ORDER NO. 97-150

ENTERED APR 23 1997

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

ARB 3

ARB 6

DISPOSITION: APPLICATIONS FOR RECONSIDERATION

GRANTED IN PART

On March 7, 1997, U S WEST Communications, Inc., (USWC) filed an application for reconsideration of Commission Order No. 97-003 entered in this proceeding. On the same date, AT&T Communications of the Pacific Northwest, Inc. (AT&T), and MCI Metro Access Transmission Services, Inc., (MCI) filed a joint application for reconsideration of Order 97-003.

On March 25, 1997, AT&T and MCI filed a joint response to USWC’s application for reconsideration.

USWC Application for Reconsideration

USWC requests reconsideration of several issues. It maintains that Order No. 97-003: (a) unduly relies on FCC pricing rules which have been stayed by the Eighth Circuit Court of Appeals; (b) improperly adopts terms of the AT&T contract; (c) decides matters which are not appropriate subjects of arbitration; (d) improperly adopts a "pick and choose" provision, and; (e) makes findings on numerous issues without sufficient evidence in the record.

With the exception of the "pick and choose" discussion set forth below, the Commission finds that the arguments advanced in USWC’s application for reconsideration are unpersuasive. The matters raised by USWC have already been addressed in both the Arbitrator’s decision and Order No. 97-003 and do not require further comment. Furthermore, we agree with AT&T and MCI that there is ample evidence in the record to support our findings on all of the disputed issues.

USWC requests that the Commission strike Paragraph 13 of the interconnection agreement. It contends that the paragraph "has the effect of adopting, by default, a "pick and choose" provision that violates the provisions of the stay authorized by the Eighth Circuit."

Paragraph 13 was not addressed in the Arbitrator’s decision or in Order No. 97-003 because it was not identified as a disputed issue during the arbitration proceeding. In their joint response, AT&T and MCI acknowledge that the Commission has declined to include "pick and choose" provisions in other arbitrated agreements, and propose to delete Paragraph 13 from the interconnection agreement with USWC.

The Commission finds that Paragraph 13 should be deleted from the interconnection agreement consistent with our prior decisions regarding this issue. See e.g., Order 97-052, Appendix A 2-3; Order 97-053, Appendix A at 11.

AT&T/MCI Application for Reconsideration

Issue 27—Services to be made available. AT&T/MCI recommend that the Commission amend Order No. 97-003 to eliminate potential confusion regarding the treatment of promotional offerings of less than ninety days duration that are made by an incumbent LEC. AT&T/MCI ask that the order be clarified to state that promotional offerings of less than ninety days must be made available for resale consistent with 47 C.F.R.§51.613(a)(2).

Order No. 97-003 adopts the Arbitrator’s decision set forth on Appendix A, page 17, as follows:

AT&T/MCI position adopted. USWC shall make all retail telecommunications services available for resale except for promotional offerings of less than 90 days. See FCC Order at ¶¶948-956, 968.

AT&T contract language should be amended to conform with the resale restrictions adopted by the FCC and the Oregon Public Utility Commission. (e.g. Attachment 2, ¶9.12 should be revised to provide that grandfathered services may only be resold to customers currently receiving grandfathered services.) See also FCC Order at ¶968. See also Issue 29.

The Commission agrees with AT&T/MCI that the italicized language in Arbitrator’s decision could be interpreted to relieve incumbent LECs from the obligation to resell any promotional offering of less than ninety days duration. However, we do not believe the Arbitrator intended such a result, nor would such an interpretation be consistent with Arbitrator’s decision to adopt both AT&T/MCI’s position and the FCC’s findings on this issue. Our understanding of the Arbitrator’s ruling is that promotional offerings of less than ninety days must be offered for resale, but need not be offered to resellers at a wholesale discount.

To avoid further confusion on this issue, the Commission adopts AT&T/MCI’s recommendation to strike the italicized language noted above from Order No. 97-003. Consistent with the Arbitrator’s findings, we also note that promotional offerings of less than ninety days should be offered in accordance with the restrictions imposed by the FCC in 47 C.F.R.§51.613(a)(2).

Issue 52—Reciprocal Access. In Order No. 97-003 at 10, we agreed with the Arbitrator that §251(b)(4) of the Act requires all LECs, including AT&T and MCI, to provide access to poles, ducts, and rights-of-way. This determination is contrary to the FCC position on this issue. FCC Order 96-325 at ¶1231. Based on new arguments presented by AT&T/MCI in their joint application, however, the Commission is persuaded that the Act does not mandate AT&T and MCI to provide reciprocal access to incumbent LECs.

Our decision in Order No. 97-003 was based on Section §251(b)(4) and the Joint Explanatory Statement of the Act, both of which suggest that that all local exchange carriers, including new entrants, have the duty to provide access to poles, ducts, conduits, and rights-of-way. However, §251(b)(4) also specifies that access be provided on "rates, terms, and conditions that are consistent with section 224."

Section 703 of the Act amends Section 224. Section 224(f)(1) provides that

"[a] utility shall provide a cable television system or any telecommunications carrier with non-discriminatory access to any pole, duct, conduit, or right-of-way owned or controlled by it." (Emphasis added.) The definition of "utility" in section 224(a)(1) is amended to include "any person who is a local exchange carrier or an electric, gas, water, steam, or other public utility, and who owns or controls poles, ducts, conduits, or rights-of-way used, in whole or in part, for any wire communications." (Emphasis added.) Section 703 further amends §224(a)(5) to provide that "[f]or purposes of this section, the term "telecommunications carrier" (as defined in section 3 of this Act) does not include any incumbent local exchange carrier as defined in section 251(h)." (Emphasis added.)

The Commission agrees with AT&T/MCI that the amendments to §224 establish different access rights for incumbents and new entrants. Although all local exchange carriers must provide access under the Act, the right to obtain access does not extend to incumbent local exchange carriers. Accordingly, AT&T and MCI are not required to provide USWC with access to poles, ducts, conduit, and rights of way owned or controlled by AT&T or MCI. Order No. 97-003 and the interconnection contract should be revised to conform with this decision.

Issue 77—Pricing of Unbundled Elements. Order No. 97-003 provides that unbundled network element prices should be based on the prices established by the Commission in Order No. 96-283 in docket UM 351. Order No. 96-283, in turn, provides that U S WEST may continue to assess the Carrier Common Line Charge (CCLC) on all intrastate originating and terminating toll/access minutes of use associated with the unbundled switching network element purchased by a telecommunications carrier. Since neither order places a time limit on the applicability of such charges, AT&T/MCI recommend that Order No. 97-003 be amended to conform with 47 C.F.R. §51.515(b)(2), which provides that the CCLC may not be imposed after June 30, 1997.

As we recently noted in Order No. 97-071 in docket UM 351, the FCC’s pricing rules, including 47 C.F.R. §51.515, have been stayed by the Eighth Circuit Court of Appeals. Until the appeals process has concluded, it is impossible to determine whether the FCC decision to preempt the intrastate CCLC will be upheld. In addition, the FCC is also considering major changes to the current access charge structure in CC docket 96-262. In view of these circumstances, we do not believe that Order No. 97-003 should be amended as AT&T/MCI recommend.

ORDER

IT IS ORDERED that:

1. The applications for reconsideration filed by U S WEST Communications, Inc., AT&T Communications of the Pacific Northwest, Inc., and MCI Metro Access Transmission Services, Inc., are granted to the extent set forth herein.

2. U S WEST Communications, Inc., AT&T Communications of the Pacific Northwest, Inc., and MCI Metro Access Transmission Services, Inc., shall submit for Commission approval an executed interconnection agreement consistent with the terms of this order. The interconnection agreement shall become effective five business days after the Commission issues an order approving the agreement.

Made, entered, and effective ________________________. 

A party may appeal this order to a court pursuant to applicable law.