ORDER NO. 97-288

ENTERED AUG 4, 1997

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

ARB 3

ARB 6

ORDER

DISPOSITION: INTERCONNECTION CONTRACT REVISED; USWC PETITION DENIED

Introduction

On July 3, 1997, AT&T Communications of the Pacific Northwest, Inc. (AT&T), and MCI Metro Access Transmission Services, Inc. (MCI), filed a letter with the Commission indicating that U S WEST Communications, Inc. (USWC) refused to sign an interconnection agreement submitted to it by the two competitors. AT&T and MCI state that contract complies with Order Nos. 97-003 and 97-150 issued in this proceeding and request Commission action to ensure prompt adoption of the agreement.

On July 7, 1997, and July 16, 1997, an Administrative Law Judge conducted telephone conferences with the parties to discuss USWC’s objections to the interconnection agreement submitted by AT&T and MCI.

On July 11, 1997, USWC filed a petition requesting the Commission to accept, in lieu of the disputed interconnection agreement, a contract which USWC indicates the parties have submitted in the state of Arizona. On July 17, 1997, AT&T and MCI filed a response objecting to the petition, to which USWC replied.

USWC Objections to AT&T/MCI Interconnection Contract.

USWC maintains that there are five areas where the AT&T/MCI contract does not correspond to the Commission’s decision in Order Nos. 97-003 and 97-150:

(a) Service Quality Measures. USWC argues that the service quality measures contained in Attachment 11, §3, Appendix A of the AT&T/MCI contract are contrary to the Commission’s decision in Order No. 97-003. USWC also disagrees with the contract language in Attachment 11, §§3.1 and 3.2.

AT&T and MCI respond that Order No. 97-003 requires USWC to provide written objective measures of quality for the service categories set forth in Appendix A.

Attachment 11, §3, Appendix A of the AT&T/MCI contract contains a list of service quality categories (e.g., missed appointments, repeat trouble) and corresponding service quality measures (e.g., each instance of a missed customer appointment, each instance of repeat trouble within 60 days). The service quality categories identified by AT&T/ MCI correspond to the five areas specified in Order No. 97-003. The quality measures also appear to be reasonable. Nevertheless, Attachment 11, §3, Appendix A should be deleted from the contract because Order No. 97-003 contemplates that USWC will submit a detailed list of its service quality standards and performance measures within 30 days of the date the interconnection contract is executed. In other words, USWC, rather than AT&T or MCI, should propose the service quality categories and measures that will apply under the contract.

Once USWC has made its filing, the parties may agree to modify the list of service quality categories and measures. Such modifications may be made pursuant to: (a) the supplier performance quality management procedures incorporated in Attachment 11, §§1-2 of the contract; (b) the periodic review process specified in Attachment 11, §3.2 of the contract; or (c) the bona fide request process outlined in §36.12 of the contract. Service quality concerns that cannot be resolved through these processes may be addressed through the dispute resolution procedures in §11 of the interconnection agreement.

Except for the reference to Appendix A, the language of Attachment 11, §3.1 is consistent with Order No. 97-003. The language of this section should be revised as follows:

Within (30) days of the Effective Date of this Agreement, ILEC shall provide CLEC written objective measurements of its quality of service for the following categories: (a) billing; (b) operator services and directory assistance; (c) preorder/order/provisioning and maintenance/repair; (d) network quality, and (e) provisioning of interconnection and unbundled network elements. Each measurement of quality in such category shall include metrics which focus on timeliness, accuracy and network quality. These measurements shall establish benchmarks for resolving future quality of service issues.

Attachment 11, §3.2 acknowledges the need for changes to service quality standards. The language should be revised to provide that all parties shall review the service quality standards and associated metrics and performance criteria on a periodic basis. As amended, §3.2 should read as follows:

The parties acknowledge that during the term of this Agreement the need will arise for changes to the service quality standards and related elements set forth in this Agreement. Such changes may include, but are not limited to, the addition or deletion of metrics, the change in the performance standard for any particular metric, a change in weighting, or a change in associated performance credits. The ILEC and CLEC shall review the service quality standards and their associated metrics and performance criteria from time to time.

(b) Timeframe for Responding to Requests for Collocation. USWC objects to Attachment 4, §§2.3.15, 2.3.16, 2.3.17 and 2.3.20 of the AT&T/MCI contract. These sections relate to requests for collocation and require USWC to provide certain information within five business days. USWC contends that the 5-day response period is contrary to the Commission’s decision regarding Issue 12, Ordering Procedure for Collocation. See Order No. 97-003, Appendix A, Joint Issue Statement at 8.

AT&T and MCI respond that the specific contract language challenged by USWC was agreed to by all parties in October 1996, approximately two months prior to the Arbitrator’s decision in this matter. AT&T and MCI presented documentation to support their position. USWC does not dispute AT&T/MCI’s representation that the challenged contract language was negotiated by the parties.

The Arbitrator’s decision regarding Issue 12--subsequently approved by the Commission in Order No. 97-003--provides that Attachment 4, §2.2.22 of the AT&T contract should be amended to allow USWC ten days (instead of five) to respond to a request for collocation. In making this decision, however, the Arbitrator was not informed that the parties had already agreed to alternative contract language which made an amendment to §2.2.22 unnecessary. Also, because the parties did not mention this matter in their exceptions to the Arbitrator’s decision or in their applications for reconsideration, the Commission did not revise Appendix A of Order No. 97-003 to conform with agreement of the parties.

The information presented by AT&T and MCI discloses that the challenged contract language was agreed to by the parties prior to issuance of the Arbitrator’s decision and should be included in the interconnection contract. We note that USWC has included identical contract provisions in Part A, §40 of the interconnection contract it has submitted for approval. See discussion below. This substantiates AT&T/MCI’s representation that the challenged provisions were the product of negotiation and indicates that USWC will not be prejudiced by the 5-day response period.

(c) Loop Conditioning Price. USWC argues that Schedule 2 of the AT&T/MCI contract is defective because it does not include a price for loop conditioning. On July 17, 1997, AT&T and MCI filed revisions to Schedule 2 of their proposed interconnection contract. The revised schedule changes the description of "loop conditioning" to "channel performance" and makes reference to the revised unbundled element (building block) prices recently approved by the Commission in Order No. 97-239.

The Arbitrator’s decision and Order No. 97-003 specify that the prices for building blocks in the interconnection contract shall be those authorized in Order No. 96-283, docket UM 351. The Commission held that the UM 351 prices should remain in effect until new building block prices could be developed pursuant to the revised cost methodology as approved in Order No. 97-284. On June 25, 1997, the Commission approved new building block prices in Order No. 97-239.

Order No. 97-003 further provides that if the Commission has not approved a price for a building block, the price proposed in the AT&T Last Best Offer Contract (AT&T LBO contract) shall apply on an interim basis subject to true-up. If there is neither a Commission-approved price nor a price included in the AT&T LBO contract, USWC shall propose a price which shall apply on an interim basis subject the same true-up requirements.

In order to correspond with the pricing determinations in Order No. 97-003 and avoid potential confusion, the Commission finds that the price schedule in the final interconnection contract should be divided into three parts:

(a) Part I of the price schedule should include those building blocks for which there are Commission-approved prices.

(b) Part II of the price schedule should include those building blocks for which there are no Commission-approved prices, but prices are set forth in the AT&T LBO contract. As noted above, the prices for these building blocks shall be interim in nature and subject to true-up.

(c) Part III of the price schedule should include building blocks for which USWC has established a price because there are neither Commission-approved prices nor prices contained in the AT&T LBO. Again, these building block prices shall be interim in nature and subject to true-up.

The building blocks included in the revised price schedule should correspond to the building blocks authorized by the Commission, thereby eliminating definitional disputes. The structure of the revised price schedule will enable the parties to readily determine the source of each building block price and to ascertain which building blocks are subject to true-up.

(d) Standard Interval for Installation. Attachment 3, Appendix A, §4.3.3 of the AT&T/MCI interconnection contract states that the standard interval for provisioning local interconnection trunk groups shall be determined by the customer desired due date, but in no event shall be longer 10 days. USWC claims that this a Direct Measure of Quality (DMOQ). The Commission adopted the Arbitrator’s finding that DMOQs should not be included in the final interconnection contract. See Order No. 97-003 at 10-11.

The Commission agrees with AT&T and MCI that the standard installation interval in Attachment 3, Appendix A, §4.3.3 is not a DMOQ. The DMOQs were set forth Attachment 11 of the AT&T LBO contract and have been deleted from the latest version of the AT&T/MCI interconnection agreement.

(e) Condemnation. Attachment 4, §3.2.22 of the AT&T/MCI contract deals with responsibility for relocation costs necessitated by a governmental entity exercising the power of eminent domain. The contract provides that USWC shall be responsible for all costs of relocating the right of way, conduits and pole attachments, and that AT&T/MCI shall pay only the costs of any new AT&T/MCI facilities plus the cost of installing those facilities in the newly rebuilt USWC right of way, conduits and pole attachments. USWC argues that relocation costs should be allocated pro rata between the ILEC and CLEC.

The contract language in Attachment 4, §3.2.22 was included in the AT&T contract offered into evidence in the arbitration hearing and was also part of the AT&T LBO contract approved by the Commission. Because the parties did not identify costs associated with government-mandated relocation of facilities as a disputed issue during the arbitration proceeding, the matter was not considered by the Arbitrator or the Commission. USWC’s attempt to the raise the issue at this late date is untimely.

USWC Petition for Approval of Interconnection Agreement.

On July 11, 1997, USWC filed a petition requesting that the Commission approve an interconnection agreement (USWC contract). USWC states that its proposed contract is based upon a "template" agreement between USWC, AT&T and MCI and incorporates the most recent standard terms of interconnection between the parties. It also states that the terms of the "template" agreement have been filed by the parties in Arizona and are appropriate for Oregon. USWC points out that AT&T has recommended adoption of the "template" agreement in other states.

In support of the petition, USWC maintains that the Commission "has not finally committed itself or the [p]arties to the use of one of the agreements the [p]arties initially submitted," and interprets Order No. 97-150 to allow the parties to "file any agreement as long as it conforms to the Commission's orders." USWC asserts that its contract has been modified to comply with Order Nos. 97-003 and 97-150 issued in this arbitration proceeding. To the extent there are differences, however, it states that the Commission should amend its orders to conform to the terms of the contract. USWC contends that such action is appropriate because §252 of the Act only allows the Commission to consider unresolved issues.

On July 17, 1997, AT&T and MCI filed a joint response to USWC’s petition. AT&T/MCI argue that the proposed USWC agreement has not been approved in any state, includes unilateral modifications made by USWC, and does not reflect a complete agreement between the parties. AT&T/MCI also argue that USWC’s proposal will only further delay interconnection because the contract must be reviewed to ensure that it conforms with the Commission orders issued in this proceeding.

USWC’s petition is denied. Contrary to USWC’s claim, Order No. 97-003 specifically approves the Arbitrator’s decision to adopt, with limited revisions, the terms and provisions of the AT&T LBO contract. The parties were instructed to submit an interconnection agreement incorporating the AT&T LBO contract language, together with the ordered revisions. We did not authorize USWC or any other party to submit an interconnection agreement containing terms and conditions different from those approved by the Arbitrator and the Commission.

We also concur with AT&T/MCI that consideration of the proposed USWC contract will delay execution and implementation of the interconnection agreement. Before the USWC agreement could be approved, the Commission and the parties would have to conduct a thorough and, no doubt, lengthy review to determine that the contract terms are reasonable and consistent with the Act and applicable FCC and State regulations. We find no reason to revisit issues that have already been decided or to prolong the implementation of agreements that will enable AT&T and MCI to interconnect with USWC in Oregon.

As a final matter, we disagree with USWC’s position regarding procedural posture of this proceeding and our authority to consider and resolve issues under the Act. The Commission has completed the arbitration process prescribed in §252 of the Act and has ordered the parties to file a specific interconnection agreement corresponding to our decision in Order Nos. 97-003 and 97-150. As we have emphasized, it is inappropriate for USWC to propose, at this late date, a new contract containing terms and conditions different from those we have reviewed and approved. We also reject USWC’s claim that the terms of an interconnection agreement submitted for consideration in another state somehow supplant the decisions made in this arbitration proceeding.

ORDER

IT IS ORDERED that:

1. AT&T and MCI shall revise the interconnection agreements tendered to USWC on May 28, 1997, to conform with the terms of this order. The revised contracts shall then be filed with USWC for signature.

2. Five business days after service upon USWC, the interconnection contracts shall be filed with the Commission regardless of whether they have been executed by USWC. The Commission shall review the agreements to determine that the contract modifications required by this order have been made. If the Commission concludes that such modifications have been made as ordered, it shall issue an order approving the agreements. The interconnection agreements shall become effective five business days after the order approving the agreements is issued.

3. USWC’s petition for approval of an interconnection agreement, dated July 11, 1997, is denied.

Made, entered, and effective ________________________. 

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. An application for rehearing or reconsideration must be filed with the Commission within 60 days of the date of service of this order and must comply with the requirements in OAR 860-014-0095. A copy of any such application 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 applicable law.