20040305Reply Comments.pdf

Verizon f\\
(fJ
ver,zg1
"'-"
:) '" i
- '- ' '~- .-
nm, if:P _~ tO~ "... I H" -
I G:~Lil.,
;jT\L ITk~S cm.H'jJSSION
17933 N.W Evergreen Pkwy
O. Box 1100
Beaverton, OR 97076
March 5, 2004
Ms. Jean Jewell
Idaho Public Utilities Commission
472 W. Washington
Boise, ill 83702
Dear Ms. Jewell
Enclosed for filing are the Comments ofVerizon Northwest Inc. in IPUC Case No. VZN-
03-06 and VZN-03-07. Please call me at [phone] if you have any questions.
Sincerely,
Renee Willer
Verizon Northwest Inc.
F;ECEIVED!! in
..", ,- "
IDAHO PUBLIC UTILITIES COMMISSION
')(\01. M~.D -t; IHJ 10: 04Lou; I IT \ v
In the Matter of the Petition for Approval
of an Amendment to an Interconnection
Agreement Between Verizon Northwest Inc.
f/ka GTE Northwest Incorporated and
respectively MCI WORLDCOM
Communications, Inc. and MCImetro Access)Transmission Services, LLC
,V,
UTILJIIES CDi'\\'1ISSIOH
VERIZON NORTHWEST INc. RESPONSE
TO COMMENTS OF LEVEL 3 COMMUNICATIONS
Verizon Northwest Inc. (Verizon) responds to the comments filed by Level 3
Communications (Level 3).
To date, no party has opposed the Commission s approval of the proposed amendment to
Verizon s Interconnection Agreements with MCI.And Level 3 itself does not oppose it.
Instead, Level 3 raises a single legal issue that is not ripe for the Commission to consider now.
Level 3 asks the Commission to address prematurely what precedential value the Commission
approval of the proposed amendment will have in the context of future proceedings. This issue
is appropriately addressed, as a matter of law, in such future proceedings. At that time, all
parties will have the right to advance arguments about the precedential value of this amendment
as such arguments relate to matters at issue then. The Commission, therefore, should approve
the proposed amendments without addressing Level3's legal issue of future precedent.
1 The term "MCI" refers to all entities addressed by the proposed amendment.2 It is clear that a real and existing controversy does not exist with respect to Level 3's concern in the current
proceedings. No party suggests that the proposed amendment will be binding on Level 3, who is not a party to the
amendment. The Commission s approval will serve to effectuate the amendment as between Verizon and MC!.
Thus, it is apparent that any ruling on the question of law Level 3 raises (i., what precedential value the
Commission s approval should have in future cases) cannot affect the results as to the parties and the issues in the
current proceedings.
VERIZON NORTHWEST INC.S RESPONSE TO
COMMENTS OF LEVEL 3 COMMUNICA nONS PAGEl
Furthermore, while it would be inappropriate for the Commission to consider what
precedential value its approval will have in future proceedings, it is important to note that
Level3's supposed rationales for assigning the Commission s approval no value in future
proceedings are entirely inaccurate. Level 3 alleges that the amendment's "blended" rate for
compensation is inconsistent with the FCC's rules regarding compensation for Internet bound
traffic, and that the amendment's inclusion of Voice Over Internet Protocol ("VOIP") as a
Telecommunications Service is inconsistent with the definition of Telecommunications Services
contained in the Telecommunications Act of 1996 (TA96). (Level 3 Cmts., pp. 4-6). Level 3
wrong on both counts.
First, the amendment's blended rate approach expressly relies on the FCC's interim rate
structure for Internet traffic adopted in its Order on Remand.3 (See Amendment, pp. 1-, 11
Ex. B). As such, the amendment is perfectly consistent with the framework set forth by the FCC
regarding compensation for Internet bound traffic. The blending essentially permits Verizon and
MCI to reach agreement on the timing for implementation of the FCC's rate structure set forth in
its Order on Remand in each of the states in which they operate. The implementation of the
FCC's new rate structure has been the major issue in dispute between the parties , and through the
amendment they have been able to reach agreement on the issue.
Even if blended rates were not consistent with the FCC's rules, which they are, Verizon
and MCI are perfectly free to negotiate terms to govern compensation for Internet bound traffic
that differ from any rules the FCC may implement. Level 3 acknowledges that this is true.
3 Implementation of the Local Competition Provisions of the Telecommunications Act of 1996, Intercarrier
Compensation for ISP-Bound Traffic, Order on Remand and Report and Order 2001 WL 455869, 16 FCC Red.
9151 (2001)("Order on Remanet'), remanded further by WorldCom, Inc. v. FCC 288 F.3d 429 (DC Cir.
2002)(declining to vacate interim rate structure on remand), cert. denied by Core Communications, Inc. v. FCC 123
Ct. 1927, 155 LEd.2d 848 (2003).
VERIZON NORTHWEST INC.S RESPONSE TO
COMMENTS OF LEVEL 3 COMMUNICATIONS PAGE 2
(Level 3 Cmts., p. 3). Thus, Verizon s and MCI's agreement to the blended rates would still be
consistent with T A96's legal framework and Congressional intent.
Second, Level3's assertion that VOIP is not a Telecommunications Service as defined by
T A96 is pure speculation. (Level 3 Cmts., p. 5). The FCC has initiated a rulemaking to
investigate the issue of the regulatory status of VOIP traffic and has not come to any conclusive
determinations with respect to the types of VOIP traffic that MCI is offering.4 Thus, Level 3'
statements that presume certainty as to the regulatory status of VOIP traffic constitute nothing
more than guesses as to the eventual outcome of the FCC's rulemaking.
The proposed amendment provides, however, that should the FCC or Congress
subsequently hold otherwise, the parties would adhere to such decision.The proposed
amendment specifically provides as follows:
Notwithstanding anything in this Section 2 (addressing VOIP Traffic), if, after the
Effective Date, the FCC or Congress promulgates an effective and unstayed law
rule or regulation, or a court of competent jurisdiction issues an effective and
unstayed nationally-effective order, decision, ruling, or the like regarding VOIP
Traffic, the Parties will adhere to the relevant portions (i., those relating to the
regulatory classification of or, compensation for, VOIP Traffic generally or any
category of VOIP Traffic) of such legally effective and unstayed rule, regulation
order, decision, ruling or the like as soon as it becomes legally effective.
(Amendment, p. 7). Accordingly, the proposed amendment currently is consistent with the
regulatory status ofVOIP traffic.
Once again, however, it is not necessary for the Commission to consider whether Level
s arguments regarding the amendn1ent's blended rates and VOIP are accurate. Level 3 does not
comment on these matters for purposes of opposing the Commission s approval of the proposed
4 Notice of Proposed Rulemaking, Docket No. WC 04-, FCC 04-28 (adopted Feb. 12, 2004)(not yet released). To
the best ofVerizon s knowledge, MCI is not presently offering a free PC-to-PC VOIP service comparable to that of
Pulver.com, which the FCC recently concluded was an information service. See In the Matter of Petition for
Declaratory Ruling that pulver.com s Free World Dialup is Neither Telecommunications Nor a Telecommunications
Service Memorandum Opinion and Order 2004 WL 315259, WC Docket No. 03-, FCC 04-27 (reI. Feb. 19
2004).
VERIZON NORTHWEST INC.S RESPONSE TO
COMMENTS OF LEVEL 3 COMMUNICATIONS PAGE 3
amendment. Level 3 , rather, only does so in a premature effort to have the Commission declare
what preceaential value approval will have in the context of unknown, future proceedings. The
Commission should reserve judgment until such future proceedings arise.
WHEREFORE, Verizon respectfully requests that the Commission approve the proposed
amendment pursuant to Subsections 252( e) of T A96, decline to address the precedential value
that its order in these proceedings will have with respect to any future issues that may arise in
future proceedings, and grant any and all other appropriate relief.
Respectfully submitted
rfullj~
Renee M. Willer
Authorized Representative
Verizon Northwest Inc.
VERIZON NORTHWEST INC.'S RESPONSE TO
COMMENTS OF LEVEL 3 COMMUNICATIONS PAGE 4