20041129Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:CAROLEE HALL
DATE:NOVEMBER 24, 2004
RE:ADOPTION OF, AND AMENDMENT TO, THE AGREEMENT
BETWEEN VERIZON NORTHWEST INC. (VERIZON) AND AMERICAN
FIBER NETWORK, INC. (AFN) IN CASE NO. VZN-04-
BACKGROUND
On October 28 2004, Verizon Northwest Inc. (Verizon) and American Fiber Network
Inc. (AFN) filed an Amendment 1 to an existing agreement between Verizon and AFN. The
original agreement was set forth in a letter dated June 23 2000, wherein AFN adopted the
interconnection agreement between New Edge Network Inc. and Verizon (the Adoption Letter is
attached to this memo).
Staff discovered that the Adoption Letter and agreement had never been assigned a case
number, nor had a final order been issued. Staff contacted the Company and requested copies to
complete a record and this housekeeping matter. The Company provided the documents and
Staff has attached the companies' facsimile to this decision memo.
DISCUSSION
The current filing of October 28, 2004, is an amendment to make changes to the
interconnection agreement based on the Triennial Review Order (TRO) issued by the Federal
Communications Commission. Some of the TRO elements that are being amended with this
filing include, but are not limited to: Dedicated Transport; Enterprise Switching; Entrance
Facilities; Local Switching; Line Sharing; Mass Market and other Federally mandated TRO
elements.
DECISION MEMORANDUM - 1 -NOVEMBER 24, 2004
STAFF ANALYSIS
Staff has reviewed the original filing and the amendment and finds them compatible with
Federal and State guidelines. Moreover, Staff believes that both filings are consistent with the
pro-competitive policies of this Commission, the Idaho Legislature, and the federal
Telecommunications Act of 1996. Accordingly, Staff recommends that the Commission approve
the interconnection agreement as amended.
COMMISSION DECISION
Does the Commission wish to approve the Agreements between Verizon and AFN?
U/CHALUDECISION MEMONZN-O4-11 VERIZON AND AMERICAN FIBER
DECISION MEMORANDUM - 2-NOVEMBER 24, 2004
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iTI GTE Service Corporation
17933 NW Evergreen Par1C:way
D. Box 1100
Bea'Jerton . OR 97075
July 20, 2000
Ms. Myrna Walters
Idaho Public Utilities Commission
472 W. Washington
Boise, Idaho 83720
Rc: Adoption of New Edge NetWork, Inc. d/b/a New Edge Networks ,:GTE Interconnection
Agreement by American Fiber Network, Inc.
Dear Ms. Walters:
Enclosed for filing with the Commission under Section 252(0 of the Telecommunications Act
of 1996 are the original and seven copies of American Fiber NetWork., Inc,s adoption of the
arbitrated Interconnection Agreement between GTE Nonhwest~ Inc. (,"GTE") and New Edge
Network, Inc. d/b/a New Edge Networks (nTenns"'). The enclosure includes an adoption
letter signed by both GTE and American Fiher Ne(work. Inc. which is self-explanatory. and
which sets fonh the manner in which the Tenns will be applied in American Fiber Net\'. ork
lnc:s case.
As the enclosed letter explains, GTE is not voluntarily entering the Terms with American
Fiber Nctwork. Inc. and does not ~'ai\'e any rights and remedies it has concerning its position
as It) the illegality or unreasonableness of the Tenns. GTE contends that certain pro\'isions uf
the Terms may be void or unenforceable as a result of the United States Eighth Circuit court
of Appeals July and October, 1997 decisions. the Supreme Coun of the United States
decision of January 25, 1999 and the remand oflhe pricing rules to the United States Eighth
Circuit Coun of Appeals. Any modification (0 the underlying Terms shall automatically
apply (0 American Fiber Network. (ne. GTE is preser.ing its legal positions in every respcci
as to the Terms in the hands of American Fiher Set~"orkt Inc. as well as in the hands of ~e\\"
Edge Network. Inc. c.1/b/a New Edge Networks.
A pllf1 of GTE Corporation
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Ms. Walters
July 20, 2000
Page 2
All parties to Cause are being served with a copy of this letter. I f they would like a copy of
the adoption agreement, they should contact Renee Willer at 503,.645.7909.
ed Logan
Director-Regulatory & Go\'en\mental Affairs
Robert E. Heath - American Fiber Network. Inc.
Scott Miles.. GTE
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Sle~en J. Plner1e
Director-Negotiation.
Wholesala Markets
GTE Hetwork
SlrvIc8I
HQEO3867
IOQ Hidd8n Ridge
O 8o.c 1$2092
Irmg. TIC: 15038
972/7 , 1-1333
FAX [phone]
June 23, 2000
Mr. Robert E. Heath
Executive Vice President
American Fiber Networkt Inc.
9401 Indian Creek Parkway, Suitt 140
Overland Park, KS 66210
Dear Mr. Heath:
GTE has received your letter stating that, under Section 252(i) of the Telecommunications Ac( of
1996 (the "Act )t American Fiber NetWork. Inc. C-AFNH) wishes to adopt the terms of the
Interconnection Agreement between New Edge NetWork1 Inc. d/b/a New Edge Networks (I.NcVf'
Edge ) and GTE that was approved by the Commission as an effective agreement in the State of
Idaho in Docket No. 28332 (the '.Terms ). I understand you have a copy of the Terms. Please
note the following with respect to your adoption of the Terms.
By your countersignature on this letter, you hereby represent and commit to thefollowing three points:
(A)AFN adopts the Terms of the New Edge agreement for interconnection with GTE
and in applying the Terms. agrees that AFN shall be substitUted in place of New
Edge in the Tenns wherever appropriate.
(B)AFN requests that notice to AFN as may be required under the Tenns shall be
provided as follows:
To:American Fiber Networkt Inc.
Anenlion: Mr. Roben E. Heath
9401 Indian Creek Parkway, Suite 140
Overland Park. KS 66210
Telephone number: 913/338..2658
FAX number: 913/661-0538
(C)AFN represents and warrants thar it is a certified provider of local
telecommunications service in the State of Idaho. and that itS adoption of the
Tenns will cover services in the State of Idaho only.
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Mr. Robert E. Heath
June 23. 2000
Page 2
AFN's adoption of the New Edge T~rms shall become effective upon GTE's filing of this
letter with the Idaho Public Utilities Commission and remain in effect no longer than the
date the New Edge Terms are tenninated. The New Edge agreement is curren(ly
scheduled to expire on December 31. 2002.
As the Terms are being adopted by you pursuant to your statUtory rights under section
2S2(i), GTE does not provide the Tenns to you as either a voluntary or negotiated
agreement The filing and perfonnance by GTE of the T enns does not in any way
constitute a waiver by GTE of any position as to the Tenns or a portion thereof. nor does
it constitute a waiver by GTE of all rights and remedies it may have 10 seek review of the
Terms, or to seek review in any \Way of any provisions included in these Terms as a result
of AFN's 2S2(i) election.
On January 25, 1999, the Supreme Court of the United States ('.Coun ) issued its decision
on the appeals of the Eighth Circuit's decision in Iowa Utilities Board. Specifically, the
Supreme COUI1 modified several of the FCC's and the Eighth Circuit's rulings regarding
unbundled network elements and pricing requirements under the Act. AT&T Corp. JO\Hl
UriJilies Board, No. 97..826. 1999 U.S. LEXIS 903 (1999). Cenain provisions of the
Terms may be void or unenforceable as a result of the Court s decision of January 25, 1999
and the remand of the pricing roles to the United States Eighth Circuit Coun of Appeals.
Moreover, nothing herein shall be construed as or is intended to be a concession or
admission by either GTE or AFN that any provision in the Terms complies with the rights
and duties imposed by the Act, the decision of the FCC and the Commissions, the
decisions of the couns. or other law, and both GTE and Am expressly reserve their full
right to assen and pursue claims arising from or related to the Tenns.
GTE reserves the right 10 deny AFN's adoption and/or application of the Tenns, in v.,'hole
or in pan, at any time:
(a)when the costs of providing the Terms to AFN are grearer than the costs
providing it to New Edge;
,(the provision of the Tenns to AFN is not technically feasible; and/or
to the extent AFN already has an existing interconnection agreement (or existing
2S2(i) adoption) with GTE and the Terms were approved before the date
approvat of the existing interconnection agreement (or Ute effective date 0 f the
existing 252(1) adoption).
(b)
(c)
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Mr. Robert E. Heath
June 23, 2000
Page 3
As noted above. pursuant to Rule 809, the FCC gave lLECs the ability to deny 252(
adoptions in those instances where the cost of providing the service to the requesting
carner is higher than that incurred to serve the initial carrier or there is a technical
incompatibility issue. The issue of reciprocal compensation for traffic destined for the
Internet falls within this exception. GTE never intended for (ntemel traffic passing
through a telecommunications carrier to be included within the definition of local traffic
and subject to the corresponding obligation of reciprocal compensation. Despite the
foregoing, some forums have required reciprocal compensation to be paid. This produces
the situation where the cost of providing the service is not cost based. With (his in mind.
GTE opposes, and reserves the right to deny- the adoption and/or the application of the
provisions of the Terms that might be interpreted to characterize traffic destined for
Internet as 10tal traffic or requiring the payment of reciprocal compensation.
Should AFN attempt to apply the Tcnns tn a maMer that conflicts with paragraphs 3-
above, GTE reserves its rights to seek appropriate legal and/or equitable reHef.
Please sign this letter on the space provided below and retum it 10 the undersigned.
Sincerely,
E Nonhwesl Incorporated GTE Northwest Incorporated
Connie Nicholas
Assistant Vice President
Wholesale Markets-lnterco
Steven J itterle
Dlrec tor-Helot tat ions
Wholesale Markets
Reviewed and countersigned as lo points A, B, and C of paragraph
American Fiber Network, Inc.
~(~
i SI(jl"A I'UNI:.
IPltI"" """""'1
R. Ragsdale - GTE