ORDER NO. 96-160

ENTERED JUNE 19 1996

THIS IS AN ELECTRONIC COPY

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

CP 15(1)

DISPOSITION: INTERCONNECTION ARRANGEMENT ORDERED

Introduction

In this proceeding, MCI Metro Access Transmission Services, Inc., (MCI Metro) seeks an order compelling U S WEST Communications, Inc., (USWC) to provide interconnection for the provision of local telecommunications service. MCI Metro contends that it has been unable to negotiate an interconnection agreement with USWC that meets the terms and conditions of Orders No. 96-021 and 92-129 and requests Commission resolution of this issue.

On June 13, 1996, Administrative Law Judges Thomas Barkin and Michael Grant held a hearing in this matter in Salem, Oregon. Roger Pena, attorney, appeared on behalf of MCI Metro. Molly Hastings, attorney, appeared on behalf of USWC.

Based on the record in this proceeding, the Commission makes the following:

FINDINGS OF FACT AND CONCLUSIONS OF LAW

Procedural Background

In Order No. 96-021, the Commission authorized MCI Metro to provide local exchange telecommunications service in the Portland metropolitan area. Among other things, the Commission granted MCI Metro the right to interconnect with USWC and directed the parties to negotiate mutually acceptable locations where network facilities could be joined.

On March 11, 1996, MCI Metro notified the Commission that it had been unable to negotiate an interconnection agreement with USWC. Pursuant to procedures set forth in

Order No. 96-021, MCI Metro filed a motion for an order compelling USWC to provide interconnection to allow the provision of local service.

After a hearing on the motion, the Commission entered Order No. 96-129. In that order, the Commission set forth a proposed interconnection arrangement with multiple points of interconnection (POIs) and a combination of tandem switching and direct transport to end offices. The Commission directed the parties to discuss the proposed arrangement and to contact the Administrative Hearings Division if they opposed it or were unable to reach a negotiated agreement of their own.

On May 24, 1996, USWC offered MCI Metro a draft interconnection agreement based on its interpretation of Order No. 96-129. In the offer, which is diagrammed in Appendix A, USWC proposed that MCI Metro provide facilities from its switch to USWC’s Capitol Wire Center. From that site, USWC would, in turn, provide direct trunking to its Belmont Tandem, as well as tandem switching and transport to its end offices located throughout the Portland EAS Region. To accommodate additional traffic that could not be handled through the tandem switch, USWC would also provide direct trunking from its Capitol Wire Center to other end offices located within the Portland exchange.

USWC proposed to bill MCI Metro a monthly fee based on a cost sharing formula that: (1) adds the total costs of facilities provided by both USWC and MCI Metro; (2) divides that amount by two; and (3) subtracts the costs of facilities provided by each company. As part of that calculation, USWC included a flat rate charge for tandem switching and transport costs from the Belmont Tandem to its end offices. USWC based these costs on per minute of usage charges contained in its tariffs for an assumed level of demand.

MCI Metro rejected the offer, asserting that it was not consistent with the terms of the interconnection proposal set forth in Order No. 96-129. MCI Metro objected to the proposal that it share USWC’s costs for tandem switching and transport from the Belmont Tandem to end offices located throughout the Portland EAS Region. MCI Metro contends that such charges are inconsistent with the bill and keep compensation arrangement adopted in Order No. 96-021.

Discussion

As noted above, the Commission set forth a proposed interconnection agreement in Order No. 96-129. The Commission described that agreement as follows:

[T]he Commission finds that the general proposition for multiple POIs--with a combination of tandem switching and direct transport to end offices--to be a reasonable interconnection arrangement with the following clarifications. First, MCI Metro must construct or lease facilities [from its switch] to the Belmont Tandem. Second, USWC should, to the greatest extent possible, provide interconnection with existing facilities at that tandem. Third, for the additional traffic that cannot be accommodated through switched facilities, MCI Metro should construct or lease direct trunking facilities to USWC end offices to the extent necessary to overcome the capacity limitations of the tandem. Furthermore, to ensure that interconnection costs are shared equally between the parties, the Commission concludes that USWC should lease back from MCI Metro, at the full tariff rate for private line service with an appropriate handling fee, one-half of the facilities MCI Metro uses to transport traffic from its switch to the designated USWC end offices.

 

USWC’s interconnection offer is similar in many respects with the Commission’s proposal. Like the proposal above, it requires MCI Metro to lease trunking facilities to the Belmont Tandem. It also requires MCI Metro to lease direct trunking facilities to USWC end offices to the extent necessary to overcome capacity limitations at the tandem.

The Commission concludes, however, that USWC’s offer deviates from that set forth above in two primary respects. First, it requires a sharing of the total costs of facilities provided by both USWC and MCI Metro. As noted above, the Commission’s proposal requires a sharing of only those direct trunk facilities MCI Metro uses to transport traffic from its switch to the designated USWC end offices due to the capacity limitations at the Belmont Tandem. These facilities would include those MCI Metro provides to the Capitol Wire Center, as well as those it leases from the Capitol Wire Center to the Portland exchange end offices. This sharing of costs would be accomplished through a lease back of half of those facilities by USWC at the full tariff rate for private line service. The Commission’s proposal does not require USWC to also share in the costs of facilities leased by MCI Metro from the Capitol Wire Center to the Belmont Tandem, or the corresponding facilities MCI Metro provides to the Capitol Wire Center for that purpose.

More importantly, USWC’s offer also attempts to charge MCI Metro for tandem switching and transport from the Belmont Tandem to end offices located throughout the Portland EAS Region. That portion of USWC’s offer is, in essence, a renewal of its argument for a usage sensitive compensation arrangement for costs associated with the termination of local exchange traffic. The Commission rejected that argument in Order No. 96-021 and, instead, adopted a bill and keep compensation arrangement for the exchange of local and EAS traffic. Bill and keep arrangements require each carrier to absorb the cost of all traffic originating and terminating on its network. Thus, under the Commission’s proposed interconnection arrangement, MCI Metro would be responsible for transporting all traffic originating on its network to the Belmont Tandem and other POIs served by direct trunk facilities, as well as for terminating the traffic received at those points. Similarly, USWC would be fully responsible for transporting traffic to the multiple POIs, including the Belmont Tandem, and terminating traffic exchanged at those locations.

After review, the Commission concludes that MCI Metro’s arguments are well taken, and orders USWC to provide immediate interconnection on the following basis:

MCI Metro shall provide facilities from its switch at 425 SW Washington to USWC’s Capitol Wire Center located at 735 SW Park. MCI Metro shall be fully responsible for the costs of such facilities, except as described below in paragraph 5.

 

MCI Metro shall lease transport facilities from the Capitol Wire Center to establish trunking to the Belmont Tandem. MCI Metro shall be fully responsible for the costs of such facilities.

 

USWC shall, to the greatest extent possible, provide interconnection with MCI Metro at existing facilities at the Belmont Tandem.

 

To overcome the capacity limitations at the Belmont Tandem, MCI Metro shall lease direct trunk facilities to establish additional POIs with USWC end offices located within the Portland exchange.

 

To ensure that the costs of interconnection are shared equally, USWC shall lease back from MCI Metro, at the full tariff rate for private line service with an appropriate handling fee, one-half of the facilities MCI Metro uses to transport traffic from its switch to the additional POIs located as the designated end offices. To clarify, this lease back shall apply to only those facilities identified in paragraphs 1 and 4, and any additional direct trunking facilities provided pursuant to paragraph 7.

 

Neither USWC nor MCI Metro shall charge each other any minute of usage charges for terminating traffic in either direction pursuant to this interconnection arrangement.

 

USWC shall provide, as necessary, additional tandem and end office trunking to MCI Metro at its tariffed direct transport rates on a nondiscriminatory basis.

 

USWC and MCI Metro shall work together in good faith to interconnect their networks to enable MCI Metro to commence providing local exchange services in Oregon as soon as possible. To this end, initial trunk installation shall be completed by July 15, 1996.

 

This interconnection agreement shall be interim in nature and shall continue until the parties have reached a comprehensive agreement regarding interconnection and other matters as contemplated by the Federal Telecommunications Act of 1996.

 

 

ORDER

IT IS ORDERED that U S WEST Communications, Inc., shall interconnect its network with MCI Metro Access Transmission Services, Inc., pursuant to the terms and conditions set forth in this order.

Made, entered, and effective ________________________.