commonwealth of kentucky in the matter of: dpi teleconnect …psc.state.ky.us/pscscf/2009...

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COMMONWEALTH OF KENTUCKY BEFORE THE PUBLIC SERVICE COMMISSION In the Matter of: DPI TELECONNECT, L.L.C. V. BELLSOUTH ) TELECOMMUNICATIONS, INC. D/B/A AT&T ) OF THE PARTIES, INTERCONNECTION ) CA FAILURE TO EXTEND CASH-BACK ) PROMOTIONS TO DPI 1 KENTUCKY DISPUTE OVER INTERPRETATION ) AGREEMENT REGARDING AT&T KENTUCKY’S ) E NO. 09-00 1 7 NOTICE OF FILING Notice is given to all parties that the following materials have been filed into the record of this proceeding: - The digital video recording of the oral argument conducted on October 25, 201 I in this proceeding; - video recording; - All exhibits introduced at the oral argument conducted on October 25, 201 1 in this proceeding; - The written log listing, infer alia, the date and time of where each witness’ testimony begins and ends on the digital video recording of the oral argument conducted on October 25, 201 1. Certification of the accuracy and correctness of the digital A copy of this Notice, the certification of the digital video record, exhibit list, and hearing log have been served by first class mail upon all persons listed at the end of this Notice. Parties desiring an electronic copy of the digital video recording of the hearing in Windows Media format may download a copy at http://psc.kv.gov/av broadcast12009- 001 27/2009-00127 250ct11 Inter.asx. Parties wishing an annotated digital video

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Page 1: COMMONWEALTH OF KENTUCKY In the Matter of: DPI TELECONNECT …psc.state.ky.us/pscscf/2009 cases/2009-00127/20111028_PSC_Noti… · 2011-10-28  · BellSouth Telecommunications, LLC

COMMONWEALTH OF KENTUCKY

BEFORE THE PUBLIC SERVICE COMMISSION

In the Matter of:

DPI TELECONNECT, L.L.C. V. BELLSOUTH ) TELECOMMUNICATIONS, INC. D/B/A AT&T )

OF THE PARTIES, INTERCONNECTION ) CA

FAILURE TO EXTEND CASH-BACK ) PROMOTIONS TO DPI 1

KENTUCKY DISPUTE OVER INTERPRETATION )

AGREEMENT REGARDING AT&T KENTUCKY’S ) E NO. 09-00 1 7

NOTICE OF FILING

Notice is given to all parties that the following materials have been filed into the

record of this proceeding:

- The digital video recording of the oral argument conducted on October 25, 201 I in this proceeding;

- video recording;

- All exhibits introduced at the oral argument conducted on October 25, 201 1 in this proceeding;

- The written log listing, infer alia, the date and time of where each witness’ testimony begins and ends on the digital video recording of the oral argument conducted on October 25, 201 1.

Certification of the accuracy and correctness of the digital

A copy of this Notice, the certification of the digital video record, exhibit list, and

hearing log have been served by first class mail upon all persons listed at the end of this

Notice. Parties desiring an electronic copy of the digital video recording of the hearing in

Windows Media format may download a copy at http://psc. kv.gov/av broadcast12009-

001 27/2009-00127 250ct11 Inter.asx. Parties wishing an annotated digital video

Page 2: COMMONWEALTH OF KENTUCKY In the Matter of: DPI TELECONNECT …psc.state.ky.us/pscscf/2009 cases/2009-00127/20111028_PSC_Noti… · 2011-10-28  · BellSouth Telecommunications, LLC

recording may submit a written request by electronic mail to [email protected]. A

minimal fee will be assessed for a copy of this recording.

The exhibits introduced at the evidentiary hearing may be downloaded at

http://psc. kv.sov/pscscf/2009%20cases/2009-00 I 2?/.

Done at Frankfort, Kentucky, this 28fh day of October 201 I.

dp r n

Director, Filings Division Public Service Commission of Kentucky

Page 3: COMMONWEALTH OF KENTUCKY In the Matter of: DPI TELECONNECT …psc.state.ky.us/pscscf/2009 cases/2009-00127/20111028_PSC_Noti… · 2011-10-28  · BellSouth Telecommunications, LLC

Honorable Douglas F Brent Attorney at Law Stoll Keenon Ogden, PLLC 2000 PNC Plaza 500 W Jefferson Street Louisville, KENTUCKY 40202-2828

Honorable Mary K Keyer General CounseNKentucky BellSouth Telecommunications, LLC dba AT&T 601 W. Chestnut Street 4th Floor East Louisville, KY 40203

Christopher Malish 1403 West Sixth Street Austin, TEXAS 78703

Service List for Case 2009-00127

Page 4: COMMONWEALTH OF KENTUCKY In the Matter of: DPI TELECONNECT …psc.state.ky.us/pscscf/2009 cases/2009-00127/20111028_PSC_Noti… · 2011-10-28  · BellSouth Telecommunications, LLC

COMMONWEALTH OF KENTUCKY

BEFORE THE PUBLIC SERVICE COMMISSION

In the Matter of:

) DPI TELECONNECT, L.L.C. V. BELLSOUTH ) TELECOMMUNICATIONS, INC. D/B/A AT&T 1

OF THE PARTIES’ INTERCONNECTION )

FAILURE TO EXTEND CASH-BACK 1 PROMOTIONS TO DPI )

KENTUCKY DISPUTE OVER INTERPRETATION ) CASE. NO. 2009-00127

AGREEMENT REGARDING AT&T KENTUCKY’S )

CERTl FICATE

I, Kathy Gillum, hereby certify that:

1. The attached DVD contains a digital recording of the oral argument

C nducted in the above-styled proceeding on October 25, 201 1;

2. I am responsible for the preparation of the digital recording;

3. The digital recording accurately and correctly depicts the oral argument;

4. The “Exhibit List” attached to this Certificate correctly lists all Exhibits

introduced at the oral argument of October 25, 201 1

5. The “Hearing Log” attached to this Certificate accurately and correctly

states the events that occurred at the oral argument of October 25, 201 1 and the time at

which each occurred.

9 / i h

Given t h i s 2 8 day of October, 201 1.

State at Ilarge/

My commission expires: wf 3; 20/3

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Case Title: dPi Teleconnect and AT&T Case Type: Complaint Department: Plaintiff: Prosecution: Defendant: Defense:

Location: Default Location Judge: David Armstrong, Jim Gardner, Charles Borders Clerk: Kathy Gillum Bailiff:

Event Time Log Event 10:04:35 AM Case Started 10:04:40 AM Preliminary Comments

Note: Kathy Gillum

~ - - ~ " _ _ _ - - - _ " __-_--- --..---------"--.--- ~ - . ~

This proceeding is an oral argument. There are no witnesses, only attorneys for the parties who will be presenting their arguments and answering the Commission's questions.

Doug Brent and Chris Malish, counsel for dPi; Mary Keyer and Patrick Turner, counsel for AT&T; Jeb Pinney for PSC.

10:05:07 AM Introductions Note: Kathy Gillum

10:06:04 AM Opening Statement by Chris Malish (dPi) Note: Kathy Gillum

10:25:10 AM

10:25:33 AM 10:25:33 AM Normal Mode Activated 10:25:34 AM Camera Lock Deactivated 10:25:22 AM Commissioner Gardner

Note: Kathy Gillum

Camera Lock Activated (Camera: 9) Camera Lock Mode Deactivated

10:25:59 AM Chris Malish (dPi) Note: Kathy Gillum

10:26:33 AM Opening Statement (dPi) continues Note: Kathy Gillum

Chris Malish conducted the opening statement for dPi. A video presentation and paper handout was presented to the parties and the Commission. Opening statement mainly concerning cash back offers as related to the resellers. Statements explaining differences between price and cost. Statements regarding promotions of 90 days or less vs. 90 days or more. Cited Sanford case out of 4th Circuit (2007). Statements regarding Retail Promotion Methodology Adjustment (2009). Stated that today's argument is regarding 2003 through 2007 promotions.

Commissioner Gardner stated that the documentation cited the figure of 16.79 percent. Commissioner Gardner wanted to know why it had not been addressed.

Answers that he will discuss it later in the argument in more detail.

Mr. Malish continues his opening statement. Statements regarding the issue of pass-thru. Statements regarding the statute of limitations of the discount offers.

Created by JAVS on 10/28/2011 - Page 1 of 6 -

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10:29:21 AM 10:29:43 AM 10:29:43 AM Normal Mode Activated 10:29:43 AM Camera Lock Deactivated 10:32:39 AM Commissioner Gardner

Note: Kathy Gillum

Camera Lock Activated (Camera: 9) Camera Lock Mode Deactivated

10:34: 14 AM Chris Malish (dPi) Note: Kathy Gillum

10:37:19 AM Commissioner Gardner 10:37:30 AM Chris Malish (dPi)

Note: Kathy Gillum

10:39:25 AM Opening Statement (dPi) continues Note: Kathy Gillum

10:45:44 AM Commissioner Gardner Note: Kathy Gillum

10:46:59 AM 10:45:51 AM Chris Malish (dPi)

10:47:03 AM

Camera Lock Activated (Camera: 9)

Note: Kathy Gillum

Note: Kathy Gillum Opening Statement (dPi) continues

10:47:39 AM 10:47:39 AM 10:47:39 AM 10:48:00 AM 10:48: 12 AM 10:48: 12 AM 10:48: 12 AM 10:52:46 AM 10:53:03 AM

Camera Lock Mode Deactivated Normal Mode Activated Camera Lock Deactivated Camera Lock Activated (Camera: 9) Camera Lock Mode Deactivated Normal Mode Activated Camera Lock Deactivated Camera Lock Activated (Camera: 9) Exhibit dPi 1

Note: Kathy Gillum

Commissioner Gardner asks if the new contract states that it is to be governed by Georgia law. Questions regarding contract clause regarding the statute of limitations.

Mr. Malish explains his answers to Commissioner Gardner's questions. Statements regarding differences of old contract v. new contract related to disputes.

Answers question of Commissioner Gardner. States that all disputes were filed within 12 months of them being signed.

Mr. Malish makes statements regarding competition and breaking up of monopolies. Statements regarding cross class selling. Statements regarding destruction of data by AT&T.

Questions regarding 27 percent error rate.

Mr. Malish answers Commissioner Gardner's questions.

Mr. Malish continues opening statement regarding Amount Choices. Statements regarding retail customer discount rates v. resellers discount rates. Form contract passed out for review.

Exclusions and Limitations on Services Available for Resale. (Note: all documents will collectively be introduced at the conclusion of hearing as dPi Exhibit 1 and AT&T Exhibit 1 respectively.)

10:53:28 AM Opening Statement by (dPi) continues Note: Kathy Gillum statements regarding the correct way to calculate the avoided

cost. 10:55:08 AM 10:55:27 AM 10:56:59 AM 10:56:59 AM Normal Mode Activated

Camera Lock Activated (Camera: 8) Camera Lock Activated (Camera: 9) Camera Lock Mode Deactivated

Created by JAVS on 10/28/2011 - Page 2 of 6 -

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10:56:59 AM Camera Lock Deactivated 10:56:49 AM Chairman Armstrong

Note: Kathy Gillum

10:57: 14 AM Patrick Turner (AT&T) Note: Kathy Gillum

10:58:56 AM Open Statement (dPi) continues Note: Kathy Gillum

11:05:38 AM

11:07:23 AM Chris Malish (dPi)

11:08:37 AM

11:09:18 AM Chris Malish (dPi)

Questions by Jeb Pinney (PSC) Note: Kathy Gillum

Note: Kathy Gillum

Note: Kathy Gillum

Note: Kathy Gillum

Questions by Commissioner Borders

11: 14:59 AM Questions by Commissioner Gardner Note: Kathy Gillum

11:16:06 AM Douglas Brent (dPi) 11:16:12 AM Chris Malish (dPi)

11:18:34 AM Break 11:18:56 AM Case Recessed 11:35:07 AM Case Started 11:36:08 AM

Note: Kathy Gillum

Camera Lock Activated (Camera: 9)

Chairman Armstrong asks if Mr. Malish wanted to make the handout an Exhibit to the hearing. Mr. Malish stated that he may admit all of the documenb later as one Exhibit, and also stated that it was already a part of the record.

Mr. Turner gave location of the document in the case record, and made statement as to the differences in one column between the contracts.

Statements regarding absolute value calculation. Concludes opening statement.

Questions regarding consolidated docket.

Mr. Malish answers Mr. Pinney's questions.

Questions regarding competition v. monopoly.

Mr. Malish explains discount to wholesale customers as related to pass thru.

Commissioner Gardner asked if there was an agreement prior to 2003. Witness Malish did not know the answer to the question. Questions regarding the 16.79 percent discount.

Concludes opening statement.

11:35:21 AM Opening Statement by Patrick Turner (AT&T) Note: Kathy Gillum Mr. Turner references power point display and paper copy of

power point passed out to parties. Statements regarding issues moot beyond mid-2007. Statements regarding issue regarding cash back and wholesalers withholding monies. (Note: all documents will be collectively introduced a t conclusion of hearing).

Chairman Armstrong asks if there are any questions so far. There were none.

Statements regarding the 16.79 percent discount rate. Statements regarding procedure for applying promotional rates. Mr. Turner explains the calculations of applying discount rate. Mr. Turner cites the Sanford case. Mr. Turner refers to handout number 1. Mr. Turner presented Louisianna and North Carolina decisions to support his argument.

11:40:16 AM Chairman Armstrong Note: Kathy Gillum

11:40:24 AM Opening Statement by Patrick Turner (AT&T) continues Note: Kathy Gillum

11:48:34 AM 11:48:34 AM Normal Mode Activated 11:48:34 AM Camera Lock Deactivated

Created by JAVS on 10/28/2011

Camera Lock Mode Deactivated

- Page 3 of 6 -

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11:49:06 AM 11:53:33 AM

11:54:20 AM

11:54:20 AM 11:54:20 AM 11:53:58 AM

11:56:36 AM

11:57:54 AM 11:57:54 AM

11:57:54 AM

12:OO:ll PM

12:01:35 PM 12:01:35 PM

12:01:35 PM 12:02:18 PM

12:02:35 PM 12:02:35 PM

12:02:35 PM 12:06:35 PM

12:06:35 PM 12:06:35 PM 12:06:35 PM

12:06:41 PM 12:07:02 PM 12:07:02 PM

12:07:02 PM

12:07:13 PM

12:07:28 PM 12:07:28 PM

12:07:28 PM 12:07:35 PM

Camera Lock Activated (Camera: 9) Commissioner Gardner

Note: Kathy Gillum Mr. Gardner asks if the issue today is whether one applies the 16.79 percent or not?

Camera Lock Mode Deactivated Normal Mode Activated Camera Lock Deactivated Opening Statement by (AT&T) continues - Exhibit AT&T 1

Note: Kathy Gillum Mr. Turner gives background. Mr. Turner refers to handout number 8. Statements regarding page 14 of power point regarding landline service. Mr. Turner refers to handout number 3. Mr. Turner refers to handout number 4 (calculations of discount). Mr. Turner refers to handout number 5 (avoided costs). Mr Turner refers to handout number 6. Mr. Turner refers to handout number 7. (AT&T Exhibit 1 passed out to parties - Motion made a t end of hearing to introduce)

Camera Lock Activated (Camera: 9) Camera Lock Mode Deactivated Normal Mode Activated Camera Lock Deactivated Camera Lock Activated (Camera: 9) Camera Lock Mode Deactivated Normal Mode Activated Camera Lock Deactivated Camera Lock Activated (Camera: 9) Camera Lock Mode Deactivated Normal Mode Activated Camera Lock Deactivated Camera Lock Activated (Camera: 9) Camera Lock Mode Deactivated Normal Mode Activated Camera Lock Deactivated Camera Lock Activated (Camera: 9) Camera Lock Mode Deactivated Normal Mode Activated Camera Lock Deactivated Camera Lock Activated (Camera: 9) Camera Lock Mode Deactivated Normal Mode Activated Camera Lock Deactivated Commissioner Gardner

Note: Kathy Gillum Commissioner Gardner asks if.it is just the first month in dispute.

Created by JAVS on 10/28/2011 - Page 4 of 6 -

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12:07:43 PM

12:09:16 PM 12:11:35 PM 12:11:35 PM

12:11:35 PM

12:11:50 PM

12:13:20 PM 12:13:20 PM 12:13:20 PM 12:13:39 PM

12:13:36 PM

12:20:53 PM 12:20:53 PM

12:20:53 PM 12:14:01 PM

12:24:32 PM

12:25:15 PM

12:26:05 PM

12:31:13 PM

12:31:20 PM

12:44:24 PM

12:44:14 PM

12:45:44 PM 12:45:45 PM

Opening Statement by (AT&T) continues Note: Kathy Gillum Mr. Turner explains one month v. over time theory. Mr. Turner

explains how a wholesale price can be higher than the retail price. Mr. Turner refers to page 18 of power point. Mr. Turner explains points in the Sanford case. Mr. Turner refers to handout number 9. End of the cash back.

Camera Lock Activated (Camera: 9) Camera Lock Mode Deactivated Normal Mode Activated Camera Lock Deactivated Camera Lock Activated (Camera: 9) Camera Lock Mode Deactivated Normal Mode Activated Camera Lock Deactivated Camera Lock Activated (Camera: 9)

No Questions by Commission Camera Lock Mode Deactivated Normal Mode Activated Camera Lock Deactivated Opening Statement by (AT&T) continues

Note: Kathy Gillum Mr. Turner refers to page 21 of power point (regarding federal law). Mr. Turner refers to page 22 of power point (regarding Ky law). Mr. Turner refers to page 23 of power point (regarding NC Commission). Mr. Turner refers to pages 24 and 25 of the power point. Mr. Turner addresses the one year clause (PLF-3, page 57).

Commissioner Gardner asked if none of it was within the 12 months.

Mr. Turner refers to Case Exhibit NWB-1. States that those 7 should not be paid at all. Mr. Turner concludes his argument.

Questions regarding promotional items such as ipods, etc., relating to discounts to dPi, etc. Questions regarding whether or not items offered are under telecommunication services.

Chairman Armstrong asked if there were any other issues to be addressed.

Mr. Malish requested to rebutt AT&Ts argument. Mr. Malish makes statements regarding 90 day timeline for discounts. Mr. Malish refers to power point titled, "Law: Wholesale must be below retail".

Commissioner Gardner Note: Kathy Gillum

Opening Statement by (AT&T) continues Note: Kathy Gillum

Questions by Jeb Pinney (PSC) Note: Kathy Gillum

Chairman Armstrong Note: Kathy Gillum

Rebuttal by Chris Malish (dPi) Note: Kathy Gillum

Case Recessed Chairman Armstrong Case Started Chairman Armstrong

Note: Kathy Gillum Chairman Armstrong asks for Motions to introduce documents referred to in hearing as exhibits.

Created by JAVS on 10/28/2011 - Page 5 of 6 7

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12:45:55 PM Motion by Chris Malish (dPi) Note: Kathy Gillum Motion by Chris Malish to introduce collectively, Power Point

Presentation titled, "dPi v. BellSouth, Oral Argument; and handout titled, "Exclusions and Limitations on Services Available for Resale" as dPi Exhibit 1.

Motion by Patrick Turner to introduce collectively, Power Point Presentation titled, "Docket No. 2009-00127, Oral Argument of AT&T Kentucky, dated October 25,2011; and Handouts 1 thru 10, titled, "Oral Argument Handouts", as AT&T Exhibit 1.

Chairman Armstrong accepts Exhibits and adjourns hearing.

12:46:05 PM Motion by Patrick Turner (AT&T) Note: Kathy Gillum

12:46:24 PM

12:46:33 PM Case Recessed 1:29:58 PM Case Stopped

Chairman Armstrong- Hearing Adjourned Note: Kathy Gillum

Created by JAVS on 10/28/2011 - Page 6 of 6 -

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Case Title: .dPi Teleconnect and AT&T Department: Plaintiff Prosecution: Defendant: Defense:

Name Description AT&T Exhibit 1 Power Point Presentation titled, "Docket No. 2009-00127, Oral Argument of AT&T

Kentucky, dated October 25, 2011; and Handouts 1 thru 10, titled, "Oral Argument Handouts". Power Point Presentation titled, "dPi v. BellSouth, Oral Argument; and handout titled, "Exclusions and Limitations on Services Available for Resale"

dPi Exhibit 1

Created by JAVS on 10/28/2011 - Page 1 of 1 -

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