ORDER NO. 96-248

ENTERED SEP 23 1996

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

CP 131

CP 136

CP 138

CP 148

CP 163

DISPOSITION: STIPULATIONS ADOPTED;

APPLICATIONS GRANTED

The five applications in these dockets were consolidated because all the Applicants wish to provide telecommunications services in the Portland metropolitan area competitive zones, the areas in which certificates of authority were granted in CP 1, 14, and 15 by Order No. 96-021.

CP 131. On February 2, 1996, Beaver Creek Cooperative Telephone Company (Beaver Creek) applied to provide telecommunications service as a competitive provider in the competitive zone of Oregon City. Beaver Creek seeks to provide local exchange services and carrier access services to residential and business customers. These services include two-way local lines, private line, trunk services, local calling, Extended Area Service (EAS), directory assistance, and 911 emergency services. Currently, U S WEST Communications, Inc. (USWC) is the only telecommunications service provider in the areas where Beaver Creek intends to serve.

USWC filed a protest on March 5, 1996. Petitions to intervene were filed by Clear Creek Mutual Telephone Company, Oregon Independent Telephone Association (OITA), Oregon Cable Telecommunications Association (OCTA), and Canby Telephone Association. All petitions were granted.

CP 136. On February 22, 1996, OGC Telecomm Ltd. (OGC) applied for a certificate of authority to provide telecommunications services in Oregon and classification as a competitive telecommunications provider. OGC plans to provide local dial tone, long distance, and E-911 service to end user customers, including businesses, academic institutions, and high density residential complexes. OGC will offer service in the Hillsboro, Beaverton, Forest Grove, Tigard, and Portland exchanges. OGC has its own private switch in Beaverton and its own cable plant. It also plans to lease circuits from GTE Northwest, Inc. (GTE) and USWC, and possibly other providers. Its long distance services will be provided through interconnection with interexchange companies and resold to end user customers.

USWC and GTE filed protests on April 1, 1996. OCTA and OITA petitioned to intervene, and the petitions were granted.

CP 138. On February 29, 1996, AT&T Communications of the Pacific Northwest, Inc. (AT&T) applied for a certificate of authority to provide telecommunications services in Oregon and classification as a competitive telecommunications provider. AT&T seeks authority to provide intraexchange switched and dedicated services to residential and business customers in Oregon. Initially, AT&T plans to offer the same local exchange telecommunications services that USWC and GTE offer, within the competitive zones established by Order No. 96-021. AT&T will offer local exchange services on a resale or facilities basis, or a combination of both. AT&T will operate in the following local exchanges: Burlington, North Plains, Lake Oswego, Milwaukie-Oak Grove, Oregon City, and Portland (USWC exchanges); and Beaverton, Forest Grove, Gresham, Hillsboro, Scholls, Sherwood, Stafford, and Tigard (GTE exchanges).

GTE and USWC filed protests on April 1, 1996. OITA and OCTA petitioned to intervene, and the petitions were granted.

CP 148. On March 21, 1996, TCG Oregon (TCG) applied for a certificate of authority to provide telecommunications service in Oregon and classification as a competitive telecommunications service provider. TCG seeks to provide facilities based interexchange and intraexchange private line, interLATA and intraLATA toll and switched interexchange and switched intraexchange telecommunications services, including multi line and single line access services, analog and digital private branch exchange trunks, analog and digital direct inward dial and direct outward dial trunks, Centrex access lines, and payphone access lines. TCG plans to provide its customers with direct dial calling and operator assisted calling, as well as switched access services. TCG also requests authority to resell services of other carriers and will interconnect with other carriers for the mutual exchange of traffic. TCG plans to offer local exchange services after all necessary interconnection and operational arrangements are in place. Local exchange services will be provided on a resale or facilities basis, or a combination of both.

TCG wishes to provide its interexchange services on a statewide basis and its intraexchange services within the competitive zones established in Order No. 96-021, including the following exchanges: Burlington, Lake Oswego, North Plains, Oak Grove-Milwaukie, Oregon City, and Portland (USWC exchanges); and Beaverton, Forest Grove, Gresham, Hillsboro, Scholls, Sherwood, Stafford, and Tigard (GTE exchanges).

GTE filed a protest on April 26, 1996, and USWC filed its protest on May 2, 1996.

CP 163. On February 2, 1996, Shared Communications Services, Inc. (SCS), applied for a certificate of authority to provide telecommunications services in Oregon and classification as a competitive telecommunications provider. On April 15, 1996, that application was bifurcated into a competitive zone application and an application covering the rest of the state. SCS plans to provide local exchange and carrier access services to business customers and residential multitenant residential developments. Planned services include two way local lines and trunks, local calling, two way dialing options, operator services, directory assistance, and 911 emergency service. SCS wishes to install its own digital switch with appropriate software. SCS hopes to purchase unbundled transmission services from the incumbent local exchange companies (LECs). SCS plans to offer its services in the USWC exchanges of Portland, Milwaukie-Oak Grove, Lake Oswego, and Oregon City, and in the GTE exchanges of Gresham, Tigard, Beaverton, Hillsboro, Sherwood, and Stafford.

GTE filed a protest on February 29, 1996, and USWC filed a protest on March 5, 1996. OITA and OCTA filed petitions to intervene, which were granted.

At the prehearing conference in these dockets, held on June 4, 1996, the Administrative Law Judge (ALJ) established a schedule for the remainder of the proceeding. A stipulation was circulated to the parties, covering issues that were common to all parties (the General Stipulation). An Addendum to the General Stipulation was drafted to address one issue in Beaver Creek’s application. OGC and SCS are shared telecommunications service providers; certain issues peculiar to those parties were addressed in a First Supplemental Stipulation. Finally, issues specific to OGC only were addressed in a Second Supplemental Stipulation. The text of the stipulations is set out below.

GENERAL STIPULATION

In order to expedite the grant of the intraexchange authority sought by Applicants pursuant to the application under review in this proceeding and to avoid unnecessary delay in this docket, Applicants, Staff of the Public Utility Commission of Oregon (PUC Staff), U S WEST Communications, Inc. (USWC), and GTE Northwest Incorporated (GTE) agree, as indicated by initial of counsel with respect to each individual provision, as follows:

Considering the factors in ORS 759.050(2)(A)-(C), it is, on balance, in the public interest to grant the application of Applicant in PUC docket CP [131, 136, 138, 148, and 163] to provide the local exchange telecommunications service as described in its application as a competitive telecommunications provider. Therefore, the parties recommend that the Commission grant the application. The Commission’s Findings and Decisions in Order No. 96-021 at pages 6-21, entered pursuant to ORS 759.050(2)(A)-(C), are adopted in this agreement by reference.

 

Order No. 96-021 has designated the local telephone exchanges encompassed by the application as competitive zones.

 

3. The parties recommend that the Commission authorize Applicant to provide service as an alternative exchange carrier (AEC) within the entire geographic area designated in its application. The geographic area designated in the application consists of the following telephone exchanges: Burlington, North Plains, Lake Oswego, Milwaukie-Oak Grove, Oregon City, and Portland (USWC exchanges): and Beaverton, Forest Grove, Gresham, Hillsboro, Scholls, Sherwood, Stafford, and Tigard (GTE exchanges).

 

4. The parties recommend that the Commission not impose denial of service criteria on Applicant at this time in accordance with the Commission’s Findings and Decision at page 23 of Order No. 96-021.

 

5. The parties recommend that the Commission not impose on Applicant consumer protection measures in addition to those in OAR Chapter 860, Division 32 at this time in accordance with the Commission’s Findings and Decision at page 24 of Order No. 96-021.

 

6. Applicant, USWC and GTE agree to terminate all intrastate traffic originating on one another’s network. Applicant agrees to contribute to the Oregon Customer Access Fund and to comply with the provisions of the Oregon Customer Access Plan to the extent described in Staff/1, Turner 4 of "Attachment D" to the Partial Stipulation incorporated in Order No. 96-021 as Appendix D. A copy of Attachment D is attached hereto with its original exhibit marking as Staff/1, Turner/4. Applicant agrees to contribute to the OCAF using OCAF rates approved by the Commission on intrastate terminating carrier common line access minutes or their equivalent.

 

7. Applicant agrees to provide E-911 service in accordance with the Commission’s Findings and Decision at page 26 of Order No. 96-021. Applicant has primary responsibility to work with the E-911 agencies to make certain that all users of their services have access to the emergency system.

 

8. Unless otherwise provided pursuant to an interconnection agreement adopted by the Commission pursuant to Section 252 of the Telecommunications Act of 1996, USWC and GTE agree to offer ancillary services to Applicant as set forth below.

 

(a) USWC and GTE agree to offer to Applicant and its customers in USWC and GTE directories on a nondiscriminatory basis and on the same terms and conditions, other than prices, as it offers the services to other LECs in Oregon:

A. Yellow Pages ads

B. Basic Yellow Pages listings

C. White Pages Information pages

D. Directory distribution

 

(b) USWC and GTE agree to offer the following ancillary services to Applicant on a nondiscriminatory basis and on the same terms and conditions, other than price, as incumbent LECs would offer the services to other LECs in Oregon:

 

A. White Pages Custom and Customer listings.

(If these services are to be purchased from U S WEST Direct or GTE Directories, Applicant may, at its option, negotiate and contract directly with them.)

 

B. Directory Assistance. Inclusion of Applicant’s customers’ listings in the LECs’ Directory Assistance Databases. Providing to Applicant on-line access to Directory Assistance database listings.

 

C. IntraLATA Directory Assistance Operator Service. Provision of local Directory Assistance Operator Services.

 

D. 911 service (good faith agreement by LECs and Applicant to negotiate the use of incumbent LECs’ standard procedures, obligations, arrangements and delivery of 911 calls originated by Applicant’s customers).

 

1) Applicant agrees to deliver from its switch (if any) its customers’ voice and dialable Automatic Number Identification (ANI) telephone number to the correct 911 Controlling Office so the lead 911 LEC can deliver the 911 call to the correct Public Safety Answering Point (PSAP).

 

2) Applicant agrees to work with each 911 district and lead 911 LEC to develop database comparison procedures to match Applicant’s customer addresses to the 911 district’s Master Street Address Guide in order to obtain the correct Emergency Service Number (ESN) for each address. USWC and GTE agree to provide Applicant with a copy of the Master Street Address Guide. Applicant agrees to provide the lead 911 LEC with daily updates of new customers, moves, and changes with the corresponding correct ESN for each.

 

3) Database updating: Each lead 911 LEC agrees to provide Applicant with an electronic method of providing Applicant’s customer record information to the lead 911 LEC's Automatic Location identification (ALI) database management system so that all Applicant’s ALI records can be updated on a daily basis.

 

E. Facilitate access to Centralized Message Distribution System (CMDS) for facilitating collect and third party billing.

 

F. Busy Line Verification/Interrupt.

 

G. Mutual Repair Referral. Applicant and USWC and GTE agree to provide repair referral services subject to mutual agreement and to work out the technical and administrative details.

 

9. Unless otherwise provided pursuant to an interconnection agreement adopted by the Commission pursuant to Section 252 of the Telecommunications Act of 1996, Applicant, USWC, and GTE agree to compensate for the exchange of local and EAS traffic between Applicant and the LECs in the competitive zones based on bill and keep arrangements in accordance with Commission findings and Decision at pages 52 through 61 of Order No. 96-021. The schedule for replacing bill and keep arrangements will be determined by the Commission according to procedures the Commission has established in Order No. 96-021 and as modified by subsequent orders of the Commission.

 

10. Applicant, GTE, and USWC agree that existing local exchange boundaries and EAS routes apply to Applicant as well as USWC and GTE for the purpose of distinguishing between local and toll calling and for intercompany compensation in accordance with the Commission’s Findings and Decision at pages 64 through 65 of Order No. 96-021.

 

11. Applicant agrees to comply with universal service requirements in accordance with the Commission’s Findings and Decision at page 58 of Order No. 96-021.

 

12. Applicant agrees to limit each of its NXX codes to a given exchange and establish rate centers in those exchanges that are proximate to the existing LEC rate centers.

 

13. Unless otherwise provided pursuant to an interconnection agreement adopted by the Commission pursuant to Section 252 of the Telecommunications Act of 1996, Applicant, USWC, and GTE agree to interconnect on the same terms and conditions that LECs have used to interconnect their telecommunications networks in accordance with the Commission’s Findings and Decision at pages 68 and 69 of Order No. 96-021.

 

14. Applicant agrees not to take any action that impairs the ability of USWC and GTE to meet service standards specified by the Commission.

 

15. USWC, for such time as it remains the numbering plan administrator for Oregon or is otherwise responsible for carrying out, or in fact does carry out, the duties currently associated with being the numbering plan administrator, agrees to apply existing guidelines for assigning numbers of Applicant in a nondiscriminatory manner in accordance with the Commission’s Findings and Decision at page 74 of Order

No. 96-021.

 

16. USWC and GTE agree to provide to Applicant interim number portability service pursuant to tariffs filed by USWC and GTE and approved by the Commission in accordance with the Commission’s Findings and Decision at pages 78 and 79 of Order No. 96-021, or as subsequently modified by the Commission.

 

17. USWC and GTE will gain pricing flexibility under ORS 759.050(5) once (a) the Commission approves tariffs filed by USWC and GTE in compliance with Order No. 96-021, and (b) Staff notifies the Commission that interconnection arrangements are in place and a mutual exchange of traffic exists between USWC, GTE, and an authorized AEC, including, but not limited to, the Applicant.

 

18. Applicant, USWC, and GTE agree to conduct and submit periodic traffic studies of local and EAS traffic exchanged with other carriers in accordance with the Commission’s Ordering Paragraph 7.e. at page 84 of Order No. 96-021, or as subsequently modified by the Commission.

 

19. This stipulation shall nave no precedential or binding effect on the parties in other proceedings before the Commission or other relevant forum. By entering into this stipulation the parties make no representations regarding the relationship between the operation of ORS 759.050 and Title I of the Telecommunications Act of 1996.

 

20. If any dispute concerning interpretation of the Stipulation, or compliance with its terms, arises, any party to this Stipulation may petition the Commission to commence a proceeding to resolve the dispute. The Commission shall resolve the dispute in a way that is consistent with the intent of the Stipulation and in accordance with the provisions of ORS 759.050.

 

21. If the Commission rejects all or any material part of this Stipulation, or materially amends this Stipulation, each party reserves the right to withdraw from the Stipulation, upon written notice to the Commission and other parties within fifteen (15) days of rejection.

 

22. The parties agree that this Stipulation in no manner binds the Commission in ruling in this application docket. The Stipulation in no manner restricts the Commission’s exercise of its discretion in this application proceeding or any other proceeding. The parties understand and agree that this Stipulation establishes interim arrangements for local exchange competition under ORS 759.050 and that, in light of new and continuing developments in communications industries, and in light of the recently enacted Telecommunications Act of 1996, the arrangements may be changed in the future by the Commission or other administrative agency or court of competent jurisdiction.

 

 

 

ADDENDUM TO STIPULATION

(Applies to Beaver Creek, CP 131)

The parties agree that the Commission should not require USWC to be the primary toll carrier (designated toll carrier) of intraLATA intrastate toll calls, originated from the Applicant’s customers of the Oregon City competitive zone. Nothing in this stipulation shall change the status of USWC’s designation as primary toll carrier for Applicant in Applicant’s current service area. USWC, at its option, may offer competitive toll services in Applicant’s Oregon City service area.

FIRST SUPPLEMENTAL STIPULATION

(Applies to OGC and SCS)

Applicant agrees to limit its operations as a shared telecommunications services (STS) provider to only those geographic areas and user groups for which it has a certificate of authority from the Commission as an STS.

Applicant agrees that it will obtain services from LECs for its STS operations by means of trunks which are separate from trunks or other facilities which the Applicant uses to interconnect its AEC operations with the LECs. Nothing in this paragraph shall require Applicant to obtain any services from any LEC.

Applicant agrees to assign an NXX code that Applicant has obtained for its AEC operations to any customer that it services in its capacity as an AEC. Applicant will assign telephone numbers it obtains from a LEC for its STS operations only to customers that Applicant services in its capacity as an STS.

Applicant agrees to separately account for and maintain records reflecting its distinct AEC and STS operations for the purpose of identifying all intrastate terminating carrier common line switched access traffic for which Applicant has Oregon Customer Access Fund (OCAF) responsibility.

 

SECOND SUPPLEMENTAL STIPULATION

(Applies to OGC only)

1. OGC agrees to file by July 12, 1996, an application to amend its certificate as a STS provider as follows:

 

a. OGC will request authority to provide service as an STS for the exclusive use of the tenants of the Creekside Apartments, 2705 NETWORK John Olsen Avenue, Hillsboro, Oregon (Creekside site). OGC will provide a detailed map of the Creekside site.

 

b. OGC will request an amendment to its STS certificate of authority granted in Order No. 94-561 to delete reference to "the OGI Housing Project located on the corner of NW John Olsen Ave. and NW Cornell Road" and will request a new STS certificate to serve that site, now known as the Creekside Apartments or, herein, the "Creekside site." OGC will provide a detailed map of the Creekside site showing it as an STS site separate from the STS site involved in the certificate which was amended in Order No. 94-561.

 

c. The STS site involved in the certificate which was amended in Order No. 94-561 is the site for which OGC was granted an STS certificate in Order No. 87-270, then known and described as "the Oregon Graduate Center Science Park, 19600 NW Walker Road, Beaverton, Oregon," and further described by maps and legal descriptions submitted to the Commission in Docket UM 96. Due to subsequent changes in ownership and development activities, that location is now occupied by the Oregon Graduate institute and the AmberGlen Business Center; for the purposes of this stipulation that STS site is called the "OGI/AmberGlen site."

 

2. OGC agrees that it will provide service at the Creekside site to its STS customers using switching equipment which is located at the Creekside site.

 

3. OGC agrees that any circuits it obtains from GTE to connect OGC’s switching equipment at the Creekside site to the switching equipment of GTE will be separate from the circuits that OGC obtains to connect OGC’s other STS locations to GTE.

 

4. OGC and GTE agree that the circuits which OGC obtains from GTE to connect the Creekside site to GTE’s switching equipment may terminate at OGC’s OGI/AmberGlen site. However, OGC will dedicate the circuits only to the Creekside site.

 

5. The parties agree that the "OGI/AmberGlen site" and the occupants and tenants thereof are an STS site and user group so long as the owners and tenants are obligated by contract to materially participate in common property management for the site, and that OGC’s STS certificate of authority for said site issued in Docket UM 96 applies only to members of said user group. The parties further expressly stipulate that this agreement is made for purposes of this stipulation only, to settle a dispute and buy their peace, is based on the unique facts, history and circumstances of said site, and shall not be deemed an admission or precedent as to the status of any other sites or locations involving these or any other parties.

 

6. If the Commission rejects all or any material part of this Second Supplemental Stipulation, or materially amends this Second Supplemental Stipulation, each party reserves the right to withdraw from the Second Supplemental Stipulation, upon written notice to the Commission and other parties with fifteen (15) days of rejection.

 

PARTIES’ POSITIONS

All relevant parties signed the First and Second Supplemental Stipulation. All relevant parties also signed the Beaver Creek Addendum to the General Stipulation. Staff and the Applicants signed all provisions of the General Stipulation. The table below sets out which provisions of the General Stipulation were signed by GTE and USWC.

At issue, therefore, are paragraphs 1, 3, 4, 5, 8, 9, 13, 16, and 17.

Two rounds of comments were filed with the Commission in response to the stipulations. Comments were filed by GTE, USWC, TCG, AT&T, OGC, SCS, and Commission Staff. Where GTE or USWC has made a specific objection to certain paragraphs, the comments are set out below.

Paragraph 1. GTE did not initial this section because GTE believes that this is a decision for the Commission to make. GTE argues that the Commission needs an adequate evidentiary record on which to base its findings, and that it is unclear whether the record in Order No. 96-021 would apply to resellers. GTE argues that the financial impact on the incumbents and the effect on their customers may be more significant than the findings in Order No. 96-021 would indicate.

USWC argues that the Commission must make findings regarding the statutory requirements in ORS 759.050, the competitive zone statute, and cannot do so without evidence on the record. USWC notes that it does not oppose certifying facilities based telecommunications service providers, but believes that the Commission must require information about the Applicants’ plans in order to make a finding that granting their applications is in the public interest. USWC urges the Commission to require the Applicants to demonstrate that they have financial, managerial, and technical capability to provide telecommunications services in the areas for which they seek certification.

USWC does not believe the Commission can make public interest findings on the resale aspects of the Applicants’ applications without a hearing to consider resale and universal service issues.

Paragraph 3. USWC initialed this paragraph. GTE did not initial it, because the wording presupposes agreement with Paragraph 1. GTE does not disagree with the substance of Paragraph 3.

Paragraph 4. GTE did not initial this provision, because it believes that competitors should be subject to the same regulatory requirements as the LECs. GTE argues that the federal Telecommunications Act of 1996 (the Act) specifies that state commission service quality requirements must be applied on a competitively neutral basis (Sec. 253(b)). GTE argues that this section of the stipulation would apply unequal regulatory requirements and would not be competitively neutral.

USWC states that it should not be subject to any requirements not also imposed on the alternative exchange carriers (AECs).

Paragraph 5. GTE argues that, like Paragraph 4, this paragraph recommends unequal regulation which is not competitively neutral. As with Paragraph 4, USWC argues that it should not be subject to any requirements not also imposed on the AECs.

Paragraph 8. GTE initialed a similar stipulation provision in the CP 1, CP 14, and CP 15 cases. GTE believes that the intervening Act now controls, however, and that ancillary service provision is a matter for intercompany negotiation under the Act. GTE argues that it is unnecessary and inappropriate to cover the subject matter of this provision in the stipulation.

Paragraph 9. GTE does not agree with bill and keep compensation for the exchange of local and extended area service (EAS) traffic. GTE argues that Paragraph 9 would establish bill and keep as a default compensation arrangement, and is inconsistent with the pricing standards in Sec. 252(d) of the Act.

USWC argues that the Commission may not apply to the present Applicants the finding in Order No. 96-021 that bill and keep is an appropriate compensation mechanism. USWC argues that Sec. 252 of the Act requires originating carriers to cover terminating carriers’ costs. Moreover, USWC argues that under that same section of the Act, interconnection rates must be cost based. USWC does not contend that the Act prohibits bill and keep, but rather argues that bill and keep is an acceptable compensation mechanism under the Act, provided that the Commission's conclusion to adopt that mechanism is based on the costs of both the LECs and the AECs. Because there is no cost data in the record in CP 1, 14, and 15, USWC contends that adopting bill and keep for these Applicants would run counter to the Act.

Both GTE and USWC argue that the Act limits the Commission’s ability to address interconnection issues. They assert that the requirement of bill and keep for interconnection compensation, set forth in Order No. 96-021, is inconsistent with the Act because it circumvents the negotiation process. Section 252 of the Act, they argue, provides for a negotiation process on the terms and conditions for interconnection, mutual compensation, resale, and other issues. The conclude that the Commission should allow this negotiation process to unfold without dictating any particular interconnection compensation mechanism.

Paragraph 13. GTE did not initial this section of the stipulation for reasons similar to those discussed with regard to Paragraph 9. Paragraph 13 establishes a default position that GTE would have to interconnect with the Applicants "on the same terms and conditions the LECs have used to interconnect their telecommunications networks." GTE argues that different interconnection arrangements and network configurations may justify different terms and conditions, and that the Act specifies that such issues will be addressed by intercompany negotiation.

Paragraph 16. GTE did not initial this paragraph, which calls for it to make interim number portability service available pursuant to tariffs filed in compliance with Order No. 96-021. GTE contends that Order No. 96-021 is inconsistent with the number portability provisions of the Act, especially the provisions regarding pricing of interim number portability service. GTE acknowledges, however, that as long as its compliance tariff is in effect, interim number portability service will be available to the Applicants under that tariff.

Paragraph 17. GTE did not initial this paragraph because it does not contain a third pricing flexibility "trigger" that GTE considers necessary, based on the CP 138 application. Order No. 96-021 did not address resale applications, so GTE suggests that the Commission should add the following "trigger" to this paragraph:

[O]r (c) Applicant or another authorized AEC begins offering resold local exchange services.

GTE argues for this added language because Applicant in CP 138, AT&T, has indicated its intent to provide local exchange services via resale. If resale offerings occur before the conditions in (a) and (b) of the paragraph as currently worded, the incumbents would not receive pricing flexibility and would still be facing competition.

USWC believes that the Commission should adopt no mechanism to trigger pricing flexibility once a competitive zone is established. More particularly, USWC argues that the Commission should adopt no mechanism that makes USWC dependent on the actions of another party to receive pricing flexibility.

Commission Findings and Decision

The Commission takes official notice of the record in CP 1, 14, and 15.

The General Stipulation. In the following, we address GTE’s and USWC’s comments on the paragraphs of the General Stipulation.

Paragraph 1. The General Stipulation is designed to apply the findings and decisions in Order No. 96-021 to the present applications. USWC argues that the findings and conclusions in Order No. 96-021 apply to facilities based carriers, such as the three carriers whose applications were approved in that docket. Accordingly, USWC argues that we may not apply those findings and conclusions to carriers who are, at least initially, primarily resellers. GTE also expresses reservations about applying the findings in Order No. 96-021 to resellers.

We disagree. In Order No. 96-021, the Commission made findings of general applicability on the beneficial nature of local exchange competition in the Portland metropolitan area. Our findings in that order are sufficiently broad to cover all pertinent aspects of the applications currently before us. Our conclusion that competition for telecommunications services in the Portland metro market is in the public interest relates to local exchange competition generally, and applies regardless of the means that a competitor uses to provide service.

Moreover, the federal Act expressly contemplates resale as a market entry device. In its recent order discussing the rules implementing Sections 251 and 252 of the Act, the FCC states: "This Order addresses other operational barriers to competition, such as access to rights of way, collocation, and the expeditious provisioning of resale and unbundled elements to new entrants. The elimination of these obstacles is essential if there is to be a fair opportunity to compete in the local exchange and exchange access markets." Order FCC 96-325 at 12 (Paragraph 18).

USWC raises a concern about unauthorized resale of telecommunications services. We have resale restrictions in place (for instance, restrictions against selling reselling residential service to business customers) through Order No. 96-188 (UM 351). Those restrictions will be reflected in the tariffs USWC files in compliance with that order. This docket is not the forum for addressing that issue.

USWC also asks the Commission to require more information about the current Applicants’ financial, managerial, and technical ability to provide telecommunications service. USWC’s request raises no specific concerns about any of the Applicants. We decline to require more information from these Applicants at this time.

Paragraph 3. GTE has no objection to the substance of this paragraph. It did not sign this paragraph because the language assumes agreement with Paragraph 1.

Paragraphs 4, 5 and 8. GTE and USWC argue that they should not be subject to any requirements not also imposed on the AECs. Both companies state, without providing a specific citation, that the Act requires equal treatment of LECs and AECs. We disagree. The Act does not relieve incumbent telecommunications utilities of their duties under state law. Until competition is firmly established and the incumbent LECs have a less overwhelming market share, the LECs will be subject to extra duties and obligations under Oregon law. The Act also imposes different requirements on LECs

and AECs. See, for instance, Sec. 251(b) and (c). However, as we stated in Order No. 92-021, at 24:

The LEC goal of regulatory parity requires effective competition for local exchange services. Once competition is established, we will consider whether the

. . . requirements imposed on LECs should be relaxed.

 

Paragraph 9. Both USWC and GTE argue that bill and keep is inconsistent with the pricing standards of the Act. Based on its reading of Sec. 252, USWC argues that bill and keep is acceptable under the Act, but must be cost based. We disagree with this interpretation of the Act, and have set out our argument in Order No. 96-119, denying USWC’s and GTE’s petitions for reconsideration of CP 1, 14, and 15. See Order No.

96-119 at 9 and following. We will not repeat the argument here.

USWC and GTE also argue that the bill and keep requirement for interconnection compensation is inconsistent with the Act because it circumvents the negotiation process set out in Sec. 252. They suggest that the Act implicitly preempts state law on the issue of interconnection. We disagree. The Act leaves in place any state law not inconsistent

with its provisions, and permits a state to impose requirements on a telecommunications carrier that are consistent with the Act. See Sec. 601(c)(1); Sec. 261(b) and (c).

ORS 759.020 and 759.050 govern competitive provider applications. Those statutes describe a process by which an Applicant may become a competitor in an existing LEC market. The goal of our competitive statutory scheme is to "encourage innovation within the industry by a balanced program of regulation and competition." ORS 759.015. This goal is consistent with the purpose of the Act, which aims at removing barriers to competitive entry (Sec. 253) and at promoting economic competition and technological advancement (Sec. 257).

Our competitive zone statute is one means for telecommunications providers to enter into competition with incumbent LECs in the LECs’ service territories. The negotiation provisions of the federal Act lay out another means to the same end. These provisions are complementary, and overlap only in part. For instance, under the Oregon competitive zone statute, the LECs are entitled to pricing flexibility in exchange for allowing competition in their exchanges. Under the Act, the tradeoff for the LECs involves their ability to compete in the interLATA toll market. Thus the Act cannot be seen to preempt state telecommunications law entirely.

The Act explicitly intends to remove barriers to competitive entry. It would be inconsistent with that intent to interpret negotiation as the sole means of competitive entry, when the competitive zone statute and the findings in Order No. 96-021 provide a quicker procedure. We find that the negotiation provision of the Act does not require negotiation as the exclusive means of allowing competitive entry and does not preclude our processing the competitive provider applications under Oregon’s competitive zone statute.

Furthermore, the General Stipulation specifically recognizes that interconnection obligations arrangements are interim in nature and may be superseded by interconnection agreements adopted by the Commission pursuant to Sec. 252 of the Act. The interim period for bill and keep should run concurrently with original 24-month period mandated in Order No. 96-021.

Paragraph 13. GTE again raises the objection that this paragraph covers interconnection arrangements that should be the subject of negotiations under Sec. 252 of the Act. Our arguments with respect to bill and keep arrangements (see discussion of Paragraph 9 immediately above) apply to this paragraph as well.

Paragraph 16. GTE argues that the Act’s interim number portability pricing is inconsistent with the pricing of interim number portability in Order No. 96-021. However, GTE notes that interim number portability service will be available to the Applicants under its compliance tariff filed pursuant to Order No. 96-021 as long as that tariff is in effect.

We have opened two dockets (UT 129 and UT 130) to deal with issues of interim number portability in light of the federal Act. In the meantime, the compliance tariff filing requirements from Order No. 96-021 remain in effect and apply to the current Applicants as well as to those in CP 1, 14, and 15.

Paragraph 17. GTE wishes to add a pricing flexibility "trigger" to the stipulation to include resellers. GTE’s basis for this addition is that Order No. 96-021 did not address resellers specifically. GTE fears that a reseller could enter the market quickly and subject it to competition for which it would have no response.

The only criterion that remains to be satisfied for USWC and GTE to gain pricing flexibility in the Portland area competitive zones is Commission approval of interim number portability rates. The parties have stipulated to rates in dockets UT 129 and 130, and an order will issue in those dockets shortly. Once that order is issued, GTE and USWC will have pricing flexibility for all services that ELI, MCI Metro, and MFS have authority to provide, which is virtually all local dial tone services. GTE’s additional trigger is thus not necessary.

USWC wishes pricing flexibility to be granted immediately on certificating an AEC. As we noted in Order No. 96-021, however, we believe that without interconnection arrangements with the LECs, a certificate is meaningless. We adhere to the requirements set forth in Order No. 96-021 and reiterated in Paragraph 17 of the General Stipulation.

Other Issues. USWC raised several other issues in its comments. It asks the Commission to establish a separate enforcement mechanism to ensure that AT&T obeys the joint marketing restrictions in the Act. We do not consider this necessary. Aggrieved parties have a federal forum for redress of grievances with respect to these restrictions.

USWC also proposed restrictions on resale. We have addressed this issue elsewhere in this order. In summary, there is no reason to treat resellers differently from facilities based carriers at this point in the development of a competitive market.

USWC queries whether the Applicants in these dockets should be designated as Eligible Telephone Companies under the Act. That issue will be considered in UM 731, Universal Service, and is therefore not before us here.

USWC states that the LECs must comply with affiliate transaction requirements that are not imposed on AECs. This issue is not an appropriate matter for decision in these dockets. The Legislature differentiated between requirements on telecommunications utilities and competitive telecommunications providers in ORS 759.020(5). It has imposed affiliate transaction requirements only on telecommunications utilities. See ORS 759.390. The Commission cannot alter this legislative mandate.

CONCLUSIONS

We have reviewed all the stipulations submitted in these dockets. We have reviewed the comments of the parties, our previous orders, and the federal Act. We conclude that the stipulations are reasonable and adopt them in their entirety. On the basis of the findings in Order No. 96-021, we conclude that granting the applications in this docket is in the public interest.

ORDER

IT IS ORDERED that:

1. The General Stipulations submitted in CP 131, CP 136, CP 138, CP 148, and CP 163 are adopted.

 

2. The Addendum to the General Stipulation in CP 131 is adopted.

 

3. The First Supplemental Stipulations submitted in CP 136 and CP 163 are adopted.

 

4. The Second Supplemental Stipulation submitted in CP 136 is adopted.

 

5. The applications of Beaver Creek Cooperative Telephone Company

(CP 131), OGC Telecomm Ltd. (CP 136), AT&T Communications of the Pacific Northwest, Inc. (CP 138), TCG Oregon, Inc. (CP 148), and Shared Communications Services, Inc. (CP 163) are in the public interest and are granted.

 

 

Made, entered, and effective ________________________. 

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561.

A request for rehearing or reconsideration must be filed with the Commission within 60 days

of the date of service of this order. The request must comply with the requirements in OAR 860-014-0095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-013-0070(2). A party may appeal this order to a court pursuant to ORS 756.580.