USW317A.docx

1 BOISE, IDAHO, MONDAY, MARCH 17, 1997, 1:00 P. M.
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4 COMMISSIONER SMITH: Let's go back on the
5 record. I believe Ms. Hobson had just concluded her
6 cross of Ms. Faunce.
7 Mr. Phillips, do you have questions?
8 MR. PHILLIPS: Thank you, Madam Chairman.
9
10 MADONNA FAUNCE,
11 produced as a witness at the instance of the Staff,
12 having been previously duly sworn, resumed the stand and
13 was further examined and testified as follows:
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15 CROSS-EXAMINATION
16
17 BY MR. PHILLIPS:
18 Q I have one question, Ms. Faunce. On almost
19 the last page of your surrebuttal, page 24 on line 22,
20 you change a figure there from 210,000 to 103,000.
21 A Yes, because the 210,000 would have been at
22 the intrastate level and I was referring to just
23 Title 61. That's how we get the 103.
24 MR. PHILLIPS: Oh, I see; so that's
25 adjusted it opposite the way I thought it was going to,
1827
CSB REPORTING FAUNCE (X)
Wilder, Idaho 83676 Staff
1 but now I understand. Thank you very much.
2 COMMISSIONER SMITH: Mr. Harwood.
3 MR. HARWOOD: No questions.
4 COMMISSIONER SMITH: From the
5 Commissioners.
6 COMMISSIONER HANSEN: No questions.
7 COMMISSIONER NELSON: I don't have any
8 questions. Thank you.
9 COMMISSIONER SMITH: Nor do I.
10 Any redirect?
11 MR. HOWELL: No redirect.
12 (The witness left the stand.)
13 COMMISSIONER SMITH: Thank you,
14 Ms. Faunce.
15 (The witness left the stand.)
16 MR. HOWELL: Madam Chairman, could we go
17 off the record for a moment?
18 COMMISSIONER SMITH: Certainly, we'll be at
19 ease.
20 (Off the record discussion.)
21 COMMISSIONER SMITH: All right, let's go
22 back on the record. Ms. Hobson, we're going to your
23 witness.
24 MS. HOBSON: U S WEST calls Paul Gobat.
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1828
CSB REPORTING FAUNCE (X)
Wilder, Idaho 83676 Staff
1 PAUL E. GOBAT,
2 produced as a rebuttal witness at the instance of
3 U S WEST Communications, Inc., having been first duly
4 sworn, was examined and testified as follows:
5
6 DIRECT EXAMINATION
7
8 BY MS. HOBSON:
9 Q Would you please state your name and spell
10 your last name for the record?
11 A My name is Paul Gobat, G-o-b-a-t.
12 Q What is your business address?
13 A 7800 East Orchard Road, Englewood,
14 Colorado.
15 Q By whom are you employed and in what
16 capacity?
17 A I'm employed as a director of compensation
18 at U S WEST, Inc.
19 Q Mr. Gobat, in connection with your
20 employment for U S WEST, did you prepare and cause to be
21 filed in this case certain rebuttal testimony consisting
22 of nine pages and dated January 28, 1997?
23 A Yes, I did.
24 Q Do you have any corrections, additions or
25 changes to that testimony at this time?
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CSB REPORTING GOBAT (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 A No, I don't.
2 Q Did you also have certain exhibits which
3 accompanied that testimony being previously marked as
4 Exhibits 36A through 36F as in "Frank"?
5 A Yes, I did.
6 Q Were those exhibits prepared at your
7 direction?
8 A Yes.
9 Q And do you have any corrections or changes
10 to make to those exhibits at this time?
11 A No, I do not.
12 Q Mr. Gobat, if I were to ask you the
13 questions contained in your prefiled testimony at this
14 time, would your answers be the same?
15 A Yes, they would.
16 MS. HOBSON: Madam Chair, at this point, we
17 would ask that Mr. Gobat's testimony, rebuttal testimony,
18 be spread upon the record as if read and that his
19 exhibits be offered.
20 COMMISSIONER SMITH: If there's no
21 objection, we will spread the prefiled rebuttal testimony
22 of Mr. Gobat upon the record as if read and admit
23 Exhibit 36, Parts A through F.
24 (U S WEST Communications, Inc. Exhibit
25 No. 36, A-F, was admitted into evidence.)
1830
CSB REPORTING GOBAT (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 (The following prefiled rebuttal
2 testimony of Mr. Paul E. Gobat is spread upon the
3 record.)
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CSB REPORTING GOBAT (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 I. SUMMARY OF TESTIMONY
2 Q MR. GOBAT, WILL YOU PLEASE SUMMARIZE YOUR
3 TESTIMONY?
4 A My testimony demonstrates that U S WEST's
5 compensation plans, including base salary and incentive
6 plans, are a prudent, balanced and reasonable business
7 expense. The incentive plans are an integral part of the
8 management and executive compensation plans at U S WEST
9 and should be viewed not in isolation but as integrated
10 with the salary and benefits of management and executive
11 employees. The incentive plans are designed to motivate
12 and reward team and individual achievement of goals which
13 provide ratepayer benefit. The compensation plans
14 deliver total cash compensation, if goals are achieved,
15 that is in line and even slightly below the marketplace.
16 U S WEST incentive plans are consistent with and similar
17 to plans in general use in the utility and
18 telecommunications industries. Because U S WEST uses
19 incentive pay, it demonstrates that U S WEST is committed
20 to paying for results. Therefore, because the
21 compensation plans are a prudent and reasonable business
22 expense, the compensation plans (including the incentive
23 plans) incur costs which should be eligible for rate
24 recovery.
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1832
PAUL E. GOBAT - REB 1
U S WEST Communications, Inc.
1 II. IDENTIFICATION OF WITNESS
2 Q. PLEASE STATE YOUR NAME, BUSINESS ADDRESS
3 AND POSITION.
4 A. My name is Paul Gobat. My business address
5 is 7800 E. Orchard Road, Englewood, Colorado. I am a
6 Director - Compensation for U S WEST, Inc.
7 Q. PLEASE REVIEW YOUR EDUCATION AND WORK
8 EXPERIENCE.
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PAUL E. GOBAT - REB 1A
U S WEST Communications, Inc.
1 A. I have a Bachelor of Arts degree from
2 St. Martin's College and a Master of Business
3 Administration degree from City University. I am an
4 accredited Certified Compensation Professional by the
5 American Compensation Association. Since October 1987 I
6 have designed and administered compensation plans at
7 U S WEST, Inc. and its subsidiaries. In addition to my
8 work at U S WEST, I have made a presentation to the
9 Sub-committee on Management Analysis of the National
10 Association of Regulatory Commissioners and have
11 published four articles in professional Human Resource
12 journals.
13 Q. HAVE YOU TESTIFIED BEFORE THIS COMMISSION
14 IN PRIOR REGULATORY PROCEEDINGS?.
15 A. No but I have testified before the
16 Washington Utilities and Transportation Commission and
17 the Utah Public Service Commission.
18 Q. HAVE YOU FILED TESTIMONY BFORE ANY OTHER
19 STATE COMMISSIONS?
20 A. Yes, I have filed testimony before the
21 Oregon Public Utility Commission.
22 III. PURPOSE OF TESTIMONY
23 Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY?
24 A. The purpose of my testimony is to
25 demonstrate that U S WEST's plans, including the various
1834
PAUL E. GOBAT - REB 2
U S WEST Communications, Inc.
1 incentive plans, for management and executive employees
2 are prudent, balanced and reasonable business expenses.
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PAUL E. GOBAT - REB 2A
U S WEST Communications, Inc.
1 IV. DESCRIPTION OF U S WEST'S BASE SALARY PLANS
2 Q. PLEASE DISCUSS THE BASE SALARY PLANS AT
3 U S WEST.
4 A. U S WEST's base salary plans are designed
5 to pay at a competitive rate based on an analysis of
6 comparable positions in our competitive market group.
7 The competitive market group is composed of companies
8 that are our competitors and companies of similar size in
9 general industry.
10 Q. DOES U S WEST USE MARKET SALARY DATA FROM
11 NATIONAL SURVEYS TO ESTABLISH TOTAL CASH COMPENSATION
12 LEVELS?
13 A. Yes, in fact U S WEST bases pay on a total
14 compensation philosophy. The competitive market pay rate
15 for each position at U S WEST is the total of base salary
16 and the annual incentive award at target goal
17 achievement.
18 V. DESCRIPTION OF INCENTIVE PLANS AT USWC
19 Q. PLEASE DESCRIBE THE TYPES OF MANAGEMENT AND
20 EXECUTIVE COMPENSATION PLANS AT USWC.
21 A. The USWC management and executive
22 compensation plans are designed to attract and retain
23 highly competent management and executive employees.
24 USWC competes for such employees in the market place. A
25 key feature of the USWC plans is that a significant
1836
PAUL E. GOBAT - REB 3
U S WEST Communications, Inc.
1 portion of all management employees, including
2 executives, total compensation is "at risk" through the
3 incentive and team performance award plans.
4 Consequently, USWC managers and executives are
5 compensated on a pay for results basis. These plans are
6 designed to drive behavior and results
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PAUL E. GOBAT - REB 3A
U S WEST Communications, Inc.
1 which are in the interests of customers, shareowners and
2 employees. It is important to realize the USWC incentive
3 plans is not a "profit sharing" plan.
4 Q. PLEASE DISCUSS THE TEAM PERFORMANCE AWARD
5 (TPA) PLAN.
6 A. The Team Performance Award Plan (TPA) is
7 designed to reward team and individual achievement and to
8 deliver total annual compensation consistent with our
9 "pay for performance" philosophy. Under this
10 philosophy, the TPA is an important part of every
11 manager's total compensation. In the same vein, USWC
12 will not pay or will decrease the TPA, which is the "at
13 risk" portion of total compensation any year in which
14 USWC does not meet or exceed its customer service and
15 financial goals.
16 Q. PLEASE DISCUSS THE USWC EXECUTIVE SHORT
17 TERM INCENTIVE PLAN.
18 A. The USWC Executive Short Term Incentive
19 Plan (STIP) is designed, like the TPA, to motivate team
20 and individual performance in the achievement of
21 customer service and financial goals.
22 Q. PLEASE DISCUSS THE EXECUTIVE LONG TERM
23 INCENTIVE PLAN.
24 A. The Executive Long Term Incentive Plan is a
25 combination of stock options and a performance plan.
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PAUL E. GOBAT - REB 4
U S WEST Communications, Inc.
1 Awards made under the performance plan are based on the
2 achievement of stock appreciation and dividend growth
3 measures. The plan is a reasonable and prudent means to
4 influence the executives to act with the long term in
5 mind.
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PAUL E. GOBAT - REB 4A
U S WEST Communications, Inc.
1 VI. DESCRIPTION OF GENERALLY ACCEPTED INDUSTRY
2 PRACTICE
3 Q. ARE THE INCENTIVE PLANS AT U S WEST
4 COMMUNICATIONS CONSISTENT WITH GENERALLY ACCEPTED
5 PRACTICE IN THE UTILITY INDUSTRY?
6 A. Yes. Incentive pay plans are very
7 prevalent in the utility industry with 95% of utility
8 companies having them. (See Exhibit No. 36A Watson Wyatt
9 Data Services - 1995/96 Survey Report on Annual
10 Incentives and Other Variable Pay Plans.)
11 Q. ARE THE INCENTIVE AWARDS AT U S WEST
12 COMMUNICATIONS CONSISTENT WITH GENERALLY ACCEPTED
13 PRACTICE IN GENERAL INDUSTRY?
14 A. Yes. As in the utility industry, 86% of
15 the companies in general industry use incentive plans.
16 (See Exhibit No. 36A).
17 Q. ARE THE PLANS AND THEIR COMPONENTS,
18 CRITERIA AND GOALS COMPARABLE TO THOSE OF OTHER SIMILAR
19 COMPANIES IN THE TELECOMMUNICATIONS INDUSTRY?
20 A. The U S WEST plans are similar to the
21 incentive pay plans of the other RBOC's, AT&T, GTE and
22 MCI. These companies provide comparable performance
23 factors, eligibility criteria and award levels in the
24 design of their incentive pay plans. A 1995 Hewitt
25 Associates (Exhibit No. 36B) confidential study of ten
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PAUL E. GOBAT - REB 5
U S WEST Communications, Inc.
1 major telecommunication companies (including those just
2 noted) indicates that all of the companies studied have
3 an annual incentive plan for management employees.
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PAUL E. GOBAT - REB 5A
U S WEST Communications, Inc.
1 Q. ARE THESE COMPANIES AMONG THOSE WHICH
2 COMPETE WITH USWC FOR QUALIFIED EMPLOYEES?
3 A. Yes.
4 Q. IS THE EXECUTIVE LONG TERM INCENTIVE PLAN
5 CONSISTENT WITH GENERAL PRACTICE?
6 A. Yes it is. The design of the plan is
7 consistent with similar plans in use in the
8 telecommunications industry as well as in general
9 industry. 83% of the companies in the Towers Perrin Long
10 Term Incentive Plan Report use stock options as a part of
11 their long term plan. 38% of the companies in the report
12 use a performance plan. (See Exhibit No. 36C)
13 Q. IS IT MORE COMMON FOR LARGE COMPANIES TO
14 USE INCENTIVE PLANS?
15 A. Yes. Large companies, those companies
16 employing more than 5,000 employees, typically use
17 incentive plans at a greater rate than smaller companies.
18 For example, large companies have some form of incentive
19 plan for management employees approximately 95% of the
20 time while in general industry only 86% of management
21 employees have some form of incentive plan. (See Exhibit
22 No. 36A Watson Wyatt Data Services)
23 VII. DESCRIPTION OF THE RELATIONSHIP OF U S WEST PAY
24 LEVELS TO MARKET.
25 Q. DO YOU BELIEVE THAT THE INCENTIVE
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PAUL E. GOBAT - REB 6
U S WEST Communications, Inc.
1 COMPENSATION PLANS/AMOUNTS AT U S WEST ARE REASONABLE?
2 A. Yes, I do. U S WEST's compensation
3 philosophy is to pay competitively for expected
4 performance, above average for exceptional performance
5 and below average
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PAUL E. GOBAT - REB 6A
U S WEST Communications, Inc.
1 for less than expected performance. In 1995, the Team
2 Performance Award paid out at 77% of target and the
3 Executive Short Term Incentive Plan payout was 60% of
4 target.
5 Q. WHAT EVIDENCE DO YOU HAVE THAT TOTAL
6 SALARIES, INCLUDING INCENTIVE PAY, WAS PRUDENT?
7 A. U S WEST uses nationally recognized salary
8 surveys of market levels of pay to establish target
9 levels of total cash compensation. These surveys are
10 noted in Exhibit No. 36D. To compete for employees in
11 the competitive market, U S WEST must target pay at
12 prevailing market wages. Comparison against the market
13 is a measure of the prudence of the pay levels of
14 U S WEST employees.
15 Q. WHAT IS THE RELATIONSHIP OF U S WEST
16 EMPLOYEE PAY TO THE MARKET?
17 A. For 1994 and for 1995 the managers at USWC
18 were paid under the market for base salary and for total
19 cash compensation. The average USWC manager, weighted by
20 the number of managers in each grade, received 4.6% less
21 total cash compensation than the market in 1995. The
22 weighted average base salary is approximately 4.0% under
23 the market base salary. (Exhibit No. 36E) USWC
24 establishes the compensation of their employees on a
25 total cash compensation basis, as does the marketplace.
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PAUL E. GOBAT - REB 7
U S WEST Communications, Inc.
1 In the market, as at USWC, total cash compensation
2 includes salary and incentive pay. As I noted earlier,
3 incentive plans are common in the telecommunications
4 industry, with all of the large telecommunications
5 companies using an incentive plan to pay for results.
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PAUL E. GOBAT - REB 7A
U S WEST Communications, Inc.
1 Q. IF U S WEST ELIMINATED INCENTIVE PAY, WHAT
2 SHOULD REGULATORS EXPECT TO HAPPEN TO COMPENSATION?
3 A. Incentive pay would be replaced with base
4 pay. U S WEST would have to do that to attract and
5 retain a quality work force by matching the level of
6 market pay which includes base pay and incentive pay.
7 Q. DOES EXECUTIVE PAY AT USWC EXHIBIT A
8 SIMILAR RELATIONSHIP TO THE MARKET?
9 A. Yes. Executives at U S WEST are slightly
10 under the market for base salary and more than 7% under
11 on total cash compensation. (Exhibit No. 36F)
12 Q. FOR EXECUTIVES, HAS THIS RELATIONSHIP TO
13 THE MARKET CHANGED OVER THE LAST SEVERAL YEARS?
14 A. Yes it has. The Regional Oversight
15 Committee audit in 1992 found that U S WEST was over the
16 market on base salary and under the market on total cash
17 compensation. One of their recommendations was to bring
18 base salaries in line with the market by continuing to
19 use the 18-24 month salary review process for executives.
20 U S WEST has continued to use that process and has
21 brought the base salaries into line with the market.
22 U S WEST continues to be under the market on total cash
23 compensation.
24 Q. WHAT IS YOUR CONCLUSION REGARDING THE
25 U S WEST COMPENSATION PLANS?
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PAUL E. GOBAT - REB 8
U S WEST Communications, Inc.
1 A. The compensation plans at U S WEST result
2 in prudent and reasonable employee expenses in 1995. I
3 urge the Idaho Commission to allow the inclusion of these
4 costs into the rate making process.
5 Q. DOES THIS CONCLUDE YOUR TESTIMONY?
6 A. Yes. Thank you.
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PAUL E. GOBAT - REB 9
U S WEST Communications, Inc.
1 (The following proceedings were had in
2 open hearing.)
3 MS. HOBSON: Thank you. We have some brief
4 live surrebuttal.
5 COMMISSIONER SMITH: Okay.
6
7 DIRECT EXAMINATION
8
9 BY MS. HOBSON: (Continued)
10 Q Mr. Gobat, this morning, Ms. Faunce
11 testified that U S WEST's base pay is actually above
12 market in several categories based upon data which you
13 provided to her in data requests. Were you present when
14 she provided that testimony?
15 A Yes, I was.
16 Q Did she correctly interpret the data that
17 you had provided in the data responses?
18 A No, she did not. The average, the weighted
19 average, of the salaries and the total compensation for
20 the managers at U S WEST Communications is approximately
21 four percent under the market.
22 Q Now, Mr. Gobat, are you distinguishing
23 between the base pay and the total compensation package
24 when you provide that estimate?
25 A The data was provided under both base
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CSB REPORTING GOBAT (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 salary and total compensation and in both cases, they're
2 approximately four percent under the market.
3 Q Mr. Gobat, Ms. Faunce alleges in her
4 testimony that the 1995 team awards which were paid in
5 '96 contain no service quality component. Is that a
6 correct analysis?
7 A No, it's not. In response to Staff
8 Question No. 350, we provided information that indicated
9 that the business units have 20 to 40 percent based on
10 the service quality. In fact, network, which is the
11 largest business unit, had 40 percent based on service
12 quality indicators.
13 Q Would that be 40 percent of the overall
14 100 percent of the criteria upon which incentive pay is
15 based?
16 A It would be 40 percent of the overall team
17 award.
18 Q Now, is every U S WEST Communications
19 management employee in a business unit?
20 A Yes, they are. There's about 20 business
21 units.
22 Q And which one is the largest one?
23 A Network is the largest one. It has about
24 one-third of the management employees.
25 Q Did service quality have an impact on the
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CSB REPORTING GOBAT (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 1995 team award that was paid in 1996?
2 A Yes. Depending on the business unit and
3 how they achieved their service quality goals or service
4 quality indicators, it was paid out, partly could have
5 been paid out, as a result of how they achieved those
6 goals. If all the goals had been met, the revenue
7 requirement in Ms. Wright's testimony would have
8 increased.
9 Q For 1995?
10 A For 1995.
11 Q Now, on page 23 of Ms. Faunce's testimony,
12 she lists the components of the short-term incentive
13 plan, also known as STIP. Do any of those components
14 relate to service quality?
15 A Yes, they do. There were four service
16 quality indicators in that short-term incentive plan.
17 There were held orders, access to the business office,
18 missed commitments on repair, and missed commitments on
19 installation.
20 Q Now, if U S WEST were to pay below the
21 market over a period of time, what impact would you
22 expect that to have on U S WEST's employees?
23 A I expect that U S WEST would start to lose
24 highly-skilled employees whose skills are highly mobile.
25 (Documents being distributed.)
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CSB REPORTING GOBAT (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Q BY MS. HOBSON: Mr. Gobat, Ms. Faunce
2 testified this morning that she was not given information
3 relating to the criteria for the performance under the
4 incentive pay plans for 1995. Do you agree with her
5 testimony on that point?
6 A No, I don't. It was provided to her under
7 Request 350.
8 Q And you have been handed what has been
9 previously marked as U S WEST Exhibit No. 57. Can you
10 identify that exhibit for the record, please?
11 A That is the response to Request No. 350
12 from myself.
13 Q Did this provide the information that
14 Ms. Faunce claims that she was lacking?
15 A Yes, it does. On page -- well, it's
16 labeled "page 5." Down in the pie chart where it says
17 "Team Performance Award Components," it indicates 20 to
18 40 percent is on customer service or quality. There is a
19 label on the top of the page that says "1995" because
20 Ms. Faunce requested multiple years.
21 MS. HOBSON: Thank you, Mr. Gobat. That's
22 all of the live surrebuttal I have and the witness is
23 tendered for cross-examination.
24 COMMISSIONER SMITH: Thank you,
25 Ms. Hobson.
1851
CSB REPORTING GOBAT (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Mr. Phillips, do you have any questions?
2 MR. PHILLIPS: No, I do not. Thank you.
3 COMMISSIONER SMITH: Mr. Harwood.
4 MR. HARWOOD: No questions.
5 COMMISSIONER SMITH: Ms. Hamlin.
6 MS. HAMLIN: Yes, thank you.
7
8 CROSS-EXAMINATION
9
10 BY MS. HAMLIN:
11 Q Mr. Gobat, looking at Ms. Faunce's Exhibit
12 155 which outlines the team awards --
13 A Is this on her surrebuttal?
14 Q I'm sorry, 156. It says at the top,
15 "Request No. 350: Financial Goals, Team Awards"?
16 A Yes.
17 Q When you look down to 1995, is it my
18 understanding that the business unit objectives which has
19 a target of 55 percent includes a percentage for service
20 quality?
21 A Yes, that is true.
22 Q And when I look at your exhibit -- was it
23 57 that we just had?
24 A Uh-huh.
25 Q -- 57, page 5, on this pie chart, you have
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CSB REPORTING GOBAT (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 20 to 40 percent customer service/quality.
2 A That's correct.
3 Q Did U S WEST meet the criteria for customer
4 service/quality that year?
5 A It varied by business unit. If you're
6 looking at to take network as an example, they did not
7 meet it at 100 percent.
8 Q What did they meet it at?
9 A About 48 percent.
10 Q And what was the criteria that U S WEST
11 used for evaluating that?
12 A The number of held orders, the number of
13 repair commitments missed, number of installation
14 commitments missed and access to the business office for
15 network.
16 MS. HAMLIN: Thank you. I have no further
17 questions.
18 COMMISSIONER SMITH: Questions from the
19 Commission.
20 COMMISSIONER NELSON: Thank you, I had a
21 couple of questions.
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CSB REPORTING GOBAT (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 EXAMINATION
2
3 BY COMMISSIONER NELSON:
4 Q I'm wondering in the last question
5 Ms. Hamlin asked, what percent did you need to meet in
6 order to be eligible for an incentive payment?
7 A On the --
8 Q Is there an overall criteria you need to
9 meet as an average?
10 A No, it varies by the number or by the
11 actual indicator. For example, for held orders, there
12 were a set number of held orders that had to be achieved
13 in order to "meet it at 100 percent." If you got the
14 held order numbers, if network achieved a lower number
15 than that, they may have achieved a greater payout.
16 Since they didn't necessarily meet that target number,
17 they didn't get the 100 percent payout.
18 Q What percent would you have to meet to get
19 a minimum payout?
20 A Again, on held orders, it's not a percent.
21 It's just the number of held orders. I would have to
22 look and see what that number is.
23 Q Well, I would assume you would have to meet
24 some standard in order to be eligible for an incentive
25 payment.
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CSB REPORTING GOBAT (Com-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 A For example, for missed commitments met on
2 repair, the target was, I believe, and I would have to
3 verify this, but as an example, the target may have been
4 you could not miss more than 20 percent of your repair
5 commitments. If you missed more than 20 percent, your
6 payout would go down.
7 Q But you'd still get -- there's a range
8 there where you would get some payout?
9 A Yes, there is a range where you would get
10 some. Beyond 30 percent, you would get zero.
11 Q So there is a minimum standard you have to
12 meet?
13 A Yes, there is a minimum standard that you
14 have to meet.
15 Q Okay, well, my question is of the -- and
16 this was for management generally, wasn't it?
17 A Yes, it is for management employees.
18 Q What percent of the eligible employees
19 received an incentive payout in the test year 1995?
20 A About 99 percent.
21 Q Ninety-nine percent?
22 A They received about, on average their
23 payout was about 60 percent of what they would have
24 received had they met all the goals.
25 Q Okay; so the average employee who was
1855
CSB REPORTING GOBAT (Com-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 eligible for the incentive program received 60 percent of
2 the maximum amount that he was eligible?
3 A Of the target amount that they were
4 eligible for, yes. If their target was 15 percent, they
5 got paid about seven percent or eight percent.
6 COMMISSIONER NELSON: Okay, thank you.
7 That's all I have.
8 COMMISSIONER SMITH: Just one question,
9 Mr. Gobat.
10
11 EXAMINATION
12
13 BY COMMISSIONER SMITH:
14 Q What does a certified compensation
15 professional do?
16 A They design compensation plans, all kinds
17 of compensation plans, management compensation plans,
18 stock plans, executive plans.
19 Q I see.
20 A You probably have some working for the
21 state.
22 Q They're not working for the Commission, I
23 can tell you that.
24 A They may not be working for the Commission,
25 but in fact I do know there are some working for the
1856
CSB REPORTING GOBAT (Com-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 state.
2 COMMISSIONER SMITH: Is there any redirect,
3 Ms. Hobson?
4 MS. HOBSON: No way.
5 COMMISSIONER SMITH: Thank you for your
6 help.
7 (The witness left the stand.)
8 COMMISSIONER SMITH: Mr. Howell.
9 MR. HOWELL: Looking at my score card of
10 exhibits, I don't see that we admitted 54 or that there
11 was a motion to introduce 55.
12 COMMISSIONER SMITH: And that troubles
13 you?
14 MR. HOWELL: 55 troubles me because that
15 was the one that we could not agree on exactly whether
16 that project was in the record, so I would move that it
17 not be admitted and I would not oppose the admission of
18 Exhibit 54 with the proviso that there is an updated
19 response from the Staff on that workpaper.
20 COMMISSIONER SMITH: Do you want to take
21 this up now, Ms. Hobson?
22 MS. HOBSON: Well, I guess we'll move the
23 admission of 54 and I guess at this point I don't -- I
24 would like to leave open the option that we may be able
25 to resuscitate 55, but I think the record at this point
1857
CSB REPORTING GOBAT (Com-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 is clear that the witness was not able to identify it.
2 COMMISSIONER SMITH: Okay; so we'll admit
3 Exhibit 54.
4 (U S WEST Communications, Inc. Exhibit
5 No. 54 was admitted into evidence.)
6 MS. HOBSON: Could we also move to admit
7 57?
8 COMMISSIONER SMITH: If there's no
9 objection, we'll admit Exhibit 57.
10 (U S WEST Communications, Inc. Exhibit
11 No. 57 was admitted into evidence.)
12 COMMISSIONER SMITH: We're ready,
13 Ms. Hobson.
14 MS. HOBSON: Thank you. U S WEST calls
15 Maggie Barrington.
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1858
CSB REPORTING COLLOQUY
Wilder, Idaho 83676
1 MARGARET A. BARRINGTON,
2 produced as a rebuttal witness at the instance of the
3 U S WEST Communications, Inc., having been first duly
4 sworn, was examined and testified as follows:
5
6 DIRECT EXAMINATION
7
8 BY MS. HOBSON:
9 Q Would you please state your name and spell
10 your last name for the record?
11 A My name is Margaret Barrington,
12 B-a-r-r-i-n-g-t-o-n.
13 Q And what is your business address?
14 A 4001 Discovery Drive in Boulder, Colorado,
15 80303.
16 Q By whom are you employed and in what
17 capacity?
18 A I'm employed by U S WEST Communications and
19 I'm a manager in regulatory finance.
20 Q Ms. Barrington, in connection with your
21 employment for U S WEST, did you prepare and cause to
22 have filed in this jurisdiction certain written rebuttal
23 testimony dated January 28, 1997?
24 A Yes.
25 Q And that testimony consists of 16 pages?
1859
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 A Yes, that's right.
2 Q And were there any exhibits with that
3 testimony?
4 A Exhibit No. 46.
5 Q Did you prepare Exhibit 46?
6 A I did.
7 Q Do you have any additions, corrections or
8 deletions to your prefiled testimony?
9 A I do have one correction to the testimony.
10 This is on page 12 regarding line 16. When I had
11 received those costs, I only had the project costs and
12 the amounts included. There were some additional
13 miscellaneous costs that I had excluded from the numbers,
14 so the true total for AT expense is $793,995, adding in
15 the miscellaneous cost of Bellcore brings it to $967,941;
16 so the total for AT and Bellcore combined for adjusted
17 Title 61 costs is $1,761,936.
18 Q With that correction, if I were to ask you
19 the questions contained in your prefiled written
20 testimony today, would your answers be the same?
21 A They would.
22 MS. HOBSON: At this point, then,
23 Madam Chair, we would move that Ms. Barrington's
24 testimony be spread upon the record as if read and we
25 would offer Exhibit 46 for admission.
1860
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 COMMISSIONER SMITH: If there's no
2 objection, we will spread the prefiled testimony of
3 Ms. Barrington upon the record and admit Exhibit 46.
4 (U S WEST Communications, Inc. Exhibit
5 No. 46 was admitted into evidence.)
6 (The following prefiled rebuttal
7 testimony of Ms. Margaret Barrington is spread upon the
8 record.)
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1861
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Section 1: Introduction and Purpose
2 Q PLEASE STATE YOUR NAME, ADDRESS, AND
3 POSITION WITH U S WEST COMMUNICATIONS, INC.
4 A My name is Margaret A. Barrington. I am
5 employed by U S WEST Communications (USWC) as Regulatory
6 Finance Manager. My address is U S WEST Advanced
7 Technologies, 4001 Discovery Drive, Boulder, CO 80303.
8 Q WHAT ARE YOU RESPONSIBILITIES AS REGULATORY
9 FINANCE MANAGER?
10 A In my current position as Regulatory
11 Finance Manager at USWC and in my previous position as
12 Regulatory Manager at U S WEST Advanced Technologies
13 (AT), I ensure that processes are in place for compliance
14 with regulatory requirements and provide analysis in
15 support of those requirements. As Regulatory Manager at
16 AT, I also chaired the Allocations Team, which was
17 responsible for determining appropriate allocation bases
18 for AT's Strategic Work projects, and I chair the Fair
19 Compensation Review Committee.
20 Q WHAT IS YOUR EDUCATIONAL BACKGROUND?
21 A I received a Bachelor of Science degree in
22 Environmental Health Science from Richmond University,
23 City University of New York in 1975, and a Master of
24 Science degree in Applied Statistics from Rutgers
25 University in 1981. I completed a Certificate in
1862
MARGARET A. BARRINGTON 1
U S WEST COMMUNICATIONS, INC.
1 Management from the University of Colorado in 1984 and a
2 Certificate in Marketing
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1863
MARGARET A. BARRINGTON 1A
U S WEST COMMUNICATIONS, INC.
1 Management from the University of Denver in 1991. I have
2 also attended numerous classes to continuously learn more
3 in the areas of telecommunications technology,
4 management, and public policy.
5 Q WHAT IS YOUR PROFESSIONAL EXPERIENCE?
6 A I have been employed by U S WEST for
7 fifteen years. My first two years were in U S WEST
8 Communications (USWC) Costs, Rates, and Regulatory
9 Department where I created demand analysis models to
10 determine price elasticities of telecommunications
11 services. I moved to the Carrier Division and was
12 responsible for forecasting Interexchange Carrier volumes
13 and revenues for five years and for business planning and
14 MFJ compliance for four years. I was the Regulatory
15 Manager at U S WEST Advanced Technologies (AT) from
16 February, 1993 until October 1996. In October, I
17 transferred back to USWC and retained the
18 responsibilities I had as Regulatory Manager.
19 Prior to employment at U S WEST, I was a Research
20 Scientist at New York State Institute for Basic Research
21 in Developmental Disabilities.
22 Q HAVE YOU PREVIOUSLY TESTIFIED BEFORE THIS
23 COMMISSION OR ANY OTHER COMMISSION IN REGULATORY
24 PROCEEDINGS?
25 A Yes, I have testified in Utah Docket
1864
MARGARET A. BARRINGTON 2
U S WEST COMMUNICATIONS, INC.
1 No. 95-049-05 and in Washington Docket No. UT-950200. I
2 have filed Direct Testimony in Oregon Docket No. UT-125.
3 Q WHAT IS THE PURPOSE OF YOUR TESTIMONY?
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1865
MARGARET A. BARRINGTON 2A
U S WEST COMMUNICATIONS, INC.
1 A The purpose of my testimony is to explain
2 why Staff's recommended disallowance of 98.7% of Advanced
3 Technologies' (AT) Idaho Intrastate charges and 99.23% of
4 Bellcore's Idaho Intrastate charges is in error. I also
5 support USWC's view that allocation is necessary to
6 separate Title 61 and Title 62 expenses.
7 Section 2: AT and Bellcore Disallowances
8 Q ON WHAT WAS THE RECOMMENDED DISALLOWANCE OF
9 ADVANCED TECHNOLOGIES AND BELLCORE COSTS BASED?
10 A According to testimony submitted by
11 Ms. Faunce, Staff examined more than 1300 AT and Bellcore
12 project descriptions and alleges that the costs are
13 misallocated as Title 61 costs.
14 Q DOES MS. FAUNCE ATTEMPT TO PROVIDE EVIDENCE
15 THAT PROJECTS ARE MISALLOCATED?
16 A Ms. Faunce provides one example of a
17 project, 12112AC - Modeling Applied Research, that Staff
18 alleges is misallocated to Title 61.
19 Q IS MS. FAUNCE CORRECT IN ALLOCATING ALL OF
20 THE MODELING APPLIED RESEARCH PROJECTS COSTS TO TITLE 62?
21 A No. The purpose of this particular
22 modeling project was to define and scope projects where
23 AT's modeling expertise could serve specific business
24 needs. As a result, numerous applications of modeling
25 were applied to solve business problems for the benefit
1866
MARGARET A. BARRINGTON 3
U S WEST COMMUNICATIONS, INC.
1 of USWC's customers including customers of Title 61
2 services in Idaho.
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1867
MARGARET A. BARRINGTON 3A
U S WEST COMMUNICATIONS, INC.
1 Q PLEASE PROVIDE AN EXAMPLE OF THE
2 APPLICATION OF MODELING TO SOLVE BUSINESS PROBLEMS.
3 I will provide several examples of modeling
4 applied research that has resulted in benefits to USWC's
5 Title 61 customers. I will also provide examples of the
6 continuing work that resulted from initial scoping of
7 work in the Idaho test year timeframe.
8 One example is the use of algorithms, which were
9 created by AT's modeling applied research group (project
10 12049AD), in USWC's Force Forecasting System and
11 Appointment Scheduler. Idaho customers benefit from the
12 application of this project because it improves the
13 availability of technicians to install or repair customer
14 phone lines. By using AT's Forecaster model, Idaho's
15 Local Network Organization can better predict what work
16 force will be needed by month, day of the week, and hour
17 of the day. With better predictions of demand, the
18 availability of technicians to install and repair
19 customers service is improved; network technicians are
20 better prepared to handle peak loads of work; plus the
21 costs of doing so are minimized by not having too many
22 technicians. AT's Forecaster model provides these
23 benefits. The Appointment Scheduler model provides
24 customers with immediate feedback on their requested
25 installation dates and enables USWC to schedule
1868
MARGARET A. BARRINGTON 4
U S WEST COMMUNICATIONS, INC.
1 appointments more efficiently.
2 Q IN WHAT OTHER WAYS IS MODELING APPLIED TO
3 SOLVE BUSINESS PROBLEMS?
4 A second example from 1995 is the USWC Network
5 Planning organizations use of AT models to optimize
6 investments in the
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1869
MARGARET A. BARRINGTON 4A
U S WEST COMMUNICATIONS, INC.
1 interoffice fiber network. The interoffice network
2 connects calls between USWC customers including calls
3 within their local calling area. By designing the
4 network with AT's mathematical model USWC achieves highly
5 reliable, high quality transmission at a minimal cost.
6 This type of optimization approach has been shown to
7 reduce capital expenditures by 10 to 15 percent over
8 plans produced manually.
9 A third example of the application of modeling
10 applied research in the business is the use of modeling
11 to optimize purchasing decisions. A model was developed
12 by AT in 1994 and 1995 and used by Business Resources
13 Inc. (BRI) in making purchasing decisions for USWC
14 network electronics and technician tools. Using this
15 modeling tool, BRI was able to optimize quantities,
16 ordering schedules, vendor and storage locations, and
17 transportation options to reduce the total cost of
18 procurement for USWC. Cost reductions for network
19 electronics and technician tools impact all fourteen
20 states including Idaho.
21 Q ARE THERE CONTINUING BENEFITS FROM
22 APPLICATIONS OF MODELING WORK THAT HAVE CONTINUED BEYOND
23 1995?
24 A Yes, this work continues to benefit Idaho
25 customers of Title 61 services. Several modeling
1870
MARGARET A. BARRINGTON 5
U S WEST COMMUNICATIONS, INC.
1 projects have been in progress since 1995. One example
2 is the analysis of causes of customer trouble reports.
3 This analysis is used by USWC's Network organization to
4 focus on fixing components that cause the most trouble in
5 order to reduce the number of customer experienced
6 troubles. AT was able to model the root causes of
7 network reliability problems affecting customer service,
8 quantify by component (e.g., inside wire, drop, feeder
9 cable trouble,
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1871
MARGARET A. BARRINGTON 5A
U S WEST COMMUNICATIONS, INC.
1 central office connection, etc.) the source of trouble,
2 and begin to focus resources on replacing components to
3 get the most customer service impact from the investment.
4 Q HAS ADVANCED TECHNOLOGIES BEEN RECOGNIZED
5 FOR ITS VALUABLE IMPACT TO THE BUSINESS FROM ITS MODELING
6 EFFORTS?
7 A Yes. In 1994, U S WEST received the
8 Operations Research Society of America (ORSA) prize for
9 its outstanding applications of operations research in
10 managing the business. U S WEST received this award as a
11 result of ORSA's assessment of AT contributions on four
12 criteria: impact/value of modeling to the business,
13 breadth of impact, depth of impact, and innovation.
14 U S WEST and AT&T were recognized as the best in the
15 world at using modeling to impact the business.
16 Modeling projects such as the examples provided
17 are part of the reason that U S WEST earned this
18 recognition for impacting the business. Idaho customers
19 of Title 61 services are recipients of this value.
20 Q HAS STAFF FAILED TO RECOGNIZE THE BENEFITS
21 TO IDAHO CUSTOMERS OF TITLE 61 SERVICES RESULTING FROM
22 THIS WORK?
23 A Yes. Staff is recommending disallowance of
24 costs that clearly benefit Idaho's customers of Title 61
25 services. This modeling work, which benefits Idaho's
1872
MARGARET A. BARRINGTON 6
U S WEST COMMUNICATIONS, INC.
1 Title 61 service customers, resulted from project 12112AC
2 and other modeling projects that Staff has identified for
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1873
MARGARET A. BARRINGTON 6A
U S WEST COMMUNICATIONS, INC.
1 complete disallowance (i.e., projects 12049AD, 12050AD,
2 12084AD, 4037AC, 60010AD).
3 Q DOES STAFF INCORRECTLY CLASSIFY OTHER
4 ADVANCED TECHNOLOGIES AND BELLCORE PROJECT COSTS AS
5 TITLE 62 COSTS?
6 A Yes. Staff neglects to recognize the
7 benefits to Title 61 services from numerous AT and
8 Bellcore projects.
9 For example Project 11278BC, Fixed Wireless
10 Architecture, investigated the technical and economic
11 viability of wireless technology for providing a fixed
12 local loop. This technology is of particular interest to
13 USWC because of the high percentage of rural territory
14 and the rugged geography of USWC's states. USWC's
15 Network and Technology Services organization is very
16 interested in fixed wireless loop technology as an
17 economical alternative to copper pairs for providing
18 Basic Exchange Service. The key benefit from this
19 project is reducing held orders and providing local loop
20 in an economical and efficient manner. This is not work
21 that benefits Title 62 services. Staff has incorrectly
22 classified this project as 100% Title 62. This
23 misclassification may have occurred because Staff
24 associates the word "wireless" with mobile cellular
25 services or Personal Communications Service (PCS).
1874
MARGARET A. BARRINGTON 7
U S WEST COMMUNICATIONS, INC.
1 Nonetheless, this example demonstrates that Staff's
2 "direct" assignment methodology does not yield an
3 accurate result.
4 Q DO YOU HAVE ADDITIONAL EXAMPLES OF STAFF'S
5 MISCLASSIFICATION OF PROJECTS COSTS?
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1875
MARGARET A. BARRINGTON 7A
U S WEST COMMUNICATIONS, INC.
1 A Yes. Another example is Staff's
2 classification of several projects that support Local
3 Network Organization (LNO) systems to Title 62. USWC's
4 Local Network Organization is largely involved with
5 provisioning, maintaining, and repairing local loop and
6 feeder cable to serve customers of Title 61 services.
7 Only a small portion of the LNO work supports Title 62
8 services.
9 Project 10605TP developed the Field Access System
10 used by LNO outside technicians to access USWC's
11 operations support systems; project 10992TP did systems
12 engineering to support the entire LNO; project 11290TP
13 did a study of the LNO work force administration process
14 and system (LNO's Work Force Administration (WFA) system
15 is supported and enhanced on Bellcore projects 02448D,
16 124481, and 224480); AT project 11492TP developed the
17 forecasting requirements and architecture for work load
18 planning. All of these projects support the Local
19 Network Organization, which significantly impacts
20 provisioning and maintenance of Title 61 services.
21 All of these AT projects were incorrectly classified as
22 Title 62 in Staff's analysis.
23 Q HOW MANY OF THE OVER 1300 ADVANCED
24 TECHNOLOGIES AND BELLCORE PROJECTS SUPPORT BOTH TITLE 61
25 AND TITLE 62 SERVICES?
1876
MARGARET A. BARRINGTON 8
U S WEST COMMUNICATIONS, INC.
1 A USWC performed an analysis similar to the
2 analysis performed by Staff and found that 1010 (75%) of
3 the AT and Bellcore projects support both Title 61 and
4 Title 62 services. A summary of the types of work by
5 Program, which is a grouping of projects, is included as
6 Exhibit 1 to my testimony. Since so many of the projects
7 are common to Title 61 and
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1877
MARGARET A. BARRINGTON 8A
U S WEST COMMUNICATIONS, INC.
1 Title 62 services and the allocation would be unique to
2 each project, USWC did not attempt to allocate costs by
3 project.
4 Q IS IT REASONABLE TO ALLOCATE THESE COSTS ON
5 A PROJECT BY PROJECT BASIS?
6 A No, it isn't. The complexity of attempting
7 to allocate costs directly to Title 61 or 62 for each of
8 the 1300 AT and Bellcore projects, the majority of which
9 benefit both Title 61 and Title 62 services, is
10 overwhelming and unnecessary. While some projects can be
11 directly assigned to Title 61 or Title 62, the
12 allocations for the remaining pool of costs would need to
13 be recalculated based on the nature of the remaining
14 projects which would be a complex and unnecessary task.
15 Mr. Dallas Elder explains a more rational allocation
16 method in his Testimony in this case. Staff's attempt to
17 "directly" allocate on a project by project basis has
18 resulted in a seriously flawed view of the nature of AT
19 and Bellcore projects.
20 Q WHAT OTHER FINDINGS DOES MS. FAUNCE SITE
21 REGARDING ADVANCED TECHNOLOGIES AND BELLCORE COSTS?
22 A Ms. Faunce also claims that projects could
23 be classified as restructuring (re-engineering), Title
24 62, Part 64, out of period, FCC/Access, research,
25 lobbying, state specific and support of 61/62 functions.
1878
MARGARET A. BARRINGTON 9
U S WEST COMMUNICATIONS, INC.
1 Q ARE THESE VALID REASONS FOR DISALLOWANCE OF
2 COSTS?
3 A USWC agrees, for Bellcore and AT expenses,
4 Title 62, Part 64, out of period, FCC/Access, lobbying,
5 and state specific costs for other states should not be
6 included in costs recovered from Title 61 customers in
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1879
MARGARET A. BARRINGTON 9A
U S WEST COMMUNICATIONS, INC.
1 rates. However, USWC does not agree with Ms. Faunce's
2 methodology for disallowing costs. USWC removed these
3 costs from its Title 61 revenue requirement prior to
4 filing it.
5 Q DOES THIS MEAN YOU AGREE WITH ALL OF
6 MS. FAUNCE'S DISALLOWANCES?
7 A No. First we must distinguish between the
8 various reasons Ms. Faunce chooses to try to disallow a
9 particular project cost. For instance, to the extent
10 that Part 64 costs actually appear in allocations to
11 Title 61, we agree they should be removed. Their
12 appearance, if it exists, is evidence of a clerical
13 coding error.
14 On the other hand, just as the wireless local loop
15 example above demonstrates, we do not agree that
16 Ms. Faunce has correctly identified many projects.
17 Moreover, many projects that Ms. Faunce would like to see
18 directly assigned to Title 62 we believe should be
19 allocated between Title 61 and Title 62 because of the
20 shared benefits to basic services. Similarly, just
21 because a project may appear to Ms. Faunce to be "state
22 specific", does not mean we would agree to that
23 characterization.
24 Q YOU STATED USWC REMOVED COSTS ASSOCIATED
25 WITH FEDERAL COMMUNICATIONS COMMISSION (FCC)
1880
MARGARET A. BARRINGTON 10
U S WEST COMMUNICATIONS, INC.
1 NON-REGULATED SERVICES FROM THIS RATE CASE. WOULD YOU
2 ELABORATE?
3 A Yes. In its initial filing, USWC removed
4 costs associated with services that are FCC non-regulated
5 in compliance with FCC Part 32 and 64 accounting methods.
6 As a result, 25% ($559,554) of the Idaho total costs
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1881
MARGARET A. BARRINGTON 10A
U S WEST COMMUNICATIONS, INC.
1 for AT and 3% ($86,180) of the Idaho total costs for
2 Bellcore were removed from this rate case because they
3 are associated with FCC Part 64 (non-regulated) services.
4 Q HAS USWC REMOVED COSTS ASSOCIATED WITH
5 INTERSTATE SERVICES FROM THIS RATE CASE?
6 A Yes, USWC removed costs associated with
7 interstate services its initial filing. Again, this was
8 done in compliance with FCC Part 32 and 64 accounting
9 methods. As a result, 20% ($465,175) of the Idaho total
10 costs for AT and 27% ($670,124) of the Idaho total costs
11 for Bellcore were removed because they are associated
12 with interstate services.
13 Q HAS USWC REMOVED COSTS ASSOCIATED WITH
14 TITLE 62 SERVICES FROM THE REVENUE REQUIREMENT IN THIS
15 RATE CASE?
16 A Yes, USWC has. Bear in mind that for many
17 projects that benefit Title 62 service also benefit Title
18 61 services. Hence, a systematic approach to allocation
19 is required. USWC's approach is explained further in;
20 Mr. Dallas Elder's Testimony. As a result, 25%
21 ($579,621) of the Idaho total costs for AT and 32%
22 ($795,999) of the Idaho total costs for Bellcore were
23 removed in the initial filing because they are associated
24 with Title 62 services.
25 Q HAS USWC REMOVED OUT-OF-PERIOD AND LOBBYING
1882
MARGARET A. BARRINGTON 11
U S WEST COMMUNICATIONS, INC.
1 EXPENSES FROM THIS RATE CASE?
2 A Yes, USWC removed out-of-period and
3 lobbying expenses in Ms. Wright's testimony in adjustment
4 number 8.
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1883
MARGARET A. BARRINGTON 11A
U S WEST COMMUNICATIONS, INC.
1 Q PLEASE SUMMARIZE THE ADVANCED TECHNOLOGIES
2 AND BELLCORE EXPENSES THAT WERE REMOVED PRIOR TO FILING
3 THIS RATE CASE.
4 A The following table summarizes AT and
5 Bellcore expenses that were removed from this rate case:
6
7 AT Expenses Bellcore Total%ID
8 Total Charged USWC $80,885,739 $90,219,321 $171,105,060
9 Total Allocated to
10 Other States $78,611,104 $87,718,843 $166,329,947
11 Total Idaho
12 Expenses $2,274,635 $2,500,478 $4,775,113 100%
13 Total Allocated to
14 FCC Non-reg. $559,554 $86,180 $645,734 14%
15 Total Allocated to
16 Interstate $465,175 $670,124 $1,135,299 24%
17 Total Adjustment 8 ($5,701) ($8,680) ($14,381) 0%
18 Total Allocated to
19 Idaho Title 62 $579,621 $795,999 $1,375,620 29%
20 Adjusted Title
21 61 Costs $793,995 $967,941 $1,761,936 34%
22 This table shows that through USWC's systematic
23 approach, 66% of the combined AT and Bellcore costs
24 attributable to Idaho have been removed from the revenue
25 requirement for Idaho's Title 61 services.
1884
MARGARET A. BARRINGTON 12
U S WEST COMMUNICATIONS, INC.
1 Section 3: Nature of AT and Bellcore Services
2 Q DO YOU AGREE WITH STAFF'S DEPICTION OF
3 ADVANCED TECHNOLOGIES AND BELLCORE RESEARCH AND
4 DEVELOPMENT PROJECTS?
5 No I don't. First, Staff classifies AT and
6 Bellcore projects as "Applied and Basic Research" which
7 is incorrect. According to the McGraw Hill Dictionary of
8 Scientific and Technical Terms, Basic Research is defined
9 as
10
11 "fundamental theoretical or experimental
12 investigation to advance scientific knowledge,
13 immediate practical application not being a direct
14 objective."
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1885
MARGARET A. BARRINGTON 12A
U S WEST COMMUNICATIONS, INC.
1 Neither AT nor Bellcore performs "basic research"
2 under that definition.
3 The research performed at AT and Bellcore is
4 directed towards serving specific business purposes. AT
5 and Bellcore perform applied research which is defined by
6 McGraw Hill as:
7
8 "research directed toward using knowledge gained
9 by basic research to make things or to create
10 situations that will serve a practical or
11 utilitarian purpose."
12 AT and Bellcore applied research is performed at
13 the request of USWC mangers to support them in providing
14 telecommunications services to customers. It does not
15 have the level of risk of not being economically and
16 functionally useful that basic research has.
17 Furthermore, only a portion of AT and Bellcore
18 costs are applied research and development costs. AT and
19 Bellcore also provide Plant Operations Administration,
20 Engineering, Customer Operations, Planning, Information
21 Management, and Corporate Operations.
22 Q WHAT PERCENTAGE OF ADVANCED TECHNOLOGIES'
23 AND BELLCORE EXPENSES ARE FOR APPLIED RESEARCH AND
24 DEVELOPMENT VERSUS PLANT OPERATIONS ADMINISTRATION,
25 ENGINEERING AND INFORMATION MANAGEMENT?
1886
MARGARET A. BARRINGTON 13
U S WEST COMMUNICATIONS, INC.
1 A In 1995, 3% of AT's expenses and 12% of
2 Bellcore's expenses were for applied research and
3 development. The following table provides a breakdown of
4 the intrastate Idaho regulated expenses by category.
5
6
7
8
9
10 (Table included in hard copy of transcript.)
11
12
13
14
15
16
17
18
19 Q PLEASE PROVIDE EXAMPLES OF APPLIED RESEARCH
20 AND THE RESULTING BENEFITS TO IDAHO CUSTOMERS.
21 A The example of Modeling Applied Research
22 (project 12112AC) described earlier in this testimony
23 demonstrates benefits to customers of Title 61 services
24 resulting from applied research. Another AT project,
25 11046AC, supported modeling work in a research alliance
1887
MARGARET A. BARRINGTON 14
U S WEST COMMUNICATIONS, INC.
1 with Massachusetts Institute of Technology (MIT). One of
2 the key areas that MIT contributed to was network
3 modeling and management which enables USWC to optimize
4 its network to provide excellent reliability and
5 survivability at the lowest cost. The alliance provided
6 AT with access to MIT's faculty and researchers to keep
7 AT involved in new developments in emerging
8 technologies. AT employees improved skills by attending
9 workshops and conferences, and receiving copies of
10
11 /
12
13 /
14
15 /
16
17
18
19
20
21
22
23
24
25
1888
MARGARET A. BARRINGTON 14A
U S WEST COMMUNICATIONS, INC.
1 research papers from MIT. Idaho customers benefit from
2 AT's application of these skills to building models.
3 Other examples of benefits from projects that
4 Staff classifies as R&D are Center of Excellence for
5 Systems Engineering (10878BC), Center of Excellence for
6 Software Development (10879BC), and Center of Excellence
7 for Human Factors Engineering. These "Centers of
8 Excellence (COEs)" were created to train U S WEST
9 Technologies (USWC Information Technologies, USWC
10 Information Technology Services, and AT) employees to
11 meet national standards in software and systems
12 development. The benefits from employee training are
13 improved productivity, improved software and system
14 quality, and reduced risk of failure. This enables USWC
15 to reduce development costs and provide better quality
16 customer service.
17 Q IS IT APPROPRIATE TO ALSO DISALLOW ALL
18 RESEARCH COSTS AS STAFF RECOMMENDS?
19 A No, this is inappropriate. Again, Staff
20 misunderstands the nature of AT and Bellcore projects and
21 incorrectly categorizes their costs.
22 Section 4: Conclusion
23 Q WHAT CONCLUSIONS CAN BE DRAWN FROM YOUR
24 ANALYSIS?
25 A Because the products and services are
1889
MARGARET A. BARRINGTON 15
U S WEST COMMUNICATIONS, INC.
1 integrated in USWC's network and operations support
2 systems, a systematic approach to allocating the costs is
3 needed. USWC has provided this systematic approach in
4 its calculations.
5
6 /
7
8 /
9
10 /
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
1890
MARGARET A. BARRINGTON 15A
U S WEST COMMUNICATIONS, INC.
1 It is clear that AT and Bellcore projects result
2 in significant benefits to Idaho Title 61 customers.
3 USWC's methods allocate less than 1% of AT and Bellcore
4 total costs to Idaho Title 61. Staff recommends
5 diminishing that amount to almost nothing. Staff's
6 approach is not reasonable and should be rejected.
7 USWC's network and operations support systems
8 cannot be separated on a product basis. Rather, they
9 support a wide range of Title 61 and Title 62 products.
10 New technologies and new applications of technology
11 improve the operations and efficiencies of USWC's
12 integrated network and operations support systems.
13
14
15
16
17
18
19
20
21
22
23
24
25
1891
MARGARET A. BARRINGTON 16
U S WEST COMMUNICATIONS, INC.
1 (The following proceedings were had in
2 open hearing.)
3 COMMISSIONER SMITH: So, Mr. Howell.
4 MS. HOBSON: I'm sorry.
5 COMMISSIONER SMITH: You're not done?
6 MS. HOBSON: No, I'm not done, I'm sorry.
7 COMMISSIONER SMITH: Okay.
8
9 DIRECT EXAMINATION
10
11 BY MS. HOBSON: (Continued)
12 Q Ms. Barrington, do you have any corrections
13 to the dollar amounts that are contained in the rate case
14 reflecting the AT and Bellcore expenses other than the
15 correction that you've made in your testimony?
16 A Yes, I've prepared Exhibit No. 56 which was
17 just passed out which includes some minor dollar
18 adjustments for the removal of Part 64 projects or
19 projects that were later classified to Nebraska only.
20 Q Why are you making this adjustment at this
21 time?
22 A After further reviewing the data during the
23 course of this rate case, I found that these projects had
24 been reclassified to Part 64 or to Nebraska. The Part 64
25 reclassification was done in December, '95.
1892
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Classification to Nebraska was done in 1996; however,
2 they were never adjusted on U S WEST Communications'
3 books back to January 1995, so this adjustment adjusts
4 the rate case test year to remove those costs.
5 Q Ms. Barrington, did you prepare the
6 document which Staff has marked as Staff Exhibit No. 154?
7 A Yes, I did.
8 Q And that document appears as an exhibit to
9 Ms. Faunce's testimony?
10 A That's right.
11 Q Was that document prepared as part of your
12 regular duties at U S WEST?
13 A No, it wasn't. It was prepared as a
14 special review in the course of this rate case.
15 Q Was this review a part of the CAAS process?
16 A No, it wasn't. It was prepared as a check
17 against the allocations that were produced by the CAAS
18 process and it was prepared after the case was filed.
19 Q Ms. Faunce appears to believe that as a
20 result of your analysis that you concur that a certain
21 portion of the projects which have been allocated by CAAS
22 to Title 61 should really be, in her words, directly
23 assigned to Title 62. Is that a correct assessment of
24 what you've done?
25 A No. I don't think those project costs
1893
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Wilder, Idaho 83676 U S WEST Communications
1 should be directly assigned. What happens with the CAAS
2 system is AT and Bellcore projects get assigned to an
3 account, a type of revenue account or expense account,
4 excuse me. Those accounts then go through our regulatory
5 allocation process and ultimately are assigned by CAAS to
6 Title 61 or Title 62, so CAAS doesn't consider the
7 individual projects to decide before the allocation
8 process begins whether they support local service or not,
9 so since CAAS doesn't do allocations on a project basis,
10 I went through on a project basis to check against the
11 CAAS results and while it's true I found that some of the
12 projects don't relate to or support local service, what I
13 found was that the majority of the projects do support
14 local service in part, so my conclusion was that the
15 dollars allocated to Title 61 by CAAS looked to me to be
16 reasonable, if not conservative.
17 Q Ms. Faunce at pages 16 and 17 of her
18 surrebuttal testimony provides some calculations based on
19 your work which she contends show that CAAS has
20 overallocated to Title 61 in this case. Is that a
21 correct interpretation of your work?
22 A Absolutely not. What Ms. Faunce did was to
23 take the portion of projects that I identified as not
24 supporting local service, pulled them out of the pot and
25 then applied the same allocator, the whole pot allocator,
1894
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 to the remaining projects. I don't think that's a fair
2 representation of the true costs. My analogy, to try to
3 make this clear, is if you had a pot of stew with
4 potatoes and beef in it and you pulled out half the beef,
5 you had a ratio of 50-50 of potatoes to beef, you pulled
6 out half of the beef, the remaining ratio is not 50-50,
7 so, in essence, because the CAAS allocator assumes the
8 whole pool of costs is available, if you pull out a
9 portion of the costs, you can't just continue to apply
10 the old allocator that was really developed on the whole
11 pot of costs.
12 Q Is Ms. Faunce correct that by using CAAS
13 Title 61 customers end up paying a portion of the costs
14 which are associated with projects that support Title 62
15 multimedia and other services which are not regulated by
16 this Commission?
17 A I think that's a misleading way to
18 mischaracterize what is happening. The purpose of the
19 allocation system is to make sure that a reasonable
20 proportion of the cost gets allocated to the Title 61
21 products. After doing the analysis, I think that CAAS is
22 doing that. I think what we should care about is whether
23 the customers are paying too much for the service or
24 we're allocating too much on the whole. As I said, we're
25 allocating on a whole cost pool basis, not on an
1895
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 individual project basis, so if you bought into the
2 theory that Title 61 customers are paying in part for
3 Title 62 services, you'd also have to agree that Title 62
4 customers are paying for Title 61 services because of the
5 way the projects are allocated and I don't believe that's
6 the case.
7 Q On page 18 of her surrebuttal testimony,
8 Ms. Faunce testified that you had included costs in the
9 common pool which she believes should have been
10 excluded. Did you make any further attempt to analyze
11 those costs that she identified?
12 A I did. I prepared some data requests for
13 Ms. Faunce to find out exactly which projects she thought
14 should be excluded from the pool. I reviewed those
15 projects again, looked at the intrastate dollar amounts
16 and the Title 61 dollar amounts of those projects.
17 Q Can you give us the number of projects that
18 Ms. Faunce identified?
19 A There were seven projects identified.
20 Q And what was the total -- I'm sorry, what
21 was the Idaho intrastate amount associated with those
22 projects?
23 A Idaho intrastate was 26.6 thousand and
24 Title 61 then was $13,000.
25 Q Does this mean that you agree with
1896
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Ms. Faunce that all of these costs should not be included
2 in the common pool?
3 A No. I don't agree with all of them, but my
4 point is that the area where we have a difference is,
5 like, $13,000 out of this 1.8 million of AT and Bellcore
6 costs and I just wanted to make sure that wasn't -- kind
7 of dispel the impression if that was the impression that
8 came out of reading her surrebuttal testimony.
9 Q Now, Ms. Barrington, Staff's position in
10 this case seems to suggest that the network to provide
11 local service is already in place and doesn't require any
12 further technology services from AT or Bellcore. Would
13 you agree with that assessment?
14 A I'd agree the network is in place; however,
15 I wouldn't agree that you can just let it sit the way it
16 is or deteriorate or not continue to take advantage of
17 the new technologies that are available. I have a few
18 examples of some of the reasons why U S WEST
19 Communications needs the services of AT and Bellcore.
20 First of all, systems need to continually
21 be upgraded to make them more efficient. The hardware
22 and the software to do that is becoming available. The
23 computer industry, which, you know, our switches, our
24 operation systems are all computer, so the industry is
25 growing and technology is advancing at a rather rapid
1897
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 pace, so we need to be able to take advantage of those
2 advances.
3 One of the other reasons we need to be
4 continually upgrading is because our hardware gets old
5 and it gets -- manufacturers will discontinue making
6 certain hardware, so we have to buy new hardware. We
7 also have to rebuild the software that will run on the
8 new hardware. That's just maintaining where we're at
9 today. Systems further need to be maintained.
10 Occasionally they have breakdowns.
11 If we have a systems problem, there's a lab
12 out at Bellcore that as part of a maintenance project
13 will run the same software and simulate our system so if
14 we have a problem, we have a hot line out to Bellcore and
15 the Bellcore lab people can help to isolate the problem
16 and present a fix to us that can be incorporated into our
17 systems. That's the technology side of the business. I
18 mean, you can imagine if you had a computer that's 10
19 years old, that's almost an antique these days. You
20 can't just keep using old technology.
21 The other part of the business that's
22 changing is in the environment, in our customers and
23 their usage. One of the areas that quite a bit of work
24 has been done on recently with AT and Bellcore is on
25 dealing with the high levels of Internet usage. The
1898
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 phone system that was designed to handle several calls a
2 day or a few minutes each is now being used for these,
3 like, four-hour calls or long duration calls. That ties
4 up the switch resources. I've heard our engineers joke
5 about which day is it going to be when the network comes
6 to its knees because of all of this Internet traffic.
7 Well, most of that traffic is local
8 exchange traffic that's connecting to the Internet and
9 because of the long holding times, the engineers have to
10 look at what are we going to do to free up our switch
11 resources so that the voice calls aren't blocked.
12 Bellcore has to do studies. They're looking for where
13 the bottlenecks are in the network. They need to change
14 what they call the engineering tables that capacity
15 provisioning uses to build the network. It changes a lot
16 of factors.
17 AT is looking at some short-term fixes of
18 how do you reroute some traffic that is going to the
19 information service providers, so, I mean, all of those
20 changes are going on and affecting Title 61 services and
21 we need the technology services of AT and Bellcore to be
22 able to deal with them.
23 Q What is the nature of most of the projects
24 that are conducted by Bellcore at this point?
25 A I would typify Bellcore as basically
1899
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 providing the core network technology and the core
2 operations support systems technologies that are used by
3 all seven RBOCs.
4 Q How would you contrast that with AT?
5 A AT also does some work on the core network
6 and the operations support systems. AT is more
7 customized, works more closely with U S WEST
8 Communications to make sure these, like, generic
9 requirements actually fit into U S WEST Communications'
10 networks. It's a little closer to U S WEST
11 Communications. Oftentimes, AT would be involved in the
12 transfer of technology from Bellcore to U S WEST
13 Communications.
14 AT also does some more customized work on
15 new products. For example, in my testimony where we
16 broke out the AT costs into Part 64 costs, 25 percent of
17 AT costs were removed because they were associated with
18 the new enhanced Part 64 products; whereas, with
19 Bellcore, only three percent of their work was determined
20 to be associated with enhanced products, so Bellcore's is
21 more generic.
22 Q When you did what you've characterized as a
23 check of the CAAS allocations, why did you find so few
24 projects that you felt could be characterized as being
25 capable of direct assignment to Title 61? In other
1900
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 words, does that show that most of the work done at AT
2 and Bellcore is really oriented toward new optional
3 services?
4 A No, I wouldn't say most of the work is
5 oriented towards new services, but because of the way
6 Title 61 is defined in Idaho, it's difficult to say that
7 something is strictly Title 61. When you're looking at a
8 network technology or operations support system, if it
9 supports business lines, for example, you can't say --
10 you can't separate out between the one to five business
11 lines and the six and above, so projects that may be
12 primarily basically local service, you still can't say
13 they're only Title 61, but most of what I found is that
14 AT and Bellcore projects jointly support the entire
15 network or the operations support systems that jointly
16 provision Title 61 and Title 62 services.
17 Q Based upon your review and analysis of the
18 AT and Bellcore projects which you have classified as
19 common between Title 61 and 62, if you were to have to
20 come up with an allocator to correctly assign the costs
21 of that remaining pool between Title 61 and 62, what
22 would be your recommendation?
23 A I don't have an exact number for the
24 allocator, but clearly, it would be a higher number than
25 the allocator that comes out of allocating the whole pool
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CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 of costs, we've pulled out a portion of them, but I think
2 the bigger problem is if we start down a path of
3 allocating on a project-by-project basis or direct
4 assigning on a project basis, that leaves us with having
5 to create new allocations on a project-by-project basis
6 and to do that for 1,000 or more AT and Bellcore projects
7 just seems like a near impossible task, basically
8 definitely a very difficult task and the CAAS system has
9 some allocators that do it at a higher level that I think
10 would be more appropriate.
11 MS. HOBSON: Thank you, Ms. Barrington.
12 The witness is tendered for cross-examination.
13 COMMISSIONER SMITH: Mr. Howell.
14
15 CROSS-EXAMINATION
16
17 BY MR. HOWELL:
18 Q Good afternoon, Ms. Barrington. A couple
19 of housekeeping matters first. You were asked just a
20 moment ago about U S WEST Exhibit 56 that was, I guess,
21 an adjustment or a decrease of $13,370 on Title 61
22 correction. Is that correction reflected in your change
23 that you made to line 16 on page 12 of your testimony?
24 A No, it isn't. It needs to be subtracted
25 out of line 16 as well.
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CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Q Would you agree with me that one of the
2 purposes of cost allocation is to ensure that Title 61
3 customers don't pay too much for research projects?
4 A I would agree in this case.
5 Q And is it your testimony that the Company
6 then relies upon the cost allocation process to ensure
7 that customers of Title 61 services or ratepayers in
8 Idaho don't pay too much of costs that may appropriately
9 be assigned to other categories?
10 A That's true. We rely on the CAAS system to
11 correctly allocate the costs.
12 Q Now, you spoke a little bit about the
13 concern that engineers have for Internet usage and as
14 Internet usage increases, it may affect the capacity or
15 hold times on switches. Isn't it true that Internet
16 service if ever offered by U S WEST in Idaho would be a
17 Title 62 service?
18 A Well, U S WEST does not offer Internet
19 service, nor does it intend to. What happens is that
20 customers, residence customers, when they go home in the
21 evening and want to get on the Internet, they'll use a
22 modem, dial up their local service provider and get into
23 the Internet. Likewise, small businesses using the
24 Internet will just use their modem over their 1FB line,
25 dial into the Internet and that's what's tying up the
1903
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 switched traffic. It's not separated out from the voice
2 traffic.
3 Q But if U S WEST were to offer an Internet
4 access service, would that service not in Idaho be a
5 Title 62 service?
6 A Yeah, if U S WEST offered an Internet
7 service, it would be an information service. It would be
8 Part 64. It would be unregulated.
9 Q And would you agree with me that the
10 definition of a Title 61 service in Idaho is that it's
11 the two-way interactive switched voice communications for
12 residential and small business customers?
13 MS. HOBSON: I'm going to object to the
14 question. I believe that Counsel is mischaracterizing
15 the statutory language. I'd further observe that the
16 witness is not a legal expert and has not rendered an
17 opinion on the definition of Title 61 service under Idaho
18 law.
19 COMMISSIONER SMITH: Mr. Howell.
20 MR. HOWELL: Madam Chairman, I'm looking at
21 the Company's response to Staff Interrogatory 342 which
22 says Ms. Barrington's classification made in the chart
23 which has been identified as Faunce Exhibit 154 which is
24 a work product produced by this witness was done so with
25 the assistance of U S WEST employees who are familiar
1904
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 with the Idaho Code for Title 61 and Title 62 services.
2 Based on their knowledge of the work programs in Idaho
3 Code, programs were classified as described in
4 Exhibit 46, which as I mentioned is Exhibit 154, so it's
5 this witness that has produced the workpapers and I'm
6 trying to inquire whether she knows the difference
7 between a 61 and a 62 service.
8 COMMISSIONER SMITH: I think you need to
9 reformulate your question.
10 Q BY MR. HOWELL: Would you agree with me
11 that the basic local exchange service means the provision
12 of access lines to residential and small business
13 customers with the associated transmission of two-way
14 interactive switched voice communications within a local
15 exchange area?
16 A I could look up the definition that I used
17 when I was doing this work, but I think that where our
18 difference is when you say "switched voice." We don't
19 have control over whether customers plug a modem into
20 their phone line or whether they pick it up and talk into
21 the phone line, so the service is one and the same
22 whether they're using a modem and talking computer to
23 computer or whether they're picking up and talking voice
24 to voice, so I don't know that those words, voice,
25 switched voice, were used. My understanding was local
1905
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 exchange service, we also know it as 1FR and 1FB, is what
2 falls into Title 61 category and that's used by people to
3 access the Internet.
4 Q Let me move on to a different area.
5 Madam Chairman, I have a number of cross
6 examination exhibits. It would certainly speed things up
7 if I didn't have to go through a foundation for each
8 item. I will represent to the Commission that all of
9 these items were produced by the Company in response to
10 production requests or data requests propounded by the
11 Commission Staff. There is handwriting and underwriting
12 on many of the exhibits, but I would say that the primary
13 exhibits are -- there's been no change in the
14 representation of those exhibits.
15 (Documents being distributed.)
16 Q BY MR. HOWELL: Ms. Barrington, do you
17 recognize this document that's been handed to you?
18 A I recognize page 1. Should I go through
19 the whole thing, the whole exhibit?
20 Q Sure, why don't you take a moment.
21 A I recognize the first two pages. That's a
22 data request that I responded to. I have not seen the
23 last four pages before.
24 Q You wouldn't disagree with me that pages 3,
25 4, 5, and 6 were attached as Attachment B to the first
1906
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 two pages of the production request?
2 A That's right. What it says is a copy of
3 the U S WEST cost allocation manual is provided as
4 Attachment B.
5 Q And if I were to direct your attention to
6 Exhibit 162, page 2, the last paragraph, do you see where
7 it says "A copy of U S WEST cost allocation manual is
8 provided as confidential Attachment B"?
9 A Yes, I see that.
10 Q And would you agree with me that pages 3
11 through 6 represent pages of Attachment B, the
12 confidential cost allocation manual?
13 A Yes.
14 Q Do you have Ms. Faunce's Exhibit 154 which
15 is your workpapers? Do you have those in front of you?
16 A I think I have them here. Yes, I have
17 them.
18 Q And I believe you've already testified that
19 this exhibit was a workpaper produced by you?
20 A That's right.
21 Q And that in the far right-hand column of
22 Exhibit 154 is a column entitled, "Analysis result:
23 R=Title 61, D=Title 62, C=Common, and N=Not analyzed"?
24 A That's right.
25 Q Did you prepare or have caused to prepare
1907
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 those categories?
2 A I did.
3 Q Again directing your attention to Staff
4 Exhibit 162, could you read paragraph b at the top of
5 that page?
6 A Page 3?
7 Q Page 1, paragraph b, small "b."
8 A The question is, "Please give an analysis
9 for each project showing why the project should be
10 classified in the manner shown on Ms. Barrington's
11 workpapers."
12 Q And what was the Company's response?
13 A "See response to a above," which says,
14 "This classification was made by Ms. Barrington and a
15 subject matter expert on Bellcore projects with
16 assistance from U S WEST Communications employees who are
17 familiar with the Idaho Code for Title 61 and Title 62
18 services. Based on their knowledge of the work programs
19 and Idaho Code, programs were classified as described in
20 Exhibit No. 46. Each project description was then
21 scanned to determine whether it supports a Title 61
22 service, Title 62 service, or a network component or
23 system that supports both Title 61 and Title 62
24 services. After several discussions among the group,
25 projects were classified as shown in Workpapers of
1908
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Margaret Barrington.
2 A more detailed written analysis for each
3 of the over 1300 projects would be extremely burdensome
4 and therefore was not done."
5 Q And is the -- could you read paragraph e on
6 page 1 at the top?
7 A The question is, "For each AT and Bellcore
8 project identified in the workpapers for Exhibit 46,
9 please show why the project was originally undertaken and
10 what Title 61 service or system it replaces. If it
11 doesn't replace a system or service why was it needed by
12 Title 61? Supply all supporting workpapers and
13 documentation."
14 Q And the answer to that?
15 A Is that "All AT and Bellcore projects for
16 U S WEST Communications are undertaken at the request of
17 clients within the U S WEST Communications organization.
18 More specific reasons for undertaking the work may be
19 identified in the project descriptions provided in
20 response to Request No. STF-034. Further investigation
21 into each of the over 1300 projects would require a
22 special study and would be extremely burdensome."
23 Q Of the 1300 projects, can you tell the
24 Commission how many projects were directly assigned to
25 Title 62?
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CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 A I just want to make it clear I wasn't
2 directly assigning projects here. I did identify
3 projects that were not related to local service. I think
4 it was 25 percent of them. Let me check. I found that
5 over 1,000 projects, 75 percent of the AT and Bellcore
6 projects support both Title 61 and Title 62 services.
7 The remaining 25 percent were mostly Title 62 services
8 and there were, I think, three projects that I found
9 supported only Title 61 services.
10 Q So, in other words, out of 1300 projects,
11 only three were entirely Title 62 service projects -- 61?
12 A 61, that's right. As I explained earlier,
13 if you've got a project that supports even only local
14 exchange service, since portions of local exchange
15 service, business customers with more than six lines
16 would be Title 62, it's difficult to say that any
17 projects, like, soft dial tone that, you know, are local
18 exchange projects clearly, it's difficult to say they'd
19 be 100 percent Title 61.
20 (Documents being distributed.)
21 MR. HOWELL: Madam Chairman, I'm
22 distributing what's been marked as Staff Exhibit 163,
23 pages 1 through 5.
24 Q BY MR. HOWELL: Ms. Barrington, this
25 Exhibit 163 contains three project descriptions,
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1 project 12070, project 4041 and project 4050. Did the
2 Company produce these documents?
3 A Yes, they look like our project
4 descriptions.
5 Q And in fact, your recent Exhibit 56 that
6 was distributed just a few minutes ago specifically
7 mentions project 12070 and project 4041 as adjustments or
8 reductions to the Title 61 allocations, do they not?
9 A Yes, they do, Exhibit 56 does; so these are
10 projects that were later determined to be classified as
11 Part 64 and the retroactive adjustment was made.
12 Q Now, turning your attention briefly to
13 project 4041, which is the second project on page 2 of
14 Exhibit 163, that was an AT project to work with the
15 citizens of the newly wired town of Winona, Minnesota,
16 was it not?
17 A That's right. That was a test town where
18 some experimentation was being done.
19 Q And if I were to look on some additional
20 workpapers, would you agree with me, subject to check,
21 that this project which was 4041AC was originally
22 allocated to account 6535?
23 If I can approach the witness, I can just
24 show her.
25 (Mr. Howell approached the witness.)
1911
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Wilder, Idaho 83676 U S WEST Communications
1 THE WITNESS: 4041 is account 6535.
2 Q BY MR. HOWELL: And what account is 4050?
3 A 6535.
4 Q And finally -- well, we'll skip that one.
5 Now, as part of the cost allocation process, projects are
6 assigned to accounts, are they not?
7 A Yes, they are.
8 Q And then those accounts go to make up cost
9 pools, do they not?
10 A They do.
11 Q And for purposes of illustration, I believe
12 you just moments ago indicated that account 4041
13 involving the wiring or services to the wired town of
14 Winona, Minnesota, were account 6535. Could you turn to
15 page 3 of Exhibit 162? How many cost pools are in
16 account 6535?
17 A I'm not familiar with this document. The
18 question would probably be better addressed to Dallas
19 Elder on the cost pools and the allocation models.
20 Q Do you have knowledge of how the cost pools
21 are created?
22 A I have some general knowledge that it's
23 done by the accounts that are assigned to each project.
24 For more detailed information, you'd have to see Dallas
25 Elder.
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Wilder, Idaho 83676 U S WEST Communications
1 Q Would by looking at this table, would you
2 agree with me that there are only two cost pools in 6535?
3 A That's what I see in the cost pools
4 column. There's one pool for direct nonregulated and
5 then the remaining pool is for the other.
6 Q I'm just curious about how, although it's
7 been subsequently corrected, how project 4041 found its
8 way into one of these two pools. Can you enlighten us a
9 little bit about that?
10 A I can tell you how the accounts get
11 assigned to the projects. Where they go into the cost
12 pools in the model, I don't know the detail of that end.
13 Dallas Elder could explain that. With the project
14 descriptions that I provided in the course of this rate
15 case, we also provide those descriptions to the
16 accounting classifications people at U S WEST
17 Communications and then accounting classifications
18 reviews those descriptions and makes an assignment based
19 on what they see in the description.
20 If they have any questions at all, they can
21 call back and let me know what their questions are. I
22 can get them in touch with the product manager and we can
23 get their get questions clarified and they make the
24 assignment based on the information they learn through
25 that process.
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Wilder, Idaho 83676 U S WEST Communications
1 Q Directing your attention to Exhibit 163,
2 page 4 and 5 which is a project description for project
3 code 4050AC --
4 A Uh-huh.
5 Q -- and in the first paragraph, it says that
6 this is for new speech services. Is it your
7 understanding that new services would be Title 61
8 services in Idaho?
9 A No, it's my understanding that new products
10 and services would be Title 62 in Idaho.
11 Q And what is the basis for that
12 understanding?
13 A Having read the code that was provided to
14 me.
15 Q And what code are you referring to?
16 A Let me see. Well, I didn't get the title
17 page with it, but it has a page called "Services
18 Remaining Under Title 61 Regulation," a page called
19 "Title 62 Services." The note on the bottom says,
20 "Notice of election, revised and supplemented
21 Attachment B, March 10th, 1989."
22 Q Let me try to come at it this way: To your
23 knowledge, would Caller ID be a Title 61 service?
24 A No, I would say it would be a Title 62
25 service.
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Wilder, Idaho 83676 U S WEST Communications
1 Q Would digital communications be a Title 61
2 or Title 62 service?
3 MS. HOBSON: I'm going to object to the
4 question. I don't know that digital communications has a
5 precise meaning.
6 COMMISSIONER SMITH: Mr. Howell.
7 MR. HOWELL: Well, I think it has meaning
8 subject to common understanding.
9 MS. HOBSON: I believe it refers to a
10 technology that a variety of services can be offered
11 over.
12 MR. HOWELL: Let me rephrase the question.
13 Q BY MR. HOWELL: Would digital data
14 communications be a Title 61 service?
15 A There is a product that U S WEST
16 Communications sells called DDS or digital data service
17 to large businesses, that would be a Title 62 service.
18 It doesn't mean all digital communications would be
19 Title 62. As Ms. Hobson said, it's a technology rather
20 than a product.
21 Q If new speech, looking again at project
22 4050, if this project was delivering a new service, for
23 instance, a new speech service, would you agree with me
24 that such a service would be Title 62?
25 A I would. In fact, this platform was for
1915
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Wilder, Idaho 83676 U S WEST Communications
1 voice access service which I expect would be a Title 62
2 product in Idaho.
3 Q And again in your surrebuttal testimony,
4 you indicated that you thought the allocations used in
5 the CAAS manual were conservative, in fact maybe some
6 allocations might be higher in your opinion.
7 A That's correct.
8 Q Again directing your attention to 4050,
9 would you agree with me that the intrastate allocation
10 for that project was $57,071?
11 A I'll have to look that up.
12 Q Maybe to make it easier for you, if you
13 could go to page 11 of Exhibit 154 and when you're at
14 that page, I'll tell you where it is.
15 A Okay.
16 Q And then in the Title 61 dollars, go down
17 and find the $25,073. Do you see that?
18 A Yes, I do.
19 Q And that is project 4050AC?
20 A That is.
21 Q And that project, then, under this chart
22 you have assigned $25,073 to Title 61 from that project;
23 correct?
24 A I didn't make that assignment. That's the
25 result of the CAAS model, where in a data request we were
1916
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Wilder, Idaho 83676 U S WEST Communications
1 asked to provide the project level detail from the
2 results of the CAAS model, so the results of the CAAS
3 model by account was spread over the projects,
4 essentially.
5 Q I believe --
6 A So I'm not claiming that that individual
7 project should have that amount assigned to Title 61, but
8 when you look at the entirety of the whole pot of AT and
9 Bellcore projects, the allocators that were assigned look
10 reasonable to me.
11 Q And then again just focusing on this
12 project 4050 as Exhibit 163, page 4, do you believe an
13 allocation of 25,000 would be reasonable to Title 61?
14 A I don't believe it's reasonable to try to
15 allocate on a project basis. It's too cumbersome, it's
16 too burdensome. I think we need to go to a higher level
17 to do the allocations.
18 Q And can you tell the Commission what is the
19 allocation ratio for this particular project?
20 A I could find which account this project
21 booked to and look up the allocation by that account if
22 you want me to take a couple of minutes.
23 Q Would you accept, subject to check, that
24 64 percent of the intrastate costs were allocated to
25 Title 61 on this project?
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Wilder, Idaho 83676 U S WEST Communications
1 A As I said before, we did not allocate on a
2 project level. We allocated at a higher level. When you
3 take that percentage that was for the total account,
4 apply it to this project, you get that number for this
5 project. It doesn't mean that we allocated this
6 particular project.
7 Q But in effect, doesn't it mean that
8 Title 61 ratepayers are asked to pay in rates and revenue
9 requirement $25,000 or 64 percent of this project?
10 A No, I would say that we're asking
11 ratepayers to pay a reasonable amount from the whole
12 pot. If you would say that Title 61 customers are paying
13 for part of this project, then you'd have to say that
14 Title 62 customers are also paying for some Title 61 work
15 that was done according to that theory.
16 Q Didn't you a few moments ago say that this
17 project 4050 was a Title 62 project?
18 A I would say voice access would be a
19 Title 62 product in Idaho.
20 Q All right.
21 (Documents being distributed.)
22 Q BY MR. HOWELL: Ms. Barrington, my
23 able-bodied assistant is handing you what purports to be
24 project 11250. This is a project for AIN. Could you
25 explain to the Commission what AIN is?
1918
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 A The acronym stands for advanced intelligent
2 network. It's a new, I would say, network technology
3 that Bellcore has been very heavily involved in
4 developing for several years. It adds some additional
5 intelligence to the network that allows the network to
6 route calls based on specific triggers. For example, one
7 of the things that AT came up with on dealing with the
8 Internet calls is if we see that a call is going to an
9 America Online or an Internet service provider, we can
10 say, oh, that's got a chance to be a long duration call,
11 so we're going to route it a little differently so we
12 don't tie up switch resources, so it's more intelligence
13 in the network to allow the network to route calls more
14 efficiently.
15 Q Would you agree with the description
16 identified in the first paragraph of Staff Exhibit 165
17 that says the platform allows for rapid introduction of
18 products and services?
19 A That's correct, because you do the --
20 actually develop the product and service, U S WEST
21 Communications can actually develop the new product and
22 service itself.
23 Q And if I were to look at page 1 of Madonna
24 Faunce's Exhibit 154, the fourth line down, I would find
25 this project, would I not?
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Wilder, Idaho 83676 U S WEST Communications
1 A Yes.
2 Q And that the classification in the far
3 right column is "D" as in Title 62?
4 A That's correct. It's for introducing new
5 products and services.
6 Q All right, and although it's a new product
7 and service that the next column over, would you agree
8 with me that it indicates that $5,053 were allocated to
9 Title 61 for this project?
10 A Again, the allocations were not done on a
11 project basis. That project spread was produced in
12 response to a data request from Ms. Faunce for us to
13 spread the allocations on a project level and the
14 allocation was really done at a higher level than
15 project.
16 Q Directing your attention to the program
17 name, read the program name.
18 A Advanced intelligent network.
19 Q And what's the next word?
20 A After advanced intelligent network?
21 Q In the program name -- I'm sorry, on
22 Exhibit 165?
23 A The project -- oh, the program name, AIN -
24 unregulated.
25 Q And by "unregulated," should this entire
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1 cost have been removed by the allocation process?
2 A No, in this case, this is not referring to
3 FCC Part 64, unregulated. At the time this project was
4 done, the U S WEST Communications IT organization and
5 Advanced Technologies organizations were merged
6 together. Organizationally, some managers, some
7 developers were still on the regulated side of the
8 Company, some were on the unregulated side and this term
9 "unregulated" was used to indicate that it was people on
10 the unregulated side of AT working on the project. It's
11 not FCC Part 64, unregulated. The AT project managers
12 who write these descriptions are not generally familiar
13 with the FCC rules and allocations.
14 Q But would you agree with me that this
15 project is primarily for a Title 62 service?
16 A I would say that new AIN services would be
17 deregulated in Idaho, Title 62 in Idaho.
18 (Documents being distributed.)
19 Q BY MR. HOWELL: You've been handed what's
20 been marked as Staff Exhibit 166 which is project
21 2349BD. If you were to look also on page 1 of
22 Exhibit 154, from the top it's about 10 columns down,
23 you'll see a Title 61 amount of $1,033?
24 A Yes, I do.
25 Q What year was this project costed in?
1921
CSB REPORTING BARRINGTON (X-Reb)
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1 A Well, from the number on the project
2 description, it looks like it started in 1994. It's got
3 a 1994 project number and I assume since -- if there was
4 no 1995 project number that the 1994 work carried over
5 into 1995. What happens frequently with AT projects is
6 the projects may close down at the end of December in
7 1994, but they book at U S WEST Communications in January
8 1995 and so we see some 1994 projects that book in '95.
9 Q So this might have been a carry-over
10 project?
11 A It might have been.
12 Q And again if I were looking on page 1 of
13 Exhibit 154, I would see a Title 61 cost of 1,033?
14 A That's correct.
15 Q And would you agree with me that the first
16 paragraph of the project description discusses the
17 "specific products and services utilizing Advanced
18 Intelligent Network capabilities" and then moving down to
19 the next line "to rapidly deploy new features/services"?
20 A Yes, that's what the project description
21 says.
22 Q Good, and would you agree with me that this
23 is a Title 62 service?
24 A Yes, I'd agree.
25 (Documents being distributed.)
1922
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Wilder, Idaho 83676 U S WEST Communications
1 Q BY MR. HOWELL: You've been handed what's
2 been marked as Staff Exhibit 168 which purports to be a
3 project 11173, AT.
4 A 11173CD.
5 Q And if you were to turn to page 10 of
6 Exhibit 154, about six from the bottom in the Title 61
7 column, you'll see an amount 33,507?
8 A Yes.
9 Q Is that the project we just handed you
10 that's encompassed in Staff Exhibit 168?
11 A Yes, it is.
12 Q Would you agree with me that this project
13 as at least coded on page 10 of Exhibit 154 is a Title 62
14 project?
15 A Yes, I would. In fact, 25 percent of the
16 projects in this Exhibit 154 I have identified as
17 Title 62 projects, so that means about 300 of them we
18 could identify as not supporting local exchange service
19 and supporting Title 62 projects.
20 Q And yet the allocation system because of
21 the pooling requirements asks that Title 61 ratepayers
22 pay $33,000 of this cost?
23 MS. HOBSON: Madam Chairman, I'm going to
24 object. The witness has repeatedly been asked this line
25 of questions and has repeatedly stated her position. I
1923
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Wilder, Idaho 83676 U S WEST Communications
1 don't know that we really need to go through it again and
2 again.
3 COMMISSIONER SMITH: Mr. Howell.
4 MR. HOWELL: Madam Chairman, I'm attempting
5 for the record to show that the Title 61 ratepayers have
6 been asked to pay an appreciable cost of Title 62
7 projects and the best way that I know of getting at this
8 is going project by project.
9 COMMISSIONER SMITH: I'm going to overrule
10 the objection, Ms. Hobson. I think it's what we're about
11 here and the Company will have adequate opportunity to
12 show its side of the story.
13 THE WITNESS: Would you repeat the
14 question, please?
15 MR. HOWELL: I'll withdraw it.
16 Q BY MR. HOWELL: Maybe we can make this go a
17 little faster. Would you agree with me that projects
18 that implement video/multimedia architecture are Title 62
19 projects?
20 A Yes, I'd agree.
21 Q And again referring you to page 10 of
22 Exhibit 154, five lines up from the bottom, you'll see a
23 $982 amount and the project name is video/multimedia?
24 A That's right.
25 Q And you would agree with me that that's a
1924
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Wilder, Idaho 83676 U S WEST Communications
1 62 service?
2 A I would. That's one of the 25 percent
3 that's Title 62.
4 (Documents being distributed.)
5 Q BY MR. HOWELL: Referring you to page 12,
6 about 10 lines down from the top in the Title 61 dollars
7 column, do you see an amount $28,931?
8 A Yes.
9 Q And that is for project 11280 which you've
10 just been handed what's been marked Staff Exhibit 171?
11 A Uh-huh, that's true.
12 Q And it's a broadband infrastructure
13 project?
14 A That's right.
15 Q And again looking at that line, almost
16 $29,000 of Title 61 funds have been assigned to that
17 project?
18 A Yeah. Of those project costs, if you take
19 the CAAS allocation and you spread it back to the
20 projects, that's the number you end up with.
21 Q Can you explain to the Commission why in
22 your Exhibit 56 where you removed several broadband
23 activities which occurred in other states why this
24 broadband multimedia activity in Denver, Colorado, was
25 not removed?
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CSB REPORTING BARRINGTON (X-Reb)
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1 A What was removed in Exhibit 56 was projects
2 that were allocated to FCC Part 64 and were allocated to
3 Nebraska. This particular architecture project would not
4 be Part 64 because the basic network that's providing the
5 broadband services is not considered Part 64 and
6 deregulated. It's only the information services that are
7 carried across that network would be Part 64, the
8 enhanced services. The network itself is not an enhanced
9 service. Likewise, this was not classified as relating
10 to the Omaha trial which was the other group of projects
11 that were pulled out in Exhibit 56. It was more general
12 video/multimedia work.
13 Q In your opinion, should this have been
14 removed from the intrastate Title 61 category since it
15 deals with video on demand?
16 A No. In my opinion, it's part of the costs
17 that go into the cost pool that CAAS allocates and if you
18 were to pull these certain projects, these projects that
19 you've identified as Title 62, out of that pool, you
20 would have to go back and redo all of the allocators to
21 allocate the remaining projects, so I don't think you can
22 pull individual projects out of that pool. It would
23 change the allocators and the allocation scheme wouldn't
24 work correctly if you've directly assigned some projects
25 that weren't Part 64.
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CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Q If I could have you turn to page 18 of
2 Exhibit 154, and about 12 columns down you'll see a
3 dollar amount in the 61 dollars of 14,576 and that is for
4 project 4R32G0?
5 A I'm sorry, I'm not on the right page here.
6 Q That's all right, page 18.
7 A Okay.
8 Q And U S WEST business broadband services
9 would be a Title 62 service in Idaho?
10 A No. I don't think a broadband service
11 would be a Title 62, especially business broadband.
12 COMMISSIONER SMITH: Are you sure?
13 MR. HOWELL: I can get at it.
14 THE WITNESS: Do you want me to read the
15 description?
16 MS. HOBSON: Well, I'm not sure whether
17 there was a question and answer communication there on
18 the correct title.
19 MR. HOWELL: Let me hand out another
20 exhibit.
21 COMMISSIONER SMITH: Try that one again.
22 MR. HOWELL: All right, let me try it
23 again.
24 Q BY MR. HOWELL: Would you agree with me
25 that project 4R32G0, U S WEST business broadband
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Wilder, Idaho 83676 U S WEST Communications
1 services, would be a Title 62 service in Idaho?
2 A Yes, I'd agree, Title 62.
3 COMMISSIONER SMITH: Thank you.
4 (Documents being distributed.)
5 Q BY MR. HOWELL: On that same page, about in
6 the middle of the page, and I'm speaking of page 18 of
7 Exhibit 154, do you see a dollar amount for 1,536 and it
8 goes with project 5C0110?
9 A That's correct.
10 Q And referring you to Staff Exhibit, what's
11 been marked, 173, could you give the project name,
12 please?
13 A Phase 1 INCS Project for U S WEST.
14 Q And what is INCS?
15 A It doesn't appear to be spelled out here.
16 I don't know.
17 Q Would you agree that it's an unregulated
18 affiliate of U S WEST?
19 A No. INCS is not an unregulated affiliate
20 of U S WEST. There was an interprise organization at
21 U S WEST that was partially regulated, partially
22 unregulated, in fact still is.
23 Q Would INCS be a service offered by
24 U S WEST, referring to the description of 1995 work?
25 A Not that I know of. It looks like a
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Wilder, Idaho 83676 U S WEST Communications
1 Bellcore name for the project. I don't know of any
2 service called INCS that's offered by U S WEST.
3 Q Can you explain to the Commission, then,
4 why U S WEST Communications should pay for a project that
5 they don't know what it's about?
6 A I'm not saying U S WEST doesn't know what
7 this project is about. I'm saying I don't know the
8 details of this project. As part of our budgeting
9 process, there would have to be a sponsor at U S WEST
10 Communications who would agree to fund this project out
11 of their budget and I'm sure they would know what this
12 project is about.
13 Q Could you read the first sentence in the
14 description of 1995 work?
15 A "This work proposal covers initial Bellcore
16 support for the deployment of U S WEST INCS."
17 Q And then up in project overview, would you
18 agree with me that INCS is intended to be or provide a
19 new Internet-like global data connectivity service?
20 A That's correct.
21 Q Would you agree that that is clearly a
22 Title 62 service in Idaho?
23 A Yes.
24 Q Would you agree with me that Bellcore
25 projects done for PCS Consulting should not be a
1929
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Wilder, Idaho 83676 U S WEST Communications
1 regulated activity in the State of Idaho?
2 A I would agree.
3 Q Could you turn to page 26 of Exhibit 154?
4 A Yes.
5 Q And the sixth project down with a 61
6 dollars amount of $9,470, would you agree with me if I
7 were to represent to you that the product name is PCS
8 Consulting of a radio propagation study?
9 A It's not the name that I have on this list,
10 but I wouldn't be surprised that there was another name
11 on it in the description.
12 Q Well, just for the record?
13 A It is a project that is identified as
14 Title 62 in Idaho as well.
15 (Documents being distributed.)
16 Q BY MR. HOWELL: You've been handed what's
17 been marked as Staff Exhibit 174 which purports to be
18 project 5W1100 for PCS Consulting and deployment
19 support.
20 A Uh-huh.
21 Q Would you agree with me that PCS in Idaho
22 is neither a Title 61 or Title 62 service?
23 A My understanding based on some discussions
24 at U S WEST Communications was if it's a new service, it
25 would be Title 62.
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Wilder, Idaho 83676 U S WEST Communications
1 Q Does this Commission regulate cellular
2 services in Idaho?
3 A I expect they don't.
4 Q And isn't PCS mobile radio communications?
5 A It's mobile communications, yes.
6 Q And that according to the CAAS system,
7 $9,470 were allocated to Title 61 from this project?
8 A Again, CAAS system didn't allocate it at
9 project level. It allocated at a total cost pool level
10 and when you take those factors and spread them across
11 projects, that's the amount you come out with for this
12 project.
13 Q Would you agree with me that private line
14 service in Idaho is a Title 62 service?
15 A Yes, I would.
16 Q And do you know what Flexcom systems are?
17 A No, I don't.
18 Q If you could turn to page 29 of
19 Exhibit 154.
20 (Documents being distributed.)
21 Q BY MR. HOWELL: You've been handed what's
22 been marked Staff Exhibit 175, but referring to page 29
23 of 154, you'll see an amount 7,242?
24 A Uh-huh.
25 Q And the project code is 4DCC-, I believe
1931
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 it's, I0.
2 A That's right.
3 Q It's called Flexcom system enhancements.
4 A Uh-huh.
5 Q Does this project support private line
6 activities?
7 A I'm not as familiar with the Bellcore
8 projects. I had a subject matter expert on Bellcore do
9 the assignments for the Bellcore projects. I could read
10 the description and try to make that determination for
11 you, but I'm not familiar with it by name.
12 Q You wouldn't disagree with me if you looked
13 at the underlined portion in the third paragraph that
14 underlines private line customers of the Bellcore Client
15 Companies?
16 A That's what it says and, again, it's one of
17 the 25 percent of the projects that could be assigned to
18 Title 62.
19 Q And U S WEST is a Bellcore client company?
20 A Yes.
21 MR. HOWELL: I'm ready to start a new pile,
22 Madam Chairman. Would this be a good time to break?
23 COMMISSIONER SMITH: Yes. Do you want tell
24 us what the new pile is?
25 MR. HOWELL: The projects that we've
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1 examined so far have been those projects that were at
2 least coded to Title 62 services. These projects are the
3 common projects.
4 COMMISSIONER SMITH: I see. Yeah, we need
5 a break. Let's come back at a quarter to 3:00.
6 (Recess.)
7 COMMISSIONER SMITH: Okay, we'll go back on
8 the record. We're with Mr. Howell.
9 Q BY MR. HOWELL: Ms. Barrington, now what
10 I'd like to do is to examine some of the projects
11 identified in Exhibit 154 that were marked for common
12 costs and what I will try to do is get through this as
13 quickly as I can. I appreciate you holding up.
14 If I could direct your attention to page 1
15 of Exhibit 154, about 10 rows down, do you see a cost
16 $2,350 of common costs? It's your testimony, isn't it,
17 that speech delivery services should be a Title 62
18 service? And specifically, I'm looking at project
19 10210AC.
20 A And your question was should that be a
21 Title 62 service?
22 Q Yes, ma'am.
23 A No, I don't agree with that. This speech
24 interface for service delivery could be used for service
25 delivery of local exchange services as well as advanced
1933
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1 intelligent network services.
2 Q Is dialogue-based speech interface only
3 available through advanced intelligent network services?
4 A No, it isn't. It's a separate platform
5 that's being developed. It's not an advanced intelligent
6 network platform.
7 (Documents being distributed.)
8 Q BY MR. HOWELL: You've been handed what's
9 been marked as Staff Exhibit 176. Would you read the
10 first sentence of that project description?
11 A "This project will design and develop a
12 dialogue-based speech interface for AIN service `Do Not
13 Disturb.'"
14 Q And to your knowledge, AIN service "Do not
15 Disturb," would that be a Title 62 service?
16 A AIN would be Title 62, yes.
17 Q And the CAAS system assigned or allocated
18 what Title 61 cost to this project?
19 A CAAS system didn't assign to this project.
20 It assigned at a higher level a whole pool of costs. It
21 was not project specific.
22 Q But do you believe that this project went
23 through a common pool?
24 A Yes, I do.
25 Q And then the end result of the allocation
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Wilder, Idaho 83676 U S WEST Communications
1 system, the CAAS system, resulted in Title 61 costs of
2 $2,350 being assigned to this project?
3 A The costs weren't assigned to the project.
4 They were assigned to cost pools. Costs were incurred by
5 this project. They were allocated to a common pool,
6 because while the immediate deliverable from this project
7 was the speech interface that could be used with the AIN
8 service, the description also says on page 2 that the
9 work would produce advances in speech recognition
10 technology for application to additional U S WEST
11 products and services.
12 Those additional U S WEST products and
13 services could be Title 61 services. For example, once
14 you've got a dialogue-based platform that can recognize
15 speech, customers could call in and the voice recognizer
16 could help with routing those calls. In fact, I could
17 envision a few years down the road a customer could call
18 in and reach a voice interface and say I'm moving and I
19 need my phone number moved to a new address and the voice
20 interface could say what's the new address, they could
21 provide the new address.
22 That information could automatically go
23 into a system, so it could help reduce the cost to the
24 business of providing service to the extent they could
25 automate it and so this speech interface for service
1935
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 delivery could serve multiple products in addition to the
2 AIN product and that's why it's in the common pool.
3 Q Could one of the products it serve be
4 Title 61 services?
5 A Yes.
6 Q So any revenues attributable or derived
7 from the delivery of this service if it was a 61 should
8 be available to Title 61 jurisdiction?
9 A This is not a revenue-producing service in
10 itself. It's an interface for service delivery, so the
11 application would be to U S WEST Communications' internal
12 systems, so a customer calling up for service or to move
13 a service would be able to access this voice response or
14 voice recognition unit and it would help with
15 provisioning service, so it's not a particular product or
16 service that would produce revenues. It's a way for the
17 Company to reduce its cost of doing business.
18 Q Let me have you turn to page 2 of
19 Exhibit 154 and about 10 columns down, you'll see a
20 Title 61 cost of $358 for project 60030.
21 A Yes.
22 Q U S WEST NET?
23 A Right.
24 Q Is the U S WEST carrier marketing unit, is
25 that a Title 62 marketing unit?
1936
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 A I would say the products that are offered
2 by the carrier unit, switched access/special access,
3 would be Title 62 products.
4 Q Can you explain to the Commission why costs
5 for carrier market unit projects would be assigned to
6 Title 61?
7 A They would be assigned to a common pool if
8 they also could benefit Title 61 customers.
9 (Documents being distributed.)
10 Q BY MR. HOWELL: In Staff Exhibit 178 which
11 has been marked for identification says that project
12 60030 provides statistical consulting to the carrier
13 market unit. Again, can you tell me what Title 61
14 services this project provides?
15 A I don't see any Title 61 services in this.
16 It's focused on a product for interexchange carriers.
17 Q Would it be fair to say that the costs of
18 this project should be assigned directly to Title 62
19 services?
20 A No, I wouldn't say you could directly
21 assign costs at a project level at all. It would be too
22 cumbersome. Reviewing 1300 different projects and
23 determining for each one how it would be allocated is a
24 very burdensome task. In the many hours that my Bellcore
25 associate and I spent reviewing these projects, we did
1937
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 the best job we could in identifying what's common and
2 what might be dedicated only to a Title 62-type project
3 and this is one project worth $1,000 that we may have
4 missed in doing that allocation, but I don't believe that
5 you can allocate on a project level. You need to do this
6 at a higher level.
7 Q Do you know what the customer record
8 information system is or CRIS?
9 A It's the basic billing system that U S WEST
10 Communications uses to bill its residence and small
11 business customers, all business customers. There are
12 three systems at U S WEST. There's the carrier system,
13 this CRIS system which bills residence and business
14 customers, and then there's a separate invoice system for
15 some specialized services.
16 Q And isn't the CRIS system applicable to the
17 three regions, the three billing regions, of U S WEST?
18 A Yes. Essentially, we have three CRIS
19 systems.
20 Q You have an east, central and a west?
21 A That's correct.
22 Q And what region or area is Idaho located
23 in?
24 A Idaho South is in the central region.
25 Q Directing your attention to page 2 of
1938
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Exhibit 154, the second activity from the bottom which is
2 project 11343, Western CRIS enhancements, $729?
3 A Uh-huh.
4 Q I believe it was your testimony that Idaho
5 South was in the central region.
6 A That's right.
7 Q Should any of the costs for this project be
8 apportioned or allocated to Idaho if it's in a different
9 region?
10 A I'd need to consult with our accounting
11 classifications people on how this is done because if
12 there was a -- there is central CRIS maintenance here and
13 central CRIS system work and apparently all of these
14 projects get spread across all 14 states, so while you
15 might see one project that looks like it's the western
16 CRIS enhancement getting spread across 14 states, the
17 central CRIS enhancements are also getting spread across
18 14 states, so Idaho would be paying less than just the
19 central region's portion for that project.
20 I'm not sure how accounting, what criteria
21 they would use to make the decision whether to pull
22 individual projects out and account for them at a state
23 specific level or whether they just treat the pool as
24 14-state projects, but apparently, that's the way these
25 projects are treated, and especially since so few of the
1939
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 AT, and I'm not even sure about Bellcore, so few of the
2 AT projects are state specific, it may not be --
3 accounting may have deemed it not necessary to allocate
4 them to specific states.
5 Q In a moment you'll receive what has been
6 marked Staff Exhibit 179 and Staff Exhibit 181.
7 (Documents being distributed.)
8 Q BY MR. HOWELL: The project we've just been
9 discussing, 11343, is denoted as project Staff
10 Exhibit 179. Isn't it true that the only difference
11 between Staff Exhibit 181 and 179 is the fact that one of
12 the projects is for the central CRIS and the other
13 project is for the western CRIS?
14 A That's correct, so there would be two
15 different work groups at U S WEST Communications working
16 on them. At the time this project was done in 1995, the
17 group that worked on central CRIS was different than the
18 work group on western CRIS, so they charged the time to
19 two different projects.
20 Q And is it your testimony that the Idaho
21 Title 61 ratepayers ought to pay for CRIS enhancements in
22 another region of U S WEST operations?
23 A No, I don't think Idaho customers should
24 pay for enhancements in the western region and I don't
25 think they are paying for enhancements in the western
1940
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 region. If you'd look at how all of the projects were
2 allocated and how the cost pools were allocated, I think
3 the CAAS model comes up with a fair allocation of those
4 projects to states and at a Title 61/Title 62 level. For
5 example, with central CRIS enhancements, if that had been
6 allocated only to seven states instead of to 14 states,
7 you might have seen $6,000 allocated to Idaho instead of
8 the 3,000 that's allocated here, so one project may be
9 underallocated, another may be overallocated, but when
10 you look at the whole cost pool at the level that CAAS
11 did the allocations, I think it's reasonable.
12 Q Don't these projects both carry the same
13 project number?
14 A Central CRIS and western CRIS? No, they
15 don't have the same project number. One of them is --
16 central CRIS is 11351 and western CRIS is 11343.
17 Q You're right, I stand corrected. Do you
18 know where the CRIS system is maintained which serves
19 southern Idaho?
20 A CRIS, the CRIS system that serves southern
21 Idaho is in U S WEST Communications. I understand
22 recently with this merger to one billing system, the
23 OMEGA billing system, that southern Idaho may now be on
24 the PNB part of the system or platform that's located in
25 Washington or Oregon.
1941
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Q But for the 1995 test year, isn't it true
2 that the CRIS system that serves Idaho was located in
3 Salt Lake City?
4 A I don't know that. I don't know where the
5 CRIS system is located.
6 Q And do you know what region the Salt Lake
7 City CRIS system serves?
8 A No, I don't know. What I was told is that
9 there's a central CRIS system that used to be Mountain
10 Bell's billing system, so it serves those states which
11 used to be Mountain Bell. The western billing system
12 used to be Pacific Northwestern Bell's system, so it
13 serves those states that used to be PNB states and the
14 eastern billing system used to be Northwestern Bell's
15 system, so it serves the eastern states.
16 (Documents being distributed.)
17 Q BY MR. HOWELL: Turning your attention to
18 page 3 of Exhibit 154, you've been handed Staff
19 Exhibit or what has been marked as Staff Exhibit 183
20 dealing with a numbering plan area split. Can you tell
21 the Commission how much Title 61 dollars were allocated
22 from this project? It's about 10 projects up. It's
23 project 11519 up from the bottom of page 3.
24 A Again, projects were not allocated at the
25 project level. If you take the allocation factor that
1942
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 came out of CAAS for the particular pool of costs that
2 this project was part of and you apply that factor to
3 this project's costs, you come up with 14 dollars -- no,
4 $1,435.
5 Q And directing your attention to Staff
6 Exhibit 183, isn't it true that this project for the
7 number area plan did not include a number area split for
8 the State of Idaho, did it?
9 A That's true. It looks like there was no
10 numbering plan split in Idaho that year.
11 Q In fact, this project which is Staff
12 Exhibit 183 only refers to Arizona, Colorado and
13 Washington.
14 A Those are the states where NPA splits were
15 done in 1995.
16 Q And why should costs from those states be
17 allocated to Idaho?
18 A Again, I'd have to talk with accounting
19 classifications on how they make a decision whether to
20 book the costs at a state specific level or whether to
21 spread them across 14 states. It would be similar to the
22 situation with the CRIS enhancements where if there
23 happened to be an NPA split in Idaho and accounting is
24 treating all of the AT and Bellcore costs as 14-state
25 costs, the Idaho NPA split costs would be spread across
1943
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 14 states as well.
2 I'm not familiar with the decisions that
3 accounting has made on when to pull projects out
4 separately and allocate them by state and when they do
5 them by 14 states. In general, AT and Bellcore work does
6 apply to all 14 states. We rarely do state specific work
7 and so it's appropriate for most of the projects, nearly
8 all of the projects, to be billed to 14 states.
9 Q Please tell the Commission how accounting
10 codes are actually assigned to research projects.
11 A There is a group at U S WEST Communications
12 called accounting classifications. I provide them with
13 the project descriptions. They're also provided with
14 Bellcore project descriptions, so they have an
15 opportunity to review the descriptions. They are also
16 familiar with the FCC rules and the definitions of the
17 different account pools or the account codes.
18 They read the project descriptions. If
19 they have any question about how to allocate it, they
20 could call me, they could call a Bellcore subject matter
21 expert. I could get them in touch with the project
22 manager or somebody who works closely to the project who
23 could answer their questions and through that process,
24 the accounting classifications people come up with an
25 assignment of a project to a cost pool.
1944
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 I understand that that's a process that is
2 audited through our Part 64 audit process yearly. It
3 follows FCC rules and, as I said, it's an auditable
4 process and it's part of our allocation process that we
5 do for all 14 states.
6 Q As part of the accounting cost coding
7 function, does the cost accounting manual process or the
8 CAM's process, doesn't it try to directly assign costs
9 where possible?
10 A I'm not exactly sure what that rule is. I
11 don't do the accounting classifications.
12 (Documents being distributed.)
13 Q BY MR. HOWELL: If you could turn to page 8
14 of Exhibit 154, just below the middle of the page on
15 page 8 you'll see a project that correlates with Staff
16 Exhibit 189 which is project 11083.
17 A Okay.
18 Q Shouldn't this project have been removed
19 from the allocation pool because it's for an unregulated
20 affiliate?
21 A No, this is similar to a project you
22 brought up earlier where the Advanced Technologies
23 project manager used this term unregulated. It was
24 referring to part of the U S WEST Technologies
25 organization that was on the unregulated side of the
1945
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 business; in other words, Advanced Technologies.
2 This is not Part 64, unregulated. In fact,
3 this project is providing, it says installation, support
4 and maintenance of the voice, data and mail systems for
5 the U S WEST Technologies organization in the Denver
6 metro area and Boulder, so it's an internal system, so it
7 would be counted like an overhead and it would belong in
8 a common pool.
9 Q But this Commission doesn't regulate or
10 exercise regulatory control over U S WEST Technologies,
11 does it?
12 A The U S WEST Technologies organization was
13 a combination of employees in U S WEST Communications and
14 Advanced Technologies and so by regulating the products
15 and services of U S WEST Communications, essentially you
16 would be regulating U S WEST Technologies organization, a
17 part of it.
18 Q What product is this project actually
19 delivering?
20 A It's not delivering a specific product.
21 It's the internal systems that support the U S WEST
22 Technologies organization. This is the organization that
23 is providing support to U S WEST Communications'
24 operations support systems, so it's their internal
25 computer systems. These are the systems that a service
1946
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 rep would use when taking an order for any service,
2 Title 61 or Title 62.
3 They're the systems that transfer that
4 order to the network so that network systems can take the
5 order, assign a telephone number, assign a line to it,
6 send a copy to the billing system so that billing can be
7 initiated and there's a myriad of internal systems that
8 are necessary when providing Title 61 service as well as
9 Title 62 service and this project would support all of
10 those internal systems and that's why it's in the common
11 pool.
12 (Documents being distributed.)
13 Q BY MR. HOWELL: You've been handed Staff
14 Exhibit 193 for project 4628. Project 4628 appears on
15 page 12 of Exhibit 154 about midway in the column. Can
16 you explain to the Commission why some of the costs for
17 this project involving U S WEST Direct's involvement or
18 U S WEST's involvement in international and domestic
19 standards bodies benefits Title 61 ratepayers?
20 A Yes, I can. That's primarily because the
21 portion that's billed to U S WEST Communications
22 represents our interest in the domestic standards
23 bodies. These bodies set the standards for how systems
24 will inter-operate with each other. In fact, they set
25 standards for almost everything the Company does.
1947
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 For example, I don't know if it was 1995,
2 it may have been the 1994 time frame, there was a
3 standard being set for digging trenches for laying fiber
4 optic cable and the company that was proposing the
5 standard was one of the companies that actually goes out
6 and digs trenches and they proposed a standard that said
7 trenches have to be so and so deep and they have to have
8 this many layers of material on the bottom before you put
9 the fiber down and they have to be this wide and put
10 together all this criteria which the Advanced
11 Technologies manager that works on these standards
12 projects said, well, that's definitely overbilled.
13 We know, we've put in fiber in the ground
14 at U S WEST Communications. We know how deep it has to
15 be, we know what materials. They're overkilling it so
16 they can make more money for themselves and so somebody
17 from U S WEST Communications needs to be attending these
18 standards bodies and making sure that U S WEST
19 Communications' needs are represented.
20 Another example is with the SONET
21 interoffice network. There was a standard that came up
22 around this time frame for how you hook into a SONET
23 network to do your testing. This is something that's
24 needed for the interoffice SONET facilities used both by
25 Title 61 and Title 62 customers and by AT's
1948
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 representation representing U S WEST Communications on
2 the domestic standards committee, we were able to get a
3 standard that fit with the way U S WEST Communications
4 was already doing the testing, so U S WEST Communications
5 didn't have to go out and buy new equipment to meet some
6 other standard that was proposed.
7 Generally, the way this applies in the
8 international groups is once we've got a standard
9 developed internationally, we may also participate if
10 invited to go to an international standards body and it's
11 presenting that same standard that we use domestically,
12 so the largest, largest part of the work here is on
13 domestic standards and only when invited and when it's
14 consistent with U S WEST's needs we go to participate in
15 the international standards bodies.
16 This is a corporate R&D project that was
17 shared between U S WEST Communications and the
18 international group. Communications paid for the part
19 that represents our domestic standards participation.
20 The project was allocated to a common pool, so it's
21 shared between Title 61 and Title 62 appropriately.
22 Q Directing your attention to the second
23 paragraph on what's been marked Staff Exhibit 193, is
24 interactive video delivery system a Title 62 service?
25 A It would be Title 62 if it were offered
1949
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 here.
2 Q Is PCS a nonregulated activity by this
3 Commission?
4 A Yes.
5 Q Is SS7 services Title 62?
6 A The signalling system 7 is the
7 infrastructure of our network. It's not a product or
8 service. It's the network and the signalling system
9 that's used. Signalling means if there's a -- you know,
10 how does the customer get its off-hook via dial tone when
11 they pick up the phone, how do they know to ring the
12 phone on the other end with the number that's being
13 rung. That's the signalling system that's controlling
14 that and that signalling system 7 is the most current
15 version.
16 Q Would set top boxes be associated with
17 Title 62 services?
18 A No, those would be the part of the project
19 that are Title 62.
20 Q So the answer to my question is yes, it
21 would be a Title 62 service?
22 A Yes, set top box would be the part of the
23 project that's Title 62.
24 Q Would multimedia electronic data
25 interchange be a Title 62 service?
1950
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 A That one is a little more difficult to
2 say. There could be some applications internally.
3 Electronic data interchanges, the way that business we
4 expect will be done in the future where instead of
5 sending your customers a paper copy of a bill, for
6 example, or instead of sending your vendors a paper
7 order, you have this electronic data interchange where
8 it's done all through your computer, so I could envision
9 some internal applications for electronic data
10 interchange as well as external.
11 Q Would frame relay be a Title 62 service?
12 A Frame relay would be Title 62.
13 Q Would voice messaging be a Title 62?
14 A Voice messaging is Title 62 and FCC
15 non-reg. That's gets pulled out in the Part 64 removal
16 of costs, as with the set top box, I expect. Several of
17 these projects -- interactive video delivery system is
18 Part 64 FCC non-reg, so those kinds of costs get pulled
19 out in Part 64.
20 Q Would any of your workpapers show the
21 Part 64 removal?
22 A I think so. In the workpaper that was
23 attached to my rebuttal testimony labeled "Advanced
24 Technologies Payments to Affiliates," the far right
25 column shows amounts that are booked to FCC deregulated
1951
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 and this is summarized in the table in my testimony on
2 page 12 where 559,000 or 25 percent of AT costs are
3 allocated to Part 64 and 86,000 or 3 percent of Bellcore
4 costs are allocated to Part 64 and those are removed from
5 the Idaho costs prior to them being allocated between
6 Title 61 and Title 62.
7 Q Interactive video delivery systems or
8 services would be Title 62 services, wouldn't they?
9 A They would and they would be Part 64.
10 (Documents being distributed.)
11 Q BY MR. HOWELL: We're in the home stretch
12 on Bellcore. You've been handed what's been marked as
13 Staff Exhibit 196, a two-page document of project 5G6408,
14 intraLATA PIC. What Title 61 benefits or services are
15 being provided by this project?
16 A I don't know.
17 Q Do you know if February of last year
18 customers in Idaho had their choice of intraLATA
19 carriers?
20 A No, I didn't know that.
21 Q And isn't activities for intraLATA
22 carriers, wouldn't that be a Title 62 service in Idaho?
23 A I would assume it would based on my
24 knowledge of Title 61/Title 62 definitions.
25 (Documents being distributed.)
1952
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Q BY MR. HOWELL: You've been handed what's
2 been marked as Staff Exhibit 199, a directory software
3 for large and medium business services, project
4 No. 3Y8080. Would this project which looks like it
5 supports directory software, would this be a -- should
6 this be removed from Title 61?
7 A Well, again, the projects were allocated at
8 a total cost pool level, not at a project level, and so
9 we didn't remove projects individually from the cost
10 pools that were allocated in CAAS.
11 Q Isn't it true that medium and large
12 business services are services provided to customers with
13 five -- with greater than five lines in Idaho?
14 A I expect so.
15 Q And if I could get you to turn to page 24
16 of Exhibit 154, project 3Y8080 is about 12 down in the
17 Title 61 dollars. Do you see how much Title 61 revenues
18 or costs were the product of the cost allocation pooling?
19 A Yes.
20 Q What was that amount?
21 A $1,674. Again, on the Bellcore projects, I
22 relied on another subject matter expert at U S WEST to
23 identify which Bellcore projects provided local service,
24 were related to local exchange service only, which were
25 common, and I'd have to talk with him about this project
1953
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 to find out what -- how he knew it would be allocated to
2 a common pool.
3 (Documents being distributed.)
4 Q BY MR. HOWELL: On page 24 of Exhibit 154,
5 about in the middle of the page there is a Title 61
6 dollar amount of $2,242 which represents the Title 61
7 allocations for project 423228 which is identified in
8 Staff Exhibit 200.2.
9 MS. HOBSON: I'm going to object just for
10 the sake of the record. I believe the witness has
11 repeatedly told Mr. Howell that there's not a Title 61
12 allocation.
13 COMMISSIONER SMITH: Mr. Howell.
14 MR. HOWELL: Well, whatever terminology
15 the -- well, let me rephrase my question.
16 COMMISSIONER SMITH: Okay.
17 Q BY MR. HOWELL: Do you see that amount in
18 Title 61 dollars?
19 A 3,527 we're talking about?
20 Q Is that the intrastate amount?
21 A For project 423228?
22 Q Yes, ma'am.
23 A No. That's the amount that you get if you
24 take the factor from CAAS that assigned the cost
25 allocation pool that this project was in and you apply
1954
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 that factor to this particular project. Even though that
2 allocation was not done on a project level, in response
3 to a data request, we were asked to show at a project
4 level how those factors would impact each project.
5 That's why this data was created, in response to a data
6 request.
7 It's not the way the Company does their
8 allocations. We don't allocate on a project level and
9 looking at any specific project and trying to decide
10 whether this number is too high or too low, it would be a
11 burdensome process to do that and we've gone through this
12 for, what, 20 projects here, 15 projects. If we did this
13 for all 1300 projects, it would just require an
14 incredible amount of resources at U S WEST. We don't
15 allocate at the project level. We allocate cost pools
16 and Dallas Elder will be testifying, I think, later this
17 week or next week and can explain the details of that
18 cost allocation manual or process.
19 From what I see and the results of the CAAS
20 system where I see 34 percent of AT and Bellcore project
21 costs showing up as Title 61 costs, that looks entirely
22 reasonable to me, if not conservative, and when I see
23 Ms. Faunce's allocation resulting in one percent of AT
24 and Bellcore project costs being allocated to Title 61,
25 that's looks absolutely absurd to me. There's a lot of
1955
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 value coming out of AT and Bellcore.
2 When we have service problems, AT technical
3 staff is out riding the trucks with the network
4 technicians helping to figure out what the problems are
5 and helping to find the technology solutions to those
6 problems. Bellcore is working in their labs as we're
7 having systems problems trying to fix the systems
8 problems and get those fixes out to us, so there's a lot
9 of value coming out of AT and Bellcore, clearly a lot
10 more than one percent of our costs.
11 I'm not surprised to see the 34 percent of
12 costs that come out of CAAS assigned to Title 61. That
13 looks entirety reasonable to me. That's not done at a
14 project level and continuing to go through individual
15 projects, it just demonstrates what a burdensome process
16 this could be if we tried to do it on an individual
17 project level.
18 Q Ms. Barrington, isn't it true that we only
19 really have to find out the true costs of these projects
20 only when we have a rate case in Idaho?
21 A Well, no, because Advanced Technologies and
22 Bellcore bill U S WEST Communications the true costs of
23 the projects as the work is being done and as the service
24 is being provided, AT and Bellcore bill U S WEST
25 Communications at cost.
1956
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Q But isn't it true that you've only had to
2 look at the 1300 projects for this particular rate case?
3 A I've only had to look at the Title 61/Title
4 62 implications for this rate case.
5 Q And when was the last rate case in Idaho?
6 A I don't know.
7 Q I almost lost where we were. Do you have
8 Staff Exhibit, what's been marked as Staff Exhibit,
9 No. 200.2 in front of you?
10 A Yes, I do.
11 Q And isn't it true that the services denoted
12 on lines 2 and 3 of the second paragraph,
13 video-on-demand, interactive video, and multimedia would
14 be Title 62 services?
15 A Yes. They would also be Part 64 services.
16 (Documents being distributed.)
17 MR. HOWELL: You've been handed what's been
18 marked as Staff Exhibit 200.5. I guess by way of
19 clarification for the Commission, the reason for the --
20 COMMISSIONER SMITH: Yes, Mr. Howell, we
21 know you've exceeded your exhibit numbers. In order to
22 avoid going into someone else's, we're now into
23 decimals.
24 Q BY MR. HOWELL: Is it a fair representation
25 that project 5A3030 is a workshop conducted by Bellcore
1957
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 for U S WEST Interprise?
2 A I need to read the description. I haven't
3 read it before. Okay, from what I see, it's direct
4 consultation support in the form of a two-day workshop
5 covering an overview of TMN architecture and
6 functionality for U S WEST.
7 Q And TMN doesn't stand for transcendental
8 meditation notes, does it?
9 A I don't know what it stands for.
10 Q Is U S WEST Interprise an unregulated
11 affiliate of U S WEST, Inc.?
12 A No. U S WEST Interprise is an organization
13 within U S WEST. Part of that organization is in an
14 unregulated entity called U S WEST Communications
15 Services. The other part of the Interprise organization
16 was in U S WEST Communications, so the network side of
17 the organization was in U S WEST Communications. The
18 sales and some value added feature side was in the
19 unregulated Communications Services.
20 Q By looking at your workpapers, it appears
21 that approximately 64 percent of the intrastate costs
22 that flow as a result of the CAAS process was assigned to
23 Title 61. Can you explain that?
24 A The best person to explain that would be
25 Dallas Elder. It would be based on the cost pool that
1958
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 the project was assigned to.
2 (Documents being distributed.)
3 Q BY MR. HOWELL: You've been handed what's
4 been marked as Staff Exhibit 200.10 which purports to be
5 a project 5D0760. Can you read the project overview out
6 loud, please?
7 A "This project provides timely field testing
8 support to U S WEST to ensure that their planned roll-out
9 of Call Waiting Deluxe on 1AESS switches will be
10 successful."
11 Q And is Call Waiting Deluxe a Title 62
12 service in Idaho?
13 A Yes.
14 Q Is Call Waiting Deluxe offered in Idaho?
15 A I don't know. If it were offered, it would
16 be is what I meant to say.
17 Q And directing your attention to page 27 of
18 Exhibit 154, about 12 up from the bottom, how much
19 Title 61 costs were allocated to this project?
20 MS. HOBSON: Objection.
21 COMMISSIONER SMITH: Sustained.
22 MR. HOWELL: Just a moment, Madam Chair.
23 (Pause in proceedings.)
24 (Documents being distributed.)
25 Q BY MR. HOWELL: I'm distributing the final
1959
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 Staff exhibit which has been marked Staff Exhibit 200.8
2 which purports to be project 5W3223. Directing your
3 attention to the second paragraph of the project
4 overview -- I'm trying to remember what services I
5 haven't asked you about -- E911, is that a Title 62
6 service?
7 A I don't remember seeing it on either list,
8 either Title 61 or Title 62.
9 Q How about voice mail, is that a Title 62
10 service?
11 A Voice messaging is a Title 62, Part 64
12 service.
13 Q Could you explain to the Commission why
14 this project's costs should be assigned 64 percent?
15 A Costs weren't assigned at a project level.
16 They were assigned by a cost pool, so this project was
17 assigned to a cost pool that is common and because of
18 that, a portion of the total pool's costs were allocated
19 to Title 61.
20 Q Ms. Barrington, if I had more questions
21 about the actual mechanics of the cost allocation system,
22 would those questions be better directed to Mr. Elder?
23 A They would.
24 Q If I wanted to ask you questions about the
25 actual ratio of the cost pools and how costs fall out of
1960
CSB REPORTING BARRINGTON (X-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 the cost pools, would that question be better directed to
2 you or to Mr. Elder?
3 A Mr. Elder can explain the cost pools and
4 the ratios that are used in them.
5 Q Have you been involved with any
6 verification of how the cost pools allocate to correctly
7 costs?
8 A As I mentioned earlier, I work with the
9 accounting classifications people at U S WEST
10 Communications and I provide them with project
11 descriptions. If there's ever a question about how to
12 assign the project description, they would ask me.
13 Generally, when they do assign projects, I get a printout
14 of how they've assigned them, so I have an opportunity to
15 look it over and if I see something that doesn't appear
16 reasonable, I call them and question them on it, so
17 that's my involvement. It's in the discussions with the
18 people who actually do the accounting classifications and
19 in providing them any data that they need to answer any
20 of their questions to enable them to do the
21 classifications job.
22 MR. HOWELL: No further questions.
23 COMMISSIONER SMITH: Thank you,
24 Mr. Howell.
25 Mr. Phillips?
1961
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Wilder, Idaho 83676 U S WEST Communications
1 MR. PHILLIPS: No questions.
2 MR. HARWOOD: No questions.
3 COMMISSIONER SMITH: And how many exhibits
4 do you have?
5 COMMISSIONER NELSON: No exhibits, a
6 couple of questions.
7 COMMISSIONER SMITH: Commissioner Nelson.
8
9 EXAMINATION
10
11 BY COMMISSIONER NELSON:
12 Q Ms. Barrington, is it true that it's the
13 yellow paper that's not recyclable?
14 A I understand if there's only a small amount
15 of it, they will accept it.
16 Q On Exhibit 154 on almost every page there's
17 some negative numbers. Do you know what those numbers
18 represent?
19 A They are basically prior period
20 adjustments. Bellcore and AT both do an accrual at the
21 beginning of the year when they start the project work,
22 so we bill our costs one month out in arrears, so as I
23 mentioned before, the December 1994 bill actually hits
24 the books in January, '95 and the accrual from the
25 previous year gets reversed in January, '95.
1962
CSB REPORTING BARRINGTON (Com-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 These negative amounts have actually been
2 removed from the case in about the June time frame in
3 adjustment No. 8 that Margie Wright submitted. They are
4 out-of-period adjustments.
5 Q I heard you say a few minutes ago that
6 34 percent of project costs are in Title 61. Are you
7 talking about the total amount that goes into the CAAS
8 system and then you take out whatever comes out of
9 Part 64 and then you go to intrastate and it winds up
10 that 34 percent of the total or 34 percent of the amount
11 that winds up in intrastate?
12 A I did that calculation on an Idaho intra --
13 an Idaho State basis. Those are the numbers on page 12
14 of my testimony, so it starts with 100 percent of Idaho
15 expense, pulls out the FCC non-reg expense, which is 14
16 percent, pulls out the interstate 24 percent, and then
17 the CAAS allocation pulls out another 29 percent to
18 Title 62, so that's the table on page 12 based on Idaho
19 numbers and total Idaho I understand is two percent of
20 the total Company costs, so we're talking less than one
21 percent of the costs for AT and Bellcore are what we're
22 asking to recover in this rate case.
23 Q So looking at this table, then, it would be
24 fair to say that 34 percent goes to Title 61 and 29
25 percent goes to Title 62?
1963
CSB REPORTING BARRINGTON (Com-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 A That's correct.
2 Q While Mr. Howell was catching his breath at
3 one point, I went through here and looked at the projects
4 that were labeled "R" or Title 61 and I found three of
5 them, which to me equates to about two-tenths of one
6 percent of the projects and in a sample of the first
7 three pages, why, it looked like about 40 percent of the
8 projects were "D's" which would be Title 62 which would
9 leave about 60 percent of the projects that were common.
10 A Those numbers are a little bit skewed. Let
11 me explain a little bit with that 40 percent, because
12 you're looking alphabetically by project, you're seeing
13 the advanced network services and advanced intelligent
14 network projects that are being pulled out. Actually, if
15 you go through all 38 pages or however many it was, 75
16 percent of the projects are common, roughly 25 percent
17 are dereg, and then I think it's less than one percent,
18 because of the way Title 61 is defined, it's hard to say
19 that something is 100 percent Title 61, so less than one
20 percent is and that's the wireless basic exchange.
21 Q And that was my question. In your
22 analysis, what percentage of these were common?
23 A Seventy-five percent.
24 Q Well, even by that analysis, it would
25 appear that if 34 percent total costs wind up in 62, but
1964
CSB REPORTING BARRINGTON (Com-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 if you take the 37.5 percent of the -- I get down to
2 around 10 percent total cost going to Title 61 if you
3 figure that 75 percent of these were -- let me reword
4 that.
5 A Seventy-five percent of them were common;
6 however, if you go back and look at the allocation
7 factors, once you've pulled out all of the projects that
8 relate to BGS, relate to carrier, relate to data services
9 as opposed to voice, what you've got left is a pool
10 that's mainly voice-related or local exchange-related, so
11 if you look at the allocation factor for that pool of 75
12 percent that's common, it wouldn't any longer be the same
13 allocation factor that was applied to the whole pool.
14 You'd have to look at another factor and if you can
15 envision the network, if you pull out all the data
16 services, pull out the carrier services, pull out other
17 FCC-enhanced services, what you've got left is pretty
18 much the core network that's providing basic exchange to
19 business and residence customers.
20 A huge proportion of what's left would be
21 allocated to Title 61, so a huge proportion of that 75
22 percent would be Title 61 as opposed to the proportions
23 that come out of the CAAS models which allocate a portion
24 to the data services and carrier and BGS services and so
25 you'd have to change the allocation factor, so as I was
1965
CSB REPORTING BARRINGTON (Com-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 saying, you'd need to relook at the allocation factor on
2 that 75 percent. It might be 60 or 70 percent of that 75
3 that's really Title 61.
4 COMMISSIONER NELSON: I'll work on that.
5 Thank you.
6 COMMISSIONER SMITH: Commissioner Hansen.
7 COMMISSIONER HANSEN: I've got one
8 question.
9
10 EXAMINATION
11
12 BY COMMISSIONER HANSEN:
13 Q Earlier in the questioning you referred, I
14 thought, I just want to make sure I understood this, did
15 I understand you saying that under the current U S WEST
16 allocation of costs that you're subject to a three to
17 four percent error factor or I know you mentioned the
18 three or four percent error factor and I missed what you
19 were tying that to.
20 A I don't recall that question or that
21 response. I don't know of any specific error factor. I
22 wouldn't be surprised if in reviewing 1300 projects we
23 missed one or two, you know, assigning them to the right
24 code.
25 COMMISSIONER HANSEN: I'll wait and read
1966
CSB REPORTING BARRINGTON (Com-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 it. I must have been a little confused on it. Thank
2 you.
3 COMMISSIONER SMITH: Redirect, Ms. Hobson?
4 MS. HOBSON: I wonder if the Chair would
5 indulge me in five minutes so that I can avoid creating
6 another lengthy process here.
7 COMMISSIONER SMITH: Yes. We'll take a
8 five- or six-minute break.
9 (Recess.)
10 COMMISSIONER SMITH: Ms. Hobson.
11 MS. HOBSON: Thank you.
12
13 REDIRECT EXAMINATION
14
15 BY MS. HOBSON:
16 Q Ms. Barrington, when you were discussing
17 with Mr. Howell Staff Exhibit 178 which is the project
18 description for project 60030AD, which is also depicted
19 on page 2 of Exhibit 154 -- I hesitate even to wade into
20 this, except I believe the record is unclear -- the
21 dollar amount in the column which you have told us is not
22 the allocated amount but is merely the result of applying
23 a formula, could you tell us what the correct dollar
24 amount in the column would be for 60030AD just to clarify
25 the record?
1967
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 A The correct amount is $358.
2 Q Thank you. Ms. Barrington, you have
3 testified, I believe, that the majority of the AT and
4 Bellcore projects are for the maintenance and enhancement
5 for U S WEST Communications' systems and operations; is
6 that correct?
7 A Yes, it is.
8 Q Mr. Howell has spent a great deal of time
9 going through particular projects which he has selected
10 or Staff has selected. I wonder if in rebuttal you would
11 select a very small number of projects which you feel are
12 representative of projects which are for the maintenance
13 and enhancement of U S WEST Communications' systems or
14 operations, including the network and if you could
15 identify those projects for us on Exhibit 154.
16 A Okay. I went through the first few pages
17 of the Advanced Technologies projects. I am most
18 familiar with them. I'm not as familiar with Bellcore by
19 name. The first one I will identify is project 11385TP
20 which is named SOCS, which stands for service order
21 correction system. It's one of our applied research
22 projects.
23 Q It's on what page?
24 A Page 1.
25 Q Approximately --
1968
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 A Halfway down the page, 11385TP, service
2 order correction system. We have in the applied research
3 group at AT, there's a group that's knowledgeable in
4 artificial intelligence techniques, so what they did on
5 this project was take the service orders that are falling
6 out of the system and they had to be manually corrected
7 by service reps. Well, they talked with the service
8 reps, asked them how they knew, where they got -- what
9 knowledge they had that enabled them to manually correct
10 the service orders.
11 They took that knowledge and developed an
12 expert system, a little program taking the service reps'
13 knowledge to automatically correct the service orders so
14 that they don't fall out of the system and they had great
15 results with thousands of services orders passing through
16 the system so that customers could get their service on
17 time rather than falling out.
18 Q Would those be Title 61 or 62 customers?
19 A It would be both. I understand we process
20 15 million service orders a year. Most of them are for
21 the basic exchange service. There's no service order for
22 toll, no service order for access from an end user
23 customer, so it would be primarily basic local exchange.
24 The next one I will identify is two lines
25 down from that, project 11924AP. It's called portable
1969
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 service agent. On this project, the applied research
2 group worked with the local network organization to give
3 the technicians out in the field access to the computers
4 inside the Company so that as they're finding the
5 facilities that are out in the field aren't exactly what
6 the data base said, they can actually make corrections to
7 that data base while they're in the field and it was a
8 way to get the data updated. It gives the local network
9 organization access to the Company's systems.
10 I understand from talking with the resource
11 administrator in Idaho about the modeling projects and
12 how he was using them that the local network
13 organization, basically around 80 or 90 percent of the
14 jobs he estimated have to do with 1FRs and 1FBs or
15 residence and business basic exchange, so a huge
16 proportion of that project as well.
17 If we were going to try to allocate on a
18 project level and kind of match, for any project where
19 you might say maybe 10 percent could be Title 61, here
20 are some projects that might be 90 percent Title 61.
21 We've already discussed another project or
22 Ms. Faunce discussed another project about two-thirds of
23 the way down the page, 12049AD. That's the demand
24 forecasting center algorithms, so these algorithms were
25 developed to enable the local network organization to be
1970
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 able to staff by week, by month, to better have the staff
2 available to meet customer needs, again, local network
3 organization primarily for local exchange service.
4 The next one right below that project,
5 12050AD, scheduling algorithms for work effort manager
6 system. The modeling group at Advanced Technologies has
7 grown quite a bit in the last couple of years and we've
8 got quite a lot of modeling projects because our clients
9 in the network organization and in the business units
10 like the work that's being done by that group and want
11 more of it and so we're seeing more and more modeling
12 work done. You'll probably see it in the industry as
13 well. It's a recognized field of research. Most
14 Fortune 500 companies do operations research and look at
15 models. Again, that's the entire network. The work
16 effort manager is scheduling jobs for any network job
17 that needs to be done from end to end.
18 On page 2, we get into the billing program
19 and in 1995, quite a lot of work was done with the CRIS
20 billing system. CRIS, there were some CRIS operations
21 work done at AT, project 10321TP, project 10439TP,
22 project 10525TP, so that's maintaining and keeping the
23 CRIS billing system running.
24 At the same time that work was going on, on
25 page 3, about two-thirds of the way down is project
1971
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 11384TP. Project OMEGA is still in progress. What we're
2 trying to do is have one billing system instead of
3 three. You can imagine the maintenance, the
4 enhancements, anything that needs to be done is better
5 done on one billing system than three billing systems,
6 plus I understand the CRIS billing system is archaic
7 technology. Computer-wise, we need to get updated to
8 some new technology.
9 It's a huge effort for 25 million customers
10 to transfer those bills. It's like changing out the
11 engine on a 727 while it's flying. You've got to keep
12 issuing the bills while the system is continuing to bill,
13 so those are all related to the residence and business
14 customer billing, so those would be, again, largely
15 Title 61.
16 On the next page, page 4, we get into the
17 capacity provisioning organization. This is our network
18 organization that's trying to make sure we have the
19 capacity out there to serve customers' needs. The first
20 project on that page, 10344TP, is called soft dial tone.
21 This is a project that, you know, we -- it might be very
22 close to 100 percent, it might even be 100 percent,
23 Title 61. Since there are some businesses -- businesses
24 with more than six lines would be Title 62, I was
25 reluctant to say it's 100 percent Title 61. We've got
1972
CSB REPORTING BARRINGTON (Di-Reb)
Wilder, Idaho 83676 U S WEST Communications
1 that allocated to a common pool.
2 Again, if you were going to go one for one
3 on a project that might be 90 percent Title 61 versus
4 90 percent Title 62, this would be a project that's
5 almost exclusively Title 61. I think I'll stop there.
6 If we had to go one for one and had some more time, we
7 could probably find enough of them to balance out.
8 Q Ms. Barrington, in view of your effort to
9 review and categorize the 1300 projects that are depicted
10 in the record in this case, would the projects that
11 you've just listed be representative in your opinion of
12 the 75 percent of those projects that you have assigned a
13 common allocator or assigned the common category on
14 Exhibit 154?
15 A Actually, I was picking projects that would
16 be more higher percentages allocated to Title 61, but
17 these are not atypical of the type of work that's there.
18 There are many systems that capacity provisioning uses
19 that I'm not sure exactly what they do. I was purposely
20 looking for projects that would be a high percentage of
21 Title 61. I'm sure there are -- most of the projects are
22 just general network support, capacity provisioning
23 support or general operations systems support that are
24 supporting all of the services and whatever ratios we're
25 providing them.
1973
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Wilder, Idaho 83676 U S WEST Communications
1 MS. HOBSON: Thank you. That's all the
2 questions I have.
3 COMMISSIONER SMITH: Thank you for your
4 help.
5 THE WITNESS: Thank you.
6 (The witness left the stand.)
7 COMMISSIONER SMITH: Let's go off the
8 record.
9 (Off the record discussion.)
10 COMMISSIONER SMITH: We'll go back on and
11 we'll commence in the morning at 9:30.
12 MS. HOBSON: Thank you.
13 (The Hearing recessed at 4:30 p.m.)
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1974
CSB REPORTING BARRINGTON (Di-Reb)
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