20021216_348.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
CO MMISSI 0 NER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RANDY LOBB
DON HOWELL
LYNN ANDERSON
JOE CUSICK
CAROLEE HALL
WAYNE HART
DOUG COOLEY
BEVERLY BARKER
RON LAW
GENE FADNESS
TONYA CLARK
WORKING FILE
FROM:BIRDELLE BROWN
DATE:DECEMBER 13, 2002
RE:VERIZON NORTHWEST INC. ADVICE NO. 02-16 TO CLARIFY THE
ACCESS TARIFF PERTAINING TO JURISDICTIONAL
DETERMINATION OF SWITCHED ACCESS TRAFFIC AND THE
REPORTING OF PERCENTAGE INTERSTATE USAGE (PIU) FACTORS
TO BE EFFECTIVE JANUARY 8, 2003
Verizon filed this tariff advice to revise the method interexchange carriers use to report
Percent Interstate Usage (Pill). Pill is a method of calculating interstate vs. intrastate toll usage
for the purpose of determining access charges to interexchange carriers.
Verizon reports that recent reviews of the Pill reports to verify accuracy revealed many
reporting irregularities including failure of the IXCs to update their Pill factors, failure to deliver
requisite information to the LECs in accordance with tariffed provisions and FCC requirements
(47 C.F .R. ~ 61.1601), and unreasonable or impossible results. In response to Verizon' s request
for clarification and/or correction of their reports, IXCs either did not update their reports or
could not provide supporting data, and one carrier did not respond at all. Verizon proposes
revisions to its Access tariffs to (1) clarify the manner of developing Pill factors; (2) establish a
DECISION MEMORANDUM DECEMBER 13 , 2002
jurisdictional report verification process; (3) institute requirements for maintaining data. (4)
establish provisions for contested jurisdictional reports, and (5) clarify Verizon s legal remedies.
Most Feature Group C (FGC) and Feature Group D (FGD) produce call records that
contain the both the calling and called numbers, enabling LECs to determine whether calls are
interstate or intrastate. Feature Group A (FGA) and Feature Group B (FGB) records often do not
contain both the originating and the terminating numbers. LECs have generally used IXC-
provided PIU factors to determine the jurisdiction of all FGA and FGB because IXCs were in a
better position to develop those factors from billing records than were the LECs.
The FCC has shifted many subsidies from interstate switched access rates to the end user
customers (SLC, USF and PICC charges), resulting in a widening disparity between interstate
and intrastate access rates. Because interstate rates are significantly less expensive to the IXC'
than intrastate rates, the IXCs are sometimes motivated to report their minutes to the interstate
jurisdiction.
1. Verizon proposes a new two-part definition derived from the FCC definition of
interstate calls: For FGA and FGB, every call that enters a customer s network at a point in a
state other than that where the called station is situated is an interstate communication. For FGC
and FGD, every call that originates from a calling party in one state and terminates to a called
party in a different state is an interstate communication. This definition is a departure from
IPUC Order No. 21433 issued in 1987 that said that every call originated by a calling party in
Idaho and terminating to a called party in Idaho is an intrastate communication and all else is
interstate, but it is a departure that may be moot. The FCC requires LECs to define interstate
according to its rules (as reflected in these definitions), and the difference between interstate and
total calls (100%) becomes the percent of intrastate usage. Even ifIdaho wanted a definition
different from the federal definition, the Company must start with the federal numbers, do the
math and get to the same definition that Verizon has chosen.
2. In its existing tariff, Verizon accepts customer-reported PIUs. In view of the apparent
misreporting and perhaps fraud Verizon is encountering, it now proposes to calculate PIUs
whenever it has records that contain the originating and terminating locations. When the
Company does not have sufficient call detail to determine jurisdiction, it will use customer-
provided PIU, which will be updated quarterly. Verizon provides specific requirements for
companies to use when reporting and updating their reported PIUs. Updates will be provided
every three months and will determine the charges for the following three months. If a customer
DECISION MEMORANDUM DECEMBER 13 2002
fails to file a quarterly report, the Company will assume the simple average of all others
purchasing access from the Company.
3. Customers are required to retain their records for 12 months in case Verizon
determines a verification is necessary. Verizon may request these records no more often than
one time per year. If the reports do not agree with Verizon , Verizon will attempt to determine
the actual data using the customers records. If the customer responds incorrectly or responds but
has no data, Verizon will assign a 50% default factor which will remain in effect until the
customer provides a new, supported factor. Disputes may be resolved according to contested
jurisdictional report process such as arbitration, or complaints/legal action in the courts or at the
FCc. Verizon feels, in light of the lack of cooperation of customers whose PIUs appear to be
inaccurate or suspicious, or where customers significantly misrepresent their PIUs or commit
actual fraud in reporting them, that Verizon must have the right to pursue any and all other legal
remedies to recover under-billed charges associated with incorrect customer-provided PIU
factors.
STAFF RECOMMENDATION
This tariff advice only affects the terms and conditions of Access services. There are no
changes in rates or services. Staff recommends approval of this tariff revision effective January
2003. Does the Commission agree?
coITesp/drnernos/2002/advO216. ver
DECISION MEMORANDUM DECEMBER 13, 2002