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February 21, 2001

Mr. Stan J. BugnerState Director — Government AffairsVerizon South, Inc.1301 Gervais Street, Suite 825Columbia, South Carolina 29201

In Re: Docket No. 99-338-C - Application for Approval of Negotiated Agreement Verizon South,Inc. f/k/a GTE South, Inc. and Valence Communications Management

Dear Mr. Bugner:

The Negotiated Interconnection Agreement between Verizon South, Inc. and Valence CommunicationsManagement was presented to the Commission for consideration during its Regular Business Session onFebruary 21, 2001.

After consideration, the Commission approved this Agreement since it is consistent with the standardsof Section 252 (a) (1) of the Telecommunications Act of 1996 and since it is not discriminatory and isconsistent with the public interest in that it promotes competition.

Consistent with previous Commission Orders, the Commission finds that the terms of thisInterconnection Agreement are not to be considered as a precedential standard for other agreements, norare they binding on any other communications carrier.

Sincerely yours,

David S. LacosteUtilities Department

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V&I"l7ONVerlzon CommnnleelloneBank of Amerfoa Tower

August 29, 2000

Mr. Gary E. WelshExecutive DirectorThe Public Service CommissionP. O. Drawer 11649Columbia, SC 29211

RE 252 ('

/.C V

l f Dear Mr. Walsh:

tween Verizon South Inc. (f/ka/ GTE South Inc.) andanagement, LLC

Enclosed you will find three copies of the above referenced agreement stating Valence'sacceptance of the approved agreement which is already on filed between GTE South Inc.and NewSouth Communications Corp. This 252 (i) agreement is being filed with your'office for consideration and approval. Should you have any questions concerning thismatter please do not hesitate to contact my office.

Very truly yours,

STAN J. BUGNERState Director,Government Affairs

c: Mr. Robert Heath, Valence Comm.

q Jr&l l f

6/6lv ~ yr'

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Steven J. PitterleDirector - NagcsationsWttotasats Marttats

August 16, 2000

wholesale Network asrvtcss900 Hidden Slides Ht2303897

P.O. 8ox 1 ISQ2lrvlnc, Texas 79039

Phono 972.719 t333Fax 972-'719-1279

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Mr. Robert E. HeathValence Communications Management LLC,General Partner of Valence Communications Services, LTD904 SunningdaleRichardson, TX 75081

Dear Mr. Heath:

Verizon South Inc. f/k/a GTE South Incorporated ("Verizon") has received your letter stating that, underSection 252(i) of the Telecommunications Act of 1996 (the nAct"), Valence Communications ManagementLLC, General Panner of Valence Communications Services, LTD ("Valence") wishes to adopt the terms ofthe Interconnection Agreement between NewSouth Communications CotIC( ewgou~t and GTE thatwas approved by the Commission as an effective agreement in the State of South Carolina in Docket No.2000-0110-C (the "Terms"). The Terms provide for the election by Newsouth of certain additionalprovisions from a GTE arbitrated agreement ("Arbitrated Provisions")'. I understand you have a copy ofthe Terms. Please note the following with respect to your adoption of the Terms.

By your countersignature on this letter, you hereby represent and commit to the following threepoints:

(A) Valence adopts the Terms of the Newsouth agreement for interconnection with Verizon. and in applying the Terms, agrees that Valence shall be substituted in place of Newsouth

in the Terms wherever appropriate.

(B) Valence requests that notice to Valence as may be required under the Terms shall beprovided as fogows:

To: Valence Communications Management LLC,General Partner of Valence Communications Services, LTDAttn: Robert E. Heath - President904 SunningdaleRichardson, TX 75081Telephone number: 972-470-9015FAX number: 972-234-4686

I These "agreemcnts" are not agreements in the generally accepted understanding of that term. GTE wasrequired to accept these agreements, which werc required to rcflect then-effective FCC rules and otherapplicable law. All references to the Terms hcrcin shag include the Arbitrated Provisions.

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0Mr. Robert E. HeathAugust 16, 2000Page 2

(C) Valence represents and warrants that it is a certified provider of local telecommunicationsservice in the State of South Carolina, and that its adoption of the Terms will coverservices in the State of South Carolina only.

Valence's adoption of the Newsouth Terms shall become effective upon Verizon's filing of thisletter with the South Carolina Public Service Commission and remain in effect no longer than thedate the Newsouth Terms are terminated. The Newsouth agreement is currently scheduled toexpire on March 20, 2002.

As the Terms are being adopted by you pursuant to your statutory rights under section 252(i),Verizon does not provide the Terms to you as either a voluntary or negotiated agreement. Thefiling and performance by Verizon of the Terms does not in any way constitute a waiverby'erizonof its position as to the illegality or unreasonableness of the Terms or a portion thereof,nor does it constitute a waiver by Verizon of all rights and remedies it may have to seek review ofthe Terms, or to petition the Commission, other administrative body, or court for reconsiderationor reversal of any determination made by the Commission pursuant to arbitration in Docket No.96-375-C, or to seek review in any way of any provisions included in these Terms as a result ofValence's 252(i) election.

On January 25, 1999, the Supreme Court of the United States ("Court") issued its decision on theappeals of the Eighth Circuit's decision in Iowa Utilities Board. Specifically, the Supreme Courtmodified several of the FCC's and the Eighth Circuit's rulings regarding unbundled networkelements and pricing requirements under the Act. AT/kT Corp. v. Iowa Utilities Board, No: 97-826,1999 U.S. LEXIS 903 (1999). Certain provisions of the Terms may be void or unenforceable as a'esultof the Court's decision of January 25, 1999 and the remand of the pricing rules to the UnitedStates Eighth Circuit Court of Appeals. Moreover, nothing herein shall be construed as or isintended to be a concession or admission by either Verizon or Valence that any provision in theTerms complies with the rights and duties imposed by the Act, the decision of the FCC and theCommission, the decisions of the courts, or other law, and both Verizon and Valence expresslyreserve their full right to assert and pursue claims arising from or related to the Terms.

Verizon reserves the right to deny Valence's adoption and/or application of the Terms, in whole orin part, at any time:

(a)

(b)(c)

when the costs of providing the Terms to Valence are greater than the costs of providingit to the Newsouth;if the provision of the Terms to Valence is not technically feasible; and/orto the extent Valence already has an existing interconnection agreement (or existing252(i) adoption) with Verizon and the Terms were approved before the date of approvalof the existing interconnection agreement (or the effective date of the existing 252(i)adoption).

As noted above, pursuant to Rule 809, the FCC gave ILECs the ability to deny 252(i) adoptions inthose instances where the cost of providing the service to the requesting carrier is higher than thatincurred to serve the initial carrier or there is a technical incompatibility issue. The issue ofreciprocal compensation for traffic destined for the Internet falls within this exception. Verizonnever intended for Internet traffic passing through a telecommunications carrier to be includedwithin the definition of local traffic and subject to the corresponding obligation of reciprocalcompensation. Despite the foregoing, some forums have required reciprocal compensation to bepaid. This produces the situation where the cost of providing the service is not cost based. With

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Mr. Robert E. HeathAugust i6, 2000Page 3

this in mind, Verizon opposes, and reserves the right to deny, the adoption and/or the applicationof thc provisions of the Terms that might bc interpreted to characterize traffic destined for Internetas local traffic or requiring the payment of reciprocal compensation.

Should Valence attempt to apply the Terms in a manner that conflicts with paragraphs 3-6 above,Verizon reserves its rights to seek appropriate legal and/or equitable relief.

Please sign this letter on the space provided below and return it to the undersigned.

Sincerely,

Verizon South Inc. f/k/a GTE South Incorporated

Director-NegottatronsWholesale Markets

Reviewed and countersigned as to points A, B, and C of paragraph I:

Valence Communications Management LLC,General Partner of Valence Communications Services, LTD

(SIGNATURE)

(PRINT NAME)

c: W.E. Munsell — Verizon