20050727Vol I Oral Argument.pdf

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ORIGINAL
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF
DIECA COMMUNICATIONS 1 INC. DBA
COVAD COMMUNICATIONS COMPANY FOR
ARBITRATION OF AN INTERCONNECTION
AGREEMENT WITH QWEST CORPORATION
) CASE NO. CVD-T- 05-
ORAL ARGUMENT
BEFORE
COMMISSIONER MARSHA SMITH (Presiding)
COMMISSIONER PAUL KJELLANDER
COMMISSIONER DENNIS HANSEN
PLACE:Commission Hearing Room
472 West Washington
Boise 1 Idaho
DATE:July 12 2005
VOLUME I - Pages 1 - 26
CSB REpORTING
Constance S.Bucy, CSR No. 187
17688 Allendale Road * Wilder, Idaho 83676
[phone] * [phone]
Email csb~spro.net
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For Covad
Communications:
For Qwest
Corpora t ion:
McDEVVITT & MILLER 1 LLP
by Dean J. Miller, Esq.
420 West BannockBoise, Idaho 83702
- and -
Covad Communications
by Gregory Diamond, Esq.
Senior Counsel
7901 Lowry Boulevard
Denver Colorado 80230
STOEL RIVES
by Mary S. Hobson, Esq.
101 South Capitol Boulevard
Boise 1 Idaho 83702
- and -
PERKINS COlE LLP
by John M. Daveney, Esq.
607 Fourteenth Street 1 N. W.Washington 1 D.C. 200005-2011
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BOISE , IDAHO 1 TUESDAY , JULY 12, 2005, 10: 00 A.
COMMISSIONER SMITH:Good morning, ladies
and gent emen .This is the time and place set for an
oral argument in Case No. CVD-05-1, further identified
as in the matter of the petition of Dieca Communications
Inc. dba Covad Communications Company for arbitration of
an interconnection agreement wi th Qwest Corporation.
First, I'll introduce us.The Commission in Idaho
composed of three members, all here today.On my left
Commission President Paul Kj ellander and on my right
Commissioner Dennis Hansen.My name is Marsha Smi th and
I will Chair today' s hearing.
Now we'll go to the appearances of the
parties.Do you want to be called Covad?
MR. MILLER:Covad Communications will be
fine.
COMMISSIONER SMITH:All right 1 Mr.
Miller.
MR. MILLER:Thank you, Madam Chairman
Dean J. Miller of the firm McDevitt & Miller on behalf
the petitioner Covad Communications 1 and I would also
like to i~troduce to the Commission Mr. Gregory Diamond
seated to my left who is senior counsel with Covad
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, ..
Communications.
We had previously 1 Madam Chairman 1 filed
with the Commission a written motion for limited
admission of Mr. Diamond for the purpose of participation
in this hearing and would ask, if appropriate 1 the motion
be granted at this time and Mr. Diamond be permitted to
present the arguments of Covad Communications.
COMMISSIONER SMITH:m certain that will
be fine.Are you asking to be excused, Mr. Miller 1 are
you going to stay for the duration?
MR. MILLER:Thi s looks ike too much fun.
COMMISSIONER SMITH:WeIl , I am informed
that I probably don't have authority to admit you to the
Bar 1 but since you have been kind enough to ante up the
payment to them 1 then you are qualified or allowed to
appear in this proceeding and welcome 1 Mr. Diamond.
MR. DIAMOND:Thank you.
COMMISSIONER SMITH:Ms. Hobson.
Thank you.MS. HOBSON:It's Mary
Hobson from Stoel Rives in Boise representing Qwest
Communications and with me today
- -
Qwest Corporation
excuse me 1 and wi th me today is John Devaney who is wi
the Perkins Coie law firm from Washington D. C.
Like Mr. Diamond 1 Mr. Devaney and I have
filed a petition for Mr. Devaney's admission for
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appearance in this case and we would ask at this time
that he be admitted for the limited purpose of presenting
the argument in this case today.
COMMISSIONER SMITH:And welcome to Idaho
and to the Commission , Mr. Devaney.
MR . DEVANEY:Thanks very much.
COMMISSIONER SMITH:So I assume
- -
are
there any preliminary matters before we go to Covad for
its argument?
MR. MILLER:We're prepared to proceed.
COMMISSIONER SMITH:Okay 1 then we will
allow.Mr. Diamond.
MR . DIAMOND:Good morning 1 Greg Diamond
on behalf of Covad Communications.First of alI , I want
to thank all of you for allowing me to have the
opportuni ty to appear here before you.There are two
issues that are before this Commission, two legal issues.
The first one is whether the Idaho Commission has
authori ty in an arbi tration proceeding to requlre Qwest
to unbundle network elements set forth in the competitive
checklist of Section 271 of the Telecommunications Act of
1996.
The second issue is whether the Commission
has authori ty to set rates for unbundled network elements
set forth in Section 271 of the Act.Covad naturally
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believes that the answer to both of these questions
yes.Both the FCC and other state commissions have
concluded time and again that, not withstanding whether
Covad would be impaired without access to Section 271
elements 1 an ILEC like Qwest must make the competitive
checklist elements set out in Section 271 available to
Covad at what we believe to be just and reasonable rates
and that standard, just and reasonable, comes from
Section 201 and Section 202 of the Telecommunications Act
of 1934.
Recently 1 Qwest acknowledged this
obligation.In answers that it filed last week to data
requests from a Nebraska arbi trator 1 Qwest was asked and
provided the answer to the following question:Is Qwest
still required to provide the unbundled network elements
that are only specified in Section 271 to a requesting
CLEC in Nebraska?Qwest hasQwest answered as follows:
an obligation to offer to CLECs on an unbundled basis the
network elements that it is required to provide under
Section 271.
Now 1 if Qwest had no duty to make Section
271 elements available to a requesting carrier 1 its right
to provide in-region long distance would be effectively
meaningless.Qwest received authority from the Federal
Communications Commission to provide in-region long
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distance serVlce in Idaho on the condition that Qwest
would provision and continue to provision Section 271
network elements to requesting carriers.
If Qwest' s pos it ion were to carry the day
its independent obligation to provide access to network
elements identified in Section 271 would be effectively
eviscerated, notwithstanding the fact that it obtained
authority from the FCC to provide in-region long distance
servlce on the condition that it would continue to make
Section 271 elements available to competing carriers.
Qwest really never comes to grips with the
FCC's holding that RBOCs like Qwest must provision these
elements.Rather 1 it relies heavily on four state
commission arbitration decisions involving the parties
here today that reached an opposite conclusion.However
like Qwest 1 these four decisions simply ignore the
holding of the FCC that Qwest must make these elements
available to Covad at just and reasonable and
non-discriminatory rates.In that regard, the decisions
are In error.
Now , the starting point here in terms of
legal analysis is the checklist itself 1 the competitive
checklist 1 and for Covad's purposes, Covad is a CLEC, but
it relies predominantly upon loops and transport as a
facilities-based carrier in order to provide service to
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its customers.It has a wide range of serVlces that it
offers its customers.It's most well known for its DSL
serVlce.Covad has more co-locations in central offices
throughout the Uni ted States than any other carrier in
the country.It has over 2 000 central office
co-locations and it is specifically interested in items 4
and 5 of the competitive checklist 1 specifically local
loop transmission and local transport.
Qwest has a duty to unbundle these two
elements regardless of the impairment analysis under
Section 251 of the Act, and the FCC has affirmed this
holding on three separate instances.In the Triennial
Review Order 1 the Commission held we continue to believe
that the requirements of Section 271 establish an
independent obligation for BOCs to provide access to
loops 1 switching transport 1 and signaling regardless of
any unbundling analysis under Section 251.This holding
was affirmed by the D.C. Circuit in the Court of Appeals
decision in what is known as USTA II , United States
Telecom Association versus FCC.
The court held the FCC reasonably
concluded that checklist items four 1 five 1 six and ten
posed unbundling requirements for these elements
independent of the unbundling requirements imposed by
Section 251.In other words, even in the absence of
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impairment 1 BOCs must unbundle local loops 1 local
transport 1 local switching and call-related databases in
order to enter the interLATA market.
Given the foregoing 1 it really isn'
plausible for Qwest to argue that this Commission has no
unbundling authority under Section 271 of the Act.The
FCC has never said that it has exclusive authority to
order ILECS to provision Section 271 elements at just and
reasonable rates.Recently 1 the Maine Public Utilities
Commission has concluded that state commissions have the
authority to arbitrate Section 271 pricing in the context
of Section 252 arbitrations which is what is before this
Commission today.
Now 1 what is unique about Idaho is that
Idaho has a statute that provides explicit authority for
this Commission to do several things.The first one
set forth in Section 62-614 of the Code which provides
that this Commission has the power to resolve disputes
between telecommunications carriers.Clearly 1 we have a
dispute here over a legal issue and the Commission has
authori ty to resolve it pursuant to state statute.
The other section is specific to telecom
and it's specific to the Federal Telecommunications Act
of 1996.62-615 of the Code provides that the Commission
shall have power and authority to implement the Federal
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Telecommunications Act of 1996, so in terms of a
jurisdictional dispute here 1 it's clear that the state
legislature has granted this Commission the authority to
implement the Act which would include 1 of course 1 Section
271 unbundling obligations.
Now , with respect to pricing and really
when you get right down to it, this docket is effectively
about price or rates 1 you will hear Qwest argue, of
course 1 that the rates under Section 251 unbundling
meanlng the TELRIC standard, is inapplicable.We would
argue that following 1 again , the Maine unbundling order
that I cited previously 1 they state the following:
have no record basis to conclude that TELRIC rates do not
qualify as just and reasonable rates.Covad's position
is that it is appropriate for this Commission to set
rates and it's appropriate for the Commission to set
rates at a TELRIC basis.
The font of that authori ty is 1 again, the
Idaho statute and the Idaho statute says that with the
power to implement the Federal Telecom Act 1 it includes
but is not limited to, the power to establish unbundled
network element charges in accordance wi th the Act 1 so in
that respect 1 unlike the other four state commission
decisions which Qwest will no doubt talk about 1 those
commissions didn't have that kind of state statute in
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order to provide a basis for this Commission to order
unbundling of 271 elements at TELRIC-based rates.
Now 1 I'm going to wrap up very quickly
here.A few weeks ago I appeared before the South Dakota
Commission for this very same issue that we'
arbitrating here and the staff attorney for the South
Dakota Commission asked me whether Covad could seek
redress with the FCC if the rates that Qwest charged for
unbundled network elements were not just and reasonable
and, of course 1 I had to answer yes.I think that the
Commission does have authority 1 the FCC has authority 1 to
declare a rate not just and reasonable 1 but that begs the
question and really brings us back full circle who is
going to set rates for Section 271 network elements, and
we believe that it has been the tradition of state
commissions to do that 1 both from a historical
perspective setting rates for regulated entities, but
also in the post-96 era, state commissions have routinely
set rates for unbundled network elements in various cost
docket s
You have approved Qwest' s rates pursuant
to its application for 271 authority by approving its
Those rates are essentially TELRIC estimates andSGAT.
you're not going to hear much in the way of law from
Qwest about the fact - - they're not going to come forward
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with any law that says the FCC has exclusive authority to
The practical reali ty is the FCC doesn t setset rates.
rates for anybody.That is clearly traditionally under
law in this state within the province of this Commission
and with that, I'll conclude and be happy to take any
quest ions.
COMMISSIONER SMITH:Thank you 1 Mr.
Diamond.Do we have any questions for Mr. Diamond right
now?
Mr. Devaney.
MR. DEVANEY:Good morning 1 John Devaney
on behalf of Qwest and I also thank you for the
opportunity to appear before you today.I'd 1 ike to
begin , if I could, to just sort of pull back and talk
about the context wi thin which we're here today.As the
Commission is aware 1 the Telecom Act of 1996 imposes
certain obligations on both incumbent local exchange
carriers like Qwest and competitive local exchange
carrlers ike Covad , and two of the most fundamental
obligations that the Act imposes are an obligation for
the carriers to permi t their networks to be
interconnected; that is 1 your network connects wi th mine
so we can exchange traffic 1 and then there's an
addi t ional obI iga t ion imposed on incumbent local exchange
carriers 1 who I'll call ILECs 1 like Qwest and that is
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that we have to make unbundled network elements available
to CLECs so they can use those what are called UNEs to
compete in the marketplace 1 including against the
incumbent local exchange carrier.
Those obligations are set forth in
so-called interconnection agreements and I m sure you
had many agreements presented to you for approval or
rej ection under the Act 1 but those agreements set out the
obligations of the parties generally with respect to
these interconnection and UNE obligations that I'
described.There are basically two ways that the parties
enter into these interconnection agreements.The first
step in the process is either the ILEC or the CLEC
requests negotiation and the parties sit down together,
and in this case over a period of many, many months 1 and
they negotiate 1 try to work out all the terms, and if
they can work everything out, they submi t the agreement
to you for approval.
I f they don't work everything out 1 then
the issues are arbi trated , the unresolved issues are
arbitrated, by the commissions and that I s why we re here
today.This particular case 1 I think 1 is a very good
example of how the Act can function in an efficient way.
Qwest and Covad negotiated, as I said, for many 1 many
months in very good faith and the end result of that was
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we agreed on hundreds of terms 1 leaving for this
arbi tration just one single issue.
The interconnection agreement 1 as you
probably know , is probably about this thick and for the
record, I'm pointing to about six inches 1 and we agreed
on everything except a small number of terms wi thin that
agreement relating to this unbundling issue 1 so although
nei ther Mr. Diamond nor I was involved in the
negotiations 1 I think the negotiators for both sides
really do deserve a pat on the back.The negotiations
and the arbi tration, and this is an important point for
the legal arguments I'm about to make 1 need to focus on
the obligations set forth in Section 251 (B) & (C) of the
Act.
Those two sections (B) & (C) 1 set forth the
specific obligations that are the subj ect of negotiations
and if negotiations fail 1 the subject of arbitration, and
the reason why I'm emphasizing this is you've heard from
Covad that the 271 unbundling obligation should be
imposed in this Section 252 interconnection agreement.
WeIl, this Commission's focus today by statute is on the
251(B)&(C) duties in the Act.Those duties have nothing
to do with Section 271.That's a completely different
regulatory framework that's under the auspices of the FCC
and that is why 1 as Mr. Diamond has candidly
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acknowledged, the other four state commissions that have
heard this precise issue before you today have ruled in
favor of Qwest and against Covad concluding that it would
not be proper to include in this interconnection
agreement the 271 unbundling obligations that Covad
asking you to order here today.
We've quoted extensively in our briefs
from those other decisions 1 but just to be clear 1 the
four other states that have ruled on this issue are
Washington , Minnesota, Utah and most recently Iowa, and
all four of those state commissions found it would be
improper to include 271 obligations in an interconnection
agreement.Some of those commissions concluded they
didn t have authority to do so under the Act and in
addition , another issue that's raised in Covad' s papers
but wasn't argued here today 1 those commissions concluded
that you cannot order an element to be unbundled under
state law that the FCC has declined to require ILECs to
unbundle.
That is sort of the backdrop of these
issues.I would like now to just walk through a few
the legal reasons why Covad' s unbundling proposal is not
lawful and why 1 as the four commissions before you have
done, we would ask that you, too, reject their unbundling
proposal.The fundamental obligation in the Act for
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ILECs to unbundle these network elements and provide them
to CLECs is that we have to provide only those elements
for which a CLEC would be impaired if they didn't have
under these TELRIC-based rates 1 and as you're probably
aware, the FCC has spent many, many 1 many hours 1 many
weeks 1 many months wrestling with this idea of what
impairment and how does it translate into what network
elements have to be provided.
In fact 1 on three different occasions 1 the
FCC has issued voluminous orders trying to address this
issue of impairment and each time the FCC has been
reversed by the D. C. Circuit 1 and we're finally settling
down and we have a better understanding of what
impairment means 1 but the fundamental proposi tion in the
Act is a CLEC is not entitled to a network element unless
the CLEC has demonstrated it would be impaired without
access to it 1 and in the Triennial Review Order that the
FCC issued and then in the Triennial Review Remand Order
the FCC issued, the FCC identified a significant number
of elements for which CLECs are not impaired, that they
don I t have them 1 and Covad responded, in particular to
the TRO ruling 1 by proposing the language that's before
you today.
We view it 1 frankly, as sort of an end run
around the Triennial Review Order.They would like to
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continue to have access at TELRIC rates to these elements
that the FCC has said we, an ILEC 1 do not have to
unbundle on the grounds that CLECs aren't impaired
without them, so we really do Vlew this as sort of an end
run around the FCC rul ings
What I want to emphasize is that just
because Covad might not get these elements under this
interconnection agreement before you today doesn't mean
that they won't get them at all and this is a very
important point.We are more than happy to provide Covad
with network elements required under Section 271 , and by
the way 1 Mr. Diamond suggested in his argument that
somehow oppose that.We recogni ze we have anWe don't.
obligation under 271 to provide certain network elements
but our fundamental point is we do that in the context
not of a 252 interconnection agreement 1 but instead
through commercial agreements and through tariffs 1 and
that's consistent wi th the regulatory framework
established by the Act.It's consistent wi th FCC
rulings, and I don't want to belabor that point 1 but I
think it's a very important one, so I want to just give
you an example.
In Idaho 1 as in Qwest' s other states
Covad and Qwest have entered into a commercial agreement
called Qwest Platform Plus under which Covad has access
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to these 271 elements at market-based, negotiated rates.
Similarly 1 Qwest and Covad have agreements in mul tiple
states for line sharing which also is not a 251 element.
It's a commercial agreement.Through Qwest' s FCC access
tariff 1 Covad can continue to have access to elements
that are no longer required under Section 251, so what
I m trying to drive home here is simply because you might
rule that these elements shouldn't be in this
interconnection agreement, which I think the law requlres
that you reach that resul t 1 does not mean that Covad
won't have access to 271 elements.It will and I think
it would acknowledge here today that it does.
Wi th respect to whether the agreement
should include these 271 unbundling obligations 1 we cite
In our brief two important legal propositions that bear
on this issue:First of alI , state commission authority
under the Telecom Act of 1996 has to be expressly found
in the Act 1 and if you look at Section 271 , you'll see
that there is no authori ty in that section that gives a
state commission the power to order unbundling of network
elements.It's not anywhere in the statute and I don'
think that even Covad contends that that statute by its
terms supports state commission unbundling of 271
elements 1 and in that regard, I just would like to read
to you a decision by a federal district court in Indiana
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that focused on this preClse issue of whether state
commissions have decision-making authority under 271 and
that court stated that Sections 251 and 252 contemplate
state commissions may take affirmative action towards the
goals of those sections, while Section 271 does not
contemplate substantive conduct on the part of state
commlsslons.
It's a very different standard.251 and
252 , yes 1 states have decision-making authority 1 271 they
do not, and there's not a single federal authority that
Covad can cite that reaches a contrary conclusion and
indeed, the four commissions before you have reached the
conclusion that I'm articulating to you today.
The other point related to this 271 issue
that I would like to emphasize is 1 as I said earlier 1 the
authority of a state commission in an arbitration like
this is to impose obligations arising under 251 (B) & (C)
and again, 271 is unrelated to 251 (B) & (C) and therefore
there is no authority in the context of an arbitration to
impose 271 obligations.The state commissions that have
gone before you have reached the same conclusion.For
example 1 the Washington Commission in an order issued
several months ago said this Commission has no authori
under Section 251 or 271 of the Act to require Qwest to
include 271 elements in an interconnection agreement.
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Similarly 1 the Minnesota administrative
law judge in a decision adopted by that commission said
there is no legal authori ty in the Act 1 the Triennial
Review Order or in state law that would require the
inclusion of Section 271 terms in the interconnection
agreement over Qwest' s obj ection; so in sum 1 with respect
to the 271 argument and proposal by Covad, there is no
statutory basis for including those obligations in this
252 interconnection agreement.
The next issue I would like to touch upon,
and I'll do so briefly, is the argument of Covad that
this Commission should order under state law Qwest to
unbundle elements that the FCC has specifically said
Qwest does not have to unbundle.Essentially what Covad
is asking you to do is issue rulings that conflict
directly with FCC rulings on unbundling.For example, in
the Triennial Review Order, the FCC ruled unequivocally
that Qwest and other ILECs do not have an obligation
under Section 251 to provide to CLECs so-called feeder
subloops.Feeder is part of the telephone network.It'
basically a cable that runs from the wire centers out to
neighborhoods and that loop can be sectioned off into
pleces 1 and what Covad would like is for you to order
that we have to provide under 251 those pieces of feeder
to them at TELRIC rates.
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The FCC very clearly ruled we don't have
to do that and that it's important to federal policy that
we not be required to do that so that CLECs are
encouraged to build their own facilities.Covad wants
you to say despi te that, yes 1 Qwest you have to unbundle
feeder subloops.It is a direct conflict with the
Federal Act and wi th the FCC's implementation of that
Act.
Now 1 this Commission , like other state
commissions 1 does have authori ty to issue regulations
that implement the Act 1 and any suggestion that we say
otherwise is not correct.We recognize the state
commissions have authority under the Act to regulate 1 but
critically the authority of state commissions to regulate
is only to do so to the extent regulations are consistent
wi th federal law and wi th FCC implementation of the Act
and what Covad is asking you to do is regulate in a way
that is fundamentally inconsistent with federal law as
interpreted by and implemented by the FCC and that is why
the four state commissions that have gone before you also
have refused to accept Covad I s demands for unbundling
under state law recognizing that those demands would
confl ict wi th federal law.
Now 1 in Idaho it is indeed a somewhat
unlque si tuation different from some other states.
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you look carefully at the statutes that Covad is relying
upon for your state law unbundling authority 1 there is no
state law unbundling authority in those statutes.All
three statutes that they cite in their briefs do not
mention unbundling and do not in any way suggest that
this Commission has authority to order unbundling under
state law 1 so the fundamental issue is do you have that
authority and the answer pretty clearly from your
statutes is that you don't 1 but even if you did, you
couldn't exercise the authority in the way they re asking
you to do so which would be 1 as I said, inconsistent wi
federal law.
My final point goes to the issue
pricing of 271 elements.I'll just spend 30 seconds on
this.ve al ready argued to you that you don't have
authority to unbundle network elements under 271.
follows 1 therefore 1 that you don t have pricing authority
over those elements under 271.We make the argument in
our brief and we think it's quite clear that the FCC has
said that it and it alone has pricing authority over 271
elements.There's a fairly clear statement in the
Triennial Review Order to that effect and there's nothing
in 271' s express language that suggests state commissions
have pricing authori ty over those elements.
In conclusion , therefore, we would ask you
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to follow the rulings of the four state commissions
before you and adopt Qwest' s language which properly
gives Covad access to the elements it I S entitled to under
Section 251 and 252 of the Act 1 and we emphasize that you
also rej ect Covad' s language which asks you to exercise
authority you don't have 1 and finallYl we emphasize again
that just because Covad might not have access to the
elements it's seeking under this agreement, it will have
access to those elements under other commercial
agreements and tariffs.
Thank you very much.That's all I have.
COMMISSIONER SMITH:Do we have questions?
I just had one.Mr. Diamond ment ioned a Maine order and
I noticed that you did not.Are you distinguishing that?
MR. DEVANEY:We do distinguish that in
our brief, Chairwoman.The Maine order focused on an
agreement that, I believe it was, Verizon had entered
into during the 271 approval process where they said
look, if you give us, the Maine Commission 1 if you
consul t wi th the FCC and recommend approval of our long
distance application, we will agree in a tariff in Maine
to continue to provide network elements in that tariff
even if they're delisted by the FCC, and if you read the
Maine order carefully 1 what the Maine Commission
saying is we have authority to enforce that promise that
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was made to us when we recommended approval.
They're not saying they have authori ty to
require unbundling under Section 271, and I think if you
read the Maine decision carefully, that's very clearly
what's happening there 1 which is the conclusion, by the
way 1 that at least one or two state commissions before
you in these arbi trations have reached, that that case
readily distinguishable and does not give authority to
unbundle under 271.
COMMISSIONER SMITH:Thank you.
Mr. Diamond 1 would you like the last word?
A short reply would beMR. MILLER:
appreciated.Mr. Devaney who Just a few comments.
have the utmost respect for 1 by the way 1 we work together
a lot on a number of issues and he's a fine lawyer, I
just want to make a few comments.He makes much of the
fact that somehow we're asking you to do something that'
inconsistent wi th federal law , the argument that because
certain network elements have been delisted by the FCC
means that you don't have authority to do something that
apparently conflicts with federal law.The point of my
argument is that in the Triennial Review Order 1 the
commlsslon made it clear on multiple occasions that Qwest
has Section 271 unbundling obligations separate and apart
from any unbundling analysis under Section 251 , which
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means that whether or not the FCC has delisted a specific
element 1 whether it's a dark fiber or some other element
that is no longer available under the Act 1 mass market
switching 1 the idea is that you are really only being
asked to enforce essentially a legal obligation that
already exists in the first instance and that's not
inconsistent wi th anything under federal law.
More importantly 1 Qwest makes the argument
that there's no state law on unbundling authority and
62-615 makes it clear you have the power to establish
unbundled network element charges.Implicit in that
authori ty is you re going to make a determination as to
which network elements you re going to set rates for and
implicit in that is the authority to actually order
unbundling of elements that they already have an
obligation to unbundle, so really 1 we're back full circle
again to the idea of rates.
Now , Mr. Devaney mentioned the fact that
we could get access to these elements through commercial
agreements and tariffs and he makes much of the fact of
the so-called Qwest Platform Plus agreement which
basically a replacement for the famous AT&T UNE platform
and the problem is that those rates weren't negotiated
and the agreement itself was not negotiated.I t was
simply presented to us as an al ternati ve.We were more
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than happy to enter into it 1 but again 1 it does not have
what we would consider to be commercially reasonable
rates.
Now 1 that's not the case with respect to
the commercial line sharing agreement.That was clearly
a negotiated contract and the rates themselves were
negotiated as weIl, so there is some play there.
Certainly, Covad would be pleased to enter into a
commercial agreement wi th Qwest at commercially
reasonable rates.The problem is that the tariff rates
the FCC 1, those rates are very high.The state
interstate access rates are very high.
Now, one of the questions that you may be
thinking is why is Covad even here 1 why are we before
you, and what we have done is we've made the decision
that this issue is really an entry issue for us.
don't have facili ties in Idaho.We're not a
facilities-based CLEC.We don't provide DSL serVlce
through our own facilities.We would like to.We would
like to come into this state and provide service on rates
that are just 1 reasonable and non-discriminatory.The
only available mechanism for us to do that is to come to
this Commission and ask that the Commission order
unbundling of Section 271 elements at appropriately
commercially viable rates.
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The current rates that are in place right
now make it very difficult, I won't say impossible 1 but
make it very difficult for Covad to justify on a business
level to come into the state 1 but we would really 1 of
course, like to do that 1 and we've raised this issue in
seven other Qwest states, solely the 271 issue, and so on
that basis 1 that's all I have in reply.
Do we have questionsCOMMISSIONER SMITH:
for Mr. Diamond?Nor 1, so I thank the parties for
appearing this mornlng.It is helpful to always have the
opportuni ty to hear it in person and to ask questions 1 so
we appreciate your time and your expertise.The
Commission will deliberate on this and issue its decision
as promptly as possible.Wi th that 1 we are adj ourned.
(The Hearing adjourned at 10:35 a.
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T I C T I O
This is to certify that the foregoing
proceedings held in the matter of the petition of Dieca
Communications 1 Inc. dba Covad Communications Company for
arbitration of an interconnection agreement with Qwest
Corporation, commencing at 10: 00 a. m. 1 on July 12 , 2005,
at the Commission Hearing Room , 472 West Washington
Street 1 Boise 1 Idaho 1 is a true and correct transcript of
said proceedings and the original thereof for the file of
the Commission.
CONSTANCE S. BUCY
Certified Shorthand
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Wilder 1 Idaho
AUTHENTI CATION
83676