the tandem switch, which saves Qwest expense on its side of the connection point. (Transcript pages 400 and 401)

Discussion
The scope of these proceedings does not include questions of Qwest’s failure to provide services, such as the T1 or frame-relay facilities, and facilities in accord with the retail tariffs under which petitioners made payments subject to credits under the TSR Wireless Order. The only issue is to determine what portion of payments actually made should be credited because they relate to facilities or services necessary for the delivery of one-way paging traffic to petitioner’s network. That some other form or nature of facilities or services might have been purchased under retail tariffs is not relevant to that issue. Moreover, even accepting the relevance of Qwest’s performance under retail tariff obligations, petitioner’s evidence was not sufficient to support a claim of a material failure by Qwest to perform any such obligations. Petitioner cited no specific tariff obligation that was not met and the evidence about whether alternate retail services or facilities were or were not actually ordered by petitioners was inconclusive. Certainly, alternate facilities were discussed; however, there should be more definitive evidence of the placement of orders required here. This customer is sophisticated enough to be operating an interconnected network that it has designed to carry paging, local exchange, long distance, cellular, and Internet traffic, all of which fall within the services that this petitioner offers to the public. It may be that Qwest should be held to a higher standard of performance in supporting less sophisticated users; however, the evidence here shows no failure on Qwest’s part to handle service requests from another carrier.

In addition, it is not proper in this proceeding to assess Qwest’s responsibilities under some hypothetical network configuration that might have been in place had the parties’ relationships arisen through an interconnection agreement, rather than through retail tariff purchases. The evidence is sufficient to conclude that the petitioner’s conduct and statements show a recognition that petitioner’s interest in securing a frame relay system lay in a desire to change maintenance requirements and reliability characteristics of facilities for which it considered itself responsible; i.e., on its own side of what petitioner considered to be its interconnection(s) with Qwest. The evidence moreover demonstrates that the capabilities of the frame relay system (e.g., packet switching) also provided capabilities to serve functions other than paging traffic carriage (e.g., Internet access) included within petitioner’s business plans and operations.

Toll Buy-Down Facilities

Petitioners
Mr. Casper testified that Tel-Car has used facilities that allow it to avoid the payment of toll charges that would otherwise have applied to calls reaching their interconnection points. Tel-Car used the facilities to avoid toll charges to Hailey to Twin Falls, but he considered it significant that the facilities were within the LATA. (Transcript page 145)

Mr. Jackson testified that there was no logic to the 20-mile breakpoint used by Qwest in its credit calculations. Because all calls within the LATA are, for purposes of interconnection, defined as “local,” he felt that all facilities in the LATA, regardless of length, should be considered local. (Transcript at page 255)

Qwest
Qwest made its credit calculations under the assumption that the FCC’s TSR Wireless Order allows for the continued recovery of charges associated with facilities used to buy down toll charges. Ms. Fraser testified that Qwest used facilities of more than 20 miles as a proxy for those that fall into the toll buy-down category. For the shorter facilities, Qwest recalculated billings by dropping all charges, except for the 24 percent for transit traffic. For the longer facilities, Qwest continued to apply full rates for the periods in question. Qwest said that the 20-mile break point reflected a system-wide average factor, not an Idaho-specific one. Ms. Fraser testified that Qwest’s credit calculations deducted for the transit traffic that the TSR Wireless Order allowed them to charge for facilities or services used to buy down toll charges. Qwest used the term “FX” to apply to all means for buying down toll charges for calls that cross local calling areas, whether or not the facilities constituted FX facilities as that term is narrowly used. Ms. Fraser said that Qwest used 20 miles as the Qwest region-wide average where toll charges would apply. They therefore continued to charge for all facilities over 20 miles at the tariffed rate and charged those under 20 miles at 24% to reflect the transit factor. (Transcript pages 318 and 319)

Discussion – Toll Buy-Down
The very types of charges addressed in the TSR Wireless Order (at page 5) excluded what petitioners want credits for here:

U S West had billed and continues to bill TSR for the following types of charges under U S West’s Arizona tariff, which TSR contests: 1) monthly recurring charges for DID numbers; 2) monthly recurring charges associated with dedicated Type 1 DID trunks; 3) charges for dedicated T-1 circuits necessary to connect U S West offices to the TSR network for delivery of LEC-originated traffic to TSR’s network; 4) installation charges for DID numbers, DID trunks and T-1 circuits; and 5) usage charges described as “transport land to mobile and end office switching” associated with wide area calling service provided by U S West.

The TSR Wireless Order specifically addressed the obligations on an ILEC serving paging companies through retail tariffs, rather than under Section 252 of the Telecommunications Act of 1996. As the FCC said, the only obligation imposed by the First Report and Order that is relevant here is as the FCC said at page 17:

The Commission’s Local Competition Order clearly calls for LECs immediately to cease charging CMRS providers for terminating LEC-originated traffic; the order does not require a section 252 agreement before imposing such an obligation on the LEC.

There is no bar on charging for other retail services. The FCC went on to say at page 18 that:

We find persuasive U S West’s argument that “wide area calling” services are not necessary for interconnection or for the provision of TSR’s service to its customers. We conclude, therefore, that Section 51.703(b) does not compel a LEC to offer wide area calling or similar services without charge. Indeed, LECs are not obligated under our rules to provide such services at all; accordingly, it would seem incongruous for LECs who choose to offer these services not to be able to charge for them.

The TSR Wireless Order obliges Qwest to deliver local traffic (i.e., all traffic within the LATA), not just traffic that consists of traffic within a local calling area as defined by Qwest. However, nothing prohibits Qwest from charging local toll charges for traffic that crosses its local calling areas as it heads toward the pager’s point of connection. The TSR Wireless Order says furthermore that nothing prohibits agreements between Qwest and pagers for reducing those toll charges for persons calling paging devices. The petitioners suggest that they have not so agreed; therefore, this “agreement” provision does not apply. Under the evidence before us, however, we may read petitioner’s prior relationships with Qwest as intending such an agreement and such a reduction. Certainly there was motivation on the petitioners’ part; they gained the benefit of a toll reduction that made their services cheaper for callers to gain access to in reaching paging customers.

The record here refutes any claim that there has been no requisite agreement. The history of petitioners’ dealings with Qwest cannot be interpreted fairly to allow them retroactively to deprive Qwest of revenues in lieu of intrastate toll charges. Doing so would allow petitioners to keep the benefits that came from decisions that the record shows they themselves undertook to make their network more valuable to paging customers. The clearly appropriate conclusion in light of the FCC’s decision is that pagers who have made retail tariff orders, and who have had the benefit of facilities that used not only to deliver traffic, but also to reduce toll charges, should pay for them as the record shows they agreed to do. Simple logic and fairness would compel this same result even had the FCC not so limited its ruling.

We came to the heart of this issue when petitioners’ counsel agreed at hearing that their argument was that they should be permitted to select a configuration that eliminates the obligation to pay toll charges in the first place. (Transcript page 419) We must ask ourselves why ever a pager would agree to a configuration it must pay for in order to avoid toll charges when it could demand at Qwest’s cost a configuration that would have the same result. The obvious answer is that a paging company never would, which makes the whole construct of the FCC’s TSR Wireless Order, as petitioners would construe it, moot. We do not believe that the FCC made so much ado about nothing. The better construction is that in applying the decision retroactively, we should presume the kind of agreement anticipated existed in those cases where the facilities in question produced the toll reduction benefits, particularly for customers who, from the evidence here, evidently knew that toll reductions were one of the benefits of the tariff purchases they made. The petitioners here clearly are such customers. The question thus becomes whether Qwest’s means for identifying those cases is reasonable.

The FCC has held in the case of TSR Wireless, LLC v. U.S. West Communications, Inc, et al., FCC 00-194 (“the TSR Order”) that:

In the Local Competition Order, the Commission promulgated section 51.703(b), which provides that: ‘A LEC may not assess charges on any other telecommunications carrier for local telecommunications traffic that originates on the LEC’s network.’ In adopting this rule, the Commission stated that ‘[a]s of the effective date [of the Local Competition Order], a LEC must cease charging a CMRS provider or other carrier for terminating LEC-originated traffic and must provide that traffic to the CMRS provider or other carrier without charge.’

Petitioners have argued that the term “originate” is only intended to describe the direction of traffic flow between any two networks. Thus, even if the call began on a third carrier’s network, passed through Qwest’s network, and terminated on the network of one of the petitioners, Qwest would still, vis-à-vis the petitioners be considered the carrier on whose network the traffic “originated.” The inappropriateness of this distinction is made clear by the fact that it would make either all traffic or no traffic fall within the FCC’s definition. That was manifestly not the intention of the FCC.

Qwest’s interpretation of the toll-buy-down issue addressed in the TSR Wireless Order was reasonable. It applied a 20-mile rule that it said was supported by region-wide data on breakpoints between local calling areas. Qwest failed to address the relationship between this 20-mile system-wide assumption and actual local calling area ranges in Idaho. Certainly, those areas extend in many cases well beyond 20 miles today. However, there was no evidence at all from petitioners that this break point would substantially ignore or distort Idaho calling area boundaries.

The use of a region-wide factor to simplify Qwest’s need for recalculations with paging providers all across its 14-state region thus finds support in the record. Certainly, petitioners have provided no evidence to contradict it. Perhaps some effort could be made to take notice of the applicable distances under local calling areas actually established by the Commission in the areas served by these petitioners. However, doing so would require a number of assumptions about petitioners’ traffic and the nature of the Qwest Idaho calling areas as they changed across the relevant time period, which ended in 1999, because petitioners have not presented any evidence about the relevant aspects of their traffic.

Moreover, the amounts at issue may not warrant such extraordinary effort by the commission, given the petitioners’ decision not to present evidence. For example, in the case of Radio Paging, Qwest eliminated no charges for non-local facilities (i.e., greater than 20-mile facilities), thus making this issue irrelevant to that petitioner. In the case of Tel-Car, Qwest showed only $4,174 in charges for plus 20-mile facilities, as compared with more than ten times that amount in facilities charges to which credits were applied. For PageData/Interpage, Qwest showed about $7,000 in plus-20 mile facilities, but about $52,000 in facilities charges to which credits were applied. Thus, the facilities in question form a relatively small portion of the total facilities in question even for these two petitioners. We also do not know how many of these facilities would continue to fall into the “non-local” category, even if the distance factor were increased significantly. In addition, it would still be necessary to charge 24 percent for the applicable transit traffic factor anyway. Thus it is by no means clear that a significant Commission effort to undertake the state-specific distance calculations, from information of which it can take administrative notice, would have a substantial impact on final credits due. Given this uncertainty and the failure of petitioners to offer any evidence on this issue, Qwest’s system-wide approximation of local calling area distances may be considered sufficient.

Footnote 13 of the FCC’s recent order addressing damages questions arising from the TSR Wireless Order defines wide area calling as follows:

wide area calling,” also known as “reverse billing” or “reverse toll,” is a service in which a LEC agrees with an interconnector not to assess toll charges on calls from the LEC’s end users to the interconnector’s end users, in exchange for which the interconnector pays the LEC a per-minute fee to recover the LEC’s toll carriage costs. In essence, paging carriers use wide area calling to place toll charges on pager users, rather than the people calling them. [Citations omitted]

We interpret this provision as applying to all means for reducing toll charges otherwise applicable to those who call paging company customers. Thus, whether the facilities fit Idaho definitions of “FX” service or facilities is not material. Moreover, the discussion of interconnection points is ultimately not helpful in resolving this dispute. The interconnections between Qwest and the carriers here were not developed under the methods contemplated by he Telecommunications Act of 1996, such as interconnection agreements and SGATs, to manage carrier-to-carrier relationships. The relationships at issue here arose under methods that existed in Idaho apparently for decades; for example, the US West Exchange and Network Services Tariff. The FCC rulings in question do not support a theory that facilities ordered under tariffs can be broadly reclassified as if they had been purchased otherwise. They seek only to establish that ILECs have the responsibility to transport traffic initiated on their networks at their own cost, not at the cost of the paging carrier accepting it.

FINDINGS OF FACT

1. The Qwest credit calculations of Exhibits 201, 202, and 203 failed to match the required recovery period. For example, in the case of Petitioner Radio Paging, Qwest’s calculations did not provide a credit for the first nine days of the recovery period (as Qwest determined it) or the last three days. There are about 920 days in the recovery period for this petitioner. Qwest’s method caused about 1.3 percent of those days not to be covered, which equals about $400 in lost credits if they are prorated. It would be a straightforward process for Qwest to provide for the lost credit amounts for each petitioner by the following method:

Calculate the number of days for which credits were due

Calculate the number of days that Qwest’s recalculations cover

Divide the first number by the second number

Multiply the result of that division by the total credit produced by Qwest’s calculations (that total credit being adjusted for any other findings and conclusions hereof)

Apply the result of that multiplication as the total credit.

2. The amount actually paid by Radio Paging during the credit period was $52,429.30, rather than the $50,034 shown in the “Rerate Information” section of the first page of Exhibit 201. This more appropriate payment amount is reflected on page 8 of Exhibit 201. In order to accurately calculate the Radio Paging credit, this change should be made before the preceding pro rating change is made. (Transcript page 349) Qwest should recalculate the Radio Paging credit to account for this increase in payments credited for the period in question. No similar change is required for the other petitioners, because they had stopped making payments to Qwest by the end of their credit periods.
3. Qwest’s calculations of the bills rendered and paid during the credit period, as shown on Exhibits 201, 202, and 203, were: (a) otherwise sufficiently accurate, (b) based on information regularly used to for customer billing and payment tracking, (c) available to the petitioners for cross checking and challenge for an extended period of time prior to hearings, and (d) supported by information detailed enough to allow petitioners to challenge Qwest’s records down to the many individual billing items that made up each monthly bill during the credit period.
4. Petitioners failed to present sufficiently substantiated billing and payment information to support their claims for credits in amounts different from those testified to by Qwest.

5. The petitioners failed to provide evidence, beyond bare assertions, that none of the facilities for which they sought reimbursement were used for purposes beyond delivery of paging traffic from Qwest’s network. The evidence showed clearly that petitioners have internal business needs for telecommunications and that some of them provide two-way services to their customers through the same networks that carry paging traffic. Qwest made a reasonable effort to distinguish facilities used for delivering paging traffic by performing a billing-element-by-billing-element review of facilities and the codes assigned to them.

6. Qwest adequately supported the use of 24 percent as the appropriate factor to use as a measure of transit traffic for calculating credits to the petitioners.

7. Qwest made a reasonable estimation of the charges that should be attributed to facilities that benefited petitioners by enabling those who called petitioners’ paging customers to avoid intraLATA toll charges; petitioners were aware of and understood those benefits during the period that they secured them under retail tariffs.

8. Petitioner failed to show that the PageData/Interpage acquisition of the frame-relay system was occasioned by a failure of Qwest to perform any duty under the applicable retail tariffs. Petitioner also failed to show that Qwest violated any tariff or other applicable retail requirement in connection with the installation of any T-1 facilities.

CONCLUSIONS OF LAW

1. Qwest erred by failing to match the billing and credit periods properly.
2. Qwest should be obliged to correct that error by providing a pro rata credit for the missing days pursuant to the formula set forth in Finding of Fact Number 1 above.
3. Qwest insufficiently credited Radio Paging by failing to use $52,429.30 in lieu of the $50,034 shown in the “Rerate Information” section of the first page of Exhibit 201, thus rendering its credit calculations deficient in the amount of $2,395.30. In order to credit Radio Paging properly, this higher amount should be used to calculate this petitioner’s credit, and that recalculation should be made before the preceding pro rating change, in order to assure that those two prorations reflect the higher resulting base credit amount.
4. The Commission’s prior orders in this case establish September 24, 1996 as the first potential date for recovery. It is clear from the TSR Wireless Order that it is the First Report and Order that gives rise to the Qwest obligation for which credits are due here. See for example footnote 10 and paragraph 19. The obligation to deliver traffic to paging companies without separate charges arises under the FCC’s First Report and Order addressing incumbent interconnection obligations under the Telecommunications Act of 1996. The effective date of that order is November 1, 1996, which makes charges for the delivery of paging traffic to petitioners on and after that date improper under law and therefore subject to recovery.
5. The facilities in question here were not, for the relevant time period, ordered pursuant to an interconnection agreement or an SGAT. They were ordered, as was apparently the historical custom, from Qwest tariffs. This proceeding’s purpose was not to determine what petitioners could or would have done with respect to network configurations under interconnection agreements or and SGAT. There has been no allegation or evidence that Qwest denied petitioners access to such means of providing for interconnection. Therefore, network configuration issues must be examined here under the rules applicable to tariffs, excepting only the requirements of the TSR Wireless Order.
6. Alleged failures by Qwest to perform any applicable, state-jurisdictional duty with respect to the installation of the frame-relay system or T-1 lines are not properly within the scope of these proceedings
7. The operative language, from page 1, of the TSR Wireless Order is that, “Defendants may not impose upon Complainants charges for facilities used to deliver LEC-originated traffic to Complainants.” The FCC did not restrict charges for facilities that are used for other purposes. Moreover, the order makes clear that Qwest may make charges for the same facilities that do deliver paging traffic, if those facilities perform other functions, such as the delivery of transit traffic or for “’wide area calling’ or similar services.”
8. Petitioners have the burden of showing that all facilities for which they seek reimbursement are used for the delivery of paging traffic. Qwest provided substantial evidence to demonstrate that a number of facilities for which petitioners sought reimbursement were used for other purposes, including but not limited to: (a) accepting delivery of traffic originated on networks other that Qwest’s, and (b) buying down toll charges that Qwest customers calling petitioners’ paging customers would have otherwise been obligated to pay. Petitioners failed to rebut that evidence. Petitioners also failed to meet their burden of proof that the facilities excluded by Qwest in Exhibits 201 through 203 were not used for other purposes; moreover, the evidence shows affirmatively that such facilities were properly excluded from credit calculations.
8. Except where recalculations are specifically required above for the mismatching of billings and payments and the determination of the amount paid by Radio Paging, Qwest shall be required to credit petitioners in the amounts shown on Exhibits 201, 202, and 203.
9. Petitioners shall be entitled to interest in accord with Idaho requirements at the rate of 6 percent for credits accumulated for 1996 and 1997 and at the rate of 5 percent for credits accumulated during 1998 and 1999.

10. As is provided for in Order 28,683, Petitioners shall be entitle to file written comments or exceptions to this proposed order within 21 days of its service date.

DONE by the Commission’ Hearing Examiner at Boise, Idaho, this 29th Day of November, 2001

____________________
JOHN ANTONUK
HEARING EXAMINER

ATTEST:

___________________
Jean D. Jewell
Commission Secretary
The relevant interests of Interpage were acquired by PageData; while the operations of the two were merged, Interpage and PageData have separate billings, payments, and facilities that are relevant to the matter remaining in dispute.
In the Matter of TSR Wireless et al. v. US West Communications, Inc. et al., Memorandum Opinion and Order, 2000 WL 796763, 15 FCC Rcd. 11,166 (June 21, 2000).
Order No. 28626 confirmed this date’s applicability.
Note, however, that the dates covered by the billings in question represents one of the areas where the exhibits may differ from petitioner to petitioner.
Advance billing means that the bills are rendered for the coming month of service, not the prior month.
Note that the summary page was out of order in Exhibit 203, which addresses PageData/Interpage.
Memorandum Opinion and Order On Supplemental Complaint for Damages, In the matter of Metrocall, Inc. v. Southwestern Bell Telephone Company and Pacific Bell Telephone Company, File Nos. E-98-16, E-98-17 (adopted September 26, 2001; released October 2, 2001)

TSR Order at page 3.
Petitioners’ Post-Hearing Brief at page 4.
3 Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, CC Docket No. 96-98, First Report and Order, 11 FCC Rcd 15499 (1996) (Local Competition Order), aff’d in part and vacated in part sub nom., Competitive Telecommunications Ass’n v. FCC, 117 F.3d 1068 (8th Cir. 1997) and Iowa Utilities Bd. v. FCC, 120 F.3d 753 (8th Cir. 1997), aff’d in part and remanded, AT&T Corp. v. Iowa Utils. Bd., 119 S. Ct 721 (1999); Order on Reconsideration, 11 FCC Rcd 13042 (1996), Second Order on Reconsideration, 11 FCC Rcd 19738 (1996), Third Order on Reconsideration and Further Notice of Proposed Rulemaking, FCC 97-295 (rel. Aug. 18, 1997), further recons. pending.

PROPOSED ORDER 1 November 29, 2001

Office of the Secretary
Service Date
November 30, 2001