ORDER NO. 97-372

ENTERED SEP 18 1997

This Is An Electronic Copy

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UM 864

DISPOSITION: STAFF RECOMMENDATIONS ADOPTED WITH CONDITIONS

At its August 26, 1997, public meeting, the Public Utility Commission of Oregon (Commission) considered a recommendation from the Commission Staff to: (a) discontinue the Interconnection Compensation Workgroup established in Order No. 96-021; and (b) allow the interim "bill and keep" compensation arrangement to lapse after January 12, 1998, as provided in Order No. 96-021. The Staff recommendation and report is attached to this order as Appendix A and is incorporated by reference.

After reviewing the Staff report and the comments of interested parties, the Commission approved the recommendation to discontinue the Interconnection Compensation Workgroup. The Commission also adopted Staff’s recommendation to allow the bill and keep compensation arrangement for the transport and termination of local exchange and EAS traffic to lapse as prescribed in Order No. 96-021. In addition, the Commission declined to adopt a proposal by AT&T Communications of the Northwest, Inc., MCImetro Access Transmission Services, Inc., and Teleport Communications Group, Inc., to convene a generic proceeding to address reciprocal compensation issues.

The interim bill and keep arrangement adopted in Order No. 96-021 was intended to provide a transitional compensation mechanism for the transport and termination of local exchange and EAS traffic. At the time the order was issued, the Commission envisioned that we would develop a more comprehensive rate structure based on recommendations presented by the Interconnection Compensation Workgroup. However, as the Staff report discloses, the workgroup has made little progress during the past 18 months. Moreover, the Telecommunications Act of 1996 (the Act) now provides detailed negotiation and arbitration procedures for resolving carrier interconnection issues. In our opinion, the procedures prescribed in the Act are more likely to produce satisfactory reciprocal compensation arrangements than will efforts to develop a global compensation mechanism in a generic proceeding.

At the same time, the Commission is aware that a number of interconnection agreements already arbitrated under the Act specify bill and keep as an interim compensation mechanism for the transport and termination of traffic. Since these arrangements will lapse after January 12, 1998, as provided in Order No. 96-021, the parties should commence negotiations immediately to develop a permanent reciprocal compensation mechanism. The parties should notify the Commission regarding the progress of negotiations. If the parties cannot agree on a compensation method, the matter may have to be resolved pursuant to the dispute resolution provisions in the contracts. In the event that compensation issues in any interconnection agreement are not resolved by January 12, 1998, the Commission may extend bill and keep for a short period until a permanent compensation mechanism is implemented.

ORDER

IT IS ORDERED that the Staff recommendations in Appendix A are adopted with the conditions set forth herein.

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 the 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 ORS 756.580.