ORDER NO. 99-194

ENTERED MAR 08 1999

This is an electronic copy.

OF OREGON

UT 138

UT 139

In the Matter of the Investigation into )

Compliance Tariffs filed by U S WEST )

Communications, Inc., Advice Nos. 1661, )

1683, 1685, and 1690. )

                                                                                                                ORDER

In the Matter of the Investigation into )

Compliance Tariffs filed by GTE Northwest )

Incorporated, Advice Nos. 589, 599, and 6ll. )

 DISPOSITION:  RECONSIDERATION GRANTED; ORDER NO. 98-444 SUSPENDED

On November 13, 1998, the Public Utility Commission of Oregon (Commission) issued Order No. 98-444 in this matter.

On January 12, 1999, applications for reconsideration were filed by U S WEST Communications, Inc., (USWC) and GTE Northwest Incorporated (GTE). USWC requests that the Commission revise Order No. 98-444: (a) to provide that competitive carriers may not use building blocks to provide switched access without also providing local service to an end user customer; (b) to revise the flow-through assumptions for service order processing to correspond to USWC’s proposals; (c) to require competitive carriers to combine all building blocks at the SPOT frame or through some form of collocation. USWC asks the Commission to reopen and supplement the record with respect to issues (b) and (c). GTE supports and joins in USWC’s application except as it pertains to USWC’s SPOT frame proposal.

AT&T Communications of the Pacific Northwest, Inc., (AT&T) and TCG Oregon (collectively AT&T/TCG) also filed a joint application for reconsideration and clarification of Order No. 98-444 on January 12, 1999. AT&T/TCG requests the Commission: (a) reconsider its decision not to require USWC and GTE to combine building blocks on behalf of competitive carriers; and, (b) clarify that the decision authorizing direct access to USWC and GTE facilities does not preclude other technically feasible methods of access.

On January 25, 1999, the United States Supreme Court issued its decision in AT&T Corp vs. Iowa Utils. Board, __ US__ (1999). In that ruling, the Court reversed decisions by the Eighth Circuit Court of Appeals which vacated rules promulgated by the Federal Communications Commission (FCC) implementing provisions of the Telecommunications Act of 1996 (Act). Among other things, the Court concluded that incumbent local exchange carriers may be required to provide competitive telecommunications carriers with combinations of unbundled network elements.

On February 8, 1999, USWC and GTE filed responses in opposition to the application for reconsideration filed by AT&T/TCG. GTE requests the Commission defer action on issues relating to unbundling, combination of elements, and direct access until after the FCC issues revised rules. USWC requests that the Commission refrain from changing its current policy and conduct a single proceeding after the FCC issues revised rules. USWC states that competitive carriers will not be prejudiced in the interim because they will continue to obtain access to unbundled elements and may combine those elements directly at USWC frames.

AT&T, TCG, and Integra Telecom filed a joint response opposing the applications for reconsideration filed by USWC and GTE. They argue that the Commission should not revisit its decision regarding service order flow through, the SPOT frame, and use of building blocks to provide switched access.

In Order No. 98-444, the Commission adopted building block access arrangements consistent with the decisions rendered by the Eighth Circuit. Our decision not to require USWC and GTE to provide building block combinations was a reluctant one, however. We emphasized that we would revisit that issue if the Eighth Circuit decisions were ultimately overturned by the Supreme Court. Since that has now come to pass, the Commission concludes that reconsideration is appropriate.

Reconsideration is granted to allow the Commission to determine the changes necessary to implement unbundling and building block access arrangements (including the combination of elements) consistent with the Supreme Court decision. In addition, we have decided to suspend operation of Order No. 98-444 and take no further action regarding these issues until a more appropriate time, such as issuance of the Eighth Circuit's order on remand from the Supreme Court, or issuance of revised FCC rules in accordance with the Supreme Court's decision. Competitive carriers may continue to purchase unbundled building blocks pursuant to existing USWC and GTE tariffs. Those tariffs shall continue in effect until further notice.

We are persuaded that the approach we have taken will conserve the resources of the parties without placing an undue burden on telecommunications competition. The issues raised by the applications for reconsideration will be resolved after the Commission has an opportunity to evaluate the revised federal rules.

Because of our decision to grant reconsideration, GTE and USWC do not have to file compliance tariffs on March 15, 1999, as specified by Order No. 98-444. The Commission will determine the appropriate schedule for compliance tariffs as part of the reconsideration process.

ORDER

IT IS ORDERED that:

1. The applications for reconsideration of Order No. 98-444 are granted.

2. Order No. 98-444 is suspended until further notice.

Made, entered, and effective _____________________.

A party may appeal this order to a court pursuant to ORS 756.580.