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TRANSCRIPT
BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION
Petition of Core Communications, Inc. for Arbitration of Interconnection Rates, Terms And Conditions with The United Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania pursuant to 47 U.S.C. §252(b)
Docket No. A-310922F7002
REBUTTAL TESTIMONY OF EDWARD B. FOX
EQ PA STATEMENT 1.1
ON BEHALF OF THE UNITED TELEPHONE COMPANY OF PENNSYLVANIA, INC.
D/B/A EMBARQ PENNSYLVANIA
*** PUBLIC VERSION ***
Prefiled: June 4, 2007
RECEIVED
06/29/2007 FRI 9:48 FAX "17 236 1389 Sprint HSBG Ext. Gov. 2)007/011
Voice Date Internet Wireless Entertainment E M B A R Q . Emberq Corporitlcn MO ti. Sid Sittct. Stite 201 Him'jfcutg, P117101 EMBASO.tcm
June 8. 2007
VIA HAND DELIVERY
The Honorable David A Salapa Office of Administrative Law Judge Pennsylvania Public Utility Commission 400 North Street, 2 n d Floor Harrisburg, PA 17101
RE: Petition of Core Communications, Inc. for Arbitration of Interconnection Rates, Terms And Conditions with Ths United Telephone Company of Pennsylvania d/b/a Embarq Pursuant lo 47 U.S.C. g252('b1 - Docket No. A-310922F70002
Dear Judge Salapa:
On behalf of The United Telephone Company ofPcnnsylvania d/b/a Embarq Pennsylvania ("Embarq PA") attached hereto is a redlincd and non-redlmed version ofthe Q&A on pages of 56-57 of Embarq PA's witness Edward B. Fox's Rebuttal Testimon}11.1 (filed on June 4,2007). Please replace pages 56-57 of both the Proprietary and Non-Proprietary Versions of Mr. Fox's Rebuttal Testimony with the non-redlined Q&A attached hereto- I apologize for any inconvenience.
If you have any questions, please do not hesitate to contact me.
Soe Benedek Attorney ID No. 60451
ZEB/jh enclosures cc: Michael Gruin, Esquire (via electronic mail and hand delivery)
Zsuzsanna E. Benedek mCH TOUNtfL hVMlt m t BiNEDttgEWSfM.COM Voice; i71?J 245-&3ii6 fax; (7171236-1339
06/29 /2007 FRI 9:49 FAX 717 236 1369 S p r i n t ilSBG E x t . Gov.
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Embarq PA chooses lo price enuarxc facilities a; access, and those prices are too
high relative to the market. Embarq PA will feel the reeuit through loss of market
share.
, . . - -j Formattetl: indent: first 0* ]
Q. Page 57 tines 1339-2343, Mr. Gates proposes that Embartj PA use Verizon's
rates for Entrance Facilities. Does Core or Mr. Gates propose and support the
7 actual rates that would result if Mr. Gates' testimony was adopted?
6 A. No. Mr. Gates does not set forth those rates, nor does he provide support in his
9 Direct Testimony for the rates soughtto ba imposed ae a result of this case.
Moreover, in response w Mr. Gates, 1 do note that Ihc xtercennection agreement
that Core operates unoer with Verizon does have tn access tariff rale for Entrance
Facilities and Transport for Imerconrtcctien Charges in effect. Piestimably, those
access rates would be mciudsd in Mr. Gatss' Tecommendaiion.
j2; Is Embarq pA propo^ngthatacc^f rian^ tp an Entrance
Padlby?
A. Yes, Embarq PA ie proposing that access pricing should apply to the pricing of
, anttance.facilities in litis case. The Pennsylvania Commission iiaS-iipprQYsd
access rates^^7.9Q3^^g^.iLa$P.^:%^^.a.^^,f^tgh4ie.|i reiative to Verizon.
Delated: V
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Accordingly^wititcn^wUhCg^ \ F a r m a t t e t ' ! ^ f t ^ * _ J
hae-propesed'oost base-rates (supported by. a study) for ontranoo 6301111165. f& ,''
Embarq-PA witness Mr. Dickorsoanoteo. Embai ^PA 'cost-based pricing foi
56 REBUTTAL TESTIMONY OF Edward B. fox, ISQ PA St. i . t ~ PreRlcd oiv June a. 2U07.
COISTAINS PROTRIETARY INFORMATION
REOUNEIJ VERSION
06/29/2007 FRI 9:51 FAX 7i7 236 1389 Sprint HSBG Ext. Gov. ©009/011
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wrtFancfr-focilitios-afO-jwatalty tttghdy leco than Vertaea^-fetefr jjwyyefj, since
entrance facilities were dcteimincd tc be non-impaired, 1 rccommynd jiavfrQisg
presgntod Kstimony sa^erting potenuai Commistion imposition of access prices
fcr entrance facilities in light of existing tariffs and the Pennsylvania
Commission's orders in the Verizon TRRO dockets.
Is£tjtbarqJPA proposing that access pricmc should apply h> ar, Enii'taicc
Faciiitv?
Yes. Embarq PA is prososing thet access uricins should apply to the pricing of
entiance facilities in this case. The Pennsylvania Ccmmission \}d^ apRToycQ
access rates relative 'p Ycuzoi\. Accordingly, since entranca facilides ware
detormined to be non-impaired, I recommend Conirussion inipositiou of access
prices for entrance facilitie-s in lieht of existing tariffs and the Pennsylvania
Commission's crders in Ihe Verizon TRRO dockets.
& Does this end yoar Rebuttal Tesiimony?
A. Yes.
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57 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA Si. 1.1 - Prefiled on Jun«4 t2007.
CONTAINS PROPRIETARY INFORMATION
REDLINEP VERSION
06/29/2007 FRI 9:52 FAX 7L7 236 1389 S p r i n t HSBG E x t . Gov. W V L U , V X ^
1 Embarq PA chooses to price enuance facilities at access, and those prices are too
2 high relative to the market. Embarq PA will feel the result through loss of market
3 share.
4
5 Q< Page 57 lines 1338-1343, Mr. Gates proposes that Embarq PA use Verizon Js
6 rates for Entrance Facilities. Does Core or Mr. Gates propose and support ihe
7 actual rates that would result if Mr. Gates' testimony was adopted?
8 A. No. Mr. Gates does not set forth those rates, nor does he provide support m his
9 Direct Testimony for the rates sought to be imposed as a result of this case.
10 Moreover, in response to Mr, Gates, I do note that the interconnection agreement
11 that Core operates under with Verizon does have an access tariff rate for Entrance
12 Facilities and Transport for Interconnection Charges in effect. Presumably, those
13 access rates would be included in Mr. Gates1 recommendation.
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15 Q. Is Embarq PA proposing that access pricing should apply to an Entrance
16 Facility?
17 A. Yes, Embarq PA is proposing that access pricing should apply to the pricing of
18 entrance facilities in this case. The Pennsylvania Commission has approved
19 access rates relative to Verizon. Accordingly, since entrance facilities were
20 determined to be non-impaired, I recommend Commission imposition of access
21 prices for entrance faciliiies in light of existing tariffs and the Pennsylvania
22 Commission's orders in the Verizon TRRO dockets.
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56 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1. - Prefiled on June 4, 2007.
CONTAINS PROPRIETARY INFORMATION
06/29/2007 FRI 9:53 FAX 717 238 1389 Spr in t HSBG Ext . Gov. Lg jOl l /un
1 Q. Is Embarq PA proposing thai access pricing should apply to an Entrance
I Facility?
3 A- Yes, Embarq PA is proposmg that access pricing should appiy to the pricing of
4 entrance facilities in this case. The Pennsylvania Commission has approved
5 access rates relative to Verizon. Accordingly, since er trance facilities were
6 determined to be non-impaired, I recommend Commission imposition of access
7 prices for entrance facilities in light of existing tariffs and the Pennsylvania
8 Commission's orders in the Verizon TRRO dockets.
9
10 Q. Does this end your Rebuttal Testimony?
I I A. Yes.
57 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St 1.1 - Prefiled on June 4,2007.
CONTAINS PROPRIETARY INFORMATION
1 REBUTTAL TESTIMONY OF 2 EDWARD B. FOX 3 EQ PA Statement 1.1 4 5 6 SECTION I - INTRODUCTION 7 8 Q. Please state your name, title, and business address.
9 A. My name is Edward Fox. I am employed as Regulatory Manager for Embarq
10 Management Company, which provides management services to The United
11 Telephone Company ofPcnnsylvania d/b/a Embarq Pennsylvania ("United PA"
12 or "Embarq PA"). My business address is 5454 W. 1 IO"1 Street, Overland Park,
13 KS 66211.
14 15 Q. Are you the same Edward Fox who filed Direct Testimony in this proceeding on 16 April 27, 2007? 17 18 A. Yes, lam. 19 20 Q. What is the purpose of your Rebuttal Testimony? 21 22 A. My testimony will rebut positions taken by Core witness Timothy J. Gates in his
23 Direct Testimony regarding Issue 1 through and including Issue 10. I will show
24 that Mr. Gates is wrong in his many assertions, including that Core must be
25 financially and operationally responsible for direct interconnections within
26 Embarq PA's network once a certain level of traffic is met, that Core's VNXX-
27 enabled ISP-bound traffic is not eligible for intercarrier compensation, and that
28 parties should compensate at symmetrical rates.
1 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 SECTION I I - REBUTTAL TESTIMONY
2
3 Issue 1 - Definition of "Local Traffic" versus "Section 251(b)(5) Traffic"
4
5 Q. At page 4 lines 73-83, Mr. Gates sets forth Core rs definition of "Section
6 251(b)(5) traffic." Do you have any initial comments?
7 A. Yes. At issue is whether or not Core's VNXX traffic is eligible for
8 compensation. Core believes that the VNXX traffic is not exchange access
9 traffic, even though it originates and terminates in long-distance calling areas.
10 Effectively, Core rejects Embarq PA's definition because of its clarity in that
11 VNXX calls are interexchange and not subject to compensation from Embarq PA.
12 The fact that the FCC does not use the word "local" does not eliminate the
13 concept or practice of differentiating between local and interexchange
14 jurisdictions for determining compensation. I note that Mr. Gates has avoided any
15 reference to the First Circuit Court of Appeals decision (GNAPs)1 which provides
16 the necessary clarity for deciding this issue:
17 The FCC further notes that "in establishing the new compensation scheme
18 for ISP-bound calls, the Commission was considering only calls placed to
19 ISPs located in the same local calling area as the caller." According to the
20 FCC, "the Commission itself has not addressed application of the ISP
21 Remand Order to ISP-bound calls outside a local calling area" or "decided
22 the implications of using VNXX numbers for intercarrier compensation
23 more generally."
1 Global NAPS, Inc. v. Verizon New England, Inc., et al.„ 444 F.3d 59 (1st Cir. 2006) ("GNAPs "). 2
REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007. PUBLIC VERSION
2 Q> What rationale has Core offered for its proposed definition of 251(b)(5) traffic?
3 A. Little to none. While at page 4 lines 73-83, Core sets forth its definition of
4 "Section 251(b)(5) traffic," Mr. Gates thereafter in several questions/answers
5 proceeds to address why Embarq PA's language should not be adopted. In fact,
6 the following statements by Mr. Gates are the only points at which Core in its
7 case in chief offers some support for its proposed use of Section 251 (b)(5)
8 Traffic:
9 • Page 4, lines 73-74. "Core proposes a definition of Section 251 (b)(5)
10 traffic that is consistent with the applicable FCC rule." However, Mr. Gates
11 thereafter does not explain how allegedly the cited definition is "consistent"
12 with the FCC rule, how the FCC rule is indeed "applicable", or how reference
13 to a claimed applicable FCC rule would operate in and can be used for readily
14 and clearly implementing the proposed definition.
15 • Page 5, lines 114-115. "Core's position on this issue is correct,
16 comprehensive, consistent with the FCC rules and should be adopted." Again,
17 Mr. Gates does not explain how indeed the various terms and aspects of
18 Core's proposed definition are "correct", or are "comprehensive" or
19 "consistent" beyond simply recitation of the rule. Currently, the "status quo"
20 on this issue is characterized by uncertainty, confusion and disagreement on
21 how VNXX-enabled ISP-bound traffic should be compensated. Embarq PA's
22 definition will soundly resolve this "status quo" confusion. Core's definition
23 fiirther engenders this confusion. 3
REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007. PUBLIC VERSION
1 • Page 5, lines 118-119. "Core asks that the Commission resolve this issue
2 by maintaining the status quo in the industry." Mr. Gates, however, never
3 addresses how the proposed definition does in fact "resolve" the issue -
4 particularly so as not to beget new additional issues when Core's recitation of
5 the FCC rule is applied by contracting parties. Mr. Gates also does not
6 demonstrate how exactly Core's proposed language accomplishes"
7 maintaining the status quo" and why such claimed benefit of "maintaining the
8 status quo" is in the public interest.
9 • Pages 5-6, lines 122-125. "Core's position is consistent with the
10 provisions of the Act, in that section 251(b)(5) of the Act imposes on each
11 local exchange carrier the duty to establish reciprocal compensation
12 arrangements for the transport and termination of telecommunications." As I
13 mentioned above. Core neglects the fact that the FCC has determined that
14 Section 251 (b)(5) traffic does not include calls placed to ISPs outside the local
15 calling area. For that reason Core's position is totally inconsistent with
16 section 251(b)(5) ofthe Act.
17 Thus, I am unable to respond in any meaningful manner to the blanket assertions
18 and unsupported conclusions made by Mr. Gates in support of Core's proposed
19 definition of "Section 251 (b)(5) Traffic". The interconnection agreement is an
20 "operational" tool. Its terms need to be more detailed than containing references
21 to and recitation of the Act and FCC regulations. Indeed, court cases arise from
22 the implementation and application of laws and regulations. Core's proposed
23 definition is not a workable operational tool because it regurgitates that the law or
4 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 rule should apply and does not set forth the parties' intentions. Simply
2 regurgitating the FCC's definition of Section 251(b)(5), as Core has proposed, is
3 not adequate because that definition is obviously unclear and subject to dispute.
5 In that regard, Embarq PA's use ofthe defined term "Local" effectively defines
6 the traffic that is subject to the reciprocal compensation requirements of Section
7 251 (b)(5) of the Act and thereby does clearly set forth the parties' intent as to the
8 traffic compensable under Section 251(b)(5) and how the Act and the applicable
9 rules should be applied in the resulting agreement between Core and Embarq PA.
10
11 Q. Must definitional terms in an agreement be statutorily described in an
12 interconnection agreement?
13 A. No. The goal of reaching agreement on any definition is clarity of its use, /. e.,
14 what it allows and what it limits. The definition section ofthe interconnection
15 agreement being negotiated between Core and Embarq PA contains over 100
16 definitions. Most of these definitions are not statutorily defined.
5 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
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Mr. Gates (page 6, lines 126-135) makes several assertions regarding the
alleged economic ramifications of adopting Embarq PA's language. Do you
agree?
No. Mr. Gates' claims are highly speculative and questionable. When asked in
discovery, Mr. Gates on Core's behalf could not provide any studies, analyses,
reports in support of his many speculative conclusions. For example, while Mr.
Gates in testimony claims that Core will be deprived of reciprocal
"compensation", Core's interrogatory responses do not quantify that which Core
claims is owed and that which Core claims it would be deprived of. See, attached
hereto and incorporated herein, Core's responses to Embarq PA interrogatories Set
IV, Questions 1 through 6, and 8 through and including 11. See, Exhibit EBF-5.
A copy of Core's CONFIDENTIAL 2006 Annual Report, which was provided in
response to EQ Set IV-10, is also attached hereto and marked as proprietary. See,
Exhibit EBF-6.
Moreover, Core has been certificated in Embarq PA's territory for years. While
Mr. Gates' Direct Testimony paints a picture that Core is on the brink of disaster
without reciprocal compensation for its VNXX traffic, Core's founder and
president in a recent proceeding before the Pennsylvania Commission presented a
rather bright outlook for Core in testimony recently submitted:
Core is a 100% privately held corporation. Financially, Core's condition is
exceptional for a facilities based CLEC in that Coretel currently has no
significant debt. Our network assets are completely owned and paid for in
6 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 full. This is in keeping with Coretel's organic growth philosophy, which
2 emphasizes fiscal constraint and incremental growth. Coretel's philosophy
3 is in sharp contrast to that espoused by many CLECs [sic], which involve
4 high levels of debt and rapid expansion in multiple markets
5 simultaneously, (p.4). Furthermore, as I stated earlier, Coretel currently
6 has no significant debt, and is cash-flow positive, and as a result we have
7 more than sufficient resources to accomplish this expansion."(p.9)2
8
9 Q. At pages 6-7 of his Direct Testimony, Mr. Gates cites to Joint Comments
10 submitted by Sprint five years ago. Is Mr. Gates' claim as to Embarq PA's
11 alleged "non-detrimental" endorsement of VNXX use a relevant point in this
12 arbitration proceeding?
13 A. No. As stated in Direct Testimony, Embarq PA does not oppose use of VNXX
14 arrangements per se. Embarq PA is not seeking to eliminate Core's use of
15 VNXX. Hence, generally speaking, Mr. Gates' statement is without import. What
16 is relevant and important in this case is Core's request to obtain intercarrier
17 compensation for highly out-of-balance traffic that employs VNXX arrangements.
18 It is Core's request to shift costs onto Embarq PA as associated with the transport
19 of traffic outside Embarq PA's local calling area that remains in dispute in this
20 arbitration proceeding. These are the types of issues that the Pennsylvania Public
2 Direct Testimony of Bret Mingo, President, Core Communications, Inc. Application of Core Communications, Inc. for Authority to amend its existing Certificate of Public Convenience and necessity and to expand Core's Pennsylvania operations to include the Provision of competitive residential and business Local exchange telecommunications services throughout the Commonwealth of Pennsylvania. A-310922F0002, AmA.
7 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 Utility Commission ("Commission") left open for disposition in future
2 proceedings. As the Commission found:
3 Based upon the discussion above, we decline to take any steps at 4 this time to prohibit the use of virtual NXX service in 5 Pennsylvania. Additionally, since the FCC is currently considering 6 to establish a unified intercarrier compensation regime for all 7 telecommunications traffic that utilizes the public switched 8 network, we will not make any conclusions at this time on the 9 issue of intercarrier compensation for traffic that moves over
10 VNXX arrangements 11
12 Q. In the event that the Commission considers Sprint's Joint Comments relevant,
13 can you comment on Mr. Gates' statement that Embarq PA's position in this
14 arbitration is "diametrically opposed" to those Joint Comments?
15 A. Yes, I can. Mr. Gates selectively cites to Joint Comments submitted in 2002 by
16 The United Telephone ofPcnnsylvania d/b/a Sprint and Sprint Communications
17 Company, L.P. (collectively, "Sprint") in the Commission's generic VNXX
18 investigation (Docket No. 1-00020093). In that generic Commission proceeding,
19 Sprint's Joint Comments explicitly did not endorse either a "pure ILEC" stance or
20 a "pure CLEC" stance. See, Sprint Joint Comments at 1. Indeed, in response to
21 the Commission's question,3 Sprint's Joint Comments at page 6 (just above the
22 quote cited by Mr. Gates in his Direct Testimony) provide as follows:
23 There are no detriments to customers. There are no detriments to 24 CLECs. In Sprint's view, there are no detriments to ILECs so 25 long as a limitation is placed on the distance the ILEC must 26 transport the traffic outside its local calling area boundary and 27 the CLEC compensates the ILEC at cost-based rates (e.g., 28 TELRIC-based rates) for transport beyond that limitation point. 29
3 The Commission question was: "Were there any detriments to customers and telephone companies in using Virtual NXX code arrangements?"
8 REBUTTAL TESTZiMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 Sprint's Joint Comments further provide that the FCC's ISP Remand Order has
2 already had a significant impact "on reducing ILECs' reciprocal compensation
3 payments to CLECs for ISP-bound traffic." See, Sprint Joint Comments at 7.
4 From my standpoint, Mr. Gates' "diametrically opposed" statement is outdated
5 and incorrect
6
7 Q. What do you mean outdated?
8 A. It is outdated in at least three respects. First, the comments were jointly submitted
9 in 2002 prior to the Pennsylvania Commission approval in 2006 of Embarq PA's
10 joint application to separate from Sprint Nextel. (Docket Nos. A-313200F0007,
11 A-31379F0002). Embarq PA was created as a result of that separation. As
12 addressed immediately below, the entity submitting Joint Comments referenced
13 by Mr. Gates was not Embarq PA. Second, as noted above, the VNXX Joint
14 Comments were submitted in a generic proceeding not in an arbitration
15 proceeding adjudicating specific compensation and interconnection obligations
16 and claims. Third, even the Joint Comments were submitted before the FCC's
17 rate cap and new entrant rules. Those rules resulted from a 2004 FCC Order that
18 allowed carriers to be compensated for ISP-bound service in certain markets that
19 were previously prohibited by the ISP Remand Order. In today's expanded dial-
20 up ISP market and with the aggressive use of VNXX service, the result has been a
21 larger market reach resulting in a significantly large amount of VNXX-enabled,
22 ISP-bound traffic that converges to a single carrier. In light of these market
9 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 factors, the Joint Comments submitted in 2002 prior to these FCC's rulings likely
2 would have been very different were they submitted today.
3
Can you comment on Mr. Gates' request that the Commission reject Embarq
PA's ability to "now change its position "?
Yes, I can comment. A little over a year ago, the Commission approved Embarq
PA's separation from Sprint Corporation. See, Joint Application of The United
Telephone Company of Pennsylvania d/b/a Sprint, and OfSprint Long Distance,
Inc., for all Approvals Required under the Pennsylvania Public Utility Code in
Connection with Changes of Control of The United Telephone Company of
Pennsylvania d/b/a Sprint and ofSprint Long Distance, Inc., Docket Nos. A-
313200F0007, A-311379F0002, Final Opinion and Order, entered April 7, 2006.
As counsel advises me, if there is a "change in position" then such an alleged
"change" arises from the Commission's approval of that separation and thereby is
appropriate and consistent with law. The Commission's order approving the
separation did not require the preposterous notion held by Mr. Gates that Embarq
PA must continue also to advance CLEC positions in all future regulatory and
legal arenas. Had Core intervened in that proceeding, or had the Commission
done as Core now suggests, I am confident that Embarq PA would have sought
reconsideration and/or other remedies.
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10 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 Q. Does Mr. Gates elsewhere revisit these Joint Comments in his Direct
2 Testimony?
3 A. Yes. At pages 24 and 25, Mr. Gates again relies upon those Sprint Joint
4 Comments and incorrectly argues that "United has agreed with Core" that the
5 FCC preempted the states with respect to ISP-bound traffic and that ISP-bound
6 traffic provisioned through VNXX arrangements should not be access chargeable.
7
8 Q. Do you have a response?
9 A. Yes. I agree that Sprint in 2002 submitted Joint Comments in which it jointly
10 argued that ISP-bound traffic provisioned through VNXX arrangements should
11 not be subject to switched access charges. I agree that Sprint's Joint Comments
12 had advanced that the Commission "should not" in its generic investigation
13 disallow or limit VNXX use. However, I disagree that Sprint's Joint Comments
14 submitted in a generic context almost five years ago are relevant today in an
15 arbitration proceeding litigated between Embarq PA and Core. As noted above,
16 the Commission approved a separation (Docket Nos. A-313200F0007, A-
17 311379F0002) and thereby Embarq PA is taking positions that are appropriate
18 and consistent with the Commission's approval of that separation. Furthermore,
19 since 2002, the General Assembly enacted Act 183 and regulatory policy and law
20 have evolved, as I addressed in my Direct Testimony. Mr. Gates' attempt to
21 rewind time and to impute to Embarq PA positions advanced by another business
22 entity in a generic case are inappropriate, inapplicable, and not relevant.
23
11 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 Q. At pages 25 and 26, Mr. Gates again cites to Sprint's position regarding
2 geographic end points of call as "inconsistent" with the position that Embarq
3 PA is taking in this arbitration. Do you agree with Mr. Gates' statement?
4 A. No, I do not. For all the reasons stated above, the reference to outdated comments
5 submitted in a generic investigation are not relevant today in this very specific
6 arbitration proceeding. To the extent that the Commission deems Sprint's Joint
7 Comments relevant, I reiterate that Mr. Gates' has selectively cited to Sprint's
8 Joint Comments. For example, Sprint had also advanced as follows:
9 Concerning the compensation arrangement under Sprint's 10 proposal, Sprint recognizes that there is a legitimate ILEC concern 11 regarding transport costs that are incurred when a CLEC utilizes a 12 virtual NXX. While the ILEC end users subscribing to ISPs served 13 by CLECs benefit from virtual NXX arrangements (as do the 14 CLECs who carry the ISP's traffic), ILECs generally cannot 15 increase local rates to recover these incremental transport costs. 16 This is due in part to the fact that the actual customer service 17 arrangement for ISP service exists between the ISP and the end 18 user. 19 20 Thus, under Sprint's compensation arrangement, ILECs are not 21 required to absorb all costs associated with increased network 22 usage. Sprint proposes that a limitation be placed on the distance 23 the ILEC must transport the traffic outside its local calling area 24 boundary. Sprint also proposes that the CLEC compensate the 25 ILEC at cost (e.g., TELRIC) for transport costs beyond the 26 limitation point. This compromise provides a reasonable limitation 27 on the ILEC's provision of transport over long distances, while 28 enabling CLECs to undertake an efficient market entry alternative 29 without incurring burdensome, uneconomic costs. 30
31 Clearly, rather than set forth Core's rationale for its proposed definition and rather
32 than presenting recommendations as to why Core's proposed definition should
33 prevail, Mr. Gates has chosen to submit Core's case-in-chief based upon very little
34 discussion of Core's proposed language and considerable - and incomplete -
12 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 discussion of non-relevant and outdated jointly submitted comments. Mr. Gates
2 has failed to demonstrate why Core's proposed definition should be considered
3 and adopted. As a I addressed in my Direct Testimony, Embarq PA's proposed
4 definition should be adopted by this Commission.
5
6 Issue 2 - Point of Interconnection / Dual-POI
7 and
8 Issue 9 - Indirect Traffic - Volume Limit
9
10 Q. Are Issues 2 and 9 intertwined and closely related?
11 A. Yes. These issues both concern Core's attempt to find a way to get its ISP-bound
12 traffic to its network without incurring any transport costs. By holding to its dual-
13 POI position, Core will never establish a connection on Embarq PA's network as
14 long as it continues to originate no traffic. Core's aversion to a threshold for
15 establishing a direct connection is a safeguard for Core - a safeguard from having
16 to establish a direct connection in the event the Commission accepts Embarq PA's
17 dual-POI position and/or i f Core does originate traffic, it may continue to
18 terminate all of its traffic indirectly to avoid the cost of a direct interconnection.
19 Core seems to expect to accomplish this by avoiding the requirements of the law
20 and concomitant rules that require it to directly connect to Embarq PA's network.
21
13 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 A. Point of Interconnection (POO
2
3 Q. On page 7, starting at line 159, Mr. Gates acknowledges there is legal and
4 policy precedent for the single POI per LA TA, but believes it has the right to
5 operate under a dual-POI network configuration. Please explain why this is
6 wrong in light of the purpose of the 1996 Telecom Act in relation to
1 interconnection?
8 A. A principle goal of the 1996 Act was opening the local exchange and exchange
9 access markets to competitive entry. Congress created the law and the FCC
10 implemented rules to diminish the regulatory and operational barriers existing
11 from ILECs' operations. The primary focus ofthe Act concerns obligations of the
12 ILECs. CLECs, in contrast, have no obligation to provide for interconnection
13 from the ILEC, they have no obligation to unbundle or resell their networks, and
14 no obligation to allow an ILEC to collocate. Specific to interconnection, the FCC
15 memorialized the fact that CLECs have no obligation to provide for an ILEC to
16 interconnect on their network. "Section 251 (c)(2) does not impose on non-
17 incumbent LECs the duty to provide interconnection. The obligations of LECs
18 that are not incumbent LECs are generally governed by Sections 251(a) and (b),
19 not section 251(c)."4
20
21 Q* Ifthe ILEC is the only party that must allow access to its network, how can Mr.
22 Gates justify that Embarq PA should be forced to interconnect on Core's
23 network (p. 7 lines 163-165)?
4 Local Competition Order.^220. 14
REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007. PUBLIC VERSION
1 A. This cannot be justified. I shall address this as I continue to describe the intent of
2 the Act with regard to interconnection. One significant barrier to competition was
3 brought down by Section 251(c)(2) of the Act where Congress requires the ILEC
4 to allow the CLEC to interconnect its facilities on the ILEC's network.
5 Interconnection is "the linking of two networks for the mutual exchange of traffic,
6 which does not include the transport and termination of traffic."5 Section
7 251(c)(2) provides:
8 (2) Interconnection -[the ILEC has] the duty to provide, for 9 the facilities and equipment of any requesting
10 telecommunications carrier, interconnection with the local 11 exchange carrier's network— (A) for the transmission and 12 routing of telephone exchange service and exchange 13 access; (B) at any technically feasible point within the 14 carrier's network; (C) that is at least equal in quality to that 15 provided by the local exchange carrier to itself or to any 16 subsidiary, affiliate, or any other party to which the carrier 17 provides interconnection; and (D) on rates, terms, and 18 conditions that are just, reasonable, and nondiscriminatory, 19 in accordance with the terms and conditions of the 20 agreement and the requirements of this section and section 21 252 of this title. 22 23
24 The ILEC has the "duty to provide, for the facilities and equipment of any
25 requesting telecommunications carrier, interconnection with the local exchange
26 carrier's network." The facilities the law refers to are those provided by the
27 requesting telecommunications carrier, or in other words, Core. Section 251 (c)(2)
28 and paragraph 140 of the FCC's TRRO merely requires Embarq PA to
29 interconnect its network with those Core-provided facilities. Embarq PA
5 47 CFR 51.5. 15
REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007. PUBLIC VERSION
1 maintains that its interconnection obligation is limited to interconnection with the
2 facilities provided by the CLECs.
3
4 Q. Is Core's position on dual POIs consistent with the Pennsylvania Commission's
5 interconnection precedent?
6 A. No. The Pennsylvania Commission ruled that the CLEC has the responsibility to
7 provision its facilities on the ILEC's network as described above. "Since the only
8 facilities explicitly mentioned in Section 251(c)(2) are CLEC facilities, we find it
9 reasonable that the FCC is referring to the facilities that an ILEC must have ready
10 to receive those CLEC facilities."6
11
12 Q. At page 7, line 159, Mr. Gates says it has the "flexibility" to operate with one
13 POI per LATA. What does this mean statement mean to you?
14 A. Apparently, Core believes that it has the "flexibility" to ignore the law. The
15 Pennsylvania Commission made it abundantly clear in its orders arising from a
16 US LEC/Verizon arbitration proceeding that single POI per LATA is to be on the
17 ILEC's network and that it is the originating carrier's responsibility to transport
18 its traffic ends at the POL7 In that proceeding, the Pennsylvania Commission
19 relied on the clear meaning of the FCC's rule that states "An incumbent LEC . . .
Petition of Verizon Pennsylvania Inc. and Verizon North Inc. for Arbitration of an Amendment to Interconnection Agreements with Competitive Local Exchange Carriers and Commercial Mobile Radio Service Providers in Pennsylvania Pursuant to Section 252 of the Communications Act of1934, as Amended, and the Triennial Review Order. Docket No. P-00042092, ORDER ENTERED Febmary 21, 2006 at p. 101.
7 Petition of US LEC of Pennsylvania, Inc. for Arbitration with Verizon Pennsylvania Inc. Pursuant to Section 252(b) ofthe Telecommunications Act of1996, Docket No. A-310814F7000, Opinion and Order, October 2, 2003, at pp.11-12; See also. Opinion and Order, January 12, 2006 at pp. 4-6.
16 REBUTTAL TESTLMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 shall provide interconnection . . . [a]t any technically feasible point within the
2 incumbent LECs network." See, 47 C.F.R. §51.305(a)(2). Core has no regulatory
3 basis upon which to base its dual POI position. Mr. Gates, unable to find an
4 applicable rule from the interconnection section (47 CFR 51.305) to support
5 Core's dual-POI idea, resorts to inapplicable FCC's rules regarding reciprocal
6 compensation (47 CFR 51.703(b)). See, Gates Direct, pages 9-10, lines 205-235.
7 Mr. Gates then proceeds to misapply his citation to reciprocal compensation rules
8 when citing to a federal court case, as discussed immediately below.
9
10 Q. At pages 9-10, starting at line 213, Mr. Gates claims "several" Federal Circuit
11 Courts have upheld Core fs interpretation of FCC rules in support of Core's
12 dual POI position. Is the case reference by Mr. Gates supportive of Core's
13 dual-POI position ?
14 A. No. Just the opposite. In the only case cited as support for Core's dual POI
15 proposal, the 4 t h Circuit case actually reinforces the 1996 Telecom Act's and
16 FCC's rule that the CLEC has the responsibility to interconnect on the ILECs
17 network. The multiple-POI situation the case addressed occurred because the
18 ILEC wanted the CLEC to incur the expense of bringing the traffic to the POI
19 from various wire centers within the same LATA. The Court ruled that the ILEC
20 has the responsibility for transport of its traffic on its side of the POI regardless i f
21 there is no LATA-wide local calling. The court ruled that 51.703(b) is applicable
22 to that traffic on the ILECs side of the point of interconnection, or POI. Section
17 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 51.703(b) is not applicable to the interconnection facility as Mr. Gates has applied
2 it.
On pages 12 through 14, Mr. Gates talks about being forced to make unwanted
investments in multiple POIs and claims that Embarq PA's position would
control Core's investment decisions (e.g., page 13, Line 299). Do you agree?
No. Embarq PA has no control over Core's investment decisions any more than
any other ILEC does in Pennsylvania. Mr. Gates speaks in great generalities
about multiple POIs at multiple tandems and how there seems to be important
public findings that seem to support Core's dual POI position. Core fools no one
by claiming its victim status and claims that Embarq PA's position would be
forcing Core to needlessly spend its money on transport facilities. The fact is that
Core would rather continue to take advantage of indirect interconnections at no
cost to them. If Core wants to be a CLEC, it must follow the law and take
financial and operational responsibility for its transport on its side of the POI
which is located on the ILEC's network. This pattern of financial and operational
responsibility for transport on the CLEC side of the POI has been followed by
hundreds of CLECs that have interconnected on Embarq PA's network and the
network's of its sister companies throughout its operating territories in other
states. Core's recip comp poster-boy mentality cannot be masked by blaming
others for money it must spend to operate as a legitimate CLEC.
4 Q-
5
6
7
o
A.
o
9
10
11
12
13
14
15
16
17
18
19
20
21
22
18 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - PrefUed on June 4, 2007.
PUBLIC VERSION
1 Mr. Gate's statements also it fails to mention that Embarq PA has a total of four
2 tandems in three different LATAs in Pennsylvania (see Exhibit EF-4 in my Direct
3 Testimony). If the Commission adopts Embarq PA's position and requires Core
4 to provide transport to at least one POI per LATA on Embarq PA's network, it
5 means, at a minimum, that Core is responsible for transport to three tandems. If
6 Core was so concerned about its construction budget and fiiture operating expense
7 requirements during the months that the negotiation window was open, it would
8 have totally redlined out the language in sections 54.2.1 and 54.2.1.1 of the
9 agreement. Core did not. Instead, Core "craftily" included words that reflected
10 its dual-POI position elsewhere. If the Commission decides in Embarq PA's
11 favor on Issue 2, Core is obligated to establish a direct connection at a fourth
12 tandem and at any end office where traffic levels exceed a DSl equivalent.
13
14 B. Issue 9 - Indirect Traffic/ Volume Limit
15
16 Q. At pages 45 to 46, Mr. Gates cites to the concept of transit traffic as support for
17 the proposition that using a third party tandem can be "just as efficient - if not
18 more so—than establishing new, direct interconnection facilities." Do you
19 have a response to his claims?
20 A. Yes, I do. Mr Gates claims that Core is interested in network efficiency. What
21 this may be translated to is Core being interested in unlimited free network
22 utilization at the expense of Embarq PA. Core wants no threshold - ever. Mr.
23 Gates (lines 1084-1101) paints the picture of how inefficient it would be for Core
19 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 or other carriers to duplicate the ILEC's network. Core has greatly overstated the
2 issue. For it to establish direct interconnection with Embarq PA, Core is required
3 to interconnect at offices where traffic has exceeded certain traffic thresholds
4 which is not the same as duplicating the ILEC's network. The fact is that i f there
5 is no threshold imposed on Core, then Core will have every incentive to stay in
6 Verizon's territory, to not establish a presence in Embarq PA's territory, and to
7 continue - through Core's over-reliance upon transiting of other carriers - to foist
8 its costs of doing business onto Embarq PA and Verizon.
9
10 Q. Do you have any additional comments regarding Mr. Gates' reference to transit
11 traffic?
12 A. Yes, I do. In response to a question asking why transiting is important to CLECs
13 and local competition, Mr. Gates in part asserts that, in the absence of transiting,
14 carriers would be forced to duplicate the ILEC's network which would be
15 uneconomic and not cost effective. (Page 46, lines 1082-1091.) However, even
16 Mr. Gates' rather conceptual discussion of transiting does not apply to the
17 circumstance at hand. For example, he parenthetically notes "especially for
18 carriers who exchange small amounts of traffic." Core's market presence in terms
19 of years in the marketplace and of call volume so greatly exceed the categories of
20 a new market entrant (line 1088) and small amounts of traffic (lines 1090 - 1091)
21 that this circumstance simply does not apply to Core.
22
20 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. L I - Prefiled on June 4, 2007.
PUBLIC VERSION
1 Q. Do you have a response to Mr. Gates' testimony claiming dropped calls "in the
2 absence of transiting" (p. 46-46, lines 1091 -1095)?
3 A. Yes. Mr. Gates appears to imply that absent transiting, there would be difficulty in
4 that "calls between customers of these carriers would therefore not be
5 completed...". This statement is not accurate or applicable to the facts in this
6 case. Mr. Gates seems to be concerned about call completion of every call for
7 every carrier in the state. Embarq PA cannot attest to what happens in each call
8 scenario, but it can attest that Core will never experience an indirectly connected
9 dropped call if Core directly connects to Embarq PA as the law and regulatory
10 precedent requires.
11
12 Q. Mr. Gates also claims that without transiting oftrafflCj Verizon would be the
13 only provider to "efficiently " interconnect with all carriers and thus would have
14 an insurmountable competitive advantage (page 47, lines 1095 -1100) and that
15 transiting is "critical to the development of local competition (lines 1100). Do
16 you have a response?
17 A. Yes. Mr. Gates' statements are purely speculative and divert attention from the
18 key issue which is the indirect interconnection threshold. Embarq PA is not
19 against interconnection via a third party, provided the traffic levels are low, i.e.,
20 up to a DSl level, Core seems to be taking on the role of the "call monitor" by its
21 concern of all the things that might happen if transiting were not available. This
22 instant interconnection issue is with Core, not every other carrier in the state.
23
21 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4,2007.
PUBLIC VERSION
1 Q. Are you claiming that transiting of traffic is not an important component of
2 routing traffic today, as the quote from that FCC citation indicates?
3 A. No, I am not. Embarq PA does see the benefit of low traffic levels of indirect
4 interconnection. So does the FCC. However, this is not the factual circumstance
5 applicable to Core. Mr. Gates seems to be suggesting that the FCC endorses
6 Core's position that indirect interconnection is the ideal surrogate for direct
7 interconnection. In alleged support, on page 47 Mr. Gates cites two paragraphs
8 from the FCC's ICF notice of proposed rulemaking.8 But, Mr. Gates fails to
9 provide the proper context of these citations. When placed in full context, it is
10 clear that the FCC contemplates indirect interconnection only at very low levels
11 of traffic. In paragraph 126 alone, the FCC uses the phrases to describe its
12 expected use of indirect interconnection: "[injsignificant amounts of traffic",
13 "where traffic levels do not justify establishing costly direct connections",
14 "lowers barriers to entry". These phrases do not describe the levels of traffic that
15 is factually transited to Core, as the record in this case demonstrates. If Core were
16 to aggregate all of its traffic over one connection from Embarq PA, it passes an
17 hour's worth of traffic every five seconds.9 In DS 1 parlance, this equates to over
18 190 DSl connections10 that Core has been getting free for the last several years.
19
In the Matter of Developing a Unified Intercarrier Compensation Regime. Notice of Proposed Rulemaking CC Docket No. 01-92. (April 27, 2001) and Further Notice of Proposed Rulemaking (March 3, 2005).
9 Assumes 1 million MOUs/day; 41,666 MOUs/hour; 694 MOUs/minute; and 11.6 MOUs/second. 1 0 Assumes 187,000 MOU/month per DS 1.
22 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 Q. Does the Act contemplate interconnection to take place indirectly with the
2 CLEC and the ILEC as Mr. Gates has effectively testified?
3 A. No. As stated above, the obligations of Local Exchange Carriers (LECs) that are
4 not incumbent LECs are generally governed by Sections 251 (a) and (b), not
5 Section 251 (c). Section 251 (a) requires each telecommunications carrier to (1)
6 "interconnect directly or indirectly with the facilities and equipment of other
7 telecommunications carriers." This provision requires non-dominant carriers to
8 interconnect with each other in order to transit their traffic to the ILEC. Local
9 Competition Order 991. ILECs do not have this requirement to interconnect
10 indirectly; Section 251(c) does not require an ILEC to fumish transit traffic
11 service and especially not as a surrogate for direct interconnection. An
12 interconnection agreement which fails to include a volume threshold, as Mr.
13 Gates recommends, is a Section 251(c)(2) agreement without an interconnection
14 component. Core is trying to affirmatively establish indirect interconnection
15 which is not a Section 251 (c) interconnection that is supportable under the Act.
16 Core's indirect position renders meaningless why the resulting interconnection
17 agreement is in need of language requiring direct interconnection and why the TI
18 (DS 1) threshold is proper.
19
20 Q. On page 48, Mr. Gates objects to Embarq PA's threshold of a DSl equivalent of
21 traffic as 'simply too low'. Do you have a response?
22 A. Yes. Mr. Gates notes that a DSls worth of traffic is "only 24 calls" (p.48 In.
23 1129) and claims this is "too low", but does not provide any testimony as to what
23 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4, 2007.
PUBLIC VERSION
1 is not "too low." Presumably, it is Core's position that there should be no
2 threshold and that Core should continue to enjoy the financial benefits of indirect
3 interconnection indefinitely. There are several problems with Mr. Gates'
4 testimony and Core's position. A DS I equivalent of traffic has become accepted
5 in the industry. For example, at Docket No. A-310489F7004, in an order dated
6 December 1, 2005, the Pennsylvania Commission approved a two-DSl threshold
7 level for a direct connection once indirect traffic reaches that level. Moreover,
8 thresholds in general serve legitimate purposes. A DS 1 threshold, in particular, is
9 appropriate for situations in which the traffic volumes and the nature of the traffic
10 require that the carriers involved act responsibly. For the last several years. Core
11 has been getting all of its transport 100% free and, based on the testimony of Mr.
12 Gates at Issues 2 and 9, clearly has high hopes to continue in its free-loading role
13 into perpetuity. Core conveys the idea that direct interconnection with the ILEC
14 is a forced activity (line 1085) and that they are in essence victims of Embarq
15 PA's improper cost shifting (line 295) by having to directly connect at the POI on
16 Embarq PA's network. As addressed above, this is not the factual circumstance
17 applicable to Core. Hence, Embarq PA's proposed volume threshold of a DSl
18 equivalent of traffic is appropriate and warranted.
19
20 Q. Mr. Gates suggests that "The Market" (p.48 -49, lines 1140-1155) is a good
21 guideline for establishing direct connections. Please compare Core's traffic
22 levels to other directly connected carriers in the Embarq PA market
24 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 A. There are 43 different long distance carriers directly connected to Embarq PA's
2 tandems. When sorting these carriers by their monthly minutes of use (MOUs),
3 each of the first 23 carriers' bi-directional monthly MOUs are less than one day's
4 usage for Core! Only the top one or two carriers' monthly usage approaches
5 Cores level of use. These 43 carriers are a combination of regional and/or house-
6 hold-name nation-wide long distance providers. Mr. Gates portrays Core as the
7 upstart, little carrier, providing simple dial-up service to the neglected rural
8 subscribers ofPcnnsylvania. However, the truth is that Core is the largest non-
9 ILEC (in terms of MOUs) "interconnected" carrier to Embarq PA. Core must be
10 forced to stop this network freeloading and the Commission must require Core to
11 establish its own direct interconnections according to the terms and conditions of
12 Embarq PA's proposed language in Sections 60 and 61 of the agreement.
13
14 Q. Mr. Gates describes a transiting scenario that he believes supports Core fs wish
15 to have unlimited indirect interconnection. Please respond.
16 A. Core would love to see this example as a real life situation because is assumes the
17 dual POI scenario, i.e., that Carrier A (Embarq PA) has the obligation to establish
18 direct connection on Core's network (Carrier B). Core's fictitious example of the
19 market driving the business decisions is one more example of how Core wishes to
20 continue to sustain cost-shifting onto Embarq PA.
21 Q. Mr. Gates on pages 49-52, lines 1156-1216 talks about reasons why an objective
22 threshold is not applicable. Please respond.
25 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 A. Core simply has its scenarios all wrong. As I stated above, Core's scenarios are
2 improperly based upon the dual-POI concept, i.e., that Embarq PA has the
3 obligation to interconnect with Core. Embarq PA does not have this obligation
4 and therefore the examples do not apply to this issue. Mr. Gates' first reason
5 (lines 1159-1174) incorrectly assumes the threshold is also a cap, i.e., ifthe DS3
6 is a threshold, Carrier A could not install more trunks to meet the traffic demand.
7 Mr. Gates' suggestion that this will result in dropped/blocked call is not the result
8 of the parties agreeing to a threshold. A threshold is simply a minimal level of
9 traffic and the parties are not precluded from adding a larger quantity of trunks as
10 traffic levels dictate. Core's example, again, is fictitious because Embarq PA
11 (Carrier A in this example) is not required to interconnect on the CLECs network
12 as Core would have it with a dual-POI expectation.
13
1^ Q* On pages 50S1 lines 1175-1210, Mr. Gates describes advocates an "indirect-
15 interconnection-for-all" method of interconnection for any carrier which does
16 not feel like establishing a direct connection with the ILEC. Please respond.
17 A. Core wants freedom from any regulatory requirements that trigger its obligation
18 to directly interconnect. Mr. Gates shifts his focus from his first point, where
19 Embarq PA must meet the dual-POI obligation, to saying that all carriers have the
20 option to indirectly interconnect and any threshold requiring direct
21 interconnection is a needless duplication of Verizon's ubiquitous network. Mr.
22 Gates' description does not reflect the reality of the market place which is a result
23 of many factors, including the influences and requirements of certain legal and
26 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4,2007.
PUBLIC VERSION
1 regulatory requirements for direct interconnection. If this "indirect-for-all"
2 interconnection were practiced today as Mr. Gates describes, no calling scope
3 boundaries would be observed since carriers could daisy chain their calls
4 throughout the state, with the state of Pennsylvania being one giant EAS market.
5 Mr. Gates is essentially saying to the CLEC community that Pennsylvania is a
6 great place to do business because little to no expense is incurred by CLECs.
7
8 Q. On pages 51-52 lines 1211-1216, Mr. Gates states that he believes Verizon has
9 an obligation under the Act to provide transiting services. Has the FCC
10 ordered this requirement?
11 A. No. Mr. Gates' statement is wrong. In a proceeding in which the FCC was the
12 arbitrator, it declined to require the ILEC to provide transit service at TELRIC
13 rates." The FCC declined, "on delegated authority, to determine for the first time
14 that Verizon has a section 251(c)(2) duty to provide transit service at TELRIC
15 rates. Furthermore, any duty Verizon may have under section 251(a)(1) ofthe Act
16 to provide transit service would not require that service to be priced at TELRIC."
17 The FCC clearly said that they would not require the ILEC (Verizon) in that
18 hearing to provide transit at TELRIC even if transit were a required Section
1 1 Virginia Arbitration Order, Order No. DA 02-1731, In the Matter of Petition of WorldCom, Inc. Pursuant to Section 252(e)(5) of the Communications Act for Preemption of the Jurisdiction of the Virginia State Corporation Commission Regarding Interconnection Disputes with Verizon Virginia Inc., and for Expedited Arbitration. CC Docket No. 00-218. In the Matter of Petition of Cox Virginia Telcom, Inc. Pursuant to Section 252(e)(5) of the Communications Act for preemption of the Jurisdiction of the Virginia State Corporation Commission Regarding Interconnection Disputes with Verizon-Virginia, Inc. and for Arbitration. CC Docket No. 00-249. In the Matter of Petition of AT&T Communications of Virginia Inc., Pursuant to Section 252(e)(5) of the Communications Act for Preemption of the Jurisdiction of the Virginia Corporation Commission Regarding Interconnection Disputes With Verizon Virginia Inc. CC Docket No. 00-251, Memorandum Opinion and Order, Released July 17, 2002.
27 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 251(a)(1) service. The FCC has not ruled that ILECs have a duty to provide the
2 transiting function. This transit issue is one of the topics that the FCC is
3 addressing in its pending intercarrier compensation docket.12
4
5 Q. On page 53 lines 1217-1222, Mr. Gates says that the cost for separate trunking
6 is unnecessary. Please comment.
1 A. There is no way around it for Core. Separate direct trunking is a cost of business
8 that Congress and the FCC expect CLECs to incur. As much as Core has
9 successfully achieved free interconnection and free transport since it has been
10 doing business in Embarq PA's service territory, Core cannot expect that situation
11 to continue into perpetuity.
12
13 Q. Is Core even entitled to interconnection?
14 A. Arguably not. Section 251(b)(5) requires LECs to establish reciprocal
15 compensation arrangements for telecommunications traffic. However, the facts
16 and record demonstrate in this arbitration proceeding demonstrate that nearly
17 100% of Core's traffic isdSP-bound traffic, not telecommunications traffic. As
18 Mr. Gates has testified, no threshold is required and thereby Core need not
19 directly interconnect with Embarq PA for its ISP-bound traffic. It is abundantly
20 clear to me that Core is walking the edge by seeking only indirect interconnection
21 and "exchanging" no telecommunications traffic.
22
1 2 Order No. FCC 05-42, released March 3, 2005; CC Docket No. 010-92, In Re: Developing a Unified Intercarrier Compensation Regime, FNPRM.
28 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 Moreover, there is no support for Core's position that an ILEC such as Embarq
2 PA must interconnect on a competitor's network for ISP-bound traffic. The 10th
3 Circuit Court affirmed and accurately evaluated this transport obligation in a
4 decision in Qwest's favor in December 2003. In that decision, the Coillt
5 appropriately concluded that Qwest should not bear the cost of any transport
6 involving non-telecommunications traffic and found that:
7 When connecting to an ISP served by a CLEC, the ILEC 8 end-user acts primarily as the customer of the ISP, not as 9 the customer of the ILEC. The end-user should pay the ISP;
10 the ISP should charge the cost-causing end-user. The ISP 11 should compensate both the ILEC (Qwest) and the CLEC 12 (Level 3) for costs incurred in originating and 13 transportation the ISP-bound call. Therefore, we agree with 14 Qwest that Internet related traffic should be excluded when 15 determining relative use of entrance facilities and direct 16 trunked transport. 17
18 In this proceeding, Core's dual POI proposal and Core's position on Issue 9 seek
19 that Embarq PA shoulder all costs of transport not only within Embarq PA's local
20 franchise territory, but that Embarq PA should also haul this arbitraged, VNXX-
21 enabled, ISP-bound, non-telecommunications traffic to a distant switching point
22 actually located in Verizon's territory. Simply put, Embarq PA is not required to
23 haul ISP-bound traffic beyond its serving territory to Core's network in order to
24 minimize Core's network expense, particularly in light of the fact that the traffic
25 traversing these transmission facilities is not telecommunications traffic.
26 Q. How should the Conimission resolve Issues 2 and 9?
27 A. The Commission should remain consistent with its precedent as to both these
28 issues. For issue 2, the Commission should require the POI to be on Embarq
29 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 PA's network with Core financially and operationally responsible for transport on
2 its side of the POI. For Issue 9, the Commission should require a DS 1 level
3 threshold for direct interconnection.
4
5 Issue 3 - Interconnection Methods
6
7 Q. On page IS, Mr. Gates very briefly addresses Issue 3. Do you have any
8 comments in response?
9 A. Yes. As I stated in my Direct Testimony, Issue 3 stems from Core's dual POI
10 position as identified in Issue 2. Thus, if the Judge or the Commission rejects
11 Core's dual POI position at Issue 2, resolution of this issue is unnecessary and
12 moot. Moreover, as I stated in my Direct Testimony, even if Core prevails on its
13 dual POI proposal, Core's proposed "interconnection methods" contract language
14 should be rejected given that the terms and conditions found in the
15 interconnection agreement already give Core all the capabilities it needs for
16 collocating with Embarq PA and to requirement to connect to the POI that is on
17 Embarq PA's network.
18
19
20 Q. Based upon your review of Mr. Gates' Direct Testimony, do have any
21 comments?
22 A. As with Issue 1, it is hard to respond to Mr. Gates because he has not explained in
23 any meaningful manner why and how specifically Core's proposal is reasonable
30 REBUTTAL TESTIMONV OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 and appropriate for use in the resulting agreement. For example, Mr. Gates at
2 page 15, lines 352-356, simply repeats the contract language of the three methods
3 that Core suggests should be included in the agreement. However, Mr. Gates
4 does not in detail address what these three methods of interconnection entail, what
5 are the ramifications of the methods are, and what grounds Mr. Gates relies upon
6 to require Embarq PA to directly interconnect to Core's network.
7
8 Any interconnection by Embarq PA on Core's network is purely optional for
9 Embarq PA. It is optional for Core to allow it as the FCC has stated that non-
10 ILECs do not have the duty to provide interconnection. Similarly, the
11 Pennsylvania Commission has ruled that parties may agree to ILEC
12 interconnection points on a CLECs network, but it is entirely voluntary.13
13
14 Q. What do you recommend?
15 A. I recommend that the Judge and the Commission reject Core's position on Issue 3
16 as unsupported and unnecessary.
17
18 Issue 4 - Loop Interconnection
19
20 Q. Please describe Issue 4.
1 3 Petition of US LEC of Pennsylvania, Inc. for Arbitration with Verizon Pennsylvania, Inc. Pursuant to Section 252 of the Telecommunications Act of 1996. Docket No. A-310814F7000. Order of January 12, 2006 at pages 6-7.
31 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - PrefUed on June 4,2007.
PUBLIC VERSION
1 A. The issue is what constitutes within the ILEC's network for interconnection
2 purposes, since the Act requires CLECs to interconnection within the ILEC's
3 network. Section 251(c)(2)(B).
4
5 Q. On page 16 lines 381-382, Mr. Gates claims that technical feasibility is the
6 criteria used to determine where the CLEC interconnects. Does Embarq PA
1 agree that this it he correct criteria for interconnection ?
8 A. No. The key question of interconnection is what does "within the ILEC's
9 network" mean. Interconnection is accomplished by connecting a CLECs
10 network with the ILECs network for the mutual exchange of traffic. The FCC's
11 Triennial Review Order clarified what constitutes the ILEC's network.
12 Specifically, in paragraph 366, the FCC concluded that:
13 We find that transmission facilities connecting incumbent LEC 14 switches and wire centers are an inherent part of the incumbent 15 LECs local network Congress intended to make available to 16 competitors under section 251(c)(3). On the other hand, we find 17 that transmission links that simply connect a competing carrier's 18 network to the incumbent LECs network are not inherently a part 19 of the incumbent LECs local network. Rather, they are 20 transmission facilities that exist outside the incumbent LECs local 21 network.14
22
23 Thus, the FCC found that links such as entrance facilities, used for connecting
24 ILEC and CLEC networks, are not part of the ILECs network. The Telecom Act
25 requires a CLEC to connect "at any technically feasible point within the carrier's
26 network." Section 251(c)(2)(B). Indeed, the FCC rules describe examples of
27 what "within" means at its regulation at 51.305 (a)(2) as follows:
1 4 Triennial Review Order at para. 366.
32 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4, 2007.
PUBLIC VERSION
1 At any technically feasible point within the incumbent LECs 2 network including, at a minimum: (i) The line-side of a local 3 switch; (ii) The trunk-side of a local switch; (iii) The trunk 4 interconnection points for a tandem switch; (iv) Central office 5 cross-connect points. 6 7 These requirements listed by the FCC refute Mr. Gates' statement on page 16
8 lines 383-387 that interconnection does not need to occur at a switch or tandem.
9 In each example in the FCC's rules, interconnection is found at the ILECs switch
10 or tandem.
11
12 Q. Where does technical feasibility enter into consideration regarding
13 interconnection ?
14 A. Once the location of interconnection within the ILECs network has been
15 established, i.e., at a tandem or end office, then technical feasibility may be
16 considered for that connection that is within the ILECs network.
17
18 Q. How should the Commission resolve Issue 4?
19 A. The Commission should reject Core's position as spurious and adopt Embarq
20 PA's language. This is not a technically infeasibility issue, as Mr. Gates suggests,
21 but rather an extension of Issue 2 whereby Core is financially and operationally
22 responsible for the transport to the POI that is located within the ILEC's network.
23
24 Issue 5 - Tandem versus End Office Rates for Transport and Termination
25
26 g. Please comment on Mr, Gates' testimony on this issue.
33 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 A. I have thoroughly addressed this issue in my Direct Testimony. Mr. Gates has
2 offered no new or additional claims in support of Core's position on Issue 5.
3 Accordingly, for the reasons recommended in my Direct Testimony, the Judge
4 and the Commission should adopt Embarq PA's proposed language.
5
6 Issue 6 — Reciprocal Compensation for "Section 251(b)(5) Traffic"
7 and
8 Issue 7 - Intercarrier Compensation for ISP-bound traffic
9
10 Q. Please describe the key area of disagreement regarding compensation for
11 Section 251(b)5 traffic and ISP-bound traffic.
12 A. The parties clearly disagree with how the FCC's ISP Remand Order, and
13 specifically the mirroring rule established in paragraph 89 of the ISP Remand
14 Order, implicates intercarrier compensation associated with both Section
15 251 (b)(5) traffic and ISP-bound traffic.
16
17 Q. Mr. Gates begins his arguments on this issue by stating on, page 22, that
18 "Embarq does not agree with Core's position that the ISP Remand Order
19 controls compensation for ISP-bound traffic". Do you agree with Mr. Gates'
20 initial statement?
21 A. No. To be clear, Embarq PA fully agrees that the ISP Remand Order controls
22 compensation for ISP-bound traffic because Embarq PA has chosen to adopt the
23 FCC's ISP regime in Pennsylvania. However, as I have addressed in my Direct
34 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 Testimony and as I will address later in this testimony, Embarq PA believes that
2 the FCC's ISP Remand Order only speaks to compensation for local ISP-bound
3 traffic, not VNXX-enabled ISP-bound traffic. Furthermore, by establishing the
4 mirroring rule in paragraph 89, the FCC also implicates the intercarrier
5 compensation associated Section 251(b)(5) traffic in its ISP Remand Order.
6
7 Q. Mr. Gates also states on page 22 and 23 that the parties have a
8 "misunderstanding ofparagraph 89 of the ISP Remand Order". Do you agree?
9 A. Absolutely. Core has a very interesting interpretation of paragraph 89. In fact,
10 Core's warped interpretation of the mirroring rule is unlike any interpretation that
11 Embarq PA has received to date from any other CLEC, even other CLECs who
12 are in the same business of serving ISPs.
13
14 Q. Please describe Core's interpretation of the mirroring rule.
15 A. On page 23, Mr. Gates states that the FCC's mirroring rule "applies to ILECs, and
16 ILECs only" and that "a CLEC, such as Core, is not required to make any such
17 declaration" (page 32). In a nutshell, Core is using this argument of "the
18 mirroring rule doesn't apply to us" to somehow enjoy the reduced FCC rate (i.e.,
19 $.0007/MOU) for Section 251 (b)(5) traffic it may originate, yet continue to
20 charge the higher state-approved reciprocal compensation to Embarq PA for the
21 Section 251(b)5 traffic*€oie originates.
22
35 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4,2007.
PUBLIC VERSION
1 Q. Could you please further explain your response to Mr. Gates' statement that the
2 FCC's mirroring rule "applies to ILECs and ILECs only".
3 A. To be clear, Embarq PA fully agrees that the ILEC has the decision to implement
4 the FCC's ISP rates (i.e., $.0007/MOU) on a state-by-state basis. Core and
5 Embarq PA do not appear to disagree on that point. Where the parties disagree is
6 with respect to how the mirroring rule is implemented. Specifically, once an
7 ILEC, such as Embarq PA, opts into the FCC's ISP Remand Order, the parties
8 disagree on what rates apply to Core and to the various types of traffic.
9
10 Q. Please restate Embarq PA's interpretation of the mirroring rule.
11 A. To the extent the ILEC decides to adopt the FCC's rate regime in a state, as
12 Embarq PA has done in Pennsylvania, Embarq PA first must "offer" to exchange
13 all traffic (local ISP-bound traffic and Section 251 (b)(5) traffic) at the
14 $.0007/MOU rate. I f Core accepts Embarq PA's opt-in offer, it creates this
15 mirroring effect. Both Embarq PA and Core would pay and receive $.0007/MOU
16 for both local ISP-bound traffic and Section 251(b)(5) traffic. If Core rejects
17 Embarq PA's opt-in offer, local ISP-bound traffic exchanged between Core and
18 Embarq PA is subject to the FCC's $.0007/MOU, and Section 251(b)(5) traffic is
19 subject to reciprocal compensation. In either case, the FCC has made clear that
20 whether or not Embarq PA's opt-in offer is accepted or rejected; both Embarq PA
21 and Core pay and receive the same rate for the same type of traffic. Mr. Gates
22 does not seem to agree with "offer" concept. He states on page 32 that "the order
23 does not restrict the CLECs ability to continue to charge the full reciprocal
36 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4,2007.
PUBLIC VERSION
1
2
3
4
5
6
7
8
9
10
11
12
13
14
compensation rate" for termination of Section 251(b)(5) traffic. Embarq PA
agrees. Core has the option to reject Embarq PA's opt-in offer, thereby allowing
Core to continue charging the higher reciprocal compensation rate for Section
251(b)(5) traffic. However, it is completely unreasonable to believe that the FCC
intended for Core to charge Embarq PA S.Ol/MOU for Section 251(b)(5) traffic
but pay Embarq PA $.0007/MOUs for the same type of traffic.
Please summarize your recommendation as to how the Commission should
require Core and Embarq PA to implement the mirroring rule.
Simply put, the Commission cannot allow Core's argument that the "the mirroring
rule only applies to ILECs" to allow it to manipulate the intercarrier compensation
arrangements in such a twisted, self-serving manner. The following flow chart
describes Embarq PA's logical interpretation of the mirroring rule and Embarq
PA encourages the Commission to approve this interpretation.
ILEC Opls Into FCC Order
15
$.0007/MOU applies to all local ISP-bound and Section 251(b)(5) traffic
CLEC Accepts
Offer
CLEC Rejects Offer
ILEC to CLEC traffic above 3:1 ratio (i.e. local ISP-bound traffic) - $.0007/MOU.
ILEC to CLEC traffic below 3:1 ratio (Le. 251(b)(5) traffic) - Recip Comp rate.
CLEC to ILEC traftic (251(b)(5)) traffic - Recip Comp rate.
37 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 Q. In response to a question concerning "United/Embarq", Mr. Gates claims that
2 "United" specifically stated that access charges do not apply to ISP-bound
3 traffic (page 25, lines 612-624) and claims the "United/Embarq" has changed
4 its position "for this proceeding" (lines 622, 6629). Do you agree with Mr.
5 Gates' assertions?
6 A. Absolutely not. As I addressed above in my Rebuttal Testimony, Core
7 mischaracterizes and skews the facts. I additionally note that The United
8 Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania was not in
9 existence in 2003. Moreover, the FCC in 2004 clarified its ISP Remand Order
10 regarding the rate cap and new entrant rules. The market for VNXX-enabled dial-
11 up services have allowed for a tremendously greater amount of convergence of
12 ISP-bound traffic than was available before the FCC's 2004 Order. Therefore, it
13 cannot be argued, as Mr. Gates has, that Embarq PA "changed its position for this
14 proceeding". It is speculative for Mr. Gates to even assume that the entities
15 submitting joint comments (namely, Sprint Communications Company, L.P. and
16 The United Telephone Company of Pennsylvania d/b/a Sprint) would still submit
17 the same comments in 2003 given the change in circumstances arising from the
18 FCC's Order of 2004.
19
20 Q. Mr. Gates asserts (pages 25-26, lines 625-643) that Embarq PA's end-to-end
21 analysis is not consistent with a previously filed position. Do you have a
22 response?
38 REBUTTAL TESTLMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 A. Yes, I do. While Mr. Gates cites to that generic VNXX proceeding, Core fails to
2 mention that Sprint in an arbitration proceeding had argued an end-to-end analysis
3 before this Commission. Specifically, in a 2001 arbitration proceeding between
4 Verizon and Sprint (A-310183F0002), Sprint launched an unsuccessful attempt to
5 seek a ruling based upon an end-to-end analysis for compensation purposes.15
6 Instead, The Commission determined that the underlying network facilities used
7 in completing the call determined how a call is compensated. Because the calls in
8 question traversed an access facility, the Commission ruled that access rates
9 apply. (Order at pages 72-78.)
10
1 5 Notwithstanding that the facts were not substantially similar to those in this issue, the Commission did not support Sprint's position, not that they were opposed to end points per se, but because the traffic in question did not originate on one party's network and terminate on the other party's network as Section 51.701 (e) requires in order for a carrier to receive reciprocal compensation.
39 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4, 2007.
PUBLIC VERSION
1 Q. Is Embarq PA fs position in this case consistent with the Commission's ruling in
2 that Sprint/Verizon arbitration case?
3 A. Yes. The network facilities used to complete Core's ISP-bound calls fiirther
4 impact the Commission's determination of compensation obligations. As
5 demonstrated in Mr. Hart's Direct Testimony, except for a very small amount of
6 EAS traffic, the traffic destined to Core's network travels over access (long
7 distance) facilities between Embarq PA and Verizon. The Sprint/Verizon
8 arbitration dealt with a compensation issue dealing with "00-minus" calling which
9 has similarities to ISP-bound VNXX-enabled calling in that they both look like a
10 local call to the end user. The reasons that access charges applied to these call is
11 because the traffic transversed the access/long distance network. Order at page 73.
12 As the Commission in the Sprint/Verizon arbitration case stated: "The fact that
13 ... calls go between two networks (i.e., from the local switched network to the
14 switched access network) is an important factor in our reaching a disposition on
15 this issue that the call is indeed subject to access charges." Order at page 74.
16 Thus, Embarq PA's position is consistent with that Commission precedent.
17
18 Q. Core describes the use of VNXX traffic service to carry/maintain a local calling
19 service for its ISPs' customers (pages 26-27, lines 646-666). Is Embarq PA
20 contesting Core's ability to provide service via VNXX arrangements?
21 A. No. Embarq PA has not challenged Core's provisioning of VNXX service.
22 Embarq PA's issue is that such ISP-bound VNXX-enabled traffic is subject to
23 originating access. Mr. Gates refers on lines 651 to 654 that customers of the ISP
40 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 are making local calls to connect to the Internet. Embarq PA believes this
2 statement is misleading. To the customer, it is a local call since they only dial a
3 seven-digit number, but the call itself is not local but rather an interexchange
4 (long distance) call. As mentioned earlier, Embarq PA is willing to compromise
5 with a Bill & Keep arrangement so long as the Commission accepts Embarq PA's
6 position on Issue 2.
7
8 Q. Mr. Gates further claims that the FCC "disclaimed its previous reliance on the
9 idea that intercarrier compensation was limited to 'local' traffic" (pages 30-31,
10 lines 720 -732). Do you agree with Mr, Gates' statements?
11 A. No. The ISP Remand Order excludes such Section 251 (g) traffic which is
12 Information Access - ISP-bound traffic. The FCC's comments in the GNAPs
13 ruling make the distinction between local ISP-bound traffic and VNXX enabled
14 ISP-bound traffic.16 Also, Section 251 (g) limits the scope of Section 251 (b)(5)
15 traffic. ISP Remand Order at If 47. Mr. Gates' statement is not accurate and does
16 not reflect the clear language of the ISP Remand Order and the GNAPS decision
17 where the FCC has made it clear that there is a distinction between call inside and
18 calls outside the local calling area. VNXX-enabled ISP-bound calls are not local
19 calls for compensation purposes.
20
16 Global NAPS, lnc, v. Verizon New England, Inc., et al, 444 F.3d 59 (hi Cir. 2006) (-GNAPs'). 41
REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St 1.1 - Prefded on June 4, 2007. PUBLIC VERSION
1 Q. Why is it important to maintain references to "Local traffic" in this agreement
2 (page 31, lines 731-732)?
3 A. First, it is necessary in order to reflect the FCC's distinction between local ISP-
4 bound traffic and VNXX enabled ISP-bound traffic. Mr. Gates fails to make this
5 distinction in his testimony (line 726). On lines 723-728, he states that the FCC's
6 intercarrier compensation regime applies to ISP-bound and non-toll traffic.
7 Second, it is important to include "local" to put and end to Core's delicate but
8 highly inconsistent avoidance of the term, by attempting to substitute local with
9 non-toll. This exercise by Core is for the sole purpose of hoping that its
10 interexchange VNXX ISP-bound service is classified as local or Section 251 (b)(5)
11 calls. It is impossible to understand what "Section 251(b)(5) Traffic" means
12 without having a definition of what contracting parties intend and understand as
13 the meaning of local traffic.
14
15 Q. On page 30 lines 713 to 715 Mr. Gates states that the FCC removed all
16 reference to local from its rules. Is the term "Local Traffic" still used and
17 accepted in telecom regulation, and specifically in the context of reciprocal
18 compensation requirements?
19 A. Yes. The First Circuit Court of Appeals recently ruled on call jurisdiction for
20 compensation purposes and determined the jurisdictional nature of a call is
21 determined on an end to end basis, not the artificial rating points of a call (to/from
22 numbers). In the case of ISP-bound traffic, this requires that the ISP provider be
23 physically located in the same local calling area as the end user originating the
42 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. L I - Prefiled on June 4, 2007.
PUBLIC VERSION
1 call. Therefore, whether a call is a non-local, VNXX voice call or a non-local,
2 VNXX ISP-bound call, the physical end points of the call determine the
3 appropriate intercarrier compensation.17
5 The 1 s t Circuit ruling was issued five years after the FCC changed "Local" to
6 "251 (b)(5)" traffic - ample time for the jurists to purge "local" from its legal
7 lexicon and replace it with "Section 251(b)(5) traffic," as Mr. Gates suggests.
8 There is no evidence that this has happened. In the GNAPs decision, the term
9 "local" appeared over 60 times, each of these times it is used in the context of a
10 "local calling area" which is used as the acid test for calls that were eligible for
11 compensation. The court makes the distinction between "local" and
12 "interexchange" traffic stating that "Local traffic stays within the boundaries of a
13 local calling area. Interexchange (or "non-local") traffic crosses the boundaries of
14 a local calling area and is generally subject to toll or long-distance charges paid
15 by the calling party. Traditionally, local calling areas have been geographically
16 defined."18
17
77 Global NAPS, Inc. v. Verizon New England, Inc., et ai., 444 F.3d 59 (1st Cir. 2006) ("GNAPs"). 18 Id.
43 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 Q. At p. 31, tines 733-741, Mr. Gates on line 738 states that Embarq PA has agreed
2 to pay Core for terminating minutes for all Section 251(b)(5) and ISP-bound
3 traffic in Pennsylvania. Is this true?
4 A. No. Embarq PA will pay compensation only on local ISP-bound traffic. The FCC
5 has made this differentiation and clarified in the GNAPs ruling that the ISP
6 Remand Order only pertains to local ISP-bound traffic. Embarq PA does not
7 believe that VNXX-enabled (voice or ISP-bound) traffic qualifies as Section
8 251(b)(5) traffic.
9
10 Issue 8 - VNXX Compensation
11
12 Q. At pages 35-36, Mr. Gates describes the call routing of VNXX calls. Do you
13 agree with his account?
14 A. Somewhat. I agree that an Embarq PA customer places a modem call and it
15 terminates on Core's network. What happens in between these events is of
16 significant importance for compensation purposes and facility resources. On line
17 834, Mr Gates describes what seems to be a typical CLEC network configuration
18 with Core having a POI at an Embarq PA tandem. The truth is, this is solely an
19 imaginary call flow discussion since Core has not and has no intention of creating
20 a POI at Embarq PA's tandem based upon its dual-POI (Issue 2) position and its
21 eternal indirect interconnection position (Issue 9). On lines 840-841, Mr. Gates
22 describes the call going to the imaginary trunk group at Embarq PA's tandem.
23 What actually happens today, however, is Core's VNXX calls go to long distance
44 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4, 2007.
PUBLIC VERSION
1 trunk groups that are in place between Embarq PA and Verizon, and not to any
2 make-believe POI on Embarq PA's network that Mr. Gates describes.
3
4 Q. Mr. Gates states that it is Embarq PA fs position that "ifthe ISP's gear is in a
5 different Embarq retail local calling area, Embarq says that the call is a
6 'VNXX' call and is not locaL " Does Mr. Gates correctly characterize Embarq
7 PA fs position ?
8 A. Yes. This is the essence ofthe GNAPS decision that end points of the call matter.
9 The First Circuit said:
10 The FCC further notes that "in establishing the new compensation scheme
11 for ISP-bound calls, the Commission was considering only calls placed to
12 ISPs located in the same local calling area as the caller." According to the
13 FCC, "the Commission itself has not addressed application of the ISP
14 Remand Order to ISP-bound calls outside a local calling area" or "decided
15 the implications of using VNXX numbers for intercarrier compensation
16 more generally."
17
18 The First Circuit also noted:
19 Global NAPs' argument ignores an important distinction. The FCC has
20 consistently maintained a distinction between local and "interexchange"
21 calling and the intercarrier compensation regimes that apply to them, and
22 reaffirmed that states have authority over intrastate access charge regimes.
45 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 Q. Does the location of the call hand-off between Embarq PA and Core affect the
2 call's jurisdiction ?
3 A. No. The call jurisdiction is based upon its end points, not where it is handed off.
4 A very common example is the handoff of long distance calls to IXCs is at the
5 ILECs' central office. Similarly, the ILEC hands off local calls to CLECs at the
6 POI which is also at the central office. In each instance, the handoff is at the
7 ILEC's central office with its switch performing essentially the same function. In
8 the first case, the handoff involves access traffic and originating access applies;
9 with the CLEC, reciprocal compensation applies to the local traffic. In each
10 example, compensation is driven by the call's jurisdiction, which is determined by
11 the end point of the call. The rating based upon the number dialed is solely a
12 billing function which normally assumes geographic significance to the dialed
13 number.
14
15 g. On page 35, lines 842-844, Mr. Gates makes the statement that all local calls
16 are routed in that same manner. Do you agree?
17 A. No. Mr. Gates' description on page 35 of his Direct Testimony addresses how
18 long distance or interexchange calls are routed. A call originating in Embarq
19 PA's territory and terminating on Core's network are intra-LATA, interexchange
20 calls (long distance). A true "local" call will stay within the same exchange
21 boundary as the originating Embarq PA caller's location. Core does not have the
22 capability to handle a "local" call. A local call originates and terminates in the
23 same toll-free area which means Core would need a relationship with an actual
46 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 end user in Embarq PA's territory, who is buying dial tone from Core and who
2 recognizes Core as its local service provider. There is not a single entity in
3 Embarq PA's territory who can make that claim because Core is a "local service"
4 provider in name only.
5
6 Q. On page 37, line 871-873, Core assumes that VNXX calls are local calls. Please
1 respond.
8 A. Core is hoping to receive million of dollars annually from Embarq PA if it can
9 convince the Commission that its inter-exchange, ISP-bound, information access
10 calls are "local". I have addressed this issue in my Direct Testimony (pages 33-
11 36) and addressed why VNXX calls are not subject to Section 251(b)(5)
12 compensation.
13
14 Q. Page 36, lines 850-857, Mr. Gates states that the calls destined (location of the
15 ISP equipment) does not impact the jurisdiction of the call Please comment
16 A. Core assumes that just because the ISP's customer dial a local seven digit number,
17 any and all of that call's geographic significance vanishes. The call must still be
18 routed over multiple carriers' network facilities whether it is a true local call
19 within the same wire center or a call to another section of the state (which is the
20 case with Core's calls).
21
22 Call routing has always been (and still is) jurisdictionally dependent. If a
23 customer dials an interexchange call, the ILEC switch routes it to certain trunk
47 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4,2007.
PUBLIC VERSION
1 groups that correspond with the selected IXC. If it is an EAS call, the call is
2 routed to separate trunks. In the first example the call goes to an IXC and Embarq
3 PA receives originating access from that carrier, although the same switching
4 function is performed for the IXC and EAS call. Mr. Gates incorrectly implies
5 that physical end point (page 37, lines 874-876) have no impact on Embarq PA's
6 cost or responsibilities.
7
8 Q. Do you have any further response to Mr. Gates' assertion that it is Embarq PA
9 that is creating an allegedly unfounded new way to classify calls?
10 A. Mr. Gates claims that the routing of VNXX calls is no different from the routing
11 of other local calls (Gates at page 37, lines 871-889). He also concludes that the
12 physical end points of call do not have an impact on Embarq PA's responsibilities
13 or costs. Id. These assertions are absurd. As I noted above, the distinction
14 between local and toll still exists and is the only means by which to determine
15 intercarrier compensation obligations. Presumably, and according to Core, the
16 whole world would be "local" as long as the underlying traffic was ISP-bound
17 traffic and subject to the compensation regime laid out in the FCC's ISP Remand
18 Order. The physical end points of calls do greatly impact costs and facilities used
19 to route traffic - particularly i f the traffic is ISP-bound traffic. Core's traffic is
20 virtually one-directional in nature. Based upon the MOUs I have reviewed,
21 Core's traffic hardly qualifies as a mutual exchange of traffic. In this factual
22 context, ifthe local versus toll designation no longer existed, Core could establish
23 one number in Central Pennsylvania (or perhaps at the geographic center outside
48 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4,2007.
PUBLIC VERSION
1 the United States) and have all traffic routed to it on a "local" basis per Mr. Gates
2 and Core. Clearly, the routing and the impact on Embarq PA matter given that
3 Core is using VNXX for the routing of ISP-bound calls. Core only needs "local"
4 numbers to establish its routing scheme. Core then turns around and claims that
5 local and toll are not important. It is Core that is trying to "classify calls that have
6 no operational or historical basis in the telephone network."
7
8 Q. Page 37, lines 887-889 and on page 38-39, lines 908-917, Core makes the
9 statement that Embarq PA is "trying to recoup its losses " and seeks to
10 "punish " its competitors for Core "being willing and able to offer a more
11 efficient serving arrangement to the ISPs." Do you agree?
12 A. No, not at all. As I have stated before, Embarq PA is not suggesting any
13 prohibition of Core from using VNXX service. Embarq PA agrees with the idea
14 of a competitive market place within the industry where each party contends for
15 its market share. But, that is not what is happening with Core. Embarq PA is
16 subsidizing Core's claimed ability to "offer a more efficient serving arrangement
17 to ISPs." Embarq PA's charging another carrier a non-discriminatory rate for the
18 use of its own network for the delivery of traffic to that carrier is not anti-
19 competitive, especially when the other carrier is providing a service to its ISP
20 customers from which it derives significant benefit
21
49 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 Q. Do you agree with Mr. Gates' characterization that Embarq PA's proposal
2 would require it to duplicate the network of Embarq PA and network of other
3 ILECs (Gates Direct, page 39, and beginning at line 920) ?
4 A. No. Mr. Gates characterization is absurd. Mr. Gates glowingly talks about the
5 deployment by Core of the latest soft switch technology that serves multiple rate
6 centers. ILECs, including Embarq PA have been concentrating switches for
7 decades and continue to do so; however, Embarq PA and the other ILECs are
8 actually providing service within the rate centers in question and have facilities
9 and a presence in those rate centers. Core is not and does not. For Core to
10 actually compete with Embarq PA and other ILECs for end users within the rate
11 centers that they serve. Core must secure facilities either by building or leasing
12 and should be required to incur the costs to do so. That is what true local
13 competition is, giving end user customers competitive choices for
14 telecommunications services. Core provides services to ISPs that in turn provide
15 dial-up Internet access to the end users in Embarq PA's rate centers. The dial
16 tone, the switching, the teiecommunications services used by the end users to call
17 the ISPs are provided to the end users by Embarq PA. Core would now have the
18 Commission believe that it can provide local competition without incurring any
19 network costs (and to require Embarq PA to pay Core reciprocal compensation).
20 Fortunately, Core alone is not entitled to determine how much network
21 investment it must make in order to interconnect with Embarq PA for the claimed
22 mutual exchange of telecommunications traffic. Theoretically, although not
23 legally, Core could place one soft switch on the United States eastern seaboard
50 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 and require all carriers in multiple states to install transport facilities to a single
2 "efficient" switching location. However, the federal Telecommunications Act
3 imposes some obligations on CLECs and it also limits the obligations of ILECs.
4 Core is permitted to make a decision to deploy fewer switches than ILECs
5 traditionally have, but i f that is Core's "economically efficient" choice, then the
6 trade off is Core must pay for a greater amount of transport to those switches than
7 i f Core had chosen to deploy a larger number of switches throughout the ILEC
8 territories where Core actually serves customers and has a presence. What
9 Embarq PA opposes is Core's imposition and shifting of costs of its network
10 design onto Embarq PA.
11
12 Q. On pages 38-39, Mr. Gates states that Embarq PA rs access proposal will impose
13 costs on ISPs and will cause Core to raise its rates to its ISP customers and then
14 makes other assertions. Please respond.
15 A. First of all, Core is not entitled to compensation. It must demonstrate its claimed
16 entitlement to reciprocal compensation. As I have testified, Core's traffic is not
17 local and therefore its traffic is not eligible for intercarrier compensation under
18 Section 251 (b)(5) of the Act. In addition, Core must pay access charges because
19 its traffic is interexchange in nature.
20
21 Mr. Gates says that Embarq PA's proposal would impose substantial additional
22 costs on ISPs. This claim is speculative. If originating access is applied to Core's
23 traffic, Embarq PA will bill Core. Core has not shown that ISP's costs will be
51 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4,2007.
PUBLIC VERSION
1 impacted. If Core passes this cost onto its ISPs, that is Core's choice. This is
2 not to say that Embarq PA would ignore Core's astronomically high level of
3 indirect traffic, but it seems that Core could not resist the potential for more ISP
4 arbitrage and its "money grab" in the form of substantially large reciprocal
5 compensation amounts from Embarq PA. Now, Core saying that it does not like
6 the consequences i f it incurs costs or fails to get compensation for its arbitrage
7 efforts. Mr. Gates continues his lugubrious outlook through lines 918-933 and
8 implies that Embarq PA should continue to incur all the expenses so that Core's
9 network would not become less efficient. Core simply is unwilling to accept the
10 fact that it should incur expenses of being a CLEC i f it wants to have some of the
11 benefits of being a CLEC in Pennsylvania.
12
13 Issue 10 - Entrance Facility
14
15 Q. Mr Gates also describes a pricing standard for monopoly facilities (pages 53-55,
16 lines 1253-1313). Since the FCC made a national finding of non-impairment of
17 entrance facilities are his comments pertinent to this issue?
18 A. No, not at all. I have addressed this issue in my Direct Testimony (p.48-49). The
19 Pennsylvania Commission has determined that TELRIC pricing does not apply to
20 an entrance facility.
21 22 Q. Mr. Gates seems to believe that by using the non-impaired entrance facility for
23 "interconnection," the facility somehow suddenly qualifies for impaired
24 (TELRIC) pricing (pages 55-56, lines 1314-1330). Please respond
52 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4,2007.
PUBLIC VERSION
1 A. Core's wishes are a result of the typical CLEC reading of ^140 of the FCC's
2 TRRO which states that the CLEC is entitled to 251(c)(2) interconnection
3 "facilities at cost based rates to the extent that they require them to interconnect
4 with the ILEC's network." Paragraph 140 of the TRRO may seem confusing just
5 after the FCC in the preceding paragraphs declared a national finding of non-
6 impairment for entrance facilities. However, when the TRRO is reviewed in its
7 totality, a workable interpretation of the FCC's TRRO regarding entrance facilities
8 can be achieved.
9
10 First, an entrance facility is the physical "outside plant" facility that runs between
11 the CLECs network and the ILEC's switch and terminates inside the ILECs
12 central office. This facility may be deployed by the CLEC, a third party, or
13 purchased from the ILEC's access tariff. Second, there is no restriction of traffic
14 type or use that may travel over the entrance facility, i.e., long distance traffic,
15 local traffic, UNEs, special access circuits, etc. Third, 140 makes reference to
16 two separate facilities - entrance facility and interconnection facility. The FCC is
17 not describing an interconnection function that is occurring via an entrance
18 facility. Fourth, T|140 of the TRRO refers to the interconnection facility that is to
19 be cost-based, which is pursuant to the Section 251(c)(2) interconnection
20 function. Section 251 (c)(2) of the Act requires the ILEC to provide the facilities
21 and equipment of the requesting carrier for interconnection with the ILECs
22 network. The only facilities explicitly mentioned in Section 251(c)(2) are the
23 CLECs' facilities which is the Entrance Facility that terminates in the IILECs
53 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4, 2007.
PUBLIC VERSION
1 central office(CO). The ILEC must have facilities ready to receive those CLEC
2 entrance facilities. The ILEC must supply the cross connects or collocation space
3 and facilities used for interconnection and price them at TELRIC because the
4 cross-connect facilities and floor space inside the central office are ILEC-owned
5 and controlled. The TRRO made clear the non-impairment findings for entrance
6 facilities, the TRRO did not make a corresponding finding for cross connects
7 associated with entrance facilities used for interconnection purposes.
8
9 Q. At page 56-57, lines 1331 - 1343, Mr. Gates discusses a pricing concept for an
10 entrance facility. Please comment
11 A. Core cites a Pennsylvania Order and then makes a baseless claim that access
12 prices are inappropriate for entrance facilities. The Commission did not prohibit
13 access pricing for entrance facilities. The Commission said that "we find that all
14 transport previously provided under the rubric of entrance facilities should not be
15 presumed to be priced as special access." (Emphasis added.) Each of these
16 previously provided transport connections (sometimes called entrance facilities
17 interchangeably) are configuration-specific between a particular CLEC and ILEC.
18 Prior to the clarifications of entrance facilities from the TRO/TRRO, there were
19 any number of entrance facility "rubrics" that would not pass the test of an
20 entrance facility today.
21 For example, parties referred to entrance facilities for numerous connections, e.g.
22 the cross-connections in the CO between the CLEC and the ILEC for
23 interconnection were formerly called entrance facilities or dedicated transport.
54 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1 These connections were and are still priced at TELRIC. Embarq PA agrees that it
2 would be inappropriate for these to be priced at special access. Additionally,
3 CLECs often maintain a connection to an ILEC end office via the tandem. That
4 link between the tandem and the end office may be considered dedicated transport
5 or an entrance facility. Today, however, due to clarity from the TROATRRO this
6 connection is dedicated transport at TELRIC if certain UNE use restrictions are
7 met. Similarly, it would not be appropriate to presume that this transport should
8 be priced at special access. Accordingly, there is at least one situation where
9 pricing the entrance facility at special access is appropriate, which is the facility
10 that runs between the CLEC network and ILEC switch.
11
12 Q. Is it your testimony that ILECs should be able to charge access rates or even
13 higher for entrance facilities?
14 A. Yes. Post release of the FCC's TRO/TRRO orders addressing entrance facilities,
15 the FCC described what they are and determining that they are not impaired.
16 Arguably, entrance facilities should have no pricing restrictions on them at all. If
17 an access rate is too high, carriers will turn to the market and will find other
18 entrance facility options in this highly competitive market. Competing carriers
19 agree that the most competitive type of transport is the link between an incumbent
20 LEC wire center and a competitor's network. See, TRO %367 FN1122. Thus, if
21 Embarq PA chooses to price entrance facilities at access, and those prices are too
22 high relative to the market, Embarq PA will feel the result through loss of market
23 share.
55 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefiled on June 4, 2007.
PUBLIC VERSION
1
2 Q. Page 57 lines 1338-1343, Mr. Gates proposes that Embarq PA use Verizon's
3 rates for Entrance Facilities. Does Core or Mr. Gates propose and support the
4 actual rates that would result if Mr. Gates' testimony was adopted?
5 A. No. Mr. Gates does not set forth those rates, nor does he provide support in his
6 Direct Testimony for the rates sought to be imposed as a result of this case.
7 Moreover, in response to Mr. Gates, I do note that the interconnection agreement
8 that Core operates under with Verizon does have an access tariff rate for Entrance
9 Facilities and Transport for Interconnection Charges in effect. Presumably, those
10 access rates would be included in Mr. Gates' recommendation.
11
12 Q. Is Embarq PA proposing that access pricing should apply to an Entrance
13 Facility?
14 A. The Pennsylvania Commission has approved access rates and cost-based rates for
15 entrance facilities relative to Verizon. Accordingly, consistent with Commission
16 precedent, Embarq PA in this record has proposed cost-base rates (supported by a
17 study) for entrance facilities. As Embarq PA witness Mr. Dickerson notes,
18 Embarq PA's cost-based pricing for entrance facilities are actually slightly less
19 than Verizon's rates. However, since entrance facilities were determined to be
20 non-impaired, I have also presented testimony supporting potential Commission
21 imposition of access prices for entrance facilities in light of existing tariffs and the
22 Pennsylvania Commission's orders in the Verizon TRRO dockets.
23
56 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4, 2007.
PUBLIC VERSION
1 Q. On page 53, line 1244-1245, Mr. Gates mentions that the parties were able to
2 agree on dedicated transport rates. Does Core qualify for the use of the UNE
3 dedicated transport?
4 A. No. The parties may have agreed on a price, but that does not ensure that Core
5 meets the UNE use restriction found in 47 CFR 51.309(b).19 In Core's case,
6 nearly 100% of its traffic is interexchange. Not only does Core not qualify for
7 that dedicated transport, but this issue takes us back to the ftmdamental question
8 of whether they are even entitled to interconnection at all.
9
10 Q. Does this end your Rebuttal Testimony?
11 A. Yes.
12
" "A requesting telecommunications carrier may not access an unbundled network element for the exclusive provision of mobile wireless services or interexchange services.
57 REBUTTAL TESTIMONY OF Edward B. Fox, EQ PA St. 1.1 - Prefded on June 4, 2007.
PUBLIC VERSION
BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION
Petition of Core Communications, Inc. for Arbitration of Interconnection Rates, Terms And Conditions with The United Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania pursuant to 47 U.S.C. §252(b)
Docket No. A-310922F7002
DIRECT TESTIMONY OF EDWARD "TED" C. HART
EQ PA STATEMENT 2.0
ON BEHALF OF THE UNITED TELEPHONE COMPANY OF PENNSYLVANIA
D/B/A EMBARQ PENNSYLVANIA
**PUBLIC VERSION**
Prefiled: April 27, 2007
RECEIVED JUL " 2 ?G07
PA WBUCUTUJW COMMISSION
1 DIRECT TESTIMONY OF 2 EDWARD "TED" C. HART 3 EQ PA STATEMENT 2.0 4 5 PUBLIC VERSION
6 I. Introduction
7 Q. Please slate your name, place of employment and business address.
8 A. My name is Edward "Ted" C. Hart. I am employed by Embarq Management
9 Company, which provides management services to The United Telephone
10 Company of Pennsylvania d/b/a Embarq Pennsylvania ("United PA" or "Embarq
11 PA"). I am employed in the Wholesale Markets Division, as a Business Strategy
12 Manager. My business address is 9300 Metcalf Avenue, Overland Park, Kansas
13 66212.
14
15 Q. Generally describe your present responsibilities?
16 A. I work with various interests in the Wholesale Markets division of Embarq
17 providing input and expertise for intercarrier contract offerings, wholesale
18 business sales, interconnection agreement issues, as well as researching and
19 pursuing increased revenue and expense savings opportunities. I also work with
20 our network subject matter experts analyzing network traffic flows and specific
21 interconnection traffic issues.
1
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 Q. What is your work experience?
2 A. I practiced with a small public accounting firm for seven and a half years after
3 college specializing in audit and accounting issues for closely-held companies.
4 Subsequent to that, I held senior financial positions with a medium-sized general
5 contractor and with Mobile Radio Communications, Inc., a regional Commercial
6 Mobile Radio Services ("CMRS") paging telecommunications provider. In my
7 position with Mobile Radio, I spent a good deal of time with the broad scope of
8 issues that were created by the Telecommunications Act of 1996 ("Telecom
9 Act"). Those issues included intercarrier compensation issues such as reciprocal
10 compensation and proportionate use of facilities and rights and obligations created
11 by the Telecom Act. I managed several million dollars in annual purchasing of
12 carrier services. I developed and instituted programs that addressed costs related
13 to interconnected networks, connectivity and wholesale services. I began and led
14 negotiations with local and long-distance carriers for interconnection agreements
15 and participated in FCC auctions of wireless spectrum among a host of other
16 financial duties.
17 I joined Sprint Wholesale Markets in November 2000 as a Senior Manager
18 charged with negotiation of interconnection agreements with wireless carriers.
19 Since that time I have negotiated interconnection agreements with Competitive
20 Local Exchange Carriers ("CLECs") and have managed intercarrier compensation
21 disputes between Sprint Corporation (now Embarq Corporation) and its CLEC 2
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefded April 27, 2007. PUBLIC VERSION
1 and Wireless vendors and customers. In connection with those disputes I have
2 also become familiar with the special considerations that affect bankrupt
3 telecommunications carriers and have managed the execution of numerous
4 settlement agreements between the Company and its wholesale interconnected
5 customers.
7 Q. What is your educational background?
8 A. I graduated from the University of Missouri at Kansas City in 1986 with a
9 Bachelor of Science in Accounting and passed the C. P. A. exam in 1989. To
10 retain the CP.A. license, I am required to complete approximately 40 hours of
11 continuing education each year. Continuing education totaling an estimated 1,000
12 hours taken over the last 20 years has been a diverse mix of auditing, taxation,
13 consulting, marketing, business law, telecommunications matters, financial
14 valuation, quality management, and ethics courses. In addition, I have taught
15 courses providing training for and building proficiency with specific software
16 applications and other computer-related technology.
17
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 Q. Have you submitted testimony before an administrative agency?
2 A. Yes. I have testified in arbitrations and mediation before Public Utility
3 Commissions in Florida, Texas and North Carolina. I have also provided expert
4 witness testimony in front ofthe Missouri Tax Commission.
5
6 I I . Purpose of Direct Testimony
7
8 Q. What is the purpose of your Direct Testimony?
9 A. My Direct Testimony will analyze and present the results of a study undertaken
10 regarding the nature of Core's current traffic that is flowing across the network
11 jointly constructed and maintained by Embarq PA and Verizon (the ILEC) in
12 Pennsylvania. Core has established "gateway" facilities located "behind"
13 Verizon's various LATA tandems and utilizes the telephone networks in such a
14 way as to route vast amounts of Internet-bound traffic out of Embarq PA's local
15 exchanges to distant, interexchange points in Verizon's territory, which are not
16 local to the Embarq PA originating exchanges.
17
18 My Direct Testimony provides facts surrounding an in-depth analysis of Core's
19 current traffic in Embarq PA's serving area - how and where it originates and how
20 and where it terminates. My Direct Testimony explores whether this traffic
21 should be treated as local traffic for purposes of intercarrier compensation and
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27,2007. PUBLIC VERSION
1 interconnection. My Direct Testimony and analyses are then used by Embarq PA
2 Witness Ed Fox to demonstrate that Core's traffic does not originate and terminate
3 in a local calling area so as to trigger reciprocal compensation or the obligation to
4 connect at Core's gateways. Core currently pays nothing to Embarq PA for its
5 use of Embarq PA's network notwithstanding that our studies show that Core is
6 consuming vast amounts of bandwidth. My Direct Testimony, therefore, is
7 submitted in accordance with issues concerning: (A) Core's definition of the scope
8 of its traffic (Issue 1) should be subject to reciprocal compensation (Issue 6)
9 because Core's VNXX-enabled, ISP-bound traffic is not local in nature (Issues 7
10 and 8);1 and (B) Core's various proposals to impose obligations on Embarq PA as
11 to network interconnection and transport - namely Issues 2, 4, 5 and 9.2
12
13 Q. What exhibits accompany this Direct Testimony?
14 A. Exhibit ECH-1 consists of Cure's network map and certain pages-of its-local tariff
15 ^>-ftk-4n_£eoflsytvania. Exhibit"ECII^S conGiats-o£a detailed summary of the
16 analysis of traffic that originates with Embarq PA subscribers or other
17 interconnected carriers on the Embarq PA network for termination to Core. An
18 analysis ofthe route miles between Embarq PA switches and Core's destination CQM'I fZesPWtss TO curfatf
19 switches is included. Exhibit ECH-2 consists of LERG and traffic infbrmgtioir--
20 ,-aDSOciated wtth-numborG portetHo~eorrT55ninibarqTA7-as^
1 See also. Issues 6 and 8, Order Granting in Part, Motion for Partial Summary Judgment, dated March 20, 2007. 2 'See also. Issue 1, Order Granting in Part, Motion for Partial Summary Judgment, dated March 20, 2007.
5
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefded April 27,2007. PUBLIC VERSION
1 ^fidly^awaFer Exhibit ECH-3 consists of a copy of information from Core's
2 website.
3
4 I I I . Interconnection and compensation relief requested by Core.
5
6 Q. Why is it important for this record and this Commission to have an analysis of
7 the traffic at the heart of Core's request for interconnection and intercarrier
8 compensation?
9 A. This is an arbitration proceeding initiated by Core. Core has requested
10 interconnection with Embarq PA and has sought intercarrier compensation.
11 Given the largely one-directional nature of Core's traffic, the relief requested by
12 Core would result in Embarq PA paying to Core an additional (and sizable)
13 revenue stream in the form of reciprocal compensation. It is important for this
14 Commission to have a complete evidentiary record that analyzes the type and
15 nature ofthe traffic that Core seeks to render subject to reciprocal compensation
16 in order to determine i f Core is entitled, or should receive, the relief it seeks. The
17 merits of whether Core is entitled to the interconnection and intercarrier
18 compensation requests it seeks are issues addressed by Embarq PA Witness Mr.
19 Ed Fox.
20
21 Q. Is Core certificated as a CLEC in Pennsylvania?
22 A. Yes. Core Communications, Inc., the Petitioner here, holds a Competitive Local
23 Exchange Carrier ("CLEC") certificate relative to Embarq PA's service territory, 6
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 as issued by the Pennsylvania Public Utility Commission, Core received this
2 certification on May 25, 2001 at PA Commission Docket No. A-310922F0002. A
3 little more than four years later, on August <©; 2005, Core requested an
4 interconnection agreement with Embarq PA.
5
6 Q. How does Core currently handle its traffic?
7 A. While Embarq PA is not privy to Core's business plans, based upon my analyses
8 of Core's traffic, it can be ascertained that Core has ported numbers out of Embarq
9 PA's local exchanges and has ported numbers from other carriers that exchange
10 local traffic with Embarq PA in nearby rate centers. Core has also received
11 several number blocks of its own from the North American Numbering Plan
12 Administration (NANPA). As further addressed in the Direct Testimony of
13 Embarq PA witness Mr. Maples, through the LERG, Core has directed that dial-
14 up calls to these numbers be directed to the Verizon LATA tandems, which, in
15 most instances, are located many miles and many exchanges away from the point
16 of traffic origination. These "traffic aggregation points" to which Core directs the
17 traffic exist in Verizon territory, behind Verizon tandems, terminates Intemet-
18 bound traffic to Core. These traffic aggregation points do not constitute a
19 customer operating in Embarq PA's local exchanges.
20
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 Q. How do the Parties' tariffs classify local traffic?
2 A. Tariff classification is important fact to determine whether reciprocal
3 compensation should apply. For example, Embarq PA has customers in
4 Mercersburg who dial a number that the LERG indicates terminates to the
5 Chambersburg rate center. That number has been ported out of^te-Chambersburg
6 and calls to this number are now directed to Core's gateway in Harrisburg.
7 Mercersburg to Chambersburg is a local call however the call is not terminating to
8 Chambersburg any longer. The call is now terminating at Core's switch in
9 Harrisburg. Google Maps indicate that Harrisburg is 75 miles from Mercersburg.
10 Embarq PA tariffs indicate that Mercersburg to Harrisburg is not a local call.
11 Core's tariffs, which mirror Embarq PA's tariffs with respect to local calling
12 zones, does not list a Mercersburg to Harrisburg call as a local call. Core's tariffs
13 indicate that a Mercersburg customer may dial locally, a customer in
14 Chambersburg, Greencastle, Marion, St. Thomas, and Mercersburg. Harrisburg is
15 not listed as a local call from Mercersburg. By definition, this is interexchange
16 toll traffic and but one example of the dozens of these types of interexchange
17 routing arrangements.
18
19 Core has gathered numbers from Embarq PA's exchanges as well as other carriers
20 and programmed its switches in anticipation of implementing a reciprocal
21 compensation regime that will shift costs from Core to Embarq PA. After they
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 began this traffic routing, they approached Embarq PA for an interconnection
2 agreement in an attempt to garner reciprocal compensation from Embarq PA.
3
4 Q. Does Core have an existing interconnection agreement with Embarq PA?
5 A. No. Core has been indirectly "exchanging" traffic to and through Embarq PA —
6 i.e., traffic is routed by Embarq PA to Verizon, who sends it to Core.
7 Unfortunately, such origination, switching, and transport has been undertaken
8 without any compensation to Embarq PA.
9
10 Q. How then does Core accomplish free transport from Embarq PA?
11 A. Core is able to accomplish this by assigning a Location Routing Number (LRN)
12 consistent with its switch locations yet still within the same Local Access and
13 Transport Area (LATA) in which the call originates. When Core ports numbers
14 that were originally assigned to Embarq PA or other carriers' nearby local
15 exchanges to Core's switches that are located in Verizon's local exchanges, a call
16 destined to one of those numbers must find the new terminating switch associated
17 with the number. This is accomplished by the LRN. However it's important to
18 note that even though the telephone routing network can accomplish this task, the
19 traffic that originates in Embarq PA territory is not terminating to customers in
20 Embarq PA territory. It is terminating to the internet via Core's ISP customers in
21 Harrisburg, Altoona and Pittsburgh. The end result is that a call from a Embarq
22 PA subscriber in Mercersburg, Pennsylvania to Core's ISP customer in
9
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27,2007. PUBLIC VERSION
1 Harrisburg, Pennsylvania is transformed into a local call, despite the facts that:
2 Harrisburg is neither a Mercersburg local calling point nor an Extended Area
3 Service (EAS) point. Embarq PA tariffs (as the originating carrier defines
4 Harrisburg as a toll route; and Harrisburg is 75 miles and two counties away.
5
6 Number portability is the ability of users of telecommunications services to retain,
7 at the same location, existing telecommunications numbers without impairment of
8 quality, reliability, or convenience when switching from one telecommunications
9 carrier to another.3 On the other hand, locational portability is the ability of users
10 of telecommunications services to retain existing telecommunications numbers
11 without impairment of quality, reliability, or convenience when moving from one
12 physical location to another.4 Locational porting is not permitted by the FCC, as
13 Embarq PA witness Maples has testified in his Direct Testimony.5
14
15 According to Core, the location of its POI and the called number relative to the
16 location ofthe originating end-user "is completely irrelevant for the classification
17 of the call for interconnection and intercarrier compensation purposes."6
18 "Ordinary industry practice is to rate calls as local or toll based upon the NPA-
19 NXX associated with the calling and called party numbers."7
47 U.S.C. § 153(30) (emphasis provided). 3
4 47 C.F.R. § 52.210) (emphasis provided). 5 Telephone Number Portability, 11 F.C.C.R. 8352, 1996 WL 400225 (1996). 6 Core Response to United PA Interrogatory Nos. 1 40 and 1-50; 7 Core Response to United PA Interrogatory No. 1-44.
10
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 In other words, Core's claim that its traffic is subject to reciprocal compensation
2 is based upon calls that originate on a local exchange carrier's network and then
3 are routed to an out-of exchange switch, in this case, Core's gateway POI. Per
4 Core, its traffic is local "because the number is local." For the reason set forth
5 later in my Direct Testimony, a call is defined by its physical points of origination
6 and termination for intercarrier compensation purposes, not what Core told
7 Neustar, the NANPA administrator, when it opened the number.
8
9 Q> You mentioned undertaking an analysis of Core-terminated traffic. Could you
10 explain that study?
11 A. I obtained traffic samples consisting of 171,490 call detail records from seventeen
12 trunk groups that Embarq PA uses to route toll and extended area service ("EAS")
13 traffic to Verizon, which operates the LATA tandem behind which Core operates
14 its access points to the Internet. All the traffic bound to Core that I studied flows
15 through our trunk groups to the Verizon tandem. A trunk group is essentially the
16 physical circuit and conduit that carries the call from one carrier's switch to
17 another.
18
19 The study includes a single day's worth of SS7 traffic call detail - on December
20 13, 2006 - for each of the seventeen involved trunk groups. Out ofthe call detail
21 records, I extracted the area code and exchange number (NPA/NXX) of the
22 originating (calling) number, the terminating (called) number and the terminating
U
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
Location Routing Number ("LRN1'). I then used those extractions to determine
the carriers associated with the NPA/NXXs and LRNs according to the LERG. A
detailed summary of the study is attached to my testimony as ECH Exhibit 1.
This representative sample of a single day's worth of traffic represents the largest
amount of indirect traffic from Embarq's ILECs to a single carrier originated
within a single state in which Embarq PA or its ILEC affiliates conduct business.
Core's traffic consistently holds this place. I believe that the data derived from
the traffic study is representative of typical calling patterns to Core and, therefore,
can be extracted to accurate approximations of monthly and annual traffic results.
The total 171,490 call records contained in the traffic samples comprise 2,255,574
Minutes of Use ("MOU"). Of that amount, 2,008,183 MOU were originated by
Embarq PA or originated from interconnected carriers and carried as transit traffic
across Embarq PA tandem switches for termination to other carriers. (BEGIN
PROPRIETARY]
. [END PROPRIETARY]
12
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
Traffic bound to Core's gateways constitutes approximately [BEGIN
PROPRIETARY] H U [END PROPRIETARY] ofthe trunk utilization ofthe
17 trunks studied. A single DS-1 is designed to handle approximately 216,000
MOU per month with one percent busy or blocked. [BEGIN PROPRIETARY]
[END PROPRIETARY] considering that
the bandwidth on a DS-3 is 28 times a single DS-1.
9
10
11
12
13
14
15
16
17
18
19
20
21
22
This is a huge amount of bandwidth to be associated with a company that lacks an
interconnection agreement and insists that the traffic be delivered outside Embarq
PA's local calling area, far from where the traffic had been originated, all for no
charge. To be clear. Core would have Embarq PA build facilities out of Embarq
PA territory and transport traffic to Core selected points outside Embarq PA's
territory. Then, given Core's request for reciprocal compensation, the one-
directional nature of Core's traffic would result in Embarq PA paying Core
reciprocal compensation as requested by Core in this arbitration proceeding.
Q, Why does it matter where the traffic is delivered?
A. Primarily, it is a matter of how many resources are consumed in delivering the
traffic to the destination and whether Core is engaged in a scheme that shifts costs
onto Embarq PA without proper compensation to Embarq PA. This is an issue
my Direct Testimony addresses. There is also the question of whether the proper
13
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27,2007. PUBLIC VERSION
1 compensation is being paid, given that long distance intercarrier payment
2 arrangements (i.e., access charges) differ from the payments for exchange of local
3 traffic (i.e., reciprocal compensation). This issue. Core's request for
4 compensation, is addressed by Embarq PA Witness Ed Fox.
5
6 Q. What do you mean by resources consumed to deliver traffic to a destination ?
1 A. The local exchange network is designed to handle local calls within the local
8 calling area and a small amount (perhaps 15 - 20%) of minutes handled by
9 Interexchange Carriers ("IXCs"). In the instant case, Embarq PA has constructed
10 a network within its service territory and also has facilities out of territory so as to
11 handle the necessary communications needs of subscribers in Pennsylvania for
12 making toll or long distance calls. Traffic delivered to points outside the local
13 calling area is typically handled by IXCs. The IXCs pay an access rate to the
14 local exchange carriers (LECs) that compensates the LECs for use of the local
15 exchange network.
16
17 Q. What else does your study of Core's traffic tell you?
18 A. The calls that are routing to Core's gateways last, on average, approximately 55
19 minutes per call. This indicates a dial-up internet session or data call, rather than
20 voice traffic. Voice calls are generally of much shorter, typically 2 to 4 minutes,
21 duration. [BEGIN PROPRIETARY] B E M i H I ' J | | | i | l ' m ' | B H — I
22 mmi^^mmwmmMffl®m^ffl®dBM [END PROPRIETARY] I dialed
14
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 several of the terminating called telephone numbers and LRNs and received
2 modem tones on numbers associated with approximately 87% of the Core-
3 terminated Minutes of Use ("MOU"). Some of the numbers, representing
4 approximately 9% of the Core-terminated MOUs, were either not in service or not
5 reachable from the Embarq PA business line we used to access the number. An
6 average duration time of 55 minutes per call to a line answering with a modem
7 tone confirms that the vast majority of Core's traffic, at least 96%, is ISP-bound
8 traffic.
9
10 Q. Do you have any concerns with the duration of Core-terminated traffic?
11 A. Yes, I do. The duration of this traffic poses network problems. Engineering this
12 type of traffic across the local exchange carriers' networks quickly exhausts the
13 local exchange carriers' facilities and can lead to blocked calls. Simply stated,
14 these trunks were neither designed nor initially provisioned for calls of longer
15 than-voice duration. The nature of interconnected telephone networks generally
16 causes carriers who pass large amounts of traffic back and forth to directly
17 interconnect with a local trunk group directly into the end office where the call is
18 originated. In this case, Core has found a way to utilize what are largely Embarq
19 PA long-distance trunks for the exchange of ISP-bound traffic. The traffic passes
20 through the originating end office, routes through Embarq PA's tandem, then
21 Verizon's tandem and then Core's end office equivalent or the internet gateway.
22 The use of toll trunks for internet calling causes the interconnected ILEC carrier -
15
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefded April 27, 2007. PUBLIC VERSION
1 such as Embarq PA - to construct a network that is more costly than would
• 2 otherwise be necessary for handling what is without a doubt a much smaller
3 amount of voice traffic intended to be exchanged between carriers.
4
5 Embarq PA data indicates that the trunks over which this traffic traverse have
6 been augmented in that now they are multiple times their capacities of two years
• 7 ago. This is cost that has been borne by Embarq PA (and Verizon). Core is
8 riding the network with no compensation to Embarq PA. Reading Core's
9 unbounded definition for traffic that Core is attempting to get subject to reciprocal
10 compensation, it becomes clear that Core is demanding that Embarq PA pay for a
11 wholesale traffic arrangement that inures to the primary benefit of Core's ability
^ 12 to offer an interexchange service.
13
14 Q. How is it apparent that Core's traffic is not local in nature and thus not be
• 15 subject to reciprocal compensation as sought by Core in this arbitration?
16 A. The LRN detail contained in the call records essentially tell the network where to
17 look for the switch associated with the called number when the destination
18 number has been ported away from the original switch or network to which it was
19 initially assigned when opened. The switch identifications associated with the
• 20 terminating LRNs indicate that, as a proportion of the total traffic delivered to
21 Core switches, the traffic was delivered to Core gateways in the following
22 proportions and locations: [BEGIN PROPRIETARY] I ^ S B ^ ^ H H ^ S
• 16
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27,2007. PUBLIC VERSION
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
[END PROPRIETARY]
From the originating local exchanges studied, Embarq PA customers do not have
local calling options available to reach Altoona, Harrisburg or Pittsburgh except
in very limited instances. Specifically, four of Embarq PA's 92 Pennsylvania
local exchanges8 can reach Altoona exchanges as a local call. Two Embarq PA
exchanges in the traffic sample can reach Verizon's Harrisburg exchanges. Those
facts have been considered and the minutes associated with those calls were
calculated.
As a result, only 3.3% ofthe minutes (38,798 / 1,187,788) sent to Core may be
considered local traffic according to Embarq PA's tariffs. Another 34,152 MOU
(2.9%) were originated by other carriers and transited Embarq PA's networks for
ultimate delivery to Core. The jurisdiction of those MOU would not be
considered by Embarq PA tariffs as the MOU are not originated by Embarq PA's
subscribers.
Q. Have you undertaken a check on your analysis?
A, Yes, I did. To obtain further assurance that my analysis of the traffic patterns is
correct, I researched the Vertical and Horizontal ("V & H") coordinates associated
8 The United Telephone Company of Pennsylvania, Telephone - Pa. P.U.C. No 27, Section 3, Sheets 1 - 4, Local Exchange Service Areas.
17
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 with Core's switches and calculated the mileage back to the specific Embarq PA
2 switches associated with the points of origin. The V & H coordinates are used
3 within the industry to calculate airline mileage between two switch points.
4
5 There are 109 "call paths" associated with the traffic terminated to Core's internet
6 access points. By call path, I mean a discrete combination of originating rate
7 center and terminating Core switch at one ofthe four Core termination points. Of
8 those 109 call paths, 92 of them were greater than or equal to 20 miles, 66 were
9 greater than or equal to 30 miles, and 44 were greater than or equal to 40 miles.
10 The average was 36 miles and the longest route using this analysis was 95 miles.
11
12 By comparing the originating rate centers to the terminating information indicated
13 in Core's LERG entries with Embarq PA's tariff, we found that traffic on all but
14 six of the routes should not be subject to reciprocal compensation. Restating,
15 assuming the 2.9% traffic subject to other carriers' tariffs is local in nature, and
16 adding in the 3.3% of traffic that Embarq Pa's tariffs show to be local, one is left
17 with a 6.1% (72,950 / 1,187,788) as the maximum probable local percentage. The
18 six routes that could be construed within the local calling area that we looked at in
19 this analysis each had a switch to switch call path distance of less than 15 miles.
20
18
DIRECT TESTIMOIVY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27,2007. PUBLIC VERSION
1 Q. Doesn't your analysis simply show that Core is utilizing VNXX arrangements?
2 A. It certainly shows that but it shows much more. That would be an incomplete and
3 out-of-context statement grossly understating what has been requested by Core in
4 this case. Core's traffic is not terminated locally. Core is not serving end user
5 customers located in Embarq PA territory. Traffic at issue is not local exchange
6 traffic. While VNXX is not, per se, an inappropriate routing method, as the PA
7 Commission has so determined (Generic Investigation Regarding Virtual NXX
8 Codes, Docket No. 1-00020093), what is happening in this arbitration request
9 initiated by Core is that, under its CLEC certificate and after months or years of
10 indirect interconnecting with Embarq PA (at Embarq PA's expense) through the
11 use of VNXX arrangements, Core seeks to use local compensation mechanisms to
12 gamer additional compensation to Core and to shift massive costs onto Embarq
13 PA (i.e., through reciprocal compensation and through transport costs). The
14 telephone business has differing rate structures for local versus long distance
15 calls. As my study demonstrates, a vast majority of the calls originated by
16 Embarq PA local subscribers terminate to Core's gateways that are located many
17 miles outside of the customers' tariffed local calling area. The example noted
18 above, one of Core's terminating switches is more than 60 miles from the Embarq
19 PA switch that handles the originating end ofthe call.
20
21 The method of routing undertaken by Core does not give Core a right to the
22 interconnection and compensation rights and relief that Core requests in this case,
19
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 as further addressed by Embarq PA witness Fox. Core's traffic is overwhelmingly
2 one-directional - meaning Core terminates vast amounts more traffic than it
3 originates. Core's claims for interconnection and compensation for the exchange
4 of local traffic are simply not supported by my analysis of Core's own traffic
5 patterns. For purposes of interconnection and compensation, Core is providing an
6 interexchange service and ought to be compensating Embarq PA under the
7 established long distance compensation regime of access charges. Core is clearly
8 not providing competitive local exchange service.
9
10 Q. You previously mentioned Core's tariffs. How does Core's tariff define calls?
11 A. Core's tariff contains local calling areas that match the local calling areas
12 contained in Embarq PA's tariff save the occasional spelling or clerical error. The
13 Core tariff contains an extensive list of exchanges "served" and the neighboring
14 exchanges that may be called on a local basis. The tariff states that the
15 "company's exchange areas are identical to those of United [Embarq PA]
16 Telephone." Under Core's tariff, a toll call is a service between "the calling and
17 called station, located "in different local calling areas in the same LATA." The
18 term "station," in turn, is defined as the physical location of the subscribers'
19 "premises equipment" and not the virtual location of the telephone number. In
20
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 actual practice, Core has conceded that its ISP customers are not required to have
2 any physical presence within that originating exchange."9
3
4 Q. Has Core been able to operate without an interconnection agreement?
5 A. Yes. Core does not have an interconnection agreement with Embarq PA. Core
6 has already ported numbers out of Embarq PA exchanges that Core uses to
7 terminate its customers' ISP-bound traffic. Porting requests by Core began on
8 August 1, 2005. Fifty two of the initial port requests were effectuated by Core on
9 or before August 14, 2005. As of August 14, the date of the porting requests,
10 however, Core lacked the essential contracting means to establish interconnection
11 and related services with Embarq PA. Core did not submit a request for
12 interconnection negotiations until August 17, 2005.
13
14 Q. Why, then, in your opinion, is Core seeking an interconnection agreement with
15 Embarq PA?
16 A. The agreement terms proposed by Core evidence that it has every intention of
17 attempting to receive compensation for its traffic. Core has proposed changes to
18 the definition of local traffic and has proposed a somewhat nebulous concept of
19 "Section 251 (b) (5) traffic" that is void of any tether to the concept of local
20 traffic. Other than its creation of the ISP traffic vortex it has built in Verizon's
Core Responses to Embarq PA Interrogatory Nos. 1-32 and 1-37 (attached at Exhibit ECH-2). 21
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 territory. Core does not currently have any nexus to Embarq PA's exchanges. As
2 demonstrated by my study, Core has had some degree of success in siphoning
3 traffic out of Embarq PA's local exchanges. That success does not make Core's
4 traffic subject to Section 251(b) interconnection and intercarrier compensation.
5 Core simply wants to bill Embarq PA for reciprocal compensation. This would
6 unfairly impose substantial financial costs on Embarq PA, including costs of
7 transport, as I discuss below.
8
9 Q. Can you further explain what you mean by the financial impact on Embarq PA
10 should Core prevail in this arbitration?
11 A. I've noted previously that Core does not currently have a direct interconnection
12 on the Embarq PA's network and began offering "Managed Modem" services
13 absent an interconnection agreement. Further, our analysis did not identify a
14 single call, out of the 171,000 calls we looked at on seventeen trunk groups, that
15 was originated by Core. Typically, a local exchange carrier will have its own
16 customers that actually originate traffic.
17
18 If Core's customers originate any calls, Core doesn't know about it. Core reported
19 that "has no means to track or records [sic]" call minutes that originate for
20 delivery to Embarq PA subscribers.10 Elsewhere, Core states that it "has no
21 means to track what percentage of calls are 'destined' for any particular
10 Core Response to Embarq PA Interrogatory Set I-12 and Set 1-28 (attached at Exhibit ECH-2). 22
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 destination. As noted above, a very large percentage of calls placed to Core's
2 end-user customers are made in order to establish a dial up connection with the
3 Internet."11
4
5 Core only terminates traffic that Embarq PA and other LECs, incumbent and
6 competitive, originate. Core uses other carriers' networks to haul the traffic and,
7 in fact, does not have any network of any significance that it calls its own other
8 than its gateways. By opening codes and re-homing ported numbers traffic to
9 new remote switches, Core causes the traffic to be routed to termination points far
10 outside the originating exchanges. In addition, this networking arrangement does
11 not provide just compensation to the network providers that actually haul the
12 traffic. Core does this while investing minimally in its own network.
13
14 Q. Does Core obtain an unreasonable advantage by operating as you have
15 described?
16 A. Yes, and it advertises that fact. "Switch to Managed Modems and Save Up to
17 35% on Fixed Telco Costs!" promises Core's website.12 Core accomplishes these
18 savings (and a profit for itself) by avoiding its own network cost, i f fact shifting
19 that cost to other carriers and absorbing reciprocal compensation revenues from
20 the other LECs. If Embarq PA or any other carrier were able to offload
21 substantial costs of its transport to other carriers or network providers, such a
1 1 I d , at Set 1-28 (attached at Exhibit ECH-2). 1 2 http://www.coretel.net/service/managedmodem_sellsheet.pdf (attached at Exhibit ECH-3).
23
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
1 privileged carrier would also position itself to offer generous discounts to its
2 customers. If Core wants to build a business that is predicated around the
3 transport of data traffic to its LATA POI, Core can build a network to do so.
4 Shifting that cost to other carriers because of a few tweaks of industry routing
5 data, also assigns large and improperly matched transport costs to ILECs that
6 don't participate in Core's ISP customer revenue stream. Core has also stated that
7 it expects to be paid reciprocal compensation for "accepting" traffic at its LATA
8 Internet gateway from the local exchange providers;13 traffic we again remind,
9 that Core has caused to be hauled outside Embarq PA's local calling area.
10
11 So, Core's business plan centers around routing traffic to its ISP customers while
12 establishing no local physical presence or even a leased presence in the exchanges
13 from which it draws this traffic. Core opens the VNXX block or ports numbers,
14 then proceeds to utilize a network that other carriers - the local carriers who
15 service actual end user customers - have constructed, and route the calls many
16 miles from their point of origin for termination to its few ISP customers. After
17 freeloading off of a network constructed by other carriers - to add a final insult - it
18 then seeks the right to submit an invoice to the originating ILEC for reciprocal
19 compensation associated with the traffic its gerrymandering has engineered to
20 remove from the local exchanges. By porting numbers out of Embarq PA-served
21 local calling areas, reprogramming the numbers into a switch that is located over
Core Appendix 2 (Statement of Disputed Issues) at pages 1, 10, and 15. 24
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27,2007. PUBLIC VERSION
1 60 miles from where it was intended to reside, Core also avoids paying access
2 fees to the carriers whose network it uses. That is the extent of Core's
3 construction.
4
5 Q. What is wrong with the traffic routing and termination arrangement utilized by
6 Core?
7 A. The traffic routing and termination arrangement utilized by Core causes the
8 compensation arrangement to run completely counter to traditional
9 telecommunications payment arrangements. In this case. Core is availing itself
10 access to those customer bases with no exchange of access fees. In some cases,
11 the traffic arrangement may be benefiting Core's customer which is sited outside
12 ofthe state.
13
14 It appears doubtful from Core's negotiations with Embarq PA that it intends to
15 interconnect directly to Embarq PA or establish a presence in the local calling
16 areas of Embarq PA's subscribers. Core has already routed [BEGIN
17 PROPRIETARY] I M f f i H E M [END PROPRIETARY] minutes per month
18 well outside of local exchange boundaries without an Embarq PA interconnection
19 or interconnection agreement. Embarq PA might expect to see larger volumes of
20 traffic originating from its end users and terminating to Core at points far outside
21 the Commission-approved local calling areas.
22
25
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27,2007. PUBLIC VERSION
1 Q. Are there other financial ramifications of Core's traffic routing arrangements
2 that should be considered?
3 A. Each minute of use that passes from Embarq PA network assets to Verizon, as
4 Core's tandem provider, and then on to Core creates a potential obligation to
5 Embarq PA.
6
7 In other states, the dominant LATA carrier, usually the regional Bell operating
8 company charges a transport and switching rate for traffic sent to a CLEC
9 operating in the Bell company territory. The former Bell South (now AT&T)
1G ILEC in southern states where Embarq PA's affiliates operate have a tariff in
11 South Carolina of $.006 per minute for transit traffic. While Verizon has yet to
12 do so in Pennsylvania, it certainly has an interest in recovering the cost of the use
13 of its network. Using an estimated Verizon rate of one half cent per minute for
14 35.6 million minutes per month produces a potential annual obligation upon
15 Embarq PA of [BEGIN PROPRIETARY] B B l « g M [END PROPRIETARY]
16 at current levels of use. This is a cost that would be home by Embarq PA
17 providing a benefit substantially to Core's shareholders and of course providing a
18 reduced cost to Core's ISP aggregators that Core trumpets in its advertising.
19 Growth at these fantastic rates and under an inappropriate compensation
20 mechanism would serve to harm rate payers in Pennsylvania even more in that it
21 would serve to de-fund incumbent local telephone providers. These are
22 obligations that could reasonably be expected to diminish service quality, set back
26
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefded April 27, 2007. PUBLIC VERSION
1
2
3
4 a
5
6 A.
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
efforts to provide universal service and undermine statutory obligations related to
network modernization plans.
So what would ait annual bill to Embarq PA look like based on a reasonable
projection?
Allowing for the pace of growth that Core seems intent on providing, let's take
the current levels of minutes of use at [BEGIN PROPRIETARY] BSS^jg^M
[END
PROPRIETARY] This supposition is not an unreasonable or far-fetched set of
assumptions by any means. Core more than tripled its Pennsylvania net operating
revenues for the year ending December 31, 2005 from the previous year. Core's
balance sheet increased over 1400% from the beginning of 2005 to the year end
2005.14 Apparently, providing network services at discount prices by avoiding or
offloading network expense is an explosive growth business. [BEGIN
PROPRIETARY] |
[END PROPRIETARY] Adding potential Verizon transiting fees at a rate
of $.005 per MOU, the annual expense flowing from Embarq PA to the benefit of
shareholders of Core and its affiliates would total [BEGIN PROPRIETARY]
[END PROPRIETARY].
1 4 Annual Report of Core Communications, Inc. for the Year Ended December 31, 2005 to the Commonwealth of Pennsylvania Public Utility Commission, Balance Sheet - Pages 1 - 2.
27
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - PrefiJed April 27, 2007. PUBLIC VERSION
1 IV. Conclusion
2 Q. Could you please summarize your Direct Testimony?
3 A. Based upon the my review of Core's traffic, and as testified by Embarq PA
4 witness Fox, Core's traffic does not originate or terminate in a local calling area so
5 as to entitle Core to reciprocal compensation and does not trigger an obligation on
6 Embarq PA's behalf to interconnect at Core's gateways. Core's traffic evidences a
7 business model predicated on using network assets belonging to other carriers and
8 to shift costs of Core's doing business onto Embarq PA.
9
10 Q. Does this conclude your Direct Testimony?
11 A. Yes it does.
28
DIRECT TESTIMONY OF Edward "Ted" C. Hart, EQ Statement 2.0 - Prefiled April 27, 2007. PUBLIC VERSION
E C H - 1
CONTAINS PROPRIETARY INFORMATION
E C H - 1
CONTAINS PROPRIETARY INFORMATION
Set 1-12: Fully and completely identify the number of minutes originated by Core's customers that were delivered to United PA for termination during the most recent twelve month period for which infonnation is available to Core.
OBJECTION: Core Objects to this Interrogatory on the following grounds: (1) the request is vague, overly broad and unduly burdensome; (2) the request seeks information that is neither relevant to this proceeding nor reasonably calculated to lead to the discovery of admissible evidence; and (3) the request seeks confidential infonnation that can not be produced without an appropriate protective order.
RESPONSE: Sponsored by Christopher Van de Verg, General Counsel, Core Communications, Inc.
Notwithstanding the foregoing objections, Core hereby states as follows:
Core has no means to track or records the number of MOUs originated by Core's customers for delivery to United PA's customers as opposed to Verizon customers. Core delivers all of its interconnection traffic to the Verizon tandem, which then switches each call to Verizon customers, or United PA customers, as appropriate.
12 SLl 639076V 1/100826.00003
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Set 1-28; Fully and completely identify what percentage of the total terminating minutes handled by Core were destined for the Internet during the most recent 12-month period for which information is available.
OBJECTION: Core Objects to this Interrogatory on the following grounds: (1) the request is vague, overly broad and unduly burdensome; (2) the request seeks information that is neither relevant to this proceeding nor reasonably calculated to lead to the discovery of admissible evidence; (3) the request aims to introduce issues raised in a separate and unrelated case, namely the RTCC/PTA Protest Proceeding; and (4) the request seeks confidential information that can not be produced without an appropriate protective order.
RESPONSE: Sponsored by Christopher Van de Verg, General Counsel, Core Communications, Inc.
Notwithstanding the foregoing objections, Core hereby states as follows:
Core has no means to track what percentage of calls are "destined" for any particular destination. Upon information and belief, a very large percentage of calls placed to Core's end user customers are made in order to establish a dial up connection with the Internet.
9
0 SLl 639076vl/100826.00003 28
Set 1-32: Does Core require its customers to have a physical presence within United PA's originating calling area?
OBJECTION: Core Objects to this Interrogatory on the following grounds: (1) the request is vague, overly broad and unduly burdensome; (2) the request seeks information that is neither relevant to this proceeding nor reasonably calculated to lead to the discovery of admissible evidence; (3) the request aims to introduce issues raised in a separate and unrelated case, namely the RTCC/PTA Protest Proceeding, and (4) the request seeks confidential information that can not be produced without an appropriate protective order.
RESPONSE: Sponsored by Christopher Van de Verg, General Counsel, Core Communications, Inc.
Notwithstanding the foregoing objections, Core hereby states as follows:
No.
• 32
SLl 639076vl/100826.00003
Set 1-37: Does Core require that "Superport" customers have any physical presence within United PA's originating calling area.
OBJECTION: Core Objects to this Interrogatory on the following grounds: (1) the request is vague, overly broad and unduly burdensome; (2) the request seeks information that is neither relevant to this proceeding nor reasonably calculated to lead to the discovery of admissible evidence; (3) the request aims to introduce issues raised in a separate and unrelated case, namely the RTCC/PTA Protest Proceeding; and (4) the request seeks confidential infonnation that can not be produced without an appropriate protective order.
RESPONSE: Sponsored by Christopher Van de Verg, General Counsel, Core Communications, Inc.
Notwithstanding the foregoing objections, Core hereby states as follows:
No.
37 SLl 639076v1/100826.00003
CALLING SCOPE
Set 1-40: Is it Core's position in this arbitration proceeding that traffic delivered by United PA to a Core POI located outside the local calling area of the originating caller for delivery to the Internet is "local traffic"? Ifthe response is anything other that an unqualified negative, fully and completely identify any and all bases for such contention.
• OBJECTION: Core Objects to this Interrogatory on the following grounds: (1) the request is vague, overly broad and unduly burdensome; (2) the request seeks infonnation that is neither relevant to this proceeding nor reasonably calculated to lead to the discovery of admissible evidence; (3) the request aims to introduce issues raised in a separate and unrelated case, namely the RTCC/PTA Protest Proceeding; and (4) the request seeks a legal conclusion that constitutes attorney work product.
RESPONSE: Sponsored by Christopher Van de Verg, General Counsel, Core Communications, Inc.
Notwithstanding the foregoing objections, Core hereby states as follows:
The location ofthe POI relative to the location of an originating end user on United PA's network is completely irrelevant to the classification of the call for interconnection and intercarrier compensation purposes.
SLl 639076v1/100826.00003 40
Set 1-44: Fully and completely whether Core asserts that the associated rate center of a number identifies whether the call is local rather than the number's routing instructions in the Local Exchange Routing Guide ("LERG"), if the associated rate center and the destination rate center are different.
OBJECTION: Core Objects to this Interrogatory on the following grounds: (1) the request is vague, overly broad and unduly burdensome; (2) the request seeks information that is neither relevant to this proceeding nor reasonably calculated to lead to the discovery of admissible evidence; (3) the request aims to introduce issues raised in a separate and unrelated case, namely the RTCC/PTA Protest Proceeding; and (4) the request seeks a legal conclusion that constitutes attorney work product.
RESPONSE: Sponsored by Christopher Van de Verg, General Counsel, Core Communications, Inc.
Notwithstanding the foregoing objections, Core hereby states as follows:
Ordinary industry practice is to rate calls as local or toll based on the NPA-NXX associated with the calling and called party numbers.
•
e SLl 639076vl/100826.00003
44
Set 1-50: Is it Core's position that traffic to a point outside the local calling area of the originating caller for delivery to the Internet is not "interexchange traffic"? Fully and completely identify any and all bases for such contention. Provide any and all documents related thereto.
OBJECTION: Core Objects to this Interrogatory on the following grounds: (1) the request is vague, overly broad and unduly burdensome; (2) the request seeks information that is neither relevant to this proceeding nor reasonably calculated to lead to the discovery of admissible evidence; (3) the request aims to introduce issues raised in a separate and unrelated case, namely the RTCC/PTA Protest Proceeding; and (4) the request seeks a legal conclusion that constitutes attorney work product.
RESPONSE: Sponsored by Christopher Van de Verg, General Counsel, Core Communications, Inc.
Notwithstanding the foregoing objections, Core hereby states as follows:
The location of the POI relative to the location of an originating end user on United PA's network is completely irrelevant to the classification of the call for interconnection and intercarrier compensaiion purposes.
50 SLl 639076vl/100826.00003
BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION
Petition of Core Communications, Inc. for Arbitration of Interconnection Rates, Terms And Conditions with The United Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania pursuant to 47 U.S.C. §252(b)
Docket No. A-310922F7002
REBUTTAL TESTIMONY OF EDWARD "TED" C. HART
EQ PA STATEMENT 2.1
ON BEHALF OF THE UNITED TELEPHONE COMPANY OF PENNSYLVANIA,
INC. D/B/A EMBARQ PENNSYLVANIA
PUBLIC VERSION
Prefiled: June 4, 2007
RECEIVED JUL 2 ?C07
PA PUBLIC UTILITY COMMISSION SECRETARY'S BUREAU
1 REBUTTAL TESTIMONY OF 2 EDWARD "TED" C. HART 3 EQ PA Statement 2.1 4 5 I. Introduction
6 Q. Please state your name, place of employment and business address.
7 A. My name is Edward "Ted" C. Hart. I am employed by Embarq Management
8 Company, which provides management services to The United Telephone
9 Company of Pennsylvania d/b/a Embarq Pennsylvania ("United PA" or "Embarq
10 PA"). I am employed in the Wholesale Markets Division, as a Business Strategy
11 Manager. My business address is 9300 Metcalf Avenue, Overland Park, Kansas
12 66212.
13
14 Q. Are you the same Ted Hart who filed Direct Testimony in this docket on April
15 27,2007?
16 A. Yes, I am.
17
18 II. Purpose of Rebuttal Testimony
19
20 Q. What is the purpose ofyour Rebuttal Testimony?
21 A. My Rebuttal Testimony will correct some blatant mischaracterizations regarding
22 the nature of local and toll traffic made by Mr. Timothy Gates in his Direct
23 Testimony submitted on behalf of Core Communications, Inc. ("Core"). Mr.
1
REBUTTAL TESTIMONY OF Edward "Ted" C. Hart, EQ PA St. 2.1 - Prefiled on June 4, 2007. PUBLIC VERSION
1 Gates' serial misstatements present views as to many matters which are inaccurate
2 and are contrary to many realities, such as tariffs on file at the Pennsylvania
3 Public Utility Commission ("PA PUC") and such as the exchange of traffic
4 between Embarq PA and Core.
5
6 I I I . Rebuttal Testimony
7
8 Q. At page 33, beginning at line 779 through line 784, Mr. Gates describes the
9 basic inefficiencies in establishing a physical presence in every ILEC local
10 calling area and makes assertions as to how VNXX allegedly solves those
11 claimed inefficiencies. Do you agree with Mr. Gates' claims?
12 A. No. Mr. Gates' claim of "inefficiencies" are highly subjective and very
13 incomplete.
14
15 Q. Can you explain ?
16 A. Yes, I can. Mr. Gates is being subjective and incomplete because his assertions
17 come from the overall theme and viewpoint espoused by Core throughout this
18 case that the industry - rather than Core - must establish networks for Core where
19 Core desires and demands notwithstanding that the rest of the industry may have
20 neither the authority nor desire to operate a network in those areas. Core suggests
21 that it is "inefficient" for Core to locate facilities in Embarq PA local exchanges.
22 Yet, these are the very exchanges out of which Core draws vast amounts of ISP-
23 bound traffic. Embarq PA should haul its traffic outside of Embarq PA's local
REBUTTAL TESTIMONY OF Edward "Ted** C. Hart, EQ PA St. 2.1 - Prefiled on June 4, 2007. PUBLIC VERSION
1 calling areas simply because that is what is efficient for Core. Core is already in
2 receipt of [BEGIN PROPRIETARY] [END
3 PROPRIETARY] of traffic that originates in Embarq PA's exchanges. These
4 MOUs are not local to the points of termination and transport costs are being
5 borne by Embarq PA and Verizon. Core's chosen business plan therefore creates
6 adverse economic and inefficient consequences for Embarq PA, and other ILECs,
7 and now Core seeks to further exacerbate these consequences on the basis that it
8 is more efficient for Core. In my view, what Mr. Gates means by efficiencies is
9 that Core seeks to shift costs of its doing business onto other carriers.
10
11 Moreover, one purpose of this arbitration proceeding is an attempt by Core to
12 establish a reciprocal compensation regime for Core's non-local traffic. Non-
13 local traffic is not subject to reciprocal compensation, but is subject to access
14 charges. Core seeks to have its VNXX-enabled, ISP traffic deemed 'local' for
15 compensation purposes, but neither the customers being served by Core or the
16 minimal facilities deployed by Core are located within the local calling areas of
17 the points of origin of traffic sought by Core to be subject to reciprocal
18 compensation. This is an important point: Core's customers have no local
19 presence and Core has no local presence. A reasonable person would not demand
20 the use of a local Mercersburg Pennsylvania number to call a customer presence
21 in New York City or London. Core's customers are not located locally to the
22 points of call origin and are receiving a long distance call, just as calling interstate
REBUTTAL TESTIMONY OF Edward "Ted*' C. Hart, EQ PA St. 2.1 - Prefded on June 4, 2007. PUBLIC VERSION
1 or overseas is a long distance call. Clearly, claims of "inefficiencies" are not
2 appropriate given these factual circumstances.
3
4 Q. What does Mr. Gates mean by "appropriate trunk group"
5 A. Core witness Mr. Gates uses the phrase "appropriate trunk group" (Page 36, lines
6 856 and 857). This is interesting in that the trunks used by Embarq PA to route
7 the traffic to Core are long distance trunks, not local trunks. Because Core
8 currently lacks direct local interconnection trunks with Embarq PA, traffic bound
9 to Core is handed off to Verizon which forwards the traffic on to Core.
10 Telecommunications traffic originating in one exchange and terminating to a
11 customer in an exchange that is not local to the point of origin is toll traffic under
12 Embarq PA's tariffs, as well as Core's tariffs. As addressed immediately below,
13 the vast majority of the Embarq PA originating traffic terminating to Core in
14 Verizon's local territory travels across trunk groups that are considered "Toll"
15 trunk groups. Just because Core has constructed a routing method that
16 circumvents the one-plus dialing that is normally associated with long distance
17 calling, does not make the traffic any less long distance in nature.
18
19 Q. On page 35 line 82 7 and 828f Mr. Gates states "... the calls are routed from the
20 ILEC to Core in exactly the same manner as other local calls". Is that
21 statement correct?
22 A. No it is not. The vast majority of these calls - at least 95% - follow long distance
23 call paths and route across a long distance trunk group. Alternatively, calls that
REBUTTAL TESTIMONY OF Edward "Ted" C. Hart, EQ PA St. 2.1 - Prefiled on June 4, 2007. PUBLIC VERSION
1 route and are completed locally do not need to traverse long distance transport
2 facilities because they originate and terminate within the same local calling areas
3 and typically within the same or adjacent exchanges. As I noted in my Direct
4 Testimony, the trunk groups that are hauling the traffic are long distance or access
5 trunk groups.
6
7 Moreover, Mr. Gates goes on for most of the rest of that page constructing a
8 fantasy interconnection scheme and, at line 842, compounds errors associated
9 with his assertions when he states: "This is the same manner in which all local
10 calls are routed." As I stated immediately above, this is just factually incorrect.
11 The fact is that local calls between Embarq PA and its CLEC customers route
12 across local interconnection trunks that are specifically established for the
13 exchange of local traffic. These are called local interconnection trunks - not toll
14 trunks. There are no local interconnection trunks established between Embarq
15 PA and Core at present. As Embarq PA witness Fox testifies, however, Core
16 should be made to directly interconnect with Embarq PA.
17
18 Q. What do you mean when you say Mr. Gates has undertaken "construction of a
19 fantasy"?
20 A. Mr. Gate's discussion bears no resemblance to how traffic is currently being
21 routed to Core. My Direct Testimony speaks of approximately [BEGIN
22 PROPRIETARY] (END PROPRIETARY] that are
23 already routing to Core's switches and routers (in Verizon's local territory),
REBUTTAL TESTIMONY OF Edward "Ted" C. Hart, EQ PA St. 2.1 - Prefiled on June 4, 2007. PUBLIC VERSION
1 notwithstanding the fact that the parties do not operate under an interconnection
2 agreement and that no access is being collected from Core by Embarq PA. Mr.
3 Gates' testimony at line 834 begins discussion of a single POI at the Embarq PA
4 tandem. That is not how traffic is currently being routed. Core's complete
5 reliance on indirect interconnection makes it unlikely that Mr. Gates' fantasy
6 construction would ever become reality should Core prevail in its positions. That
7 is, Core has found a way to offload most of its network costs onto other carriers.
8 Core has done this by proposing, in this case positions such as an open-ended
9 proposed definition of Section 251(b)(5) traffic, an insistence that local, toll and
10 long distance are concepts for which time has passed, and a suggestion that Core
11 can rewrite every carriers' tariffs so as to enable Core,to continue to locate its
12 switches in Harrisburg, Altoona, or presumably out of state, and to continue to
13 demand that every other carrier haul traffic all the way to Core and drop it on
14 Core's doorstep.
15
16 Q. Mr. Gates asserts at line 879 that Embarq PA is trying to invent a new way to
17 classify calls "that has no operational or historical basis in the telephone
18 network," Is this assertion true?
19 A. Absolutely not. Core is the party that is attempting to turn the rules of telephony
20 on its head. Let us visit Core's tariffs for a moment. These tariffs specifically
21 spell out local calling areas just like Embarq PA's tariffs delineate specific local
22 calling areas. A local calling area means simply areas or exchanges a subscriber
23 in one exchange may call to another exchange that is included in the price of local
REBUTTAL TESTIMONY OF Edward "Ted" C. Hart, EQ PA St. 2.1 - Prefiled on June 4, 2007. PUBLIC VERSION
1 exchange sen'ice. See, Exhibit ECH-4 for a copy of Core's tariff. Core's tariffs
2 and local calling areas look like Embarq PA's tariffs and local calling areas as the
3 Global Order addresses. However, when reviewing the end points of the call as
4 undertaken in my study, it is clear that that Core's traffic is not local and does not
5 adhere to Core's local calling scopes as set forth it Core's own tariff. Thus, it is
6 Core, not Embarq PA, that is failing to act consistent with operation and historical
7 bases for telephone networks (Gates page 37, lines 877-880).
8
9 IV. Conclusion
10
11 Q. Could you please summarize your Rebuttal Testimony?
12 A. Mr. Gates' Direct Testimony evidences just how Core wants it all. Core seeks
13 that other carriers build for Core's use a network of the most advantageous switch
14 placement. Core would continue to use numbers which are locally dialed from
15 the points of origin, but are not local to the customer receiving the call thereby
16 effectuating geographic porting. And then, when it comes time that Core must
17 abide by one single measure of the many consequences of what it has placed into
18 play. Core demands that Embarq PA and Verizon transport traffic 50 or more
19 miles outside of the originating exchange and where Core has no presence.
20
21 Q. Does this conclude your Rebuttal Testimony?
22 A. Yes it does.
REBUTTAL TESTIMONY OF Edward "Ted" C. Hart, EQ PA St. 2.1 - Prefded on June 4, 2007. PUBLIC VERSION
Core Communications, Inc. Supplement No. 16 Local Exchange Services
PA P.U.C. Tariff No. 1 3* Revised Title Sheet No. 1
Cancels 2 n d Revised Title Sheet No. 1
CORE COMMUNICATIONS, INC.
COMPETTVE LOCAL EXCHANGE CARRIER Regulations and Schedule of Charges
(C) (C)
The Company wil l mirror the exchange area boundaries as stated in the tariffs of Verizon Pennsylvania, Inc. f/k/a Bell Atlantic Pennsylvania, Inc., The United Telephone Company of Pennsylvania d/b/a Embarq, Verizon-North, Inc., Windstream Pennsylvania, Inc. f/k/a ALLTEL Pennsylvania, Inc., Armstrong Telephone Company - North, Armstrong Telephone Company -Pennsylvania, The Bentleyville Telephone Company, Buffalo Valley Telephone Company, Citizens Telecommunications Company of Kecksburg, Citizens Telecommunications Company of New York, Inc. d/b/a Frontier Communications of New York, Commonwealth Telephone Company, Conestoga Telephone and Telegraph Company, Denver and Ephrata Telephone and Telegraph Company d/b/a D&E Telephone Company, TDS Telecom/Deposit Telephone Company, Frontier Communications of Breezewood, LLC, Frontier Communications of Canton, LLC, Frontier Communications of Lakewood, LLC, Frontier Communications of Oswayo River, LLC, Frontier Communications ofPcnnsylvania, LLC, The Hancock Telephone Company, Hickory Telephone Company, Ironton Telephone Company, Lackawaxen Telecommunications Services, Laurel Highland Telephone Company, Marianna and Scenery Hill Telephone Company, North Penn Telephone Company, North Pittsburgh Telephone Company, The North-Eastem Pennsylvania Telephone Company, Palmerton Telephone Company, Pennsylvania Telephone Company, Pymatuning Independent Telephone Company, South Canaan Telephone Company, TDS Telecom/Mahanoy & Mahantango Telephone Company, TDS Telecom/Sugar Valley Telephone Company, Venus Telephone Corporation, West Side Telephone Co. d/b/a West Side Telecommunications, Yukon Waltz Telephone Company. Please see Sheet No. 105 for exchange map references.
(C)
The Company's tariff is in concurrence with all applicable State and Federal Laws (including, but not limited to, 52 Pa. Code, 66 Pa. C.S. and the Telecommunications Act of 1934, as amended), and with the Commission's applicable Rules and Regulations and Orders. Any provisions contained in this Tariff that are inconsistent with the foregoing mentioned will be deemed inoperative and superseded. (C)
Issued: February 23, 2007 Effective: February 24, 2007
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401 PAf0702
Core Communications, Inc. Supplement No. 11 Local Exchange Services
PA P.U.C. Tariff No. 1 2 n i Revised Sheet No. 50.1
Cancels T' Revised Sheet No. 50.1
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd.)
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local CaUing Areas (Cont'd)
B. The United Telephone Company ofPcnnsylvania d/b/a Sprint
Allensville Exchange Allensville Belleville
Bedford Exchange Bedford Charlesville Everett
Bedford Valley Exchange Bedford Bedford Valley
Beech Creek Exchange Beech Creek Howard
Belleville Exchange Allensville Belleville
Biglerville Exchange Biglerville Gettysburg
Blacktown Exchange Blacktown Plain Grove Volant
Blain Exchange Blain East Waterford
Huntingdon (Verizon PA.) Lewistown (Verizon PA.)
Fishertown Osterburg Schellsburg
Hyndman
Lock Haven (Verizon PA.) Mill Hall
Lewistown (Verizon PA.) Reedsville
York Springs
Grove City (Bell of Pa.) Mercer (Bell of Pa.)
Loysville
(C)
(C) (C)
(C)
(C)
Issued: ^ 6 23,2006 Effective: June 26, 2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401 PAf0605
Core Communications, Inc. Supplement No. 11 Local Exchange Services
PA P.U.C. Tariff No. 1 2 n d Revised Sheet No. 50.2
Cancels 1S I Revised Sheet No. 50.2
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd.
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local Calling Areas (Cont'd)
B. The United Telephone Company ofPcnnsylvania d/b/a Sprint, (Cont'd.) (C)
Blue Ridge Summit Exchange Blue Ridge Summit Highfield, Md. (C & P Tel. Co. of Md.)
Bruin Exchange Chicora North Washington
Butler Exchange Chicora Connoquenessing Meridian
Carlisle Exchange Carlisle Mount Holly Springs
Chambersburg Exchange Chambersburg Fayetteville
Charlesville Exchange Bedford Charlesville
Chicora Exchange Bruin Butler North Washington
Clavsburg Exchange Altoona (Verizon PA.) Claysburg Hollidaysburg (Verizon PA.)
Waynesboro
Parker Petrolia Bruin
Nixon Prospect West Sunbury Butler
Newville
Marion Saint Thomas
Everett
Petrolia Chicora
Osterburg Roaring Spring
(C)
(C)
Issued: June 23, 2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401
Effective: June 26, 2006
vAmos
Core Communications, Inc. Supplement No. 11 Local Exchange Services
PA P.U.C. Tariff No. 1 2 n d Revised Sheet No. 50.3
Cancels l s l Revised Sheet No. 50.3
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd.)
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local Calling Areas (Cont'd)
B. The United Telephone Company of Pennsylvania d/b/a Sprint, (Cont'd.) (C)
Clearville Exchange Bedford Clearville
Columbia Exchange Columbia Elizabethtown Lancaster (Verizon PA.) Marietta
Connoquenessing Exchange Butler Evans City Meridian
Dry Run Exchange Chambersburg
Duncannon Duncannon Harrisburg (Zone 1) Marysville
East Waterford Exchange Blain East Waterford
Eau Claire Exchange Emlenton Foxburg North Washington
Elizabethtown Exchange Elizabethtown Columbia Hersey (Verizon NorthJ Lancaster (Verizon PA)
Everett
Mount Joy Mountville
Wrightsville (Verizon North)
Nixon Prospect Connoquenessing
Dry Run
New Bloomfield Newport
Mifflintown Port Royal
Parker Eau Claire
Landisville (V erizon PA) Pennsylvania, Inc.) Marietta Mt. Joy Middletown (Verizon PA.)
(C)
(C) (C)
Issued: June 23, 2006 Effective: June 26, 2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401 PAfD605
Core Communications, Inc. Supplement No. 11 Local Exchange Services
PA P.U.C. Tariff No. 1 2 n d Revised Sheet No. 50.4
Cancels 1" Revised Sheet No. 50.4
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd/)
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local Calling Areas (Cont'd)
B. The United Telephone Company of Pennsylvania d/b/a Sprint, (Cont'd.) (C)
Emlenton Exchange Eau Claire Foxburg Parker
Evans City Exchange Butler Connoquenessing Criders Comers (North Pittsburgh Tel. Co.)
Everett Exchange Bedford Breezewood (Breezewood Tel. Co.)
Fairfield Exchange Emmitsburg, Md. (C & P Tel. Co. of Md.) Fairfield
Fayetteville Exchange Chambersburg
Fishertown Exchange Bedord Fishertown
Foxburg Exchange Eau Claire Emlenton
Gettysburg Exchange Biglerville Fairfield
Greencastle Exchange Chambersburg Greencastle
Rockland (ALLTEL) Emlenton
Nixon Zelienople (Verizon PA.) Evans City
Clearville Everett
(C)
(Q
Gettysburg
Fayetteville
Osterburg Schellsburg
Parker Foxburg
Gettysburg
Marion Waynesboro
Issued: June 23, 2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401
Effective: June 26,2006
PAfO605
Core Communications, Inc. Supplement No. 11 Local Exchange Services
PA P.U.C. Tariff No. 1 2 n d Revised Sheet No. 50.5
Cancels 1 s t Revised Sheet No. 50.5
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd.)
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local CaUing Areas (Cont'd)
B. The United Telephone Company of Pennsylvania d/b/a Sprint, (Cont'd.) (C)
Hanover Exchange Hanover Jefferson (Verizon North)
Harris vi lie Exchange Plain Grove Porters vi lie Slippery Rock Volant
Hewitt Exchange Cumberland, Md. (C & P Tel. Co. of Md.) Flintstone, Md. (C & P Tel. Co. of Md.) Hewitt
Hopewell Exchange Everett Hopewell
Howard Exchange Beech Creek Bellefonte (Bell Tel. Co.)
Hvndman Exchange Bedford Bedford Valley
Ickesburg Exchange Ickesburg Loysville Millerstown
Littletown New Oxford (Q
West Sunbury Wesley (Verizon North) (Q Harrisville Grove City (Verizon PA.)
Oldtown, Md. (C & P Tel. Col of Md.) Ridgeley, W. Va.(C & P Tel. Col. of W. Va.) State Line, Pa.
Saxton (Verizon PA.) (Q
Howard State College (Bell Tel. Co.) Zion
Hyndman
New Bloomfield Newport and Port Royal
Issued: June 23, 2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401
Effective: June 26, 2006
PAro605
Core Communications, Inc. Supplement No. 11 Local Exchacge Services
PA P.U.C. Tariff No. 1 2 n d Revised Sheet No. 50.6
Cancels 1 s t Revised Sheet No. 50.6
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd.)
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local Calling Areas (Cont'd)
B. The United Telephone Company of Pennsylvania d/b/a Sprint, (Cont'd.) (C)
Littlestown Exchange Gettysburg Hanover Littlestown
Liverpool Exchange Liverpool Millerstown
Loysburg Exchange Loysburg Martinsburg
Loysville Exchange Blain Ickesburg
Marietta Exchange Columbia Elizabethtown Lancaster (Verizon PA.)
Marion Exchange Chambersburg Greencastle
Marklesburg Exchange McConnellstown Huntingdon (Verizon PA.)
Martinsburg Exchange Altoona (Verizon PA.) Hollidaysburg (Verizon PA) Loysburg
New Oxford Silver Run, Md. (C & P Tel. Co. of Md.)
Newport
Roaring Spring
Loysville New Bloomfield
Marietta Mt. Joy
Mountville
Marion
Marklesburg
Martinsburg Roaring Spring Williamsburg
(C)
(C)
(C) (Q
Issued: June 23, 2006 Effective: 1^6 26,2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401 PAf0605
Core Communications, Inc. Supplement No. 11 Local Exchange Services
PA P.U.C. Tariff No. 1 2 n d Revised Sheet No. 50.7
Cancels 1 s t Revised Sheet No. 50.7
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd.)
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local Calling Areas (Cont'd)
B. The United Telephone Company ofPcnnsylvania d/b/a Sprint, (Cont'd.) (C)
Marysville Exchange Duncannon Harrisburg Zone 1 (Verizon PA.)
McAlisterville Exchange McAlisterville Mifflintown Port Royal
McConnellstown Exchange Alexandria (Bell Tel. Co.) Huntingdon (Bell Tel. Co.) Mount Union (Bell Tel. Co.)
McConnellsburg Exchange McConnellsburg
Mercersburg Exchange Chambersburg Greencastle Marion
Meridian Exchange Butler Connoquenessing Nixon
Mifflintown Exchange East Waterford Lewistown (Verizon PA.) McAlisterville
Marysville
Richfield Thompsontown
Marklesburg McConnellstown
Mercersburg Saint Thomas
Prospect Meridian
Mifflintown Port Royal Thompsontown
(C)
(C)
Issued:, June 23, 2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401
Effective: June 26, 2006
PAf06O5
Core Communications, Inc. Supplement No. 11 Local Exchange Services
PA P.U.C. Tariff No. 1 2 n d Revised Sheet No. 50.8
Cancels 1" Revised Sheet No. 50.8
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd.)
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local Calling Areas (Cont'd)
B. The United Telephone Company ofPcnnsylvania d/b/a Sprint, (Cont'd.) (C)
Millerstown Exchange Ickesburg Liverpool Millersville
Mill Hall Exchange Beech Creek Lock Haven (Verizon PA.)
Mount Joy Exchange Mount Joy Columbia Elizabethtown Marietta
Mountville Exchange Mountville Columbia Marietta Millersville (Verizon PA)
Mt. Holly Springs Exchange Carlisle
New Bloomfield Exchange Duncannon Ickesburg Loysville
Newburg Exchange Chambersburg Newburg
New Bloomfield Newport Thompsontown
Mill Hall
Mountville Lancaster (Verizon PA) Landisville (Verizon PA) Manheim (Denver & Ephrata Tel. Co.)
Mount Joy Lancaster (Verizon PA) Landisville (Verizon PA)
Mt. Holly Springs
Millerstown New Bloomfield Newport
Newville Shippensburg
(C)
(C) (C)
(C) (C) (C)
Issued: June 23, 2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401
Effective: June 26, 2006
PAf0605
Core Communications, Inc. Supplement No. I I Local Exchange Services
PA P.U.C. Tariff No. 1 2 n d Revised Sheet No. 50.9
Cancels \ s l Revised Sheet No. 50.9
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd.)
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local Calling Areas (Cont'd)
B. The United Telephone Company ofPcnnsylvania d/b/a Sprint, (Cont'd.) (C)
New Oxford Exchange East Berlin (Verizon North) Hanover Littlestown
Newport Exchange Duncannon Ickesburg Liverpool
Newville Exchange Carlisle Newburg
Nixon Exchange Butler Connoquenessing Evans City
North Washington Exchange Bruin Butler Chicora Eau Claire
Qrhisonia Exchange Orbisonia Mt. Union (Verizon PA)
Osterburg Exchange Bedford Claysburg
New Oxford Gettysburg
Millerstown New Bloomfield Newport
Newville
Meridian Nixon Saxonburg (North Pittsburgh Tel. Co.)
Petrolia West Sunbury North Washington
(C)
Shade Gap Three Springs
Fishertown Osterburg
(C)
Issued: June 23, 2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401
Effective: June 26, 2006
PAf0605
Core Communications, Inc. Supplement No. 11 Local Exchange Services
PA P.U.C. Tariff No. 1 2 n d Revised Sheet No. 50.10
Cancels 1 s t Revised Sheet No. 50.10
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd.)
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local Calling Areas (Cont'd)
B. The United Telephone Company of Pennsylvania d/b/a Sprint, (Cont'd.) (C)
Parker Exchange Bruin Eau Claire Emlenton Foxburg
Petrolia Exchange Bruin Butler Chicora
Plain Grove Exchange Harrisville Portersville Slippery Rock Volant
Portersville Exchange Butler Harrisville Plain Grove Prospect Volant
Port Royal Exchange East Waterford Ickesburg Lewistown (Verizon PA.) McAlisterville
Prospect Exchange Butler Connoquenessing Meridian
Petrolia Callensburg (Brookville Tel. Co.) Parker
North Washington Parker Petrolia
Blacktown Grove City (Verizon PA) New Castle (Verizon PA.) Plain Grove
Slippery Rock Princeton (Verizon North) Elwood City (Verizon PA.) Portersville Zelienople (Verizon PA.)
Mifflintown Port Royal Thompsontown
Portersville Prospect
(C)
(C) (C)
(C)
(C)
Issued: June 23, 2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401
Effective: June 26, 2006
PAf0605
Core Communications, Inc. Supplement No. 11 Local Exchange Services
PA P.U.C. Tariff No. 1 2 n d Revised Sheet No. 50.11
Cancels l s l Revised Sheet No. 50.11
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd.)
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local Calling Areas (Cont'd)
B. The United Telephone Company ofPcnnsylvania d/b/a Sprint, (Cont'd.) (C)
Reedsville Exchange Belleville Lewistown (Verizon PA.)
Richfield Exchange McAlisterville Mt. Pleasant Mills (Verizon North)
Roaring Spring Exchange Altoona (Verizon PA.) Claysburg Hollidaysburg (Verizon PA.)
Saint Thomas Exchange Chambersburg Mercersburg
Schellsburg Exchange Bedford Fishertown
Shade Gap Exchange Orbisonia Shade Gap
Shippensburg Exchange Chambersburg Newburg
Slippery Rock Exchange Butler Harrisville Plain Grove Portersville
Reedsville
Richfield
Loysburg Martinsburg Roaring Spring
Saint Thomas
Schellsburg
Three Springs
Shippensburg
Volant West Sunbury Slippery Rock
(C)
(C)
(C)
(C)
Issued: June 23, 2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401
Effective: June 26, 2006
PAfO605
Core Communications, Inc. Supplement No. 11 Local Exchange Services
PA P.U.C. Tariff No. 1 2 n d Revised Sheet No. 50.12
Cancels l s l Revised Sheet No. 50.12
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd.)
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local Calling Areas (Cont'd)
B. The United Telephone Company of Pennsylvania d/b/a Sprint, (Cont'd.) (C)
State Line Exchange Cumberland, Md. (C & P Tel. Co. of Md.) Flintstone, Md. (C & P Tel. Co. of Md.) Hewitt
Thompsontown Exchange McAlisterville Mifflintown Millerstown
Three Springs Exchange Orbisonia Shade Gap
Volant Exchange Harrisville Plain Grove Portersville Slippery Rock
Waynesboro Exchange Blue Ridge Summit Greencastle Highfield, Md. (C & P Tel. Co. of Md.)
West Sunbury Exchange Butler Harrisville North Washington
Oldtown, Md. (C & P Tel. Co. of Md.) Ridgeley, W. Va. (C & P Tel. Co. of W. Va.) State Line
Port Royal Thompsontown
Three Springs Huntingdon (Verizon PA)
New Castle (Bell Tel. Co.) Blacktown New Wilmington (Verizon North) Volant
Waynesboro Chambersburg
(C)
(C)
Slippery Rock West Sunbury
Issued: June 23, 2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401
Effective: June 26, 2006
PAf0605
Core Communications, Inc. Supplement No. 11 Local Exchange Services
PA P.U.C. Tariff No. 1 2 n d Revised Sheet No. 50.13
Cancels l s l Revised Sheet No. 50.13
SECTION 3 - DESCRIPTION OF SERVICE (cont'd)
3. SERVICE DESCRIPTIONS (Cont'd.)
3.1 Local Exchange Service (Cont'd.)
3.1.1 Local Calling Areas (Cont'd)
B. The United Telephone Company of Pennsylvania d/b/a Sprint, (Cont'd.) (C)
Williamsburg Exchange Altoona Hollidaysburg (Verizon PA.)
York Springs Exchange Biglerville Gettysburg
Zion Exchange Bellefonte (Verizon PA.) Howard
Martinsburg Williamsburg
York Springs
State College (Verizon PA.) Zion
(C)
(C)
Issued: June 23, 2006 Effective: June 26, 2006
By: Christopher Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, Maryland 21401 PAf0605
BEFORE THE
PENNSYLVANIA PUBLIC UTILITY COMMISSION
Petition of Core Communications, Inc.
for Arbitration of Interconnection Rates,
Terms And Conditions with The United
Telephone Company ofPcnnsylvania
d/b/a Embarq Pennsylvania pursuant to
47 U.S.C §252(b)
Docket No.
A-310922F7002
DIRECT TESTIMONY OF JAMES M. (MIKE) MAPLES
EQ PA STATEMENT 3.0
ON BEHALF OF
THE UNITED TELEPHONE COMPANY OF PENNSYLVANIA
D/B/A EMBARQ PENNSYLVANIA
Prefiled: April 27, 2007
RECEIVED JUU " 2 ?C07
PA PUBLIC UTILITY COMMISSION' SECRETARY'S iUREAU
•
•
1 DIRECT TESTIMONY OF
2 JAMES M. (MIKE) MAPLES
3 EQ PA STATEMENT 3.0
4
5 SECTION I - INTRODUCTION
6
7 Q. Please state your name, title, and business address.
8 A. My name is James M. "Mike" Maples. I am employed as Regulatory Manager for
9 Embarq Management Company, which provides management services to The United
10 Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania ("United PA" or
11 "Embarq PA"). My business address is 5454 W. 110th Street, Overland Park, KS 66211.
12
13 Q. Please summarize your education and professional background.
14 A. I received a Bachelor of Science degree from East Texas State University, Commerce,
15 Texas, in December 1973 with majors in mathematics and industrial technology.
16 Beginning in 1968, I was also employed by Sprint/United Telephone Texas as a
17 technician responsible for installing and repairing residential, simple, and complex
18 business systems. I completed the company's Management Training program in 1974
19 and was promoted to the position of Revenue Requirement Analyst later that year.
20
21 For the next seventeen years, I held positions of increasing responsibilities in state,
22 regional, and corporate Sprint organizations. During that period, I prepared or was
23 responsible for jurisdictional separation studies, revenue budgets, demand forecasts,
24 access charge rates, and financial reporting to various regulatory agencies.
1
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefded April 27, 2007
1 From 1991 through 1995, as Manager Cost Allocations at Sprint United Management
2 Company, I developed financial models for alternative regulation, participated in a two
3 year project to develop a system-wide product costing model, developed and trained
4 personnel on revenue budget models, and standardized systems for separations costing
5 through system design, development, testing, and implementation.
6
7 In 1995 I accepted the position of Manager-Pricing/Costing Strategy and for 17 months
8 coordinated several system-wide teams that were charged with the identification and
9 development of methods, procedures, and system changes required to implement local
10 competitive services. During that period, I coordinated the technical support needed to
11 establish and maintain relationships with competitive local exchange carriers ("CLECs").
12
13 From September 1996 through July 1999, I held the position of manager of Competitive
14 Markets - Local Access with the responsibility for pricing unbundled network elements,
15 supporting negotiations with new competitive carriers, and assisting in implementation
16 issues.
17
18 I began my current position for Sprint United Management Company in August 1999,
19 and later transferred to Embarq Management Company in the same capacity. My
20 responsibilities include the review of legislation and Federal Communications
21 Commission ("FCC") and state commission orders affecting telecommunications policy;
22 interpreting the impact on the company; and developing positions, communicating them
23 throughout the organization, and representing them before regulatory bodies such as the
2
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27,2007
1 Pennsylvania Public Utility Commission.
• 2
3 Q. Have you testified before regulatory commissions before?
4 A. Yes. I have testified before the Missouri, Florida, Nevada, and California regulatory
* 5 commissions regarding interconnection and network unbundling issues. In addition, I
6 have filed written testimony in Texas, North Carolina, and Georgia on network
7 unbundling matters.
8
9 Q. What is the purpose ofyour testimony?
9 10 A. The purpose of my testimony is to offer support for Embarq's position with respect to the
11 portion of Issue 8 that deals with the treatment of VoIP calls and the porting of telephone
12 numbers between Embarq PA and Core (Issues $ and 2).
13
14 Q. Please give a brief statement of Issue 8.
15 A. The terms proposed by Embarq PA at §55.7 state that Voice over Internet Protocol
16 ("VoIP") calls will be treated on the same basis as all other voice calls with respect to
17 intercarrier compensation. Core deleted §55.7 on the basis that it disagreed with Embarq
^ • 18 PA's position that the geographic end points of a voice call determine its jurisdiction.
19 This action leaves the agreement silent on how VoIP calls should be compensated.
20 Core's position is inappropriate for VoIP products that are interconnected with Public
21 Switched Telephone Network ("PSTN"), especially since VoIP products are increasingly
22 being sold as a replacement for traditional circuit switched voice service. The
^ 23 Commission should order adoption of the terms and conditions proposed by Embarq PA
3
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 21, 2007
1 for Issue 8 with respect to VoIP.
2
3 With respect to the porting of telephone numbers (Issues 8 and 2), Embarq PA has
4 reviewed telephone numbers that it has ported to Core and determined that the numbers
* 5 have been ported outside of the rate center to which those numbers were originally
6 assigned, in contravention of current FCC rules. In order to maintain use of existing
7 numbers and be consistent with FCC rules and industry standards. Core should establish
8 an interconnection arrangement as proposed by Embarq PA's witness Ed Fox.
9 Alternatively, consistent with the FCC's comments in the local number portability
9 10 proceeding, Core could be required to replace the numbers with toll free 800 numbers,
11 which were designed to provide the service that Core is actually offering.
12
13 SECTION II - Unresolved Issues
14 A. Issue 8 (VoIP)
* 1 5
16 Q. What is VoIP?
17 A. The FCC has defined VoIP as "...any IP enabled services offering real-time,
* 18 multidirectional voice functionality, including, but not limited to, services that mimic
19 traditional telephony."1 An IP enabled service includes any service or application that
20 relies on the Internet Protocol ("IP") family.2 Neither definition specifies how the IP
1 In the Matter of IP-Enabled Services, WC Docket No. 04-36, Notice of Proposed Rulemaking, FCC 04-28, Released March 10, 2004 ("IP Enabled NPRM"), footnote 7. 2 IP Enabled NPRM, footnote 1.
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27, 2007
1 technology is used in providing the service, which means that the IP transmission
2 segment could be at the point where the call originates, somewhere along the route the
3 call traverses, or at the termination point.
4
5 Q. Why should the tenns of the agreement address intercarrier compensation for VoIP?
6 A. VoIP traffic is terminated to the PSTN over the traditional circuit switched trunks
7 between connecting companies commingled with all other voice traffic. There are
8 currently no means of identifying which calls are VoIP and which calls are circuit
9 switched based on the recording equipment employed to create records to bill connecting
10 companies for intercarrier compensation. It is important that the parties reach agreement
11 on the appropriate terminating compensation for such voice traffic. The terms proposed
12 by Embarq PA properly treat this VoIP traffic the same as any other voice traffic that
13 utilizes the PSTN and determine compensation based on the jurisdiction of the call. By
14 eliminating the terms proposed by Embarq PA, Core would leave the agreement silent on
15 the treatment of VoIP, effectively deferring the issue to some future date should Core
16 disagree with treating VoIP calls like any other voice calls.
17
18 Q. Is Core obligated to negotiate terms for sending VoIP traffic to Embarq PA ?
19 A. Yes. VoIP providers cannot seek interconnection under section 251 of the Act since the
20 FCC has not reached a decision regarding the statutory classification of that service and
21 must therefore seek access through a telecommunications carrier, often a CLEC.3 In
3 Time Earner Cable Request for Declaratory Ruling that Competitive Local Exchange Carriers May Obtain Interconnection Under Section 251 of the Communications Act of 1934, as Amended, to Provide Wholesale
5
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27, 2007
1 addition, the CLEC ofTering the wholesale service to the VoIP provider must provide
2 telecommunications services to its customers4 and must reach agreement with Incumbent
3 Local Exchange Carriers ("ILECs") on interconnection and intercarrier compensation for
4 such traffic.5 I f Core refuses to negotiate terms it forfeits any rights to send VoIP traffic
5 to Embarq PA.
6
7 Q. Would you please give some practical examples of VoIP services that are available to
8 the public today?
9 A. There are generally three types of VoIP calls that are currently available. The first type
10 of call originates and terminates on a computer or similar customer premises equipment
11 ("CPE"), is transmitted wholly in IP, and does not originate or terminate on the PSTN.
12 Such services are often referred to as computer to computer or IP-IP services. Examples
13 include instant messenger based services such as Skype and Window's Live Messenger.
14 These types of calls usually do not traverse the PSTN trunks connecting carriers. The
15 second type of call originates on the PSTN using normal CPE, is routed over IP
16 transmission facilities, and is terminated on the PSTN on normal CPE. These services
17 are referred to as PSTN-IP-PSTN or "IP in the middle" services. Given the fact that IP
18 based transport is becoming the de-facto standard in the industry it is probably safe to say
19 that much of the long distance traffic and even some local voice services are provided in
20 this fashion. The last type of VoIP service utilizes a computer or similar CPE at one end
Telecommunications Services to VoIP Providers, WC Docket No. 06-55, Memorandum Opinion and Order, DA 07-709, Released March 1, 2007 ("Time Warner Declaratory Ruling"), V- 3-4
Time Warner Declaratory Ruling, T| 14. 5 Time Wamer Declaratory Ruling, ^ 17.
DIRECT TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA Statement 3.0 - Prefded April 27, 2007
1 ofthe call, is routed using IP over some portion of the call, and is ultimately connected to
2 the PSTN at the other end. These services are referred to as IP-PSTN services. Vonage
3 and CATV companies are prime examples of providers offering these types of services.
4 Instant messenger based service providers also offer this capability.
5
6 Q. Please describe these services.
1 A. Customers of Vonage and Skype or other "over the top" services, including Windows
8 Live Messenger, make voice calls over Internet broadband connections they have
9 purchased from providers such as Embarq PA. These customers use their computers or
10 other specialized customer premises equipment to connect to Vonage and Skype servers
11 over the Internet and place voice calls.6 The calls can be directed to other Vonage or
12 Skype customers utilizing unique numbers or addresses assigned by the provider and
13 remain entirely on the public Internet or the calls can be directed to any telephone
14 number on the PSTN. When such calls are directed to a number on the PTSN, the VoIP
15 call is handed off to a telecommunications carrier to terminate the call. That carrier
16 converts the call from the IP protocol to traditional circuit switched voice in order to do
17 so.
18
19 CATV companies such as Time Wamer and Comcast have modified their cable networks
20 and enabled the provision of voice services. The customer can use a regular standard
21 telephone, but it must be connected to specialized customer premises equipment that
End users can install software on their computers allowing them to use the microphone and speakers; they can install an adapter that allows a standard telephone to be connected; or they can connect a telephone using IP.
9 DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27, 2007
1 converts the audio signal to IP and routes it over the broadband connection. When calls
2 are placed between a CATV customer and an Embarq PA customer, the call is usually
3 routed through a telecommunications carrier over interconnection trunks the carrier has
4 established with Embarq PA. These calls are converted from IP to traditional circuit
5 switched voice to accomplish this.
6
7 The FCC has defined these types of product offerings, which have the ability to connect
8 to the PSTN, as "Interconnected VoIP services." These services enable real-time, two-
9 way voice communications; require a broadband connection from the user's location;
10 require Internet protocol-compatible CPE; and permit users generally to receive calls that
11 originate on the PSTN and to terminate calls to the PSTN.7
12
13 Q. What has the FCC decided regarding VoIP services?
14 A. The FCC determined that free VoIP calls over the Internet using broadband connections
15 (IP-IP or computer to computer) are an unregulated infonnation service subject to FCC
o
16 jurisdiction. These calls never touch the PSTN, are restricted to subscribers of the
17 service, and do not use telephone number resources. This type of traffic is not at issue in
18 this proceeding.
19
See, C.F.R.', Title 47, §9.3. 8 Petition for Declaratory Ruling that Pulver.com's Free World Dialup is Neither Telecommunications Nor a Telecommunications Service, WC Docket No. 03-45, Memorandum Opinion and Order, FCC 04-27 , Released February 19, 2004 ("Pulver.com").
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefded April 27,2007
1 In the AT&T Phone-to-Phone9 proceeding, the FCC decided that VoIP calls that use
2 ordinary CPE, originate and terminate on the PSTN, do not undergo a net protocol
3 change, and do not receive any enhanced functionality due to the provider's use of IP
4 technology are telecommunications services and access charges apply (PSTN-IP-PSTN).
5 This ruling also applies to prepaid calling card services that utilize IP technology to
6 transport all or a portion of the calling card call.10
7 With respect to Interconnected VoIP service providers the FCC has determined that they
8 must provide E911/911 access,11 must be GALEA compliant,12 and must contribute to the
9 interstate Universal Service fund.13
10
11 Q* Has the FCC determined the method for carriers to compensate each other for these
12 VoIP services ?
13 A. As stated above, computer to computer calls are not at issue in this proceeding. It is
14 possible that an individual could make a VoIP call utilizing a dial up Internet connection,
15 but to the extent this occurs it would be treated as ISP traffic and indistinguishable from
16 it. With respect to PSTN-IP-PSTN calls, the FCC has determined that those services are
9 Petition for Declaratory Ruling that AT&T's Phone-to-Phone Telephony services are Exempt from Access Charges, WC Docket No. 02-61, Order, FCC 04-97, Released April 21, 2004 ("AT&T Phone-to-Phone"). 1 0 Regulation of Prepaid Calling Card Services, WC Docket No. 05-68, Declaratory Ruling and Report and Order, FCC 06-79, Released June 30, 2006 ("Prepaid Calling Card Order"). n IP-Enabled Services and E911 Requirements for IP-Enabled Service Providers, WC Dockets No. 04-36 and 05-196, First Report and Order and Notice of Proposed Rulemaking, FCC 05-116, Released June 3, 2005 ("VoIP 911 Order"). 1 2 Communications Assistance for Law Enforcement Act and Broadband Access and Services, ET Docket No. 04-295 and RM-10865, First Report and Order and Further Notice of Proposed Rulemaking, FCC 05-153, Released September 23, 2005 ("VoIP GALEA Order"). 1 3 Universal Service Contribution Methodology, WC Docket No. 06-122, Report and Order and Notice of Proposed Rulemaking, FCC 06-94, Released June 27, 2006 ("VoIP USF Order").
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27, 2007
1 telecommunications services and are subject to normal voice compensation, which means
2 that access charges or reciprocal compensation would apply based on jurisdiction. The
3 FCC has not made a determination regarding Interconnected VoIP services; however, in
4 its IP-Enabled Services proceeding the FCC stated, "As a policy matter, we believe that
5 any service provider that sends traffic to the PSTN should be subject to similar
6 compensation obligations, irrespective of whether the traffic originates on the PSTN, on
7 an IP network, or on a cable network. We maintain that the cost of the PSTN should be
8 borne equitably among those that use it in similar ways."14 That is effectively what
9 Embarq PA is requesting this Commission to order.
10
11 • Q. Can the Pennsylvania Commission order the application of intrastate charges to VoIP
12 since the FCC has classified interconnected VoIP as an Interstate service?
13 A. Yes. The FCC has not specifically pre-empted state commissions regarding intercarrier
14 compensation for interconnected VoIP services. A recent court decision found that the
15 Congress did not intend for VoIP services to be totally unregulated and that absent a
16 specific determination a state can exercise jurisdiction.15 When the FCC reviewed
17 Vonage's petition for a declaratory ruling concerning its Digital Voice Service, it
18 concluded that the service was jurisdictionally mixed and that it was used to enable
19 intrastate communications.16 In addition, the FCC established a VoIP safe harbor of
1 4 IP Enabled Service Proceeding, T)33. 1 5 See the decision in Comcast IP Phone of Missouri, LLC V. Missouri Public Service Commission, United States District Court for the Western District of Missouri Central Division, Case No. 06-4233-CV-C-NKL. 1 6 Vonage Holdings Corporation Petition for Declaratory Ruling Concerning an Order of the Minnesota Public Utilities Commission, WC Docket No. 03-211, Memorandum Opinion and Order, FCC 04-267, Released November 12, 2004,1|18 ("Vonage Order").
10
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefded April 27,2007
1 64.9% interstate in the VoIP USF Order, which classifies 35.1% as intrastate.17 The FCC
2 decision in the Vonage Order was specific to Vonage's Digital Voice service. It relied
3 heavily on the portable nature of the service and decided that there was no way to
4 practically separate the service into intrastate and interstate components without
1 s
5 thwarting federal law and policy. But not all Interconnected VoIP services are
6 portable. The FCC refused to declare Vonage's Digital Voice service as either
7 telecommunications or information and has yet to establish rules regulating intercarrier
8 compensation for such traffic. There is, therefore, no explicit federal rule prohibiting this
9 Commission from adopting Embarq PA's terms and conditions (§55.7). The Commission
10 has the authority to arbitrate this issue and to render an order on it consistent with
11 Embarq PA's position. Embarq PA's position is eminently reasonable given the nature of
12 the service (real-time voice to/from the PSTN), the fact that the service competes directly
13 with circuit switched voice services, and because methods to treat the service uniquely
14 are administratively more difficult.
15
16 £?. But didn't the FCC say in the Vonage Order that it would likely pre-empt any attempts
17 by states to regulate services with similar characteristics?
18 A. While there are comments to that effect in the order, the fact remains that the FCC did not
19 pre-empt regulation of those services with similar characteristics and effectively punted
20 the establishment of current interconnection arrangements to the negotiating parties and
1 7 VoIP USF Order, 1|53. 1 8 Vonage Order, f 14.
11
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefded April 27,2007
state commissions.19
3 Q. Are there any other reasons why the Pennsylvania Commission should treat
4 interconnected VoIP on the same basis as circuit switched voice?
5 A. Regulations that favor one carrier or business plan over another encourage market
6 development based on regulatory arbitrage, which is inappropriate. Therefore, it is
7 important that the Commission establish public policy on the basis of competitive
8 neutrality. The FCC recognized this when it ordered interconnected VoIP providers to
9 contribute to the Interstate USF. Embarq PA competes directly with VoIP providers in
10 offering long distance voice services. Embarq PA pays access charges, both intrastate
11 and interstate, for the services it provides. I f VoIP providers pay interstate access charges
12 or reciprocal compensation for intrastate voice traffic, they will have a competitive
13 advantage because interstate access charges and reciprocal compensation are usually
14 lower than intrastate access charges. VoIP providers should not be rewarded or favored
15 simply because they use a different technology to provide competitive voice services.
16
17 Q. You mentioned in your previous response that the FCC recognized the importance of
18 competitive neutrality in its VoIP USF Order. Please explain.
19 A. The FCC recognized that to maintain competitive neutrality it could no longer exempt
20 VoIP providers from USF obligations when VoIP service is being used as a replacement.
1 9 In the recent decision from the United States Court of Appeals for the Eight Circuit the court specifically stated that the FCC did not address fixed VoIP services in the Vonage Order and any assumption that it would do so is "a mere predicrion". (Minnesota Public Utilities Commission v. Federal Communications Commission, No. 05-1069, page 21.).
12
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27, 2007
1 for analog voice service stating:
2 We also find that the principle of competitive neutrality supports our conclusion 3 that we should require interconnected VoIP providers to contribute to the support 4 mechanisms. Competitive neutrality means that "universal service support 5 mechanisms and rules neither unfairly advantage nor disadvantage one provider 6 over another, and neither unfairly favor nor disfavor one technology over 7 another." as the Commission has noted, interconnected VoIP service "is 8 increasingly used to replace analog voice service." As the interconnected VoIP 9 service industry continues to grow, and to attract subscribers who previously
10 relied on traditional telephone service, it becomes increasingly inappropriate to 11 exclude interconnected VoIP service providers from universal service 12 contribution obligations. Moreover, we do not want contribution obligations to 13 shape decisions regarding the technology that interconnected VoIP providers use 14 to offer voice services to customers or to create opportunities for regulatory 15 arbitrage. The approach we adopt today reduces the possibility that carriers with 16 universal service obligations will compete directly with providers without such 17 obligations. We therefore find that the principle of competitive neutrality is served 18 by extending universal service obligations to interconnected VoIP service 19 providers.20
20
21 Furthermore the FCC found that it was in the public interest to treat interconnected VoIP
22 service providers on the same basis recognizing that such providers are dependent upon
23 the wider PSTN network and received great benefit from it . 2 1
24
25 Q. Are there similar situations where state commissions have ordered intercarrier
26 compensation schemes not specifically defined by the FCC?
27 A. Yes. The Public Utilities Conimission of Ohio considered this very issue in an arbitration
28 proceeding between TeleCove Operations, Inc. and SBC Ohio and ordered the
29 application of access charges to VoIP calls terminated to the PSTN based on the
2 0 VoIP USF Order, 1f44, footnotes omitted.
2 1 VoIP USF Order, 43,45.
13
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27, 2007
1 jurisdiction of the call.2 2 In addition, I understand that the state commissions of
2 Massachusetts and Vermont ordered Global NAPS, Inc. to pay Verizon's ILEC intrastate
3 access charges for ISP calls made by Verizon end users to ISPs served by Global NAPS,
4 Inc. using virtual NXX telephone numbers. The two cases were appealed to separate
5 United States Courts of Appeals and both were upheld.23
6
7 Q. What VoIP language is Embarq PA proposing?
8 A. Embarq PA is proposing that the resulting interconnection agreement include the
9 following language, as provided to Core on April 4, 2007:
10 55.7 All voice calls exchanged between the Parties originating 11 from or terminating to the PSTN shall be compensated in the 12 same manner (eg., reciprocal compensation, interstate access, and 13 intrastate access) regardless of the technology used to originate, 14 terminate, or transport the call. The Parties further agree that this 15 Agreement shall not be construed against either Party as a final 16 position on the treatment of VNXX. Both Parties reserve the right 17 to advocate their respective positions before state or federal 18 commissions whether in bilateral complaint dockets, arbitrations 19 under Sec. 252 of the Act, commission established rulemaking 20 dockets, or in any legal challenges stemming from such 21 proceedings. 22
2 2 In the Matter of TelCover Operations, Inc. 's Petition for Arbitrations Pursuant to Section 252(b) of the Communications Act of 1934, as Amended by the Telecommunications Act of 1996, and Applicable State Laws for Rates, Terms, and Conditions of Interconnection with Ohio Bell Telephone Company d/b/a SBC Ohio, Case No. 04-1822-TP-ARB, Arbitration Award, pages 10-17.
2 3 Global NAPS, Inc., Plaintiff, Appellant, v. Verizon New England, Inc., d/b/a/ Verizon Massachusetts; Massachusetts Department of Telecommunications and Energy, United States Court of Appeals for the First Circuit, No. 05-2657, April 11, 2006 and Global NAPS, Inc., Plaintiff-Appellant, v. Verizon New England, Inc., F/K/A New England Telephone & Telegraph Co., D/B/A Bell-Atlantic Vermont, Inc., Vermont Public Service Board, United States Court of Appeals for the Second Circuit, Docket No. 04-4685-cv, July 5, 2006.
14
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefded April 27, 2007
•
1 Q. Are you aware of the Pennsylvania Public Utility Commission's Policy Statement at
2 Investigation into Voice over Internet Protocol as a Jurisdictional Service, Docket No.
3 M-00031707?
4 A. Yes, I have reviewed the Commission's Policy Statement.
5
6 Q. Do you believe that the Pennsylvania Commission should come to a different
1 conclusion in this proceeding?
8 A. Yes. The decision was made in April, 2004, three years ago and the situation with
9 respect to VoIP has changed. First, VoIP is no longer a nascent technology. It has
10 entered the mainstream, many carriers are providing voice service to end user customers,
11 and it is no longer restricted to private networks or the Internet. VoIP traffic is being
12 converted and sent to the PSTN over existing trunks. Second, the FCC has made
13 decisions subjecting a subset of VoIP (Interconnected VoIP) to E911, GALEA, USF, and
14 is now considering whether or not to subject them to additional regulatory fees. Third,
15 the VoIP services that Embarq PA is seeking the Commission's decision on are not all
16 VoIP services, but just VoIP that is interconnected to the PSTN. Fourth, the VoIP
17 services in question utilize number resources from the North American Numbering Plan
18 Administrator ("NANPA"). Fifth, the FCC's IP Enabled Proceeding is still open and the
19 FCC has still not made a decision on this issue. And finally, the Commission is being
20 asked to exercise authority to resolve arbitrations under Section 251 of the 1996 Telecom
21 Act, thus as granted by federal statute, rather than under state authority.
22
15
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27, 2007
1 B. Issues 8 & 2 (Porting)
2
3 Q. What is number portability?
4 A. Number portability is the ability of a user of telecommunications services to retain, at the
5 same location, their existing telephone number when they change service providers.24
6
7 Q. Can the end user keep their telephone number if they change their location?
8 A. The end user can change location when porting their telephone number from one wireline
9 service provider to another wireline service provider as long as that location is within the
10 same rate center. The FCC has not ordered geographic portability and its rules prohibit
11 porting a telephone number outside ofthe rate center to which it is assigned. Doing so
12 can lead to problems with rating, routing, dialing parity, customer confusion, and
13 E911/911.
14
15 Q. What rules are you referring to?
16 A. The FCC adopted and codified the recommendations ofthe North American Numbering
17 Council (NANC) Local Number Portability Administration Selection Working Group
18 Report, dated April 25, 1997 (Working Group Report) in the Code of Federal
19 Regulations, Title 47 §52.26(a). Section 7.3 of Appendix D of that report states that
20 "location portability is technically limited to rate center/rate district boundaries of the
21 incumbent LEC due to rating/routing concerns" and that additional limitations might be
22 required for various reasons such as E911 operability.
2 4 Tide 47 C.F.R. § 52.21(1).
16
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27,2007
1 Q. What is a rate center?
2 A. A rate center (also know as an "Exchange") is a geographic area used as a metric in
3 rating calls (i.e., local, toll, distance where applicable). This area coincides with ILEC
4 wire center(s) boundaries, which are regulated by the Commission.
5
6 Q. Wfiat alternatives are available to customers that want geographic portability?
1 A. The FCC addressed this in the First Report and Order that mandated service provider
8 portability and rejected geographic portabihty stating, "Also, users who strongly desire
9 location portability can use non-geographic numbers by subscribing to a 500 or toll free
10 number."25 In spite of this instruction from the FCC some carriers take advantage of
11 "gaps" in LNP processes to geographically port numbers to end users that are located
12 outside ofthe rate center to which the number is assigned.
13
14 Q. What gaps are you talking about?
15 A. The FCC rules for porting numbers between wireline carriers prohibit the number from
16 being ported outside the rate center but the rules for porting numbers between a wireline
17 and wireless carrier are not restricted in the same fashion due to the mobility of the
18 wireless service. Wireline to wireless ports are restricted to the same LATA and
19 therefore the edits performed by the NPAC (Number Portability Administration Center)
20 just ensure that the port is within the LATA, not within the same rate center. It is
21 possible for a wireline carrier to request a number to be ported from another wireline
O
2 5 In the Matter of Telephone Number Portability, CC Docket No. 95-116, First Report and Order and Further Notice of Proposed Rulemaking, FCC 96-286, Released July 2, 1996, % 184.
17
DIRECT TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27,2007
1 carrier outside the rate center in contravention of the FCC rules and for that request to
2 pass the NPAC edits. This is the case of many of the numbers that Embarq PA has
3 ported to Core and had we recognized this when we received the port requests from Core
4 we could and should have disputed them.
• 5
6 Q. Why do you believe that these numbers have been ported outside the rate centers to
1 which they were originally assigned?
8 A. Several of the telephone numbers that were ported to Core were initially provided by
9 Embarq PA to an end user that purchased Remote Call Forwarding in order to route calls
9 10 from the rate center where the number was assigned to the end user location in a different
11 rate center. This method of call routing treats the forwarded call as a "second call" that is
12 treated appropriately as toll or local based on the rate center that the call was being
13 forwarded to. We therefore had reason to believe that the end user was not
14 geographically located in the rate center to which the number was assigned. I then
15 reviewed the Core switch locations to which these numbers were assigned and all of them
16 are physically located outside ofthe rate centers in question. Coupled with the fact that
17 Core has not established physical points of interconnection in the rate centers, this
* 18 indicates that both the switch to which the number was ported and the end user location
19 are both outside of the rate center to which the number is assigned.
20
21 Q. Why didn ft Embarq PA discover this?
22 A. We did not realize that the NPAC edits would not prevent this from occurring until we
0 23 conducted our investigation for this proceeding. We do not have internal edits to catch
18
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27,2007
1 such abuse and are investigating that potential. A carrier cannot get number resources
2 assigned to it without first meeting a facilities readiness test. When a carrier states via its
3 inputs into various industry systems that a number is actually working in a specific rate
4 center, the industry assumes that the carrier is abiding by the rules and guidelines.
5
6 Q. What is the facilities readiness test?
1 A. Before a carrier can secure numbering resources for a particular area from the North
8 American Numbering Plan Administrator (NANPA), they must file an application and
9 provide evidence that they are or will be capable of providing service within that area
10 within sixty (60) days.26 Examples ofsuch proof include interconnection agreements,
11 network information, and business plans.27
12
13 Q. Did Core provide this information to get number resources for Embarq PA rate
14 centers?
15 A. Core would have to do so to secure numbers directly from NANPA. It is possible that
16 they could have gotten them from another provider as an Intermediate number.
17
18 Q. Do you know what Core provided?
19 A. No. The applications are confidential and I have not reviewed them.
9
2 6 Title 47 C.F.R. §52.15(gX2)(ii). 27 In the Matter of Numbering Resource Optimization, CC Docket No. 99-200, Report and Order and Further Notice of Proposed Rule Making, Adopted March 17,2000, \91.
19
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27,2007
1 Q, You mentioned previously that porting a number outside of a rate canter can cause
2 several problems, one of which is E911 operability. Can you provide an example of
3 problems with E911/911 that might arise out of number portability if not handled
4 properly?
5 A. Certainly. I f the end user was not geographically located in the same rate center and they
6 called 911 during an emergency and they were not registered in the 911 database
7 appropriately, then they could get routed to the wrong PSAP and may not receive timely
8 assistance. This is why the FCC ordered interconnected VoIP providers to implement a
9 method for their end users to register their physical location. Wireless providers employ
10 similar capabilities registering the location of individual handsets.
11
12 Q. Should Core be providing E911 capability for these numbers?
13 A. Yes. FCC rules mandate that E911 capability be provided.
14
15 Q. What FCC rules are you referring to?
16 A. In Title 47 ofthe Code of Federal Regulations §52.23(a)(l), one of the performance
17 criteria of the LNP methodology listed by the FCC is that the existing emergency services
18 would not be adversely impacted. The FCC concluded in | 50 ofthe First Report and
19 Order on Number Portability that "The public interest also requires that service provider
20 portability not impair the provision of network capabilities that are important to public
21 safety, such as emergency services and intercept capabilities. In our proposal to ensure
22 that PBXs and CMRS provider support enhanced 911 services, we reaffirmed that 911
23 services enable telephone users to receive fast response to emergency situations, and that
20
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefded April 27, 2007
1 broad availability of 911 and E911 service best promotes "safety, of life and property
2 through the use of wire and radio communication."".
3
4 Q. What action should the Commission take with respect to Core's porting of numbers
5 outside of the rate center?
6 A. It should be clear that the telephone numbers in question are assigned to an end user
7 located in a rate center that is foreign to the rate center to which Core has assigned the
8 telephone numbers. Embarq PA's provision of service was consistent with the FCC rules
9 since calls were actually routed through the appropriate rate center and the end user
10 subscribing to the call forwarding feature paid for the cost of extending the call outside
11 the rate center and terminating it to a foreign point.28 The fact that Core simply
12 "maintained" the appropriate rate center designation in the Local Exchange Routing
13 Guide ("LERG") and did not appropriately route the call to the foreign point is not
14 consistent with the FCC rules and wireline industry standards. I f Core wants to keep
15 these numbers the Commission should require Core to establish an interconnection
16 arrangement as presented by Embarq PA's witness Ed Fox. Alternately, consistent with
17 the FCC's comments in the LNP proceeding Core could be required to replace the
18 numbers with toll free 800 numbers, which were designed to provide the service that
19 Core is offering.
20
28
•
To be clear, the end user originating the call did not pay for the cost of routing the call to the foreign rate center. The end user that was being called paid the cost of routing to the foreign rate center.
21
DIRECT TESTIMONY OF JAMES M . (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27, 2007
1 SECTION HI - CONCLUSION
2
3 Q. Please summarize your testimony.
4 A. Regarding Issue 8 fVoIP):
5 If Core wants to send VoIP traffic to Embarq PA it is obligated to negotiate the terms and
6 conditions of the intercarrier compensation arrangement. The traffic in question is real
7 time voice traffic exchanged between Core and Embarq PA over the PSTN trunk
8 facilities connecting the two carriers' networks. The traffic coincidentally utilizes IP
9 somewhere in the transmission path. The traffic directly competes with voice products
10 offered by Embarq PA using circuit switched technology.
11
12 While the FCC has not defined the intercarrier compensation structure for VoIP, it has
13 stated that the cost ofthe PSTN should be shared equitably among carriers using it in the
14 same manner. Competitive neutrality mandates treating interconnected VoIP traffic like
15 any other voice traffic. The agency has left the determination of compensation to carrier
16 negotiations and arbitration proceedings such as this one. The FCC has not said that
17 states cannot establish VoIP intercarrier compensation in the context of an arbitration
18 proceeding, and the parties in this proceeding are asking this Commission to resolve this
19 issue. Interconnected VoIP is used to provide voice communications for all jurisdictions.
20 Embarq PA's recommendation treats all voice traffic exchanged on the PSTN trunks on
21 an equal basis. The Commission should order adoption of the terms and conditions
22 proposed by Embarq PA for Issue 8.
23
22
DIRECT TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA Statement 3.0 - Prefded April 27,2007
1 Regarding Porting (Issues 8 &2):
2 Current FCC rules regulating the porting of telephone numbers between wireline carriers
3 restrict such porting to service provider portability, not geographic portability. The rules
4 mandate that rate center assignments be maintained. Investigation of numbers ported
5 from Embarq PA to Core indicate that Core has violated the current rules since both the
6 end user and carrier switch are located outside ofthe rate center and the carrier does not
7 have any physical presence within the rate center. If Core wants to keep these numbers
8 the Commission should require Core to establish an interconnection arrangement
9 consistent with the recommendations of Embarq PA's witness Mr. Ed Fox. Alternately,
10 consistent with the FCC's comments in the LNP proceeding Core could be required to
11 replace the numbers with toll free 800 numbers, which were designed to provide the
12 service that Core is offering.
13
14 Q. Does this conclude your Direct Testimony?
15 A. Yes
23
DIRECT TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA Statement 3.0 - Prefiled April 27,2007
BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION
Petition of Core Communications, Inc. for Arbitration of Interconnection Rates, Terms And Conditions with The United Telephone Company ofPcnnsylvania d/b/a Embarq Pennsylvania pursuant to 47 U.S.C §252(b)
Docket No. A-310922F7002
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES
EQ PA STATEMENT 3.1
ON BEHALF OF THE UNITED TELEPHONE COMPANY OF PENNSYLVANIA
D/B/A EMBARQ PENNSYLVANIA
**PUBLIC VERSION**
Prefiled: June 4, 2007
RECEIVED .. . " 2 /JC7
JBLIC UTILITY COMMISSION SECRETARY'S 8UREAU
1 REBUTTAL TESTIMONY OF
2 JAMES M. (MIKE) MAPLES
3 EMBARQ PA
4
5 SECTION I - INTRODUCTION
6
7 Q. Please state your name, title, and business address.
8 A. My name is James M. "Mike" Maples. I am employed as Regulatory Manager for
9 Embarq Management Company, which provides management services to The United
10 Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania ("United PA" or
11 "Embarq PA"). My business address is 5454 W. 110£h Street, Overland Park, KS 66211.
12
13 Q. Are you the same Mike Maples who filed Direct Testimony in this proceeding on April
14 27,2007?
15 A. Yes, I am.
16
17 Q. What is the purpose of your Rebuttal Testimony?
18 A. My testimony will rebut positions taken by Core witness Timothy J. Gates in his Direct
19 Testimony specific to Core's use of telephone numbers and claims that its Virtual NXX
20 ("VNXX") services are the same as Foreign Exchange ("FX") services provided by other
21 carriers such as Embarq PA. Specifically, I will show that Core is wrong in its assertions
22 that the service it provides is the same as FX services and that its use of telephone
23 numbers is consistent with industry standards.
1
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4, 2007 PUBLIC VERSION
1 SECTION II - REBUTTAL TESTIMONY
2
3 Virtual NXX and FX Service Comparison
4
5 Q. Mr. Gates claims that the Virtual NXX ("VNXX") service that Core provides is the
6 same as ILEC Foreign Exchange or "FX" service (Gates Direct, page 33 at lines 784-
7 788; and 794-796). What is Foreign Exchange Service?
8 A. The industry standard FX arrangement involves the purchase of transport by the end user
9 who requests the FX from the local exchange where the number is assigned to the local
10 exchange where that end user resides. The local exchange where the number is assigned
11 is "foreign" to the exchange where the end user requesting FX service resides. As other
12 Embarq PA witnesses have testified, Core has not purchased this transport on behalf of
13 its end user for VNXX service and, in fact, is routing calls over toll trunks without paying
14 for the transport. Following is a definition of FX service taken from an FCC order.
15
16 71. Foreign Exchange (FX) service connects a subscriber ordinarily
17 served by a local (or "home") end office to a distant (or "foreign")
18 end office through a dedicated line from the subscriber's premises to
19 the home end office, and then to the distant end office. The "home"
20 end is known as the closed end, while the "foreign" end is known as
21 the open end. In effect, this gives the subscriber a dial tone presence
22 in the distant exchange without additional toll charges. In
23 interLATA FX service, which is offered by AT&T but not MCI, the
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefiled June 4, 2007 PUBLIC VERSION
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A.
home and foreign end offices are in different LATAs, connected by
the IXC's interstate private lines. In intraLATA FX service, which is
offered by the LECs, the home and foreign end offices are in the
same LATA, connected by the LECs intraLATA, interoffice lines.
(FCC 98-321, Memorandum Opinion and Order, Released
December 9, 1998)
Would you provide an example of FX service involving two carriers?
Yes, I will. Please refer to the diagram below.
Originating and Terminating Calls
=» RatelGenterj
FX Customer
Local Calling Area 1 - Carrier I Local Calling Area 2 — Carrier 2
Figure 1 - FX Example
The example above shows two carriers that serve adjoining rate centers. Calls between
customers ofthe two carriers are long distance. A customer of Carrier 2 in Local Calling
Area 2 wants to make and receive local calls from Local Calling Area 1. Carrier 2 orders
FX service on behalf of the customer from Carrier 1 to accomplish the customer's
request. The FX customer pays for switching and transport from Carrier 1 's central
office in Local Calling Area 1 to their premises in Local Calling Area 2. Calls to and
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4,2007 PUBLIC VERSION
1 from this FX line are switched at the serving central office in Local Calling Area 1 and
2 routed to the FX customer's location in Local Calling Area 2 over the facilities leased by
3 the FX customer. The FX customer therefore pays any toll charges for calls originated
4 from the FX based on the local calling scope of the serving central office rate center
5 (where they receive dial tone and where it is switched). Similarly, Carrier 1 bills
6 originating and terminating access for interlata and intralata toll calls to and from the
7 serving central office rate center placed over the FX, not the physical location of the
8 subscriber.
10 Q. Does Embarq PA provide FX service?
11 A. Yes it does. A copy of Embarq PA's FX tariff is attached to this Rebuttal Testimony as
12 Exhibit JMM-1.
13
14 Q. What does Embarq PA charge the FX purchaser?
15 A. Embarq PA charges the end user buying FX service for the interexchange mileage at the
16 rate of $5.00 per mile and also charges $0.60 per quarter mile for line mileage outside of
17 the base rate area. The end user also pays for the actual service being purchased (such as
18 a business 1 party line) and a channel termination charge of $24.00 for each central office
19 that the FX is routed through. In addition, there is a supplemental charge of $6.00 for a
20 partial toll replacement. This supplemental charge is applied for each 5 cent multiple of
21 the day station-to-station initial period message toll rate between the normal exchange
22 and the foreign exchange for a partial toll replacement. This means that if the toll rate is
23 $.25, the supplemental charge is 5 times the $6.00 per month or $30.00 per month.
24
25
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St 3.1 - Prefiled June 4, 2007 PUBLIC VERSION
1 Q. Are these charges the same if another company is involved?
2 A. If an Embarq PA end user wants to purchase an FX from another ILEC, Embarq PA will
3 rent a terminal from the other ILEC and establish the FX line between the two wire
4 centers. Embarq PA then charges the end user buying the FX for the service provided by
5 the other ILEC at the other ILEC's tariffed rates as well as additional mileage charges.
6
7 Q. Does Embarq PA try to bill the other [LEC or the other ILEC's end users for any
8 portion of the FX service?
9 A. No. The cost is borne by the end user purchasing the FX service.
10
11 Q. How does the end user buying the FX service recover the cost ofpaying for it?
12 A. Ifthe end user buying the FX service is a business customer the cost of the FX service is
13 a business expense that it would recover from the revenues it derives from whatever
14 product it is selling. So, i f an ISP buys FX service it recovers the expense from its
15 Internet customers.
16
17 Q. Does Embarq PA provide other services to end user customers such as ISPs to provide
18 toll free calling to the ISPs customers?
19 A. Yes. Embarq PA provides services such as remote call forwarding, which is the service
20 that some of the ISPs were purchasing from Embarq PA prior to transferring their service
21 to Core.
22
23
REBUTTAL TESTLMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4, 2007 PUBLIC VERSION
1 Q. Please describe the remote call forwarding arrangement
2 A. In the remote call forwarding arrangement all calls destined for the local telephone
3 number are routed to the serving central office where the number is assigned and then
4 forwarded to a distant location via a second phone number. This is essentially a two call
5 scenario. The second call can be directed to an 800 toll free number or a number
6 assigned to the distant rate center. In that case toll charges would apply to the second call
7 and be paid for by the end user purchasing the remote call forwarding arrangement, not
8 the end user originating the call. This is consistent with an FX arrangement.
9
10 Q. What is virtual NXX ("VNXX") ?
11 A. Embarq PA witness Fox provides the following definition on page 32 of his Direct
12 Testimony.
13
14 Virtual NXX, or VNXX, refers to telephone numbers assigned to a
15 customer in a local calling area different from the one where the
16 customer is physically located in circumstances where the telephone
17 company assigning the number is not using facilities of its own to
18 transport the call from the calling area associated with the telephone
19 number to the area where the customer is actually located. {Global
20 NAPS, Inc. v. Verizon New England, Inc. et al, No. 04-4685-cv (2 n d
21 Circuit July 5, 2006)).
22
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefiled June 4, 2007 PUBLIC VERSION
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A.
In essence, a carrier assigns a telephone number for one rate center to an
end user customer in another rate center and then seeks to get calls routed
between the two rate centers over existing facilities without paying for the
transport.
Would you provide an example of a VNXX arrangement?
Yes, I will . Please refer to the following diagram.
A-Embarq Subscriber «
*
VZ Harrisburg
Tandem
Belleville Rate Center
Exchange Boundary
a
Core End Office (Dial Tone Office) -
Harrisburg
I Core ISP Subscriber
Figure 2 - Wireline VNXX, Indirect Connection
The example above is an actual VNXXarrangement deployed by Core. The telephone
number [BEGIN PROPRITARY] [END PROPRIETARY] is assigned
to the Belleville rate center by Embarq PA and was assigned to an ISP by Embarq PA for
providing dial up Internet service to Embarq PA's end users in the Belleville exchange.
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefiled June 4, 2007 PUBLIC VERSION
1 Belleville is south of State College, Pennsylvania. The ISP purchased the remote call
2 forwarding service described above to provide toll free service to its Internet customers.
3 Core ported the telephone number to its central office in Harrisburg, which is located
4 outside of the Belleville rate center. Dial tone for the number is now generated from
5 Harrisburg, Pennsylvania, and is no longer within the Belleville rate center. When an
6 Embarq PA end user dials [BEGIN PROPRIETARY! [END
7 PROPRIETARY], Embarq PA's Belleville switch determines that the number has been
8 ported and routes it to the Verizon Harrisburg tandem over the existing interexchange
9 long distance facilities. The call transits the Verizon tandem and is then handed off to
10 Core. Core receives the call in its switch in Harrisburg and routes it to the ISP. Given
11 the fact that the ISP's original arrangement with Embarq PA involved the forwarding of
12 terminating calls outside the Belleville rate center, it is highly likely that the ISP does not
13 have a presence in the Embarq PA Belleville rate center. Core does not buy any service
14 from Embarq PA, nor does Core compensate Embarq PA in any fashion for switching or
15 transport.
16
17 Q. Is Core fs VNXX product the same as Embarq PA's FX product or FX as historically
18 deployed?
19 A. No, not even close.
20
21 Q. Please explain.
22 A. There are several differences that can be grouped into two main categories: compensation
23 and technical configuration. With respect to compensation the very obvious distinction is
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4, 2007 PUBLIC VERSION
1 that with FX service the FX subscriber, not the originating carrier or the end user calling
2 the FX number, bears the cost of transporting the calls from the rate center where the
3 number is assigned to the geographic location of the FX customer. In situations where
4 multiple carriers are involved, the carrier serving the FX customer buys services from the
5 carrier serving the foreign rate center, including transport, and then passes those costs on
6 to the FX customer. In the VNXX example above, Core forces Embarq PA to bear all
7 costs.
8
9 As to the technical configuration, FX service calls are actually routed through the switch
10 that physically serves the rate center where the telephone number is assigned. In other
11 words, i f Core purchased an FX from Embarq PA's Belleville office dial tone would be
12 provided by Embarq PA and calls would be routed through the Belleville office,
13 maintaining appropriate rating and routing. With Core's VNXX configuration, the
14 telephone number does not reside in the Belleville rate center but resides instead in
15 Harrisburg. Calls to and from the VNXX (assuming that a call would ever be originated
16 from the VNXX) are routed through Core's Harrisburg switch and not the Belleville
17 switch. VNXX service is technically more like 800 toll free service rather than FX
18 service. Thus, I disagree from a technical standpoint that the VNXX service that Core
19 provides is the same as FX service.
20
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefiled June 4, 2007 PUBLIC VERSION
1 Q. How is VNXX service technically more like 800 toll free service rather than FX
2 service'/
3 A. The intent of 800 toll free service is to provide toll free calling utilizing the interexchange
4 long distance network. That is exactly how Core has configured its VNXX product. The
5 only difference between the 800 toll free service and Core's VNXX product is the
6 telephone number that customers dial, which does not offer any justification for calling
7 the traffic in question "local exchange" traffic. Nor does it provide sufficient justification
8 for requiring the originating carrier to provide all the transport for free as well as pay
9 terminating compensation. As discussed in my Direct Testimony on page 17 at line 7}
10 the FCC pointed out that users wanting location portability, that is, end users like Core's
11 ISP customer that want to use a number that is outside of the rate center that they are
12 physically located in, can use non-geographic numbers such as toll free numbers.
13
14 Q. Does Core's VNXX service provide Core with an unfair competitive advantage over FX
15 services such as those offered by Embarq PA ?
16 A. Absolutely. By refusing to reimburse Embarq PA for the costs it incurs (such as
17 interexchange transport). Core can pass that savings on to the end user buying the VNXX
18 service and thereby increase Core's profits. Core adds insult to injury by demanding that
19 Embarq PA pay Core terminating compensation. Core's proposal establishes an implicit
20 subsidy that enables Core to avoid charges for interexchange transport costs and by
21 having Embarq PA's end users, including those end users that do not even use the VNXX
22 service in question to access the ISP, absorb these costs.
23
10
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4, 2007 PUBLIC VERSION
1 Q. Why hasn't Embarq PA started offering VNXX services like Core?
2 A. The immediate response is that Embarq PA does not believe that it is right or appropriate.
3 Unlike Core, Embarq PA has incurred the cost of building facilities within and between
4 its rate centers and will use those facilities to provide toll free services such as FX. Even
5 if there were an alternate network, Embarq PA would not attempt to utilize it without
6 compensating the network owner. The costs of providing the service should be paid for
7 by the end user buying the FX service. Parity demands that Core's VNXX customer pays
8 for the cost of providing the service and ceases trying to extract payment from end users
9 that don't even subscribe to their service. In addition, Embarq PA does not port
10 telephone numbers out of the appropriate rate center. Embarq PA runs into this situation
11 with some frequency where CLECs are telling businesses that they can relocate to other
12 cities, take their telephone numbers with them, and not have to pay for the cost of
13 transport.
14
15 Q. Do you agree with Mr. Gates that ISPs do not expect to receive long distance calls from
16 customers seeking to connect to the Internet (Gates Direct, page 32 at line 773) ?
17 A. While I agree with Mr. Gates that end users seeking to connect to their dial up Internet
18 provider as a matter of course are not willing to pay per minute of use long distance
19 charges, that does not mean that the customer is in fact not making a long-distance call.
20 It only means that the end user calling the ISP does not pay for the cost of transporting
21 the call outside of the local calling area. Instead, the ISP pays, or should pay, for the cost
22 of the long-distance call. For example, ISPs have maintained 1 -800 toll free service to
23 allow customers to access their service toll-free from anywhere in the United States.
11
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4, 2007 PUBLIC VERSION
1 Such calls are in fact long distance calls. In addition, the whole concept of per minute of
2 use charging for long distance calls is rapidly going away.
3
4 Q. Do you agree with Core that the VNXX service it provides is "itt essence identical to the
5 FX service offered by Embarq PA, at least from an end user customer perspective"
6 (Gates Direct, page 33 at line 787)7
1 A. No, I do not. As I pointed out above, Core's ISP "end user" customer purchasing the
8 VNXX service receives a reduction in costs at the expense of Embarq PA's end user,
9 which in essence, is a form of an implicit subsidy. The ISP is certainly aware of the
10 benefits that it is receiving and the costs that it is avoiding when it made its choice of
11 service. Furthermore, i f you were to ask an Embarq PA customer with high speed
12 Internet access i f they wanted to pay higher rates so that others could get cheaper dial-up
13 Internet access, I doubt i f they would answer in the affirmative. VNXX is certainly not
14 the same from Embarq PA's perspective.
15
16 Q. What do you mean by the last statement?
17 A. When one carrier secures FX service from another carrier on behalf of one of its
18 customers it reimburses the other carrier. In this case Core, securing FX service on
19 behalf of its end user customer from one of Embarq PA's rate centers, would buy service
20 from Embarq PA. Core's VNXX service does not contemplate paying Embarq PA for
21 any services or for the costs that Embarq PA incurs in the provision of the service to
22 Core's end user customer.
23
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4, 2007 PUBLIC VERSION
1 Q. Do you agree with Mr. Gates that in the provision of VNXX service calls "are routed
2 from the ILEC to Core in exactly the same manner as other local calls" (Gates Direct,
3 page 35 at line 82 7 and line 842) ?
4 A. Certainly not. Any such claim is absurd. When one Embarq PA end user in a rate center
5 calls another Embarq PA end user in the same rate center it is generally a line to line
6 connection not involving any trunking at all.
7
8 Q. Isn't Mr. Gates talking about local calls handed off between carriers, between Embarq
9 PA and Core?
10 A. Mr. Gates comments could be interpreted that way. I viewed the phrase "as other local
11 calls" to encompass all local calls, even those between two Embarq PA end users within
12 the rate center. That is the context of my response above. However, in the context of
13 "local calls" between two separate carriers, the VNXX calls that Core is describing are
14 switched from an Embarq PA end user's line to an interexchange long distance trunk to
15 Verizon's tandem. The call is then switched again and linked to trunks that are
16 interconnected with Core's switch and finally terminated to Core's ISP customer, both of
17 which are located in a rate center that is a toll point. In no way does that switch call path,
18 the route, look like a local call, nor are the costs incurred the same, especially when Core
19 is demanding that Embarq PA incur all the costs to transport the calls to the foreign point
20 and then pay terminating compensation. Core's VNXX calls involve line to trunk routing
21 and utilize interexchange toll trunks, miles of toll transport, and do not terminate within
22 the local rate center. Core's claims totally dismiss the interexchange transport aspect that
23 is part of the routing of VNXX traffic. The only difference between this call that Core
13
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefiled June 4, 2007 PUBLIC VERSION
1 calls "local" and a long distance call to Core's ISP customer is the telephone number
2 dialed.
3
4 Q. Do you agree with Mr. Gate's contention that Core is the entity providing the Core ISP
5 customer with FX-like functionality (Gates Direct, page 36 at line 864)?
6 A. Not at all. FX service utilizing two carriers' networks is provided by both carriers. The
7 mere fact that Core is terminating this information services traffic does not amount to
8 provisioning by Core of an FX-like functionality for its end users. Mr. Gate's testimony
9 gives the misleading impression that Core is incurring the transport costs that are at the
10 heart of providing an FX or FX-like service. At most, Core "provides" an FX-
11 functionality to its ISP customers by abusing the number porting requirements, as I
12 discuss below. The essence of FX service, which allows an end user to receive the
13 calling scope and call rating of a rate center other than the local rate center the end user is
14 physically located in, is the end user's willingness to pay the costs of the interexchange
15 transport facilities required. However, Core is utilizing Embarq PA's network, without
16 providing compensation, in order to provide a sham FX service.
17
18 Q. Please describe what you mean by a "sham FX service"?
19 A. As I have pointed out, FX service recognizes that there are interexchange transport costs
20 incurred to route a call from its originating rate center to an end user outside of that rate
21 center. Core refuses to compensate Embarq PA for the functionality that Embarq PA
22 provides consistent with the FX principles I described above, effectively demanding that
23 Embarq PA subsidize Core's ISP customers.
14
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4, 2007 PUBLIC VERSION
1 Q. Is this good for consumers (Gates Direct, page 37, at line 887)?
2 A. The detailed comparison of FX and VNXX services above show that Embarq PA is
3 simply seeking to have Core provide fair compensation to Embarq PA for the services
4 that it provides, consistent with how carriers interact to provide FX service. In addition.
5 as I detailed above, Core's proposal imposes an implicit subsidy on Embarq PA's end
6 users that do not use the ISP service in question. Embarq PA's position is certainly in
7 their best interests.
8
9 Q. Mr. Gates implies that Embarq PA'sproposal might harm its ISP customers (Gates
10 Direct, page 38 at line 890). At page 41 (lines 958 to 962), Mr. Gates also claims that
11 the economic effect of adopting Embarq PA's proposal to charge Core access would be
12 counter to the public interest and that requiring access would "eliminate an efficient
13 and technologically advanced means of providing dial-up Internet access" in
14 Pennsylvania. Do you agree with these assertions?
15 A. No. While Mr, Gates alludes to the elimination of the dial-up business, he has not proven
16 that access charges will cause dial-up Internet access providers to go out of business. I
17 do not accept that conclusion as the only one possible i f the Commission requires Core to
18 pay access for its non-local traffic. Similarly, I do not accept Mr. Gates' assertions as a
19 foregone, proven conclusion ifthe Commission requires bill and keep compensation as a
20 result of this proceeding, as Embarq PA witness Fox has testified. Core has not
21 demonstrated that it is unable to pass on the costs of Core's doing business onto the ISPs
22 it serves. Mr. Gates' claims are speculative. The ISPs were providing service before
23 Core came along. They were buying service from Embarq PA and other carriers. Core's
15
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefiled June 4, 2007 PUBLIC VERSION
1 advent did not necessarily provide additional or new services to the customers of ISPs,
2 rather Core simply developed a business model that allows it, and its ISP customers, to
3 avoid costs and shift those costs to Embarq PA. Thus, it is certain that the ISPs
4 transferred their service to Core for financial reasons, be it reduced costs or the potential
5 for sharing reciprocal compensation revenues. No company has an unqualified right to
6 make a profit and remain in business, particularly if that company cannot pay the
7 legitimate costs associated with other providers' facilities that it uses. While Core and
8 Mr. Gates allege public interest and claim efficiencies may be eliminated, what they are
9 essentially saying is that the Commission should order Embarq PA and the other ILECs
10 in the state ofPcnnsylvania to subsidize these ISPs because Core's chosen business model
11 cannot be profitable without a competitively advantageous subsidy. Indeed, Mr. Gates
12 describes dial-up Internet access as "the universal service equivalent of a primary line for
13 voice service" (Gates Direct, page 41, at line 965), which further support's Embarq PA's
14 characterization of Core's compensation scheme as an implicit subsidy for the ISP's
15 utilizing Core's VNXX service and the ISP dial-up Internet customers. Mr. Gates'
16 speculative assertion of potential elimination of "an efficient and technologically
17 advanced means of providing dial-up Internet access" is simply not proven and is not
18 correct. And, as I've described in detail, the technology that is employed with Core's
19 VNXX service for call routing is nothing new under the sun, but is in fact the same as
20 making a long distance call.
21
16
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4, 2007 PUBLIC VERSION
1 Q. Mr. Gates makes a case for the continued provision of dial-up Internet access in his
2 Direct Testimony on pages 41 through 43 (lines 963 through 1016). Is Embarq PA's
3 position contrary to that goal?
4 A. No. There is no question that some consumers continue to use dial-up Internet access for
5 a variety of reasons, especially where broadband access is not available. Embarq PA is
6 aware of that and is committed to providing broadband access to every Embarq PA
7 consumer. In fact, counsel advises me that Embarq PA has a statutory obligation
8 ultimately to accelerate broadband availability to 100% of Embarq PA by December 31,
9 2013. However, nowhere in Act 183 or in Embarq PA's alternative regulation plan is it
10 required - let alone envisioned - that Embarq PA would not only meet Embarq PA's
11 broadband availability commitments, but also support and subsidize Core's business
12 operations and maximize Core's profit-seeking potential. Embarq PA's commitments are
13 to its customers, the General Assembly, and the Commission. Those commitments do
14 not include subsidizing Core's business. I f public policy is the benchmark, as Mr. Gates
15 suggests, then clearly from a public policy standpoint Core's prediction of doom and
16 gloom are not only speculative and unfounded, but are unsupported by any statutory
17 framework in Pennsylvania.
18
19 Q. Do you know how many dial-up Internet customers in Embarq PA's territory are
20 subscribing to the ISP's that use Core's VNXX service?
21 A. We can estimate the number of customers by reviewing the traffic study presented by Mr.
22 Hart in his Direct Testimony. According to Mr. Hart's study, calls were made from
23 approximately [BEGIN PROPRIETARY] [END PROPRIETARY] separate
17
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4, 2007 PUBLIC VERSION
1 telephone numbers. That represents [BEGIN PROPRIETARY] [END
2 PROPRIETARY] of the 338,544 end users (access lines) that receive local exchange
3 service from Embarq PA within these rate centers. In addition, the usage characteristics
4 of several of the telephone numbers are suspicious. Some were connected for the entire
5 24 hour period with as many as 60 calls. It is questionable to me that someone would sit
6 at a computer 24 hours a day making a dial up Internet call, staying on line, logging off,
7 and then logging back on approximately three times an hour. If it is in the public interest
8 to ensure that ISP's such as Earthlink (Gates Direct, page 42 at line 997) and Core's
9 profit are maximized - and that this Commission deem dial-up Internet access as part of
10 the universal service mandate for these customers - then the Commission should consider
11 it in that context, not this arbitration proceeding. Such a proceeding would show that the
12 level of subsidy demanded by Core is extreme. For example, if Embarq PA were to agree
13 to Core's terms and incur the expense estimated by Mr. Hart (see Hart Proprietary Direct,
14 page 27 at line 20), that equates to over $1,000 in annual expense for each of the
15 [BEGIN PROPRIETARY] [END PROPRIETARY] dial up Internet customers.
16 It would be cheaper for Embarq PA to pay the "high" monthly recurring rate for dial up
17 Internet access of $24.95 ($299.40 annually) for each of these customers and receive
18 proper compensation from ISPs and connecting carriers than to agree to Core's terms.
19 Core's terms result in an annual expense that is over 3 times that of just paying the ISP
20 monthly payment for each end user subscribing to dial up Internet access.
21
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - PrefUed June 4, 2007 PUBLIC VERSION
1 Q. Is Mr. Gates correct in his assessment of whether or not Embarq PA charges access
2 charges for its FX service (Gates Direct, page 40 at line 953) ?
3 A. No, he is not. Embarq PA does not oppose the use of numbers for real FX services when
4 carriers interconnect appropriately and compensate Embarq PA for the joint provision of
5 those FX services. Embarq PA's FX service essentially operates as if the end user
6 purchasing the FX service resided in the rate center. When the end user makes a long
7 distance call it is routed to their picked Interexchange Carrier and Embarq PA bills access
8 charges. Likewise, when a long distance call is terminated to the FX it is routed just like
9 other calls destined for that rate center and Embarq PA bills the IXC terminating access
10 charges. The rating is correct because the routing is the same. The additional rates in
11 Embarq PA's tariff are for the additional transport and central office terminals that are
12 needed to connect the end user buying the FX service. That is not the case of VNXX
13 services. The application of access charges and any other rate based on V&H coordinates
14 utilizing the assigned rate center would be incorrect in the case of VNXX service because
15 the actual routing is not the same. That is one of the reasons why the FCC prohibits
16 porting telephone numbers outside of the rate center to which they are assigned.
17
18 Local Number Portability ("LNP")
19
20 Q. Has Embarq PA ever taken the position that carriers cannot use telephone numbers to
21 provide FX services (Gates Direct, page 43 at line 1018)?
22 A. No, not at all.
23
19
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4, 2007 PUBLIC VERSION
1 Q. Does Mr. Gates quote from the Numbering Guidelines support Core's use of telephone
2 numbers (Gates Direct, page 43 at line 1021)?
3 A. No. The Numbering Guidelines referred to by Mr. Gates simply state that FX is the
4 exception where the end user is not geographically located inside of the rate center to
5 which the telephone number is assigned. The Guidelines do not pre-empt the FCC rules
6 that explicitly prohibit porting telephone numbers outside of the rate center (Maples
7 Direct, page 16 at line 16) and as shown above the provisioning of FX service does not
8 involve porting outside of the rate center. Nor do the Guidelines carry the same weight
9 as FCC rules because a violation of FCC rules is subject to penalties. Furthermore, there
10 are also other guidelines clearly prohibiting porting numbers outside of the rate center.
11 For example, the Telecordia Local Exchange Routing Guide ("LERG"), which
12 Telecordia Technologies will not allow any carrier to use in a proceeding without its
13 expressed permission, clearly states that service provider portability does not equate to
14 location/geographic portability.
15
16 Q. When an ILEC provides FX service as you have described, does the ILEC port the
17 number outside of the rate center?
18 A. No. Dial tone for the FX service is provided via the same switch that provides service to
19 end users that are geographically located in the rate center. ILECs have a local presence
20 in each rate center. The customer buying the FX services pays for the cost of the
21 connection between the two rate centers. As I stated in my Direct Testimony, Core
22 actually ports the telephone number to a switch located outside of the rate center, does
23 not establish a "presence" in the rate center (as in the case of FX service), and does not
20
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefiled June 4, 2007 PUBLIC VERSION
1 pay for the transport between the two rate centers (as in the case of FX), which changes
2 how calls are routed to and from the telephone number.
3
4 a 5
6
7
o
A.
o
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
What is the significance and import of Core's practice ofporting numbers without
establishing a presence within the rate center to Core's claims as made in this
arbitration case?
Core calls the traffic in question "local" simply because it uses a local number. While
other witnesses address various components of this issue, I question Core's practices with
using number resources as further demonstration that Core has no local presence. The
actual mechanics of Core's use of ported numbers further shows the non-local nature of
Core's traffic and further proves as unfounded the fiction that Core spins in order to get
compensation "as i f local. For example, Embarq PA has ported 97 numbers to Core
switches located in four foreign rate centers: Wilkes-Barre, Harrisburg, Pittsburgh, and
Altoona; however, Embarq PA does not provide local exchange service to end users in
these four locations. See, Embarq PA's response to Core Interrogatories (Set 111-27 and
28). The Core switches are not within any Embarq PA rate center. If Core does not have
any physical presence within the Embarq PA rate center, unlike FX service, calls to and
from these numbers will not be routed through the rate centers to which they are
assigned. In addition, Core has ported 60 numbers from Embarq PA rate centers that
Core has not mirrored in any way. Thus. Core's misuse of Local Number Portability
("LNP") further shows that Core's attempt to qualify its traffic as local for intercarrier
compensation purposes is flawed and suspect.
21
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefiled June 4, 2007 PUBLIC VERSION
1 Q. Are you saying that Core is porting numbers out of the Embarq PA rate center even
2 when it assigns the Embarq PA rate center to one of the four switches listed above?
3 A. Yes. While Core may argue that it is in compliance by assigning Embarq PA rate centers
4 to these switches, the reality demonstrates otherwise. For example, let's use the VNXX
5 scenario depicted above (see Figure 2). I f a Verizon end user in Harrisburg were to call
6 the ported number { f f i U Z B l ^ ^ ^ ^ it would be dialed as a long distance call since
7 Belleville is a toll point and the call would be handed off to the end user's interexchange
8 carrier. As the N - l carrier1, the interexchange carrier would do the LNP look up and
9 based on the routing information contained in the LERG, direct the call to the Verizon
10 Harrisburg tandem and on to Core, not going through the Belleville rate center or the toll
11 tandem for the Belleville rate center (Carlisle). Core would bill terminating access
12 charges based on the V & H (vertical and horizontal) location of the rate center it
13 designated in the LERG (Belleville) when the call was actually routed to the Harrisburg
14 rate center. This practice will either over or under recover the mileage sensitive aspects
15 ofthe access rates. It is also difficult for interexchange carriers to validate access billing.
16
17 Q. Isn't Core's misuse of LNP better addressed before the FCC?
18 A. Not with respect to the compensation issues now before the Pennsylvania Public Utility
19 Commission. That is, the Commission is tasked with the obligation in this case of
20 making a determination as to Core's request for intercarrier compensation based upon the
21 contention that its traffic is local in nature, and thus Core should be entitled to reciprocal
22 compensation. My testimony demonstrates that Core's practices regarding ported
1 In LNP regulations the N-l carrier is the one responsible for doing the LNP look up to determine the proper routing. In the case of long distance calls the interexchange carrier is always the N-l carrier.
22
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4, 2007 PUBLIC VERSION
1 numbers do not support Core's contention that the traffic routed to those numbers is local
2 in nature.
3
4 SECTION IH - CONCLUSION
5
6 Q. Please summarize y<H$&ffi&bul$il Testimony.
1 A. My Rebuttal Testimony has conclusively shown that Core's VNXX product is not FX or
8 FX-like with respect to actual provisioning and compensation. Core's scheme is an
9 attempt to get Embarq PA and its end users to subsidize Core and Core's end user
10 customers. Core is not providing telecommunications service to any Embarq PA
11 customer via VNXX, but is in fact providing toll free service to Core's end user
12 customers located outside of Embarq PA rate centers. Core should compensate Embarq
13 PA for the cost of transporting the calls from Embarq PA customers outside ofthe rate
14 center to the location of the Core VNXX customer. This is consistent with how FX
15 services are provisioned today. Core has accomplished this charade by manipulating the
16 LNP process and inappropriately porting telephone numbers outside of the rate centers,
17 introducing rating and routing errors. Core should be ordered to establish interconnection
18 as testified to by Embarq PA's witness Fox.
19
20 Q. Do you have anything to add?
21 A. Yes, I would like to note that Core's witness did not address the VoIP compensation issue
22 in his Direct Testimony. To the extent that Core has substantively addressed the VoIP
23 compensation issue and that testimony remains in the record, I would like to opportunity
23
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefded June 4, 2007 PUBLIC VERSION
1 to provide a response and to complete the record on this issue and the language proposed
2 by Embarq PA.
3
4 Q. Does this conclude your Rebuttal Testimony?
5 A. Yes.
24
REBUTTAL TESTIMONY OF JAMES M. (MIKE) MAPLES, EQ PA St. 3.1 - Prefiled June 4, 2007 PUBLIC VERSION
Telephone - Pa. P.U.C. No. 26
The United Telephone Section 6 Company of Pennsylvania Fifth Revised Sheet 1
Canceling Fourth Revised Sheet 1
FOREIGN EXCHANGE SERVICE
Foreign exchange service is exchange service furnished from a central office of an exchange other than that (C) normally serving the area in which the customer is located. Foreign Exchange Service, as stated in this tariff, is offered on an intraLATA basis only.
Foreign exchange service does not come within the Company's general undertaking The Company does tjot obligate itself to furnish foreign exchange service generally, but will do so where facilities of such a character^ are available as will permit satisfactory telephone transmission. In cases where facilities are available in connection with which additional equipment is required, in order to provide satisfactory transmission or signaling equipment, and it is practicable to make use of the additional equipment in connection with the available facilities, and additional charge is made to cover the cost of providing the necessary additional equipment. Pay Telephone Line Service is not furnished on a foreign exchange basis.
When foreign exchange service is furnished by means of a private branch exchange trunk line, connections to the trunk at the customer-provided private branch exchange switchboard are restricted to the customer-provided stations connected with and in the immediate vicinity of the customer-provi ded private branch exchange switchboard.
The local service and toll rates applicable to foreign exchange service are the same as apply to other stations served from the same foreign central office.
Foreign exchange service is provided only upon contract for a minimum period of six months.
When special operating is required, an additional monthly charge may be made to cover the cost of such operating.
Rates and Regulations
A. Intra-Company Foreign Exchange Service
* 1 . When the exchange area in which the customer is located is adjacent to the foreign exchange area and foreign exchange service is given by direct connection to the foreign central office.
a. Intra-Company foreign exchange service is discontinued as a new offering and is limited to existing customers in the same location. The rates for this service are the established local exchange rates applicable to the foreign exchange plus mileage charges as shown below. The mileage charge for individual line service is based on the route measurement from the boundary ofthe base rate area ofthe foreign exchange to the customer's location. The minimum rate is one mile.
Individual Line Mileage f a
* Limited to Existing Customers Certain material on this sheet formerly appeared on First Revised Sheet 2. t See Rate Sheet at end of this Section (C) Indicates Change
Issued: September 14,1999 Effective: October 1,1999
Telephone - Pa. P.U.C. No. 26
Section 6 The United Telephone Second Revised Sheet 2
Company of Pennsylvania Canceling First Revised Sheet 2
FOREIGN EXCHANGE SERVICE (Continued)
A. Intra-Company Foreign Exchange Service (Continued)
(C)
2. Foreign Exchange Service provided from terminating central offices between adjacent or non-adjacent exchange:
When the exchange area in which the customer is located is not adjacent to the foreign exchange area, connections are subject to the condition that during the period foreign exchange service is retained the subscriber is also a subscriber for local exchange service. This is not a requirement where two exchange are adjacent. In either case, the rate for foreign exchange service is the established individual line or private branch exchange trunk line base rate in the foreign exchange, plus a monthly mileage charge of (fa) per mile measured airline from the foreign central office through the local central office. In addition, a customer located outside the base rate area of the local exchange is subject to a mileage charge (tb) per quarter airline measurement. A channel terminal charge of (tc) is applicable for each central office connection.
B. Inter-Company Foreign Exchange Service
Foreign exchange service is limited to private branch exchange trunk lines and individual lines. This service will be provided only where the customer agrees to remain a customer of this company and to limit calls from the foreign exchange station to other stations in the local service area of that foreign exchange. This company will rent a terminal in the foreign exchange and provide it to the subscriber at the private branch exchange trunk line or individual line rate at the foreign exchange. In addition the following monthly charges apply:
1. Within the territory of this company, a mileage charge of (ta) per mile, or fraction thereof applies for each circuit measured airline from the rate center of normal exchange to the boundary line of the adjoining company.
Certain material formerly on this sheet now appears on Fifth Revised Sheet 1. t See Rate Sheet at end of this Section (C) Indicates Change
Issued: September 14, 1999 Effective: October 1,1999
Telephone - Pa. P.U.C. No. 26
Section 6 The United Telephone Second Revised Sheet 3
Company of Pennsylvania Canceling First Revised Sheet 3
FOREIGN EXCHANGE SERVICE (Continued)
B. Inter-Company Foreign Exchange Service (Continued)
2. Outside the territory of this company, such charges apply as are provided by other participating. (C) companies.
3. A supplemental charge of (tb) applies for 50 multiple of the day station-to-station initial period^,^ message toll rate, as filed before January 1, 1975, between the normal exchange and the foreign exchange. Such charge will not apply if the local and foreign exchanges are in the same local service area.
4. When the customer is located outside the base rate area of the local exchange, a line mileage charge of (tc) per quarter applies to the foreign exchange local channel.
5. A channel terminal charge of (td) is applicable for each central office connection.
When foreign exchange service is requested by a customer of another company to an exchange of this company, there will be a charge for the local loop of $5.00 for a business individual line or $3.50 for a residence individual line plus the charges listed in " 1 " above. The charges in "3" above apply unless a similar charge Is made by the company in whose territory the subscriber is located.
C. Inter-Company Extension Service
See Section 9, Sheet 3.
t See Rate Sheet at end of this Section (C) Indicates Change
Issued: September 14, 1999 Effective: October 1, 1999
Telephone - Pa. P.U.C. No. 26
The United Telephone Company of Pennsylvania
Section 6 Second Revised Sheet 4
Canceling First Revised Sheet 4
FOREIGN EXCHANGE SERVICE
RATE SHEET
Rates and Regulations
A. Intra-Company Foreign Exchange Service
* 1. Direct Connection
B.
Monthly Section 6, Charge Sheet
•it.
Individual Line Mileage < ta $ .56 1 (D) (C)
2. Adjacent or non-adjacent exchanges
Interexchange Mileage Line Mileage, per quarter Channel Terminal Charge, each
ta tb t c
$ 5.00 .60
24.00
2 2 2 (D)
Inter-Company Foreign Exchange Service
1. Interexchange Mileage 3. Supplemental Charge 4. Line Mileage, per quarter 5. Channel Terminal Charge, each
ta tb tc td
$ 5.00 6.00
.60 24.00
2 3 3 3 (D)
* Limited to existing customers (C) Indicates Change (D) Indicates Decrease
Issued: September 14,1999 Effective: October 1,1999
Telephone - Pa. P.U.C. No. 26
The United Telephone Section 6 Company of Pennsylvania Fifth Revised Sheet 1
Canceling Fourth Revised Sheet 1
FOREIGN EXCHANGE SERVICE
Foreign exchange service is exchange service furnished from a central office of an exchange other than that (C) normally serving the area in which the customer is located. Foreign Exchange Service, as stated in this tariff, is offered on an intraLATA basis only.
Foreign exchange service does not come within the Company's general undertaking The Company does not obligate itself to furnish foreign exchange service generally, but will do so where facilities of such a chara'b1erv
are available as will permit satisfactory telephone transmission. In cases where facilities are available in connection with which additional equipment is required, in order to provide satisfactory transmission or signaling equipment, and it is practicable to make use of the additional equipment in connection with the available facilities, and additional charge is made to cover the cost of providing the necessary additional equipment, Pay Telephone Line Service is not furnished on a foreign exchange basis.
When foreign exchange service is furnished by means of a private branch exchange trunk line, connections to the trunk at the customer-provided private branch exchange switchboard are restricted to the customer-provided stations connected with and in the immediate vicinity ofthe customer-provided private branch exchange switchboard.
The local service and toll rates applicable to foreign exchange service are the same as apply to other stations served from the same foreign central office.
Foreign exchange service is provided only upon contract for a minimum period of six months.
When special operating is required, an additional monthly charge may be made to cover the cost of such operating.
Rates and Regulations
A. Intra-Company Foreign Exchange Service
* 1 . When the exchange area in which the customer is located is adjacent to the foreign exchange area and foreign exchange service is given by direct connection to the foreign central office.
a. Intra-Company foreign exchange service is discontinued as a new offering and is limited to existing customers in the same location. The rates for this service are the established local exchange rates applicable to the foreign exchange plus mileage charges as shown below. The mileage charge for individual line service is based on the route measurement from the boundary of the base rate area of the foreign exchange to the customer's location. The minimum rate is one mile.
Individual Line Mileage t a
* Limited to Existing Customers Certain material on this sheet formerly appeared on First Revised Sheet 2. t See Rate Sheet at end of this Section (C) Indicates Change
Issued: September 14, 1999 Effective: October 1, 1999
Telephone - Pa. P.U.C. No. 26
Section 6 The United Telephone Second Revised Sheet 2
Company of Pennsylvania Canceling First Revised Sheet 2
FOREIGN EXCHANGE SERVICE (Continued)
A. Intra-Company Foreign Exchange Service (Continued)
(C)
2. Foreign Exchange Service provided from terminating central offices between adjacent or non-adjacent exchange:
When the exchange area in which the customer is located is not adjacent to the foreign exchange area, connections are subject to the condition that during the period foreign exchange service is retained the subscriber is also a subscriber for local exchange service. This is not a requirement where two exchange are adjacent. In either case, the rate for foreign exchange service is the established individual line or private branch exchange trunk line base rate in the foreign exchange, plus a monthly mileage charge of (ta) per mile measured airline from the foreign central office through the local central office. In addition, a customer located outside the base rate area ofthe local exchange is subject to a mileage charge (tb) per quarter airline measurement. A channel terminal charge of (tc) is applicable for each central office connection.
B. Inter-Company Foreign Exchange Service
Foreign exchange service is limited to private branch exchange trunk lines and individual lines. This service will be provided only where the customer agrees to remain a customer of this company and to limit calls from the foreign exchange station to other stations in the local service area of that foreign exchange. This company will rent a terminal in the foreign exchange and provide it to the subscriber at the private branch exchange trunk line or individual line rate at the foreign exchange. In addition the following monthly charges apply:
1. Within the territory of this company, a mileage charge of (ta) per mile, or fraction thereof applies for each circuit measured airline from the rate center of normal exchange to the boundary line of the adjoining company.
Certain material formerly on this sheet now appears on Fifth Revised Sheet 1. t See Rate Sheet at end of this Section (C) Indicates Change
Issued: September 14, 1999 Effective: October 1,1999
Telephone - Pa. P.U.C. No. 26
Section 6 The United Telephone Second Revised Sheet 3
Company of Pennsylvania Canceling First Revised Sheet 3
FOREIGN EXCHANGE SERVICE (Continued)
B. Inter-Company Foreign Exchange Service (Continued)
2. Outside the territory of this company, such charges apply as are provided by other participating (C) companies.
3. A supplemental charge of (tb) applies for 50 multiple of the day station-to-station initial pe r iod message toll rate, as filed before January 1, 1975, between the normal exchange and the foreign exchange. Such charge will not apply if the local and foreign exchanges are in the same local service area.
4. When the customer is located outside the base rate area of the local exchange, a line mileage charge of (tc) per quarter applies to the foreign exchange local channel.
5. A channel terminal charge of (td) is applicable for each central office connection.
When foreign exchange service is requested by a customer of another company to an exchange of this company, there will be a charge for the local loop of $5.00 for a business individual line or $3.50 for a residence individual line plus the charges listed in " 1 " above. The charges in "3" above apply unless a similar charge is made by the company in whose territory the subscriber is located.
C. Inter-Company Extension Service
See Section 9, Sheet 3.
t See Rate Sheet at end of this Section (C) Indicates Change
Issued: September 14,1999 Effective: October 1,1999
Telephone - Pa. P.U.C. No. 26
The United Telephone Company of Pennsylvania
Section 6 Second Revised Sheet 4
Canceling First Revised Sheet 4
FOREIGN EXCHANGE SERVICE
RATE SHEET
Rates and Regulations
A. Intra-Company Foreign Exchange Service
* 1. Direct Connection
B.
Monthly Section 6, Charge Sheet
Individual Line Mileage ta $ .56 1 (D) (C)
2, Adjacent or non-adjacent exchanges
Interexchange Mileage Line Mileage, per quarter Channel Terminal Charge, each
ta tb tc
$ 5.00 .60
24.00
2 2 2 (D)
Inter-Company Foreign Exchange Service
1. Interexchange Mileage 3. Supplemental Charge 4. Line Mileage, per quarter 5. Channel Terminal Charge, each
ta tb tc td
$ 5.00 6.00
.60 24.00
2 3 3 3 (D)
* Limited to existing customers (C) Indicates Change (D) Indicates Decrease
Issued: September 14, 1999 Effective: October 1, 1999
0 BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION
Petition of Core Communications, Inc. for Arbitration of Interconnection Rates, Terms And Conditions with The United Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania pursuant to . 47 U.S.C §252(b)
Docket No. A-310922F7002
DIRECT TESTIMONY OF KENT W. DICKERSON
«0
EQ PA STATEMENT 4,0
ON BEHALF OF THE UNITED TELEPHONE COMPANY OF PENNSYLVANIA
D/B/A EMBARQ PENNSYLVANIA
**PUBLIC VERSION**
Prefiled: April 27, 2007
RECEIVED JUL " 2 ?CG7"
PA PUBLIC UTILITY COMMIillON SECRiTAamUHiAy
1 DIRECT TESTIMONY OF
2 KENT \V. DICKERSON
3 EQ PA STATEMENT 4.0 4
5 Q. Please state your name, business address, employer and position.
6 A. My name is Kent W. Dickerson. My business address is 5454 West 110lh Street,
7 Overland Park, Kansas 66251. 1 am employed as Director - Cost Support.
8
9 Q. Please describe your educational background and business experience.
10 A. I received a Bachelor of Science degree from the University of Missouri - Kansas
11 City in 1981 with a major in Accounting. I am a Certified Public Accountant in the
12 State of Missouri. From 1981 to 1983,1 was employed as a Corporate Income Tax
13 Auditor n for the Missouri Department of Revenue. From 1983 to 1985,1 worked
14 for Kansas Power and Light (now Western Resources) in the Tax and Internal Audit
15 areas. I joined United Midwest Group (ultimately an Embarq subsidiary) in
16 September 1985 as a Staff Accountant in the Carrier Access Billing area.
17 Thereafter, I moved through a progression of positions and responsibilities within
18 the Finance and Regulatory departments. Since 1994,1 have managed a work group
19 which performs economic cost of service studies for retail and wholesale services,
2 0 Unbundled Network Elements ("UNEs"), and specialized cost recovery programs
21 (e.g.. Federal number portability, Federal and State High Cost Assistance
22 Programs).
1
DIRECT TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.0 - Prefiled April 27, 2007
1 Q. What are your duties and responsibilities in your present position ?
2 A. My work includes developing and implementing cost study methods that comport
3 with Total Service Long Run Incremental Cost ("TSLRIC") and Total Element
4 Long Run Incremental Cost ("TELRIC") methodologies. I am responsible for
5 written and oral testimony, serving on industry work groups, and participating in
6 technical conferences related to TSLRIC/TELRIC costing methodology, filing of
7 studies within 18 individual states that comprise the local telephone division and
8 providing cost expertise in regulatory cost dockets. I have provided testimony in
9 Nevada, Texas, Missouri, Kansas, Pennsylvania, Minnesota, North Carolina,
10 Florida, Georgia, Virginia, Tennessee and at the Federal Communications
11 Commission ("FCC").
12
13 Q. What is the purpose of your Direct Testimony?
14 A. The purpose of my Direct Testimony is to respond to Issue 10 on the joint
15 "Unresolved Issues Matrix" filed with the Commission on March 6, 2007. More
16 specifically, my Direct Testimony will introduce cost based rates (and the
17 accompanying cost study underlying those rates) for Entrance Facilities located
18 within Embarq PA's service exchange territory. For purposes of the cost analysis
19 and resulting cost based rates, I am utilizing the definition of an Entrance Facility as
2 0 described in the Direct Testimony of Embarq PA witness Mr. Ed Fox. Mr. Fox
21 addresses Embarq PA's position and proposed language for Entrance Facilities.
2
DIRECT TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.0 - Prefiled April 27, 2007
1 Q. Why is the issue of cost based rates for Entrance Facilities at play in this
2 proceeding?
3 A. After submission ofthe Joint Matrix, and prior to April 17, 2007, Embarq PA and
4 Core attempted in good faith to resolve both the pricing and the terms and
5 conditions associated with Entrance Facilities (along with pricing and terms and
6 conditions for dedicated transport). Indeed, on several occasions during ongoing
7 negotiations with Core, Embarq PA reasonably understood the Entrance Facility
8 rate issue to be settled. Unfortunately, as of April 17, 2007, settlement of rates and
9 the terms and conditions for Entrance Facilities were no longer the case. The
10 dedicated transport issue, however, was settled by parties.
11
12 Q. What Entrance Facility rates does Embarq PA propose?
13 A. Attached to this Direct Testimony as Exhibit KWD-1 is a cost study. Exhibit
14 KWD-1 was prepared under my direct supervision and control. Exhibit KWD-1
15 sets forth Embarq PA's proposed prices for Entrance Facilities at the four Embarq
16 PA tandem locations of Bedford, Butler, CarUsle„and Chambersburg. Prices
17 proposed include both DS 1 and DS3 Entrance Facility bandwidths.
18
19 Q. How did Embarq PA arrive at those four Embarq PA tandem locations?
20 A. Core currently has established no direct interconnecting facilities with Embarq PA's
21 network for the exchange of traffic. Rather, Core indirectly routes it's traffic via
22 tandem switches owned and operated by Verizon Pennsylvania Inc. ("Verizon") to
3
DIRECT TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.0 - Prefded April 27, 2007
1 the subtending Embarq PA tandem locations of Butler, Bedford, Chambersburg, and
2 Carlisle and further into each of the Embarq PA end offices subtending the four
3 Embarq PA tandems. There are only four tandems in Embarq PA's territory in
4 Pennsylvania. Reference Exhibit EBF-4 of Embarq PA witness Ed Fox's Direct
5 Testimony which provides a helpful diagram. Embarq PA's proposed prices at
6 these tandems reflect that Core may in the future choose to establish points of
7 interconnection at the same four Embarq PA tandem switches where Core today
8 indirectly routes traffic to Embarq PA.
9
10 Q. Has Core provided an indication ofthe Embarq PA switch locations where Core
11 would like to interconnect with Embarq PA's network and at what bandwidth
12 capacity?
13 A. No. Despite repeated requests for that information, Core has chosen not to provide
14 any information relative to its intentions to interconnect with Embarq PA. See, for
15 example, Core Response to Embarq PA Set 1, No. 8, (dated June 8, 2006) which is
16 attached hereto as Exhibit KWD-2. Similarly, Core has not specified the traffic
17 volumes and accompanying interconnecting facility bandwidth, e.g. DSl and DS3.
18 Core's demand for pricing, at this time, for all 92 end office switch locations in
19 Embarq PA's territory and for all possible bandwidths is completely unnecessary
2 0 and unreasonable in light of their refusal to engage in meaningful exchange of
21 information, coupled with the extreme unlikelihood of a genuine interest in
22 interconnecting to all of these additional locations. In fact, Core's refusal to provide
4
DIRECT TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.0 - Prefded April 27, 2007
1 any meaningful input for this most fundamental of information (location and traffic
2 volumes) renders any further cost analysis deeper into Embarq PA's switching
3 network - i.e., end office behind Embarq PA tandems — impossible at this time.
4 Thus, absent this necessary information from Core, I have proposed prices at
5 locations that logically and reasonably track with Core's existing locations for
6 indirectly routing traffic with and through Embarq PA. Should Core choose to
7 locate a point of interconnection in a non-tandem location on Embarq PA's
8 network, there are provisions in the proposed interconnection agreement that can
9 readily be modified to accommodate a situation whereby Core and Embarq PA
10 develop individual case-based ("ICB") pricing for those future locations within 30
11 days of Core's request.
12
13 Q. Could you please describe this ICB process for developing prices for establishing
14 potential future interconnections?
15 A. Yes. Assuming that Core might at some future time be willing to share Core's
16 specific prospective direct interconnection end office locations, and the logically
17 anticipated traffic volumes specific to each of those locations (for example, Embarq
18 PA has many end office locations sub-tending Embarq PA's tandem locations), then
19 a 30-day ICB process could be employed for this potentiality. The interconnection
2 0 agreement currently has agreed-upon ICB language for UNEs (§43.1 and §43.2).
21 Core has already agreed to these sections of the ICA and agreed to employ an ICB
22 process for UNEs. Embarq PA proposes to include language in the interconnection
5
DIRECT TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.0 - Prefiled April 27, 2007
1 portion of the resulting ICA (§54) modeled after existing UNE ICB process. The
2 language and ICB process proposed by Embarq PA for developing Entrance Facility
3 rates at non-Embarq PA tandems is as follows:
4 Individual Case Basis (ICB) pricing will be provided by Embarq 5 upon request from the CLEC for customer specific rates or tenns 6 for Entrance Facilities that are not otherwise provided for in this 7 Agreement.
8 Embarq will process ICB Pricing requests upon receipt from the 9 CLEC. Embarq will provide CLEC a price quote within thirty
10 (30) business days from the receipt ofthe request. Price quote 11 intervals may vary depending upon the complexity ofthe requesl 12 but shall not exceed thirty (30) business days from the receipt of 13 the request.
14
15 Thus, Embarq PA has provided pricing for Entrance Facilities at the four Embarq
16 PA tandems. The rates for Entrance Facilities include two distance sensitive price
17 bands for each tandem. Moreover, as the above-quoted language demonstrates,
18 there is a pricing process - the ICB process - for addressing any non-tandem
19 location at which Core may someday make due on its claim of direct
2 0 interconnection with Embarq PA.
21
22 Q. You mentioned a moment ago that your Direct Testimony includes an
2 3 accompanying cost study underlying Embarq PA's proposed rates. Please
2 4 describe the cost study.
25 A. The cost study supporting the cost based Entrance Facility rates proposed by
2 6 Embarq PA is attached at Exhibit KWD-1. Provided within the cost study is a
27 narrative description ofthe cost study, its major network components and
6
DIRECT TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.0 - Prefded April 27, 2007
1 technologies, network diagrams, and cost study inputs. I incorporate herein the
2 narrative description. At this juncture, I will highlight the cost study's sound
3 methodology, inputs and results.
4
5 The cost study utilizes inputs which are specific to Embarq and, where applicable,
6 to the specific Embarq tandem location. For example, all vendor material prices for
7 the necessary SONET optical terminals and fiber optic cable reflect the current
8 prices Embarq PA pays for those equipment items. Labor costs for both Embarq PA
9 employees as well as external contractor labor also reflect costs specific to Embarq
10 PA. The operating expense components of the cost study are supported by analyses
11 of Embarq PA's most recent 2006 operating period.
12
13 Q. Mow were the SONET optical terminal sizes and utilizations determined for each
14 of the Embarq PA tandem locations?
15 A. The SONET terminals sizes, for example OC3, OC12, and utilizations, were
16 determined for each tandem location based on an analysis of the actual traffic
17 volumes exchanged between Embarq PA and Core at each of the four Embarq PA
18 tandems during January, 2007. This approach ensures a very reasonable and
19 efficient sizing of the SONET terminal size and utilizations to the actual traffic
20 volumes flowing between Embarq PA's network and Core's network. The same
21 DSl and DS3 circuit requirements resulting from this actual traffic analysis is also
22 the basis for the fiber cable unit cost calculations. Thus, Embarq PA's cost analysis
7
DIRECT TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.0 - Prefded April 27,2007
1 and resulting cost based rates are supported in by current data and realities for each
2 of the four Embarq PA tandem locations where Core currently indirectly routes
3 traffic today.
4
5 Q. In the Joint Matrix at Issue 10, Core states that it has proposed Verizon's
6 TELRIC rates as a proxy for Embarq PA's cost of Entrance Facilities. Do you
1 have an initial response?
8 A. Well, I would like to see Core's testimony justifying and addressing the use of
9 Verizon's rates as a proxy in order to respond fully to Core's proposal and Core's
10 position. At the outset, however, I can say that Core's proposal is unwarranted and
11 unreasonable. Verizon and its sister affiliates dominate the East Coast of the United
12 States and arguably are the largest RBOC in the country with a national scale
13 approximately 700% larger than Embarq's national scale (comparing wireline-to-
14 wireline figures; this difference would more than double if Verizon's wireless scale
15 was included). Thus, Core's suggestion that Verizon's rates are a reasonable proxy
16 is obviously in error. Indeed, Verizon's scale within the Commonwealth of
17 Pennsylvania is approximately 15 times greater than that of Embarq PA. Verizon's
18 shear size and operating scope gives Verizon an incredible advantage from a costing
19 standpoint. For example, unlike Embarq PA, Verizon's scale and scope enables
2 0 Verizon to realize and secure lower equipment costs from vendors due to greater
21 volume-based purchasing power. Additionally, the much larger cities served by
22 Verizon PA have an accompanying much larger volume of traffic routing through
DIRECT TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.0 - Prefiled April 27, 2007
1 Verizon's switches which then has an undeniable result of lowering unit costs for
2 Verizon's entrance facilities. In short, I cannot fathom a more polar opposite
3 company to Embarq PA for application of "proxy" pricing, as Core has suggested.
4
5 Q. Does this conclude your Direct Testimony?
6 A. Yes.
9
DIRECT TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.0 - Prefiled April 27, 2007
0
K W D - 1
CONTAINS PROPRIETARY INFORMATION
•
STEVENS & LEE LAWYERS & CONSULTANTS
17 North Second Street 16th Floor
Harrisburg, PA 17101 (717) 234-1090 Fax (717) 234-1099
www.stevenslee.com
Direct Dial: (717) 255-7365 Email: [email protected] Direct Fax: (610)988-0852
June 8, 2006
Sue Benedek United Telephone Company of PA 240 N. 3rd. St. Suite 201 Harrisburg, PA 17101
Re: Petition of Core Communications. Inc. for Arbitration of Interconnection Rates, Terms, and Conditions Pursuant to 47 U.S.C. 252(b) with the United Telephone Companv of Pennsylvania
Docket No. A-310922F70002
Dear Ms. Benedek: Enclosed please find Core's Supplemental Responses to United's Set I Discovery. Please
contact me if you have any questions.
Best regards,
STEVENS & LEE
Michael A. Gruin
End.
cc: Secretary McNulty (certificate of service only)
Philadelphia • Reading • Valley Forge • Lehigh Valley • Harrisburg • Lancaster • Scranton Williamsport • Wilkes-Barre • Princeton • Cherry Hill • New York • Wilmington
A PROFESSIONAL CORPORATION
06/08/06/SL1 64l459v 1/100826.00003
Set 1-8. Fully and completely identify each and every point of interconnection Core proposes to establish with United PA.
OBJECTION: Core Objects to this Interrogatory on the following grounds: (1) the request is vague, overly broad and unduly burdensome; (2) the request seeks information that is neither relevant to this proceeding nor reasonably calculated to lead to the discovery of admissible evidence; and (3) the request seeks confidential information that can not be produced without an appropriate protective order.
RESPONSE: Sponsored by Christopher Van de Verg, General Counsel, Core Communications, Inc.
Notwithstanding the foregoing objections, Core hereby states as follows:
This question cannot be answered definitively at this time. Core will establish POIs with United PA in accordance with customer demand and the ultimate terms of the ICA to be arbitrated or negotiated between Core and United PA.
SUPP. RESPONSE: Sponsored by Christopher Van de Verg, General Counsel, Core Communications, Inc.
Based on the discovery teleconference held on Friday, June 2, 2006, Core understands that United PA seeks additional clarification regarding the precise points at which Core will seek interconnection with United PA's network. Core further understands United PA's position to be that Core may not seek to require United PA to deliver United PA's originating traffic to Core at an IP of Core's choosing, which may be outside of United PA's service territory.
As a factual matter. Core can not expand upon its original answer to this interrogatory. Core can not predict (1) when the ICA will be executed and implemented; (2) what the terms of the ICA will be relating to POIs; or (3) what will be the precise demand for services at that time.
As a legal matter, Core urges United PA to review the Commission's most recent (and most relevant) ICA arbitration order on the subject of POI, which is the January 13, 2005 Order in the Verizon Wireless petition for ICA arbitration against Alltel PA, Docket No. 310489F7004 (attached hereto for United PA's reference). This order clarifies that each originating carrier has a
• 06/08/06/SL1 641376vl/100826.00003
duty under section 251(c)(2) of the Act to transport its own originating traffic to the terminating carrier at an IP designated in each LATA by the terminating carrier.
•
•
06/08/06/SU M ]376v 1/100826.00003
BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION
Petition of Core Communications, Inc. for Arbitration of Interconnection Rates, Terms And Conditions with The United Telephone Company ofPcnnsylvania d/b/a Embarq Pennsylvania pursuant to 47 U.S.C §252(b)
Docket No. A-310922F7002
REBUTTAL TESTIMONY OF KENT W. DICKERSON
EQ PA STATEMENT 4.1
ON BEHALF OF THE UNITED TELEPHONE COMPANY OF PENNSYLVANIA
D/B/A EMBARQ PENNSYLVANIA
Prefiled: June 4, 2007
RECEIVED JUL " 2 mi
PA PUBLIC UTILITY COMMISSION SECRETARY'S BUREAU
1 REBUTTAL TESTIMONY OF 2 KENT W. DICKERSON 3 EQ PA STATEMENT 4.1 4
5 Q. Please state your name, business address, employer and position.
6 A. My name is Kent W. Dickerson. My business address is 5454 West 110th Street,
7 Overland Park, Kansas 66251. I am employed as Director - Cost Support.
9 Q. Are you the same Kent W. Dickerson who filed Direct Testimony on behalf of
10 Embarq PA?
11 A. Yes.
12
13 Q. What is the purpose of your Rebuttal Testimony?
14 A. The purpose of my Rebuttal Testimony is to respond to the Direct Testimony of
15 Timothy J. Gates relative to Issue 10 and his assertions that "Core should pay
16 TELRIC" rates for Entrance Facilities" and, i f TELRIC rates are not provided to
17 Core, then Mr. Gates recommends the use of Verizon's Entrance Facility rates.
18 (Page 53, lines 1246-1249.) Embarq PA witness Mr. Ed Fox will respond to the
19 policy aspects of Mr. Gates' Direct Testimony on these issues.
20
1
REBUTTAL TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.1 - Prefiled June 4, 2007
1 Q. At page 53 of his Direct Testimony, Mr. Gates begins a discussion of Entrance
2 Facilities and the FCC's TELRIC-based pricing rules for Unbundled Network
3 Elements. Do you have a response?
4 A. Yes. The FCC's TELRIC-based pricing rules and the FCC's rules for Unbundled
5 Network Elements (or UNEs) are not logically associated in the manner presented
6 by Mr. Gates. Mr. Gates does acknowledge that Entrance Facilities are not UNEs
7 subject to the FCC's TELRIC pricing rules. Mr. Gates, however, goes on to argue
8 that his client is nonetheless somehow inexplicably entitled to TELRIC-based
9 prices. Simply put, the FCC's TELRIC pricing rules apply only to UNEs and thus
10 do not apply to entrance facilities (a fact seemingly acknowledged and then ignored
11 by Mr. Gates in his testimony.) As Embarq PA witness Fox testified, an Entrance
12 Facility is not a UNE. Embarq PA St. 1.0 at 48. Therefore, Core is not entitled to
13 TELRIC pricing for Entrance Facilities.
14
15 Q. Mr. Gates still recommends the use of Verizon's rates for Entrance Facilities if
16 TELRIC-based rates for Entrance Facilities are not provided to Core. Do you
17 agree?
18 A. No. As I addressed in my Direct Testimony, use of Verizon's rates as a proxy for
19 Embarq PA is inappropriate and unreasonable - and now unjustified. I have
2 0 reviewed Mr. Gates' Direct Testimony and nothing he has stated therein requires
21 that I change my Direct Testimony. Indeed, Mr. Gates himself states: "This is not a
22 suggestion that the Verizon rates are appropriate..." (Page 57, lines 1341-1342.)
2
REBUTTAL TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.1 - Prefded June 4, 2007
1 Mr. Gates has failed to provide any testimony or evidence showing that Verizon's
2 rates are in fact a reasonable proxy for use for Embarq PA. The only "proof
3 offered by Mr. Gates is that Verizon's rates have been "reviewed and approved by
4 the Commission." My understanding is that of the 30 plus Incumbent Local
5 Exchange Companies (ILECs) certificated in Pennsylvania, the Commission has
6 only undertaken a UNE investigation for Verizon. Because the Commission has
7 reviewed and approved TELRIC rates for Verizon does not render Verizon's
8 TELRIC-based UNE rates appropriate, reasonable, or just. As I discussed in my
9 direct testimony Core's proposal to use Verizon TELRIC rates as a proxy for
10 Embarq PA costs contains numerous, obvious flaws, which Mr. Gates seems to
11 acknowledge even as he makes the proposal.
12
13 £. Is Mr. Gates' Direct Testimony consistent with Core rs identification of Issue 10 in
14 the parties' March 6, 2007 Issue Matrix relative to the statement "In light of
15 Embarq's failure to provide a cost-based rate for entrance facilities..."?
16 A. That question appears to be unripe for a response. As explained in my Direct
17 Testimony at page 3, line 8, our settlement of rates, terms and conditions for
18 Entrance Facilities changed suddenly on April 17, 2007. Thus, not until after this
19 late date in negotiations that it became necessary for Embarq PA to provide a
2 0 detailed cost analysis and associated rate proposal for Entrance Facilities. As a
21 result. Core has not provided feedback or a response to that cost analysis and rate
22 proposal. Nor has Embarq PA and Core discussed this issue any further,
3
REBUTTAL TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.1 - Prefiled June 4, 2007
1 notwithstanding Embarq PA's counsel request that Core do so. Thus, until I receive
2 and review Core's Rebuttal Testimony, I am unable to ascertain if, in Core's view,
3 Embarq PA has "failed to provide a cost based rate" for Entrance Facilities and,
4 more importantly, why Core would be ofsuch a continued view. Because testimony
5 is subject to simultaneous filing, Should Mr. Gates' Rebuttal Testimony provide
6 substantive review and comments regarding my Direct Testimony and Embarq PA's
7 proposed cost based rates for Entrance Facilities, then I would like to supplement
8 my Rebuttal Testimony to respond to those comments as necessary and to provide
9 the Commission with a complete evidentiary record.
10
11 Q. Does that conclude your Rebuttal Testimony?
12 A. Yes, subject to the reservation noted above.
13
4
REBUTTAL TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.1 - Prefiled June 4, 2007
BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION
Petition of Core Communications, Inc. for Arbitration of Interconnection Rates, Terms And Conditions with The United Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania pursuant tb 47 U.S.C §252(b)
Docket No. A-310922F7002
REBUTTAL TESTIMONY OF KENT W. DICKERSON
EQ PA STATEMENT 4.1 ^ F 7 ^
ON BEHALF OF THE UNITED TELEPHONE COMPANY OF PENNSYLVANIA
D/B/A EMBARQ PENNSYLVANIA
Prefiled: June 4, 2007
RECEIVED JUL " 2/CD?
PA PUBLIC UTILITY COMMISSION SECRETARY'S BUREAU
1 REBUTTAL TESTIMONY OF 2 KENT W. DICKERSON 3 EQ PA STATEMENT 4.1 4
5 Q. Please state your name, business address, employer and position,
6 A. My name is Kent W. Dickerson. My business address is 5454 West 110th Street,
7 Overland Park, Kansas 66251. I am employed as Director - Cost Support.
8
9 Q. Are you the same Kent W. Dickerson who filed Direct Testimony on behalf of
10 Embarq PA?
11 A. Yes.
12
13 Q. What is the purpose ofyour Rebuttal Testimony?
14 A. The purpose of my Rebuttal Testimony is to respond to the Direct Testimony of
15 Timothy J. Gates relative to Issue 10 and his assertions that "Core should pay
16 TELRIC" rates for Entrance Facilities" and, if TELRIC rates are not provided to
17 Core, then Mr. Gates recommends the use of Verizon's Entrance Facility rates.
18 (Page 53, lines 1246-1249.) Embarq PA witness Mr. Ed Fox will respond to the
19 policy aspects of Mr. Gates' Direct Testimony on these issues.
20
1
REBUTTAL TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.1 - Prefiled June 4, 2007
1 Q. At page 53 of his Direct Testimony, Mr. Gates begins a discussion of Entrance
2 Facilities and the FCC's TELRIC-based pricing rules for Unbundled Network
3 Elements. Do you have a response?
4 A. Yes. The FCC's TELRIC-based pricing rules and the FCC's rules for Unbundled
5 Network Elements (or UNEs) are not logically associated in the manner presented
6 by Mr. Gates. Mr. Gates does acknowledge that Entrance Facilities are not UNEs
7 subject to the FCC's TELRIC pricing rules. Mr. Gates, however, goes on to argue
8 that his client is nonetheless somehow inexplicably entitled to TELRIC-based
9 prices. Simply put, the FCC's TELRIC pricing rules apply only to UNEs and thus
10 do not apply to entrance facilities (a fact seemingly acknowledged and then ignored
11 by Mr. Gates in his testimony.) As Embarq PA witness Fox testified, an Entrance
12 Facility is not a UNE. Embarq PA St. 1.0 at 48. Therefore, Core is not entitled to
13 TELRIC pricing for Entrance Facilities.
14
15 Q. Mr. Gates still recommends the use of Verizon's rates for Entrance Facilities if
16 TELRIC-based rates for Entrance Facilities are not provided to Core. Do you
17 agree?
! 18 A. No. As I addressed in my Direct Testimony, use of Verizon's rates as a proxy for
19 Embarq PA is inappropriate and unreasonable - and now unjustified. I have
2 0 reviewed Mr. Gates' Direct Testimony and nothing he has stated therein requires
21 that I change my Direct Testimony. Indeed, Mr. Gates himself states: "This is not a
22 suggestion that the Verizon rates are appropriate..." (Page 57, lines 1341-1342.)
2
REBUTTAL TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.1 - Prefiled June 4,2007
1 Mr. Gates has failed to provide any testimony or evidence showing that Verizon's
2 rates are in fact a reasonable proxy for use for Embarq PA. The only "proof
3 offered by Mr. Gates is that Verizon's rates have been "reviewed and approved by
4 the Commission." My understanding is that of the 30 plus Incumbent Local
5 Exchange Companies (ILECs) certificated in Pennsylvania, the Commission has
6 only undertaken a UNE investigation for Verizon. Because the Commission has
7 reviewed and approved TELRIC rates for Verizon does not render Verizon's
8 TELRIC-based UNE rates appropriate, reasonable, or just. As I discussed in my
9 direct testimony Core's proposal to use Verizon TELRIC rates as a proxy for
10 Embarq PA costs contains numerous, obvious flaws, which Mr. Gates seems to
11 acknowledge even as he makes the proposal.
12
13 Q. Is Mr. Gates1 Direct Testimony consistent with Core's identification of Issue 10 in
14 the parties' March 6, 2007 Issue Matrix relative to the statement "In light of
15 Embarq's failure to provide a cost-based rate for entrance facilities..,"?
16 A. That question appears to be unripe for a response. As explained in my Direct
17 Testimony at page 3, line 8, our settlement of rates, terms and conditions for
18 Entrance Facilities changed suddenly on April 17, 2007. Thus, not until after this
19 late date in negotiations that it became necessary for Embarq PA to provide a
2 0 detailed cost analysis and associated rate proposal for Entrance Facilities. As a
21 result, Core has not provided feedback or a response to that cost analysis and rate
2 2 proposal. Nor has Embarq PA and Core discussed this issue any further,
3
REBUTTAL TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.1 - Prefiled June 4, 2007
1 notwithstanding Embarq PA's counsel request that Core do so. Thus, until I receive
2 and review Core's Rebuttal Testimony, I am unable to ascertain if, in Core's view,
3 Embarq PA has "failed to provide a cost based rate" for Entrance Facilities and,
4 more importantly, why Core would be of such a continued view. Because testimony
5 is subject to simultaneous filing, Should Mr. Gates' Rebuttal Testimony provide
6 substantive review and comments regarding my Direct Testimony and Embarq PA's
7 proposed cost based rates for Entrance Facilities, then I would like to supplement
8 my Rebuttal Testimony to respond to those comments as necessary and to provide
9 the Commission with a complete evidentiary record.
10
11 Q. Does that conclude your Rebuttal Testimony?
12 A. Yes, subject to the reservation noted above.
13
4
REBUTTAL TESTIMONY OF KENT W. DICKERSON, EQ PA Statement 4.1 - Prefiled June 4, 2007
Voice Data Internet Wireless Entertainment E M B A R Q Embarq Corporation 240 N. Jrd Street. Suite ZQJ Harrisburg, PA 17101 EMBARQ .com
fo7
June 14,2007 VIA HAND DELIVERY
James J. McNulty, Secretary Pennsylvania Public Utility Commission Commonwealth Keystone Building 400 North Street, 2nt i Floor Harrisburg, PA 17120
Re: Petition of Core Communications, Inc. for Ajrbitration of Interconnection Rates, Terms And Conditions with The United Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania Pursuant to 47 U.S.C. 6252(1)1- Docket No. A-310922F70002
Dear Secretary McNulty,
Enclosed please find an original and three (3) copies of the Final Offer of The United Telephone Company ofPcnnsylvania d/b/a Embarq Pennsylvania.
Should you have any questions, please do not hesitate to contact me.
Sincerely,
Sue Benedek Attorney ID No. 60451
ZEB/jh enclosures cc: The Honorable David A. Salapa (via electronic mail and hand delivery)
Michael A. Gruin, Esquire (via electronic mail and hand delivery)
JUL "SPCC?
PA PUBLIC UTILITY COMMISSION SECRETARY'S BUREAU
Zsuzsanna E. Benedek SENIOR COUNSEL EiMWL: [email protected] Votce: (717) 2W-6346 Fax: {717) 236-1389
BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION
Petition of Core Communications, Inc. for Arbitration of Interconnection Rates, Terms And Conditions with The United Telephone Company ofPcnnsylvania d/b/a Embarq Pennsylvania pursuant to 47 U.S.C. §252(b)
Docket No. A-310922F7002
F I N A L O F F E R O F E M B A R Q PA
The United Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania
("Embarq PA") hereby submits its Final Offer in the above-captioned matter.1 Embarq
PA will be prepared to address any questions that the presiding Judge may have regarding
Embarq PA's Final Offer at evidentiary hearings on June 27, 2007 and June 28, 2007.
Embarq PA also will be prepared to respond to the Final Offer of Core Communications,
Inc. ("Core").
Prior to and after stay of the case, the parties undertook extensive negotiations of
the many issues raised by Core in its Petition for Arbitration. Ten unresolved issues
remain. At this juncture, the 10 unresolved issues reflect the key, divergent viewpoints
and positions of the parties. Embarq PA has identified its final positions (both primary
and secondary in some instances) on each unresolved issue and the contract language
proposed by Embarq PA (including all proposed language). Embarq PA in this Final
Offer has earnestly endeavored to present meaningful primary and secondary positions on
1 The draft negotiated ICA submitted in March 2007 and Embarq PA's proposed language refers to "Sprint" given that the parties' started negotiations in this proceeding before the Commission issued its order in the Embarq PA separation proceeding at Docket Nos. A-313200F0007 and A-311379F0002. Upon execution of a resulting agreement, it is Embarq PA's intention to conform all references to "Sprint" to correctly refer to Embarq PA.
the unresolved issues in an effort to reach reasonable end results that the Presiding Judge
and the Cornmission may deem appropriate. Embarq PA has also set forth the associated
language for both its primary position and its secondary position. Embarq PA is preparing
to present briefs on all of its positions.
While the 10 unresolved issues track Core's Petition for Arbitration, the 10
remaining issues overlap and can be grouped into three general areas:
(1) Interconnection
• Unresolved Issue 2 (POI),
• Unresolved Issue 3 (Interconnection Methods/Collocation),
« Unresolved Issue 4 (Loop Interconnection), and
o Unresolved Issue 9 (Indirect Traffic - Volume Limit).
(2) Compensation
• Unresolved Issue 1 (Definition - Local Traffic v. Section 251 (b)(5) Traffic),
• Unresolved Issue 5 (Tandem v, End Office Rates / Transport & Termination),
• Unresolved Issue 6 (Reciprocal Compensation for Section 251 (b)(5) Traffic),
• Unresolved Issue 7 (Intercarrier Compensation / ISP-Bound Traffic), &
• Unresolved Issue 8 (VNXX Traffic and VoIP).
(3) Pricing
• Unresolved Issue 10.
These general subject areas were intended to work together harmoniously because the
issues interrelate. While outside the scope of this Final Offer, it remains Embarq PA's
position that given the factual record and the law, Embarq PA's positions on the issues
appropriately recognize the harmonious and intended working together of pricing,
interconnection, and reciprocal compensation requirements.
ARBITRATION ISSUE 1:
Definition - "Local Traffic" versus "Section 251(b)(5) Traffic"
Embarq PA's Final Position: Each party has its own proposed language for unresolved
Issue 1. A ruling on this issue will determine how traffic eligible for reciprocal
compensation is defined in the resulting agreement - an agreement that will govern the
compensation arrangements between the parties for approximately two years. Therefore,
Issue 1 and the unresolved compensation issues in this proceeding (Issues 5, 6, 7 and 8)
are interlinked.
Whether the term "Section 251(b)(5) Traffic" or the term "Local Traffic" is
utilized in the agreement, it remains Embarq PA's position that this term must explicitly
limit traffic subject to reciprocal compensation to "any traffic that physically originates
and terminates within Embarq PA's local calling area, including mandatory EAS" and to
any traffic that expressly "excludes VNXX traffic." Embarq PA recommends that the
Commission adopt the following language for the definition of local traffic:
§1-97:
"Local Traffic" for the purposes of this Agreement the Parties.shall agree that "Local Traffic" means traffic (excluding Commercial Mobile Radio Service "CMRS" traffic) that is originated and tenninated within Sprint's local calling area, or mandatory extended area service (EAS) area, as defined by the Commission or, i f not defined by the Commission, then as defined in existing Sprint Tariffs. For this purpose, Local Traffic does not include any ISP-Bound Traffic.
ARBITRATION ISSUE 2: Point of Interconnection ("POI")
Embarq PA's Final Position: Each party has proposed different language in support of
their respective positions as to whether (Issue 9) the agreement must contain language to
trigger direct interconnection and, if direct interconnection is explicitly required by the
Commission and the agreement, then where (Issue 2) should such direct interconnections
occur. The remaining unresolved issues associated with the interconnection issues
(Issues 3, 4, and 5) are largely a derivative of Issues 2 and 9 in that if the Commission
imposes an affirmative and definitive requirement to trigger direct interconnection, then
language associated with where interconnection takes place becomes meaningful and
details ofthe parties' interconnection obligations and rights (i.e., Issues 3, 4, an d5) also
become meaningful.
Embarq PA is willing to accept a compromise on this issue. Embarq PA's initial
position, as filed in the testimonies submitted by Embarq PA, had recommended that
Core establish a POI on Embarq PA's network at Embarq PA's end offices once traffic
reached a DSl equivalent level (§54.2.1.1). For purposes of a compromise associated
with this Final Offer, Embarq PA is willing to accept a Commission order that requires
Core to directly interconnect in Embarq PA's service exchange territory on Embarq PA's
network at each Embarq PA tandem - rather than at end offices that subtend Embarq
PA's tandems. In support of this compromise, Embarq PA recommends that the
Commission adopt the following language - i.e., with Section 54.2.1,1 deleted:
§54.1.1:
The Parties shall make available to each other two-way trunks for the reciprocal exchange of combined Local Traffic and non-equal access IntraLATA toll traffic. Neither Party is obligated under this
Agreement to order reciprocal trunks or build facilities in the establishment of interconnection arrangements for the delivery of Internet traffic. The Party serving the Internet service provider shall order trunks or facilities from the appropriate tariff of the other Party for such purposes and will be obligated to pay the full cost of such facility.
§54.2.1:
Point of Interconnection. Unless interconnecting with Sprint on an indirect basis subject to Section 61, CLEC must establish a minimum of one POI within each LATA, at any technically feasible point, on Sprint's network. To the extent Sprint's network contains multiple tandems in the LATA, CLEC must interconnect at each tandem where it wishes to exchange (i.e. receive or terminate) traffic with Sprint.
§54t2J*lt
CLEC muot oatablioh a diroot end offioo trunk at a Sprint end office when total traffic volumes exohangod botwoon that particular Sprint end office and CLEC oxcoodn a DSl equivalent
ARBITRATION ISSUE 3 - Interconnection Methods/Collocation
Embarq PA's Final Position: Embarq PA's position remains. Core has proposed
language changes that stem from Core's dual POI position in Issue 2. If Core's position
on Issue 2 is rejected, then resolution of this issue is unnecessary. In the event that the
merits of Issue 3 are considered, then existing provisions in the March 6, 2006 draft ICA
(provisions which Core did not delete) are more than sufficient and already give Core all
the capabilities it needs for collocating with Embarq PA and connecting to the POI that is
on Embarq PA's network. See, March 6, 2007 draft negotiated ICA, Part L, Collocation,
§§77-100, which are set forth in Attachment 1, which Core did not delete or modify. The
undisputed language regarding collocation is set forth in Attachment 1, namely Part L of
the draft negotiated ICA.
Given that Section 54 of the draft negotiated agreement (submitted in March
2007) is relatively lengthy, Embarq PA's proposed language at Section 54 is set forth in
Attachment 2. Attachment 2 consists of both undisputed language at Section 54 (i.e.,
negotiated/settled language to Section 54) and Embarq PA's proposed language. The
yellow highlighted provisions consist of agreed-upon provisions by the parties. Embarq
PA recommends that the Commission adopt the language in Attachment 2 for Section 54.
A R B I T R A T I O N ISSUE 4 - Loop Interconnection
Embarq PA's Final Position: Core seeks interconnection at a "retail" or "loop"
location, i.e., at an outside plant location, and seeks loop interconnection timelines of 30
days / 60 days (augmenting of loops). It remains Embarq PA's position that loops are not
interconnection points. Interconnection is undertaken via trunk arrangements, not via
loops. The agreement already contains provisions with regard to loops. See, March 6,
2007 ICA, Part E, Sections 41 and 44 (BFR and Network Elements). See also, March 6,
2007 ICA, Part J, General Business Requirements, §71.6.3. Core has not deleted Part E
and J of the draft negotiated agreement.
As to the timelines proposed by Core, Embarq PA maintains that Core's proposed
timelines are rigid and unnecessary. When an interconnection agreement is implemented,
Embarq PA and the CLEC mutually determine date(s) for interconnection which enable
both parties to consider and factor in the specific factual circumstances of the proposed
interconnection. This process has worked with every other CLEC without issue or
dispute.
Concerning language, Embarq PA has not proposed disputed language. Rather,
Core has proposed additional language at §54.4. Embarq PA continues to recommend
that the Presiding Judge and the Commission reject Core's new language at §54.4.
Embarq PA maintains that §54.2.1.6 and the definitions at §1.51 (sections which Core
does not oppose) are sufficient, along with the provisions in Part E and Part J, as noted
above.
ARBITRATION ISSUE 5: Tandem vs. End Office Rates for Transport and Termination
Embarq PA's Final Position: Embarq PA has opted-into the FCC's ISP Remand Order.
Embarq PA has proposed language requiring Core to be connected at the tandem in order
for the tandem rate to apply. (Core, however, contends that, as long as its switch serves a
geographically comparable area to our tandem, it may be interconnected at either the
tandem or at a subtending end office and still receive the tandem rate for call
completion.) Embarq PA's primary position is that, if Core accepts Embarq PA's opt-in
offer, all local voice and non-VNXX-enabled ISP-bound traffic exchanged by the carriers
will be subject to the FCC's $.0007/MOU rate. This tandem switching rate issue then
becomes a moot issue. If Core does not accept Embarq PA's opt-in offer, at most, then
the only traffic that Issue 5 may apply to is any Embarq PA-originated local voice traffic
that falls below the ISP Remand Order's 3:1 ratio. Embarq PA's primary position is that
the Commission reject Core's position and contract language changes and adopt the
following language:
55.1.1.2:
When the POI is at the Sprint Tandem Switch, CLEC shall pay a charge for Tandem Switching, common transport to the end office and end-office tennination.
§55.1.1.3:
Charges billed to Embarq PA by CLEC for the transport and termination of Local Traffic will be equal to those that Embarq PA assesses the CLEC for the same services. Where the CLEC switch serves a geographical area greater than or equal to the area served by the Embarq tandem, Embarq PA shall pay CLEC for Tandem Switching, common transport, and end-office termination. I f the CLEC switch serves a geographical area less than the area served by the Embarq PA tandem, Embarq PA shall pay CLEC end-office tennination.
§55.1.1.5:
Where direct end office trunks are established, for CLEC-originated calls, CLEC shall pay Embarq PA end-office termination. For Embarq PA originated traffic terminating to CLEC at that end office, compensation payable by Embarq PA shall be the same as that detailed in Section 55,1.1.3 above.
As a secondary final position, and as addressed below on the other compensation
issues (Issues 6, 7 and 8), Embarq PA is willing to implement a bill and keep
compensation arrangement for all ISP-bound and local voice traffic that is exchanged i f
Embarq PA's position and proposed language as addressed at Issue 2 (POI) are adopted
by the Presiding Judge and the Commission. I f the bill and keep compensation
arrangement is adopted for the resulting agreement in this case, Embarq PA proposes to
delete Sections 55.1.1, 55.1.1.1, 55.1.1.2, 55,1.1.3, and 55.1.1.5 and replace with the
following language:
55.1. Compensation for Local Traffic Transport and Termination
55,1.1 The Parties agree to bill & keep for Local and ISP-Bound Traffic as set forth in Table One. The Parties agree that by executing this Agreement, neither Party waives any of its rights, and expressly reserves all of its rights under the Order on Remand and Report and Order, FCC 01-131, CC Dockets No. 96-98 and 99-68, adopted April 18 2001 (the "ISP Compensation Order"). Should the FCC issue a subsequent order addressing
this issue, the Parties agree to amend this Agreement to comply with the FCC order on a prospective basis only, from the effective date thereof, and no "true-up" shall be required in connection with the FCC's order, unless such FCC order explicitly requires retroactive payments. Such interim bill & keep treatment has been formulated based upon numerous factors and considerations, including without limitation, current regulatory uncertainty, technological capabilities, the existence of various licit and illicit traffic routing practices within the industry, resource allocation issues, and other circumstances. Both Parties reserve the right to advocate any position with regard to the appropriate compensation for ISP-bound traffic before all relevant forums, and the terms of this Agreement shall not be deemed or considered to have any probative value as to the substance of either Party's rights or advocacy positions nor shall this Agreement be deemed to constitute the acquiescence by either party, or a waiver by either party, to the future treatment of such traffic, outside the context of this Agreement.
For Section 55.1, the first two sentences are taken from Embarq PA's origjnaUy proposed
standard contract language, while the remainder is newly proposed language submitted as
a final position for implementation of a bill and keep compensation arrangement, as
proposed in Embarq PA's testimony (Statement 1.0 and 1.1). To summarize what Section
55 would look like in the final agreement if bill & keep is adopted for Issues 5, 6, 7 and 8
above, see Attachment 3. Embarq PA plans to submit arguments in its briefs and
pleadings on both its primary position and its secondary position.
ARBITRATION ISSUE 6: Reciprocal Compensation for "Section 251(b)(5) Traffic"
A R B I T R A T I O N I S S U E 7: Intercarrier Compensation for ISP Bound Traffic
(Witnesses for both parties addressed these issues together)
Embarq PA's Final Position: As with Issue 8, these issues involve analysis and review
of legal and factual questions surrounding Core's proposal in this arbitration case to
receive reciprocal compensation under Section 251(b)(5) of the Act for overwhelmingly
one-directional, VNXX-enabled ISP-bound traffic and whether/how the FCC's ISP
Remand Order applies to this traffic. Core and Embarq PA have radically different
interpretations and applications of the FCC's ISP Remand Order, the FCC's mirroring
rule, and Core's traffic patterns.
Embarq PA's primary position for a final offer remains as set forth in Embarq
PA's testimony. Specifically, the Commission should adopt Embarq PA's interpretation
of the FCC's mirroring rule and reject Core's proposed language in §55.3 (Issue 7). If
Core agrees to accept Embarq PA's opt-in offer, then all eligible traffic (non-VNXX-
enabled) will be compensated at $.0007/MOU. As to Embarq PA's primary position for
Issue 7, Core has proposed additional language designated as §55.3. Embarq PA
recommends that the Presiding Judge and the Commission reject Core's new language at
§553. The Commission should find that Embarq PA's positions on these issues are
consistent with the FCC's rules on symmetrical reciprocal compensation.
If Core does not accept the opt-in offer, Embarq PA is willing to implement a bill
and keep compensation arrangement for all local voice and all ISP-bound traffic
(including, but not limited to VNXX traffic) if Embarq PA's position and proposed
language as addressed at Issue 2 regarding POI are adopted by the Presiding Judge and
the Commission.
10
As to proposed language for adoption of a bill and keep compensation
arrangement, Embarq PA proposes that existing Section 55 should be modified to set
forth language and the pricing attachment (Table One) should simply reflect "bill and
keep" in lieu of specific reciprocal compensation rates in the price sheet attached to the
interconnection agreement. As such, Core's proposed additional language at §55.3, along
with Sections 55.1.1, 55.1.1.1, 55.1.1.2, 55.1.1.3, 55.1.1.5, and 55.5 in Embarq PA's
originally proposed language in Section 55 are unnecessary and can be deleted i f bill and
keep is adopted by the Commission.
As such, Section 251(b)(5) traffic originated bv both carriers would be treated as
bill and keep, as would be reflected in Table One (the pricing attachment) to the resulting
agreement. Accordingly, for implementation of bill and keep relative to Issues 6 and 7,
Embarq PA submits and recommends that the Commission adopt the following language
at Sections 55.1 and 55.1.1:
55.1 Compensation for Local Traffic Transport and Termination
55.1.1 The Parties agree to bill & keep for Local and ISP-bound Traffic as set forth in Table One. The Parties agree that by executing this Agreement, neither Party waives any of its rights, and expressly reserves all of its rights under the Order on Remand and Report and Order, FCC 01-131, CC Dockets No. 96-98 and 99-68, adopted April 18 2001 (the "ISP Compensation Order"). Should the FCC issue a subsequent order addressing this issue, the Parties agree to amend this Agreement to comply with the FCC order on a prospective basis only, from the effective date thereof, and no "true-up" shall be required in connection with the FCC's order, unless such FCC order explicitly requires retroactive payments. Such interim bill & keep treatment has been formulated based upon numerous factors and considerations, including without limitation, current regulatory uncertainty, technological capabilities, the existence of various licit and illicit traffic routing practices within the industry, resource allocation issues, and other circumstances. Both Parties reserve the right to advocate any position with regard to the appropriate
11
compensation for ISP-bound traffic before all relevant forums, and the terms of this Agreement shall not be deemed or considered to have any probative value as to the substance of either Party's rights or advocacy positions nor shall this Agreement be deemed to constitute the acquiescence by either party, or a waiver by either party, to the future treatment ofsuch traffic, outside the context of this Agreement.
The foregoing language is newly proposed and is submitted as a final position for
implementation of adoption of a bill and keep compensation arrangement, as proposed in
Embarq PA's testimony (Statement 1.0 and 1.1). To summarize what Section 55 would
look like in the final agreement i f bill & keep is adopted for Issues 5, 6, 7 and 8 above,
see Attachment 3. Embarq PA plans to submit arguments in its briefs and pleadings on
both its primary position and its secondary position.
A R B I T R A T I O N I S S U E 8: V N X X Traffic and other Rating Issues (VOIP)
Embarq PA's Final Position:
A, Compensation for VNXX-enabled Traffic: Core has requested that it receive
terminating compensation in this case. Given the law and the facts, Embarq PA
maintains that Core has not proven that it is entitled to or that it should receive reciprocal
compensation under Section 251(b)(5), nor has Core demonstrated that its VNXX-
enabled traffic is subject to the ISP Remand Order's $.0007/MOU rate. Core's VNXX-
enabled calls are not local for purposes of intercarrier compensation. As a primary
position, Embarq PA continues to recommend this position and will continue to argue
this primary position in its briefs, and shall propose the following language for §55.5 and
§55.6 as part of Embarq PA's primary position:
12
§55.6:
Calls terminated to end users physically located outside the local calling area in which their NPA/NXXs are homed (Virtual NXXs), are not local calls for purposes of intercarrier compensation and access charges shall apply. For Sprint-originated traffic terminated to CLECs Virtual NXXs, Embarq PA shall not be obligated to pay reciprocal compensation, including any shared interconnection facility costs, for such traffic.
As a secondary position, and as addressed below on the other compensation issues
(Issues 6, 7 and 8), Embarq PA is willing to implement a bill and keep compensation
arrangement for all local and ISP-bound traffic i f Embarq PA's position and proposed
language as addressed at Issue 2 (POI) are adopted by the Presiding Judge and the
Commission. I f the bill and keep compensation arrangement is adopted for the resulting
agreement for this issue, Embarq PA proposes to delete Embarq PA's originally proposed
language for §55.6 and §55.7, and replace it with the following language:
The Parties have been unable to agree as to the appropriate compensation for VNXX traffic. However, without prejudice to either Party's position concerning the application of reciprocal compensation, access charges or any other rate treatment for either VNXX traffic, the Parties agree that charges for such traffic shall be bill and keep for purposes of this Agreement only and on an interim basis only until the earlier of (i) the expiration or termination of this Agreement or (ii) until the FCC issues an Order addressing the proper charges for VNXX traffic. Should the FCC issue an order addressing these issues, the Parties agree to amend this Agreement to comply with the FCC order on a prospective basis only, from the effective date thereof, and no "true-up" shall be required in connection with the FCC's order, unless such FCC VNXX order explicitly requires retroactive payments. Such interim treatment has been formulated based upon numerous factors and considerations, including without limitation, current regulatory uncertainty, technological capabilities, the existence of various licit and illicit traffic routing practices within the industry, resource allocation issues, and other circumstances. Both Parties reserve the right to advocate any position with regard to the appropriate compensation for VNXX traffic before all relevant forums, and the terms of this Agreement shall not be deemed or considered to have any probative value as to the substance of either Party's rights or advocacy positions
13
nor shall this Agreement be deemed to constitute the acquiescence by either party, or a waiver by either party, to the future treatment of such VNXX traffic, outside the context of this Agreement.
The foregoing language is newly proposed and is submitted as a final position for
implementation of adoption of a bill and keep compensation arrangement, as proposed in
Embarq PA's testimony (Statement 1.0 and 1.1). To summarize what Section 55 would
look like in the resulting agreement i f bill and keep is adopted for Issues 5, 6, 7 and 8
above, see Attachment 3. Embarq PA plans to submit arguments in its briefs and
pleadings on both its primary and secondary position.
B. Compensation for VoIP Traffic: As to compensation of VoIP traffic,
Embarq PA proposed contract language (and Core proposed to delete this language
altogether) to treat voice calls transmitted, in whole or in part, via the public Internet in
the same manner for determination of compensation as voice traffic. Embarq PA's
proposed language:
§55.7:
Voice calls that are transmitted, in whole or in part, via the public Internet or a private IP network (VoIP) shall be compensated in the same manner as voice traffic (e.g. reciprocal compensation, interstate access and intrastate access).
Embarq PA is willing to accept a bill and keep compensation arrangement for
local VoIP traffic ifthe Commission adopts Embarq PA's position and proposed language
as addressed at Issue 2 (POI).2 Embarq PA continues to maintain that access charges
from Embarq PA tariffs apply concerning non-local VoIP traffic. In other words, non
local VoIP does not fall within the purview and scope of the resulting agreement.
2
This position is consistent with Embarq PA's proposed definition of Local Traffic.
14
Accordingly, Embarq PA recommends that the Commission adopt following language i f
it adopts bill and keep compensation for local VoIP, as follows;
The Parties have been unable to agree as to the appropriate compensation for non-local VOIP traffic. Parties agree that charges for local VOIP traffic shall be bill and keep for purposes of this Agreement only and on an interim basis only until the earlier of (i) the expiration or termination of this Agreement or (ii) until the FCC issues an Order addressing the proper charges for VOIP traffic. Without prejudice to either Party's position concerning the application of reciprocal compensation, access charges or any other rate treatment, the Parties agree that charges for such traffic shall be handled in the manner set forth herein for purposes of this Agreement only and on an interim basis only until the earlier of (i) the expiration or termination of this Agreement or (ii) until the FCC issues an Order addressing the proper charges for VOIP traffic. Should the FCC issue an order addressing these issues, the Parties agree to amend this Agreement to comply with the FCC order on a prospective basis only, from the effective date thereof, and no "true-up" shall be required in connection with the FCC's order, unless such FCC VOIP order explicitly requires retroactive payments. Such interim treatment has been formulated based upon numerous factors and considerations, including without limitation, current regulatory uncertainty, technological capabilities, the existence of various licit and illicit traffic routing practices within the industry, resource allocation issues, and other circumstances. Both Parties reserve the right to advocate any position with regard to the appropriate compensation for VOIP traffic before all relevant forums, and the terms of this Agreement shall not be deemed or considered to have any probative value as to the substance of either Party's rights or advocacy positions nor shall this Agreement be deemed to constitute the acquiescence by either party, or a waiver by either party, to the future treatment of such VOIP traffic, outside the context of this Agreement.
To summarize what Section 55 would look like in the final agreement i f bill & keep is
adopted for Issues 5, 6, 7 and 8 above, see Attachment 3. Embarq PA plans to submit
arguments in its briefs and pleadings on both its primary and secondary position.
A R B I T R A T I O N I S S U E 9: Indirect Traffic - Volume Limit
Embarq PA's Final Position: Core is currently indirectly interconnecting with Embarq
PA via Verizon because Core has chosen to situate its facilities in Verizon's local service
15
CLEC may order entrance facilities and dedicated transport links from Embarq PA that are wholly within Embarq PA's serving territory from the rates found in Table One.
§54.2.1.7:
I f CLEC chooses to interconnect with Embarq PA using a meet-point arrangement (i.e., facilities jointly provisioned by Embarq PA and another LEC), CLEC will order those facilities that are wholly within Embarq PA's service territory from Embarq PA's access tariff.
Pated: June 14, 2007
Zsuijsanna E. Benedek, Esquire Attorney ID No. 60451 240 North Third Street, Suite 201 Harrisburg, PA 17101 Direct Phone: (717) 245-6346 Fax: (717)236-1389 E-mail: sue.e.benedekfStembarqxom
Counsel for The United Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania
18
ATTACHMENT 1
PART L - COLLOCATION
77. SCOPE OF COLLOCATION TERMS
77.1 Sprint will provide Collocation to CLEC in accordance with this Agreement for the purposes of Interconnection to Sprint pursuant to the Act (including 47 U.S.C. § 251(c)(2)) and for obtaining access to Sprint's UNEs pursuant to the Act (including 47 U.S.C. § 251(c)(3)). Collocation shall be provided on a nondiscriminatory basis, on a "first-come, first-served" basis, and otherwise in accordance with the requirements of the Act (including 47 U.S.C. § 251(c)(6)).
77.2 Prices and fees for collocation and other services under this Agreement are contained in Table Two. In the event Sprint files tariffs for pricing of collocation and other services covered by this agreement, such pricing in the tariffs will control over Table Two as ofthe date the tariff becomes effective. The terms and conditions of this Agreement will control over any terms and conditions in the tariff.
77.3 This Agreement states the general terms and conditions upon which Sprint will grant to CLEC the non-exclusive right to gain access to and occupy the Collocation Space, and other associated facilities as may be necessary, for the sole and exclusive purpose of providing telecommunications service upon submission of an approved and provisioned Application for collocation service. Such service will be provided by installing, maintaining and operating CLECs equipment, which will interconnect with Telecommunications Services and facilities provided by Sprint or others in accordance with this Agreement.
78. TERMINATION OF COLLOCATION SPACE
78.1 CLEC may terminate occupancy in a particular Collocation Space upon thirty (30) Days prior written notice to Sprint. Upon termination of such occupancy, CLEC at its expense shall remove its equipment and other property from the Collocation Space. CLEC shall have thirty (30) Days from the tennination date to complete such removal, including the removal of all equipment and facilities of CLECs Guests; provided, however, that CLEC shall continue payment of monthly fees to Sprint until such date as CLEC has fully vacated the Collocation Space. CLEC will surrender the Collocation Space to Sprint in the same condition as when first occupied by CLEC, except for ordinary wear and tear.
78.2 CLEC shall be responsible for the cost of removing any enclosure, together with all supporting structures (e.g., racking, conduits), of an Adjacent Collocation anangement at the termination of
ATTACHMENT I
ATTACHMENT 1
occupancy and restoring the grounds to their original condition.
78.3 Upon termination of CLECs right to possession of a Collocation Space, CLEC shall surrender possession and vacate the Collocation Space within thirty (30) Days. Failure to surrender the Collocation Space within thirty (30) Days shall be considered abandonment and Sprint will have the right to remove the equipment and other property of CLEC or the CLECs Guest at CLECs expense and with no liability for damage or injury to CLECs property.
78.4 Should Sprint under any section of this Agreement remove any of CLECs equipment from its collocation space, Sprint will deliver to CLEC any equipment removed by Sprint only upon payment by CLEC of the cost of removal, storage and delivery, and all other amounts due Sprint under this Agreement. Should CLEC fail to remove any of its equipment deemed abandoned, title thereto shall pass to Sprint under this Agreement as if by a Bill of Sale. Nothing herein shall limit Sprint from pursuing, at its option, any other remedy in law, equity, or otherwise related to CLECs occupancy in the Collocation Space, including any other remedy provided in this Agreement.
78.5 CLEC shall surrender all keys, access cards and Sprint-provided photo identification cards to the Collocation Space and the Building to Sprint, and shall make known to Sprint the combination of all combination locks remaining on the Collocation Space.
78.6 If it becomes necessary in Sprint's reasonable judgment, and there are no other reasonable alternatives available, Sprint shall have the right, for good cause shown, and upon thirty (30) Days prior notice, to reclaim the Collocation Space or any portion thereof, any Inner Duct, Outside Cable Duct, Cable Vault space or other Sprint-provided facility in order to fulfill its common carrier obligations, any order or rule ofthe state commission or the FCC, or Sprint's tariffs to provide Telecommunications Services to its end user customers. In such cases, Sprint will reimburse CLEC for reasonable direct costs and expenses in connection with such reclamation.
78.7 If it becomes necessary in Sprint's reasonable judgment, and there are no other reasonable alternatives, to require CLEC to move to equivalent space in the Premises upon receipt of sixty (60) Days written notice from Sprint, in which event. Sprint shall pay all moving costs, and the Collocation License Fee provided for herein shall remain the same.
ATTACHMENT 1
ATTACHMENT 1
79 COLLOCATION OPTIONS
79.1 Sprint will offer Collocation Space to allow CLEC to collocate its equipment and facilities, and without requiring the construction of a cage or similar structure. Sprint shall make cageless collocation available in single bay increments. For equipment requiring special technical considerations, CLEC must provide the equipment layout, including spatial dimensions for such equipment pursuant to generic requirements contained in Telcordia GR-63-Core and shall be responsible for constructing all special technical requirements associated with such equipment pursuant to this Agreement.
79.2 Sprint will authorize the enclosure of CLECs equipment and facilities at CLECs option. Sprint will provide guidelines and specifications upon request. Based on CLECs request, space and cage enclosures in amounts as small as that sufficient to house and maintain a single rack or bay or equipment will be made available. At CLECs option. Sprint will permit CLEC to arrange with a third party vendor to construct a Collocation Arrangement enclosure at CLECs sole expense. CLECs third party vendor will be responsible for filing and receiving any and all necessary permits and/or licenses for such construction. The third party vendor shall bill CLEC directly for all work performed for CLEC and Sprint will have no liability for nor responsibility to pay such charges imposed by the third party vendor. CLEC must provide the local Sprint building contact with one Access key used to enter the locked enclosure. Except in case of emergency, Sprint will not access CLECs locked enclosure prior to notifying CLEC and obtaining authorization.
79.2.1 Sprint has the right to review CLECs plans and specifications prior to allowing construction to start. Sprint will complete its review within fifteen (15) Days of receipt of such plans. Sprint has the right to inspect the enclosure after construction to make sure it is constructed according to the submitted plans and specifications. Sprint can require CLEC to remove or correct, at its cost, any structure that does not meet these plans.
79.3 CLEC may allow other telecommunications carriers to share its caged collocation arrangement pursuant to terms and conditions agreed to by CLEC ("Host") and other telecommunications carriers ("Guests"). CLEC will notify Sprint in writing upon execution of any agreement between the Host and its Guest within twelve (12) calendar days of its execution. Further, such notice shall include the name of the Guest(s) and their term of agreement, and shall contain a certification by CLEC that said agreement imposes upon the Guest(s) the same terms and conditions (excluding rates) for
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collocation space as set forth in this Agreement.
79.3.1 As Host, CLEC will be the sole interface and responsible party to Sprint for the purpose of submitting applications for initial and additional equipment placements of Guest (to the extent required under other sections of this Agreement); for assessment and payment of rates and charges applicable to the Collocations space; and for the purposes of ensuring that the safety and security requirements of this Agreement are fully complied with by the Guest, its employees and agents. In making shared cage arrangements, Sprint will not increase the cost of site preparation or nonrecurring charges above the cost of provisioning a similar caged arrangement to a CLEC.
79.3.2 Sprint will not place unreasonable restrictions on CLECs use of a cage, and as such will allow CLEC to contract with other CLECs to share the cage in a sublease type arrangement. I f two (2) or more CLECs that have interconnection agreements with Sprint utilize a shared collocation cage, Sprint will permit each CLEC to order UNEs and provision service from the shared collocation space, regardless of which CLEC was the original collocator.
79.3.3 IfHost terminates a Collocation Arrangement, Host will provide Guest thirty (30) days notice. Guest will assume all obligations and rights of Host as to that Collocation Arrangement i f Guest remains in the Collocation Space, including payment of all charges.
79.4 Sprint will provide adjacent collocation arrangements ("Adjacent Arrangement") where space within the Premises is legitimately exhausted, subject to technical feasibility. Both Parties will mutually agree on the location ofthe designated space on the Sprint property where the adjacent structure (such as a CEV or similar structure) will be placed. I f a mutual agreement cannot be reached, Sprint will decide the location, subject to zoning or other state and local regulations and future use by Sprint or other requesting Telecommunications Carriers pursuant to an application submitted under Section 81.
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79.4.1 CLEC will provide a concrete pad, the structure housing the arrangement, HVAC, lighting, and all facilities that connect the structure (i.e. racking, conduits, etc.) to the Sprint point of interconnection. Should CLEC elect such an option, CLEC must arrange with a third party vendor to construct an Adjacent Arrangement structure in accordance with this Agreement.
79.4.2 Sprint maintains the right to review CLECs plans and specifications prior to construction of an Adjacent Arrangement(s). Sprint will complete its review within thirty (30) calendar days of site selection and receipt of plans. Except that such time period may be extended i f any delay is due to the actions of CLEC. Sprint may inspect the Adjacent Arrangements) following construction and prior to commencement to ensure the design and construction comply with submitted plans. Sprint may require CLEC to correct any deviations from approved plans found during such inspection(s).
79.4.3 Sprint will provide AC power, as requested, subject to being technically feasible. At its option, CLEC may choose to provide its own AC power to the adjacent structure as long as the AC power source is from the same provider as Sprint's.
79.4.4 Subject to CLEC being on the waiting list, in the event that space in a Sprint Premises becomes available, Sprint will provide the option to the CLEC to relocate its equipment from an Adjacent Facility into the Sprint Premises. In the event CLEC chooses to relocate its equipment, appropriate charges will apply, including charges to vacate the adjacent collocation arrangement and charges applicable for collocation within the Sprint Premises.
79.5 To the extent possible, Sprint will provide CLEC with contiguous space for any subsequent request for physical collocation space, but makes no assurances that contiguous space will be available.
79.6 Sprint will provide virtual collocation, subject to being technically feasible, i f physical collocation is not practical for technical reasons or because of space limitations and in accordance with the Act (including 47 U.S.C. § 251(c)(6) and 47 C.F.R. § 51.321).
79.6.1 CLEC may lease to Sprint, at no cost to Sprint, equipment that meets applicable FCC requirements and in accordance with this Agreement, for the sole purpose of having Sprint install and maintain the equipment in accordance with
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terms and conditions mutually agreed upon by the Parties.
79.6.2 Virtually collocated equipment shall be purchased by CLEC. Sprint does not assume any responsibility for the design, engineering, testing or performance for the end-to-end connection of CLECs equipment, arrangement or facilities.
79.6.3 Sprint will install, maintain, and repair CLECs collocated equipment within the same time periods and with failure rates that are no greater than those that apply to the perfonnance of similar funcdons for comparable equipment ofSprint, Sprint's affiliates or third parties. The following services are not covered by this Agreement:
79.6.3.1 services to resolve software or hardware problems resulting from products provided by parties other than Sprint or causes beyond the control of Sprint;
79.6.3.2 service of attached, related, collateral or ancillary equipment or software not covered by this Section;
79.6.3.3 repairing damage caused to CLECs collocated equipment by persons other than Sprint, or its authorized contractors, or
79.6.3.4 repairing damage to other property or equipment caused by operation of CLECs collocated equipment and not caused by the sole negligence ofSprint.
79.6.4 CLEC warrants that Sprint shall have quiet enjoyment of the equipment. Sprint will be entitled to the benefit of any applicable manufacturer's warranties and indemnities and, to the extent assignable, such warranties and indemnities are hereby assigned by CLEC for the benefit of Sprint and CLEC shall take all reasonable action to enforce such warranties and indemnities where available to Sprint. CLEC shall execute, upon presentation, such documents and instruments as may be required to allow Sprint manufacturer's warranty coverage for any equipment. CLEC warrants that it has full authority to lease the equipment under the terms and conditions set forth herein, and that there are no restrictions, legal or otherwise, which would preclude it from so doing.
79.6.4.1 In the event Sprint's right to quiet enjoyment is breached, either by CLECs failure to make or cause to be made payment
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to the equipment manufacturer of the full purchase price for the equipment when such payment becomes due, or otherwise, Sprint may give written notice to CLEC and all of Sprint's obligations relating to the affected equipment shall terminate immediately.
79.6.5 Sprint's preparation, i f any, ofthe Premises (e.g., Power, environmental, etc.) for the Virtual Collocation equipment will be charged to CLEC at rates on Table Two or as filed in a tariff and approved by the Commission.
80 DEMARCATION POINT
80.1 Sprint will designate the point of demarcation, unless otherwise mutually agreed to by the Parties, in or adjacent to its Collocation Space. At CLECs request, Sprint will identify the locations) of other possible demarcation points available to CLEC, and CLEC will designate from these location(s) the point(s) of demarcation between its collocated equipment and Sprint's equipment. Sprint will use its best efforts to identify the closest demarcation point to CLECs equipment that is available.
80.2 Each Party will be responsible for maintenance and operation of all equipment/facilities on its side of the demarcation point.
80.3 At CLECs option and expense, a point of termination (POT) bay, frame or digital cross-connect may be placed in or adjacent to the Collocation Space that may, at CLECs option, serve as the demarcation point. I f CLEC elects not to provide a POT frame, Sprint will agree to handoff the interconnection cables to CLEC at its equipment, at CLECs designated demarcation point. When CLEC elects to install its own POT frame/cabinet, Sprint must still provide and install the required DC power panel.
81 APPLICATION PROCESS
81.1 Upon CLECs selection of a Premises in which it desires to collocate its Equipment, Sprint will provide a then current collocation application form (the "Application") to CLEC. CLEC will submit an Application when initially requesting Collocation Space, or modifying the use of the Collocation Space. The Application shall contain a detailed description and schematic drawing ofthe equipment to be placed in CLECs Collocation Space(s), the amount of square footage required (or, in the case of Cageless Collocation, bay space) for the current year plus the next calendar year from the date of application, as well as the associated power requirements, floor loading, and heat release of each piece.
81.1.1 CLEC will complete the Application, and return it, along with the appropriate Application Fee, to Sprint. The
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Application shall include complete details ofthe collocation and interconnection requested, including, but not limited to, specific floor space, power, and environmental conditioning requirements. Sprint will not process an Application until both the Application and the applicable Application fee are received.
81.1.2 In the event CLEC desires to modify or decommission the . use ofthe Collocation Space in a manner that requires additional engineering or preparation work by Sprint, CLEC will complete a subsequent Application detailing all information regarding the modification to the Collocation Space together with payment of the appropriate Application Augment Fee. Such modifications to the Premises may include but are not limited to, floor loading changes, changes necessary to meet HVAC requirements, changes to power plant requirements, and equipment additions.
81.1.3 Where CLEC modifies the use of the Collocation Space or adds equipment that requires no additional engineering or preparation work on the part of Sprint, Sprint will not impose additional charges or additional intervals that would delay CLECs operation. CLEC will notify Sprint of the modifications or additional equipment prior to installation.
81.1.4 I f Collocation Space is unavailable or CLEC withdraws its request, the Application fee, less the costs incurred by Sprint (e.g. engineering record search and administrative activities required to process the Application) will be refunded,
81.2 IfCLEC wishes Sprint to consider multiple methods for collocation on a single Application, CLEC will need to include in each Application a prioritized list of its preferred methods of collocating, e.g., caged, shared, or other, as well as adequate information, (e.g., specific layout requirements, cage size, number of bays, requirements relative to adjacent bays, etc.) for Sprint to process the Application for each ofthe preferred methods. I f CLEC provides adequate information and its preferences with its Application, Sprint may not require an additional Application, nor would CLEC be required to restart the quotation interval should its first choice not be available in a requested Premises. Only one collocation arrangement will be provisioned per Application. Sprint will not select for CLEC the type of collocation to be ordered.
81.3 Within ten (10) Days after receiving CLECs Application for collocation. Sprint will inform CLEC whether the Application meets each of Sprint's established collocation standards. Should CLEC submit a revised Application curing any deficiencies in an
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Application for collocation within ten days after being informed of them, CLEC shall retain its original position within any collocation queue that Sprint maintains. I f Sprint informs CLEC that there is a deficiency in an Application, Sprint will provide sufficient detail so that CLEC has a reasonable opportunity to cure each deficiency.
81.4 All revisions to an initial request for a Physical Collocation ALrrangement submitted by CLEC must be in writing. A new interval for the Physical Collocation Arrangement will be established which shall not exceed two months beyond the originally established date. CLEC will be required to pay any applicable Application fees.
81.5 Sprint shall provide confirmation of space availability within ten (10) Days of receipt of a complete and accurate Application and applicable Apphcation fee for one (1) to five (5) Applications submitted. Space availability response will be increased by five (5) Days for every five (5) additional Applications received.
81.5.1 Sprint will notify CLEC in writing as to whether its request for Collocation Space has been granted or denied due to lack of space. The notification will also include a possible future space relief date, i f applicable.
81.5.2 In order to increase the amount of space available for collocation, Sprint will, upon request, remove obsolete unused equipment, from its Premises to increase the amount of space available for collocation.
81.6 After notifying the CLEC that Sprint has no available space for Physical Collocation in the requested Central Office ("Denial of Application,,), Sprint will allow the CLEC, upon request, to tour the entire Central Office within ten (10) Days, or other mutually agreeable timeframe, ofsuch Denial of Application. In order to schedule said tour the request for a tour ofthe Central Office must be received by Sprint within five (5) Days of the Denial of Application.
81.6.1 I f CLEC contests Sprint's notice that there is not sufficient space for Physical Collocation in the Central Office, the parties agree to seek expedited resolution ofthe dispute at the Commission pursuant to Section 251(c)(6) ofthe Act. Ifthe Commission determines that space is not available. Sprint will not be required to conduct a review of floor space availability in the same central office more frequently than once every six months.
81.6.2 On a first come, first serve basis, Sprint will maintain a waiting list of requesting carriers who have either received a Denial of Application or, where it is publicly known that the Premises is out of space, have submitted a Letter of Intent to collocate.
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81.6.3 Sprint will simultaneously notify the telecommunications carriers on the waiting list when space becomes available i f there is enough space to accommodate additional collocation. Subsequent to the granting of a Petition for Waiver, i f CLEC has been denied Physical Collocation space at a Sprint Premises and challenges Sprint on space availability at said Premises, CLEC will be given priority for space assignment if, as a result of the challenge, space is found to be available. CLEC will reaffirm its collocation request within thirty (30) Days ofsuch notification; otherwise, it will be dropped to the bottom ofthe list. Upon request, Sprint will advise CLEC as to its position on the list.
81.6.4 I f CLECs Application for Physical Collocation is denied due to lack of space, Sprint will place CLEC on the waiting list for collocation in particular Premises according to the date CLEC submitted its Application and not the date of denial for lack of space.
81.6.5 Sprint will maintain on its Website a notification document that will indicate all Premises that are without available space. Sprint will update such document within ten (10) Days of the date at which a Premises runs out of physical collocation space.
81.7 Sprint will provide a price quote within thirty (30) Days of receipt of a complete and accurate Application and applicable Application fee for one (1) to five (5) Applications. Price quote response will be increased by five (5) Days for every five (5) additional Applications received. The quotation will include the applicable nonrecurring and recurring rates.
81.8 CLEC has thirty (30) Days from receipt of the quotation to accept the quotation in writing. The quotation expires after thirty (30) Days. After thirty (30) Days, a new Application and Application fee are required. Collocation Space is not reserved until the quotation is accepted. Sprint need not meet the deadlines for provisioning Physical Collocation if, after receipt of any price quotation provided by Sprint, CLEC does not notify Sprint that physical collocation should proceed.
81.9 CLEC will indicate its intent to proceed with equipment installation in a Sprint Premises by accepting the price quote, which constitutes a Bona Fide Firm Order ("BFFO"). IfCLEC makes changes to its Application in light of Sprint's written Application Response, Sprint may be required to re-evaluate and respond to the change(s). In this event, CLECs Application will be treated as a Revision.
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81.10 Space preparation for the Collocation Space will not begin until Sprint receives the BFFO and all applicable fees, including all nonrecurring charges required by Sprint at the time ofthe BFFO.
82 SPACE RESERVATION
82.1 The parties may reserve physical collocation space for their own specific uses for the remainder of the current year, plus twelve (12) months in accordance with Section 81. Neither Sprint, nor any of its affiliates, will reserve space for future use on terms more favorable than those that apply to other telecommunications carriers seeking to reserve collocation space for their own future use.
83 PROVISIONING INTERVALS
83.1 Sprint will complete construction of Caged Physical (including Shared Caged), Cageless Physical, and Virtual Collocation arrangements within ninety (90) Days of receipt of a BFFO. Sprint will complete construction of Adjacent Collocation arrangements (as defined in 79.4) within one hundred-twenty (120) Days of receipt of a BFFO. I f Sprint is unable to complete construction as provided herein, the parties may agree to a mutually acceptable interval or Sprint may petition the Commission for waiver.
84 CONSTRUCTION AND COMMENCEMENT OF BILLING
84.1 Sprint shall permit CLEC or its designated subcontractor to perform the construction of physical collocation space, provided however, that any such CLEC subcontractor shall be subject to Sprint's security standards. Sprint reserves the right to reject any CLEC subcontractor upon the same criteria that Sprint would use on its own subcontractors. CLEC will notify Sprint in writing when construction of physical collocation space is complete.
84.2 Sprint shall have the right to inspect CLECs completed installation of equipment and facilities prior to CLEC turning up such equipment and facilities. CLEC shall provide written notification to Sprint when CLEC has completed its installation of equipment and facilities in the Collocation space, and Sprint shall, within five (5) Business Days of receipt of such notice, either (i) inspect such Collocation space or (ii) notify CLEC that Sprint is not exercising its right to inspect such Collocation space at that time and that CLEC may turn up its equipment and facilities. Failure of Sprint to either inspect the Collocation space or notify CLEC of its election not to inspect such space within the foregoing five (5) Business Day period shall be deemed an election by Sprint not to inspect such Collocation space. CLEC shall have the right to be present at such inspection, and i f CLEC is found to be in non-compliance with the terms and conditions of this Agreement that relate to the installation and use of
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CLECs Collocated equipment and facilities, CLEC shall modify its installation to achieve compliance prior to turning up its equipment and facilities.
84.3 To the extent Sprint performs the construction of the Physical Collocation Arrangement, Sprint shall construct the Collocated Space in compliance with a mutually agreed to collocation request. Any deviation to CLECs order must thereafter be approved by CLEC The Parties acknowledge that CLEC approved deviations may require additional construction time and may incur additional CLEC expenses. CLEC shall pay the incremental cost incurred by Sprint as the result of any Revision to the Collocation request. CLEC will pay all applicable fees, including any nonrecurring charges required by Sprint, prior to Sprint commencing construction ofthe collocation space.
84.4 CLEC will be responsible for all extraordinary costs, as determined in accordance with the Act, incurred by Sprint to prepare the Collocation space for the installation of CLECs equipment and for extraordinary costs to maintain the Collocation space for CLECs equipment on a going-forward basis. Extraordinary costs may include costs for such items as asbestos removal, fire suppression system or containment, modifications or expansion of cable entry facility, increasing the DC power system infrastructure capacity, increasing the capacity of the standby AC system (if available) or the existing commercial power facility, conversion of non-Collocation space, compliance with federal and state requirements, or other modifications required by local ordinances. Sprint will charge for these extraordinary costs on a time-sensitive or time-and-materials basis and will allocate the costs fairly among itself, CLEC and other collocators. An estimate ofsuch costs, as determined in accordance with the Act, will be provided to CLEC prior to commencing such work. Extraordinary costs will only be billed to CLEC if such costs have been authorized by CLEC. Sprint must advise CLEC i f extraordinary costs will be incurred.
84.5 Each Party or its agents will diligently pursue filing for the permits required for the scope of work to be performed by that Party or its agents.
84.6 Sprint will notify CLEC when construction of a Collocation Space is complete. The Parties will complete an acceptance walk through of each provisioned Collocation Space. Sprint will commence to correct any deviations to CLECs original or jointly amended requirements within five (5) Days after the walk through. I f CLEC does not conduct an acceptance walk through within fifteen (15) Days of the notification that the Collocation Space construction is complete, CLEC will be deemed to have accepted the Collocation Space and billing will commence.
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84.7 CLEC must submit a written request to cancel its order for Physical, Caged, Shared Cage, Adjacent Space, or Virtual Collocation. CLEC will reimburse Sprint for any actual expenses incurred and not already paid, which may include incidental equipment costs, material ordered, provided or used; labor, transportation, DSO, DSl and DS3 cable and all other associated costs.
85 EQUIPMENT
85.1 CLEC may only locate equipment necessary for interconnection to Sprint and accessing Sprint's unbundled network elements in accordance with Applicable Rules, including but not limited to 47 U.S.C. 251 (C) (3), 47 U.S.C. 251 (C) (2), and 47 C.F.R. 51.323(b-c).
85.2 CLECs equipment and facilities shall not be placed or operated in such a manner that creates hazards or causes physical harm to any individual or the public.
85.3 All equipment to be collocated must meet Level 1 safety requirements as set forth in Telcordia Network Equipment and Building Specifications ("NEBS'OJ but Sprint will not impose safety requirements on CLEC that are more stringent than the safety requirements it imposes on its own equipment. I f Sprint denies collocation of CLECs equipment, citing safety standards, Sprint must provide to CLEC within five (5) Business Days of the denial a list of all equipment that Sprint locates within the Premises in question, together with an affidavit attesting that all of that equipment meets or exceeds the safety standard that Sprint contends the competitor's equipment fails to meet. In the event that Sprint believes that the collocated equipment is not necessary for interconnection or access to unbundled network elements or determines that CLECs equipment does not meet NEBS Level 1 safety requirements, CLEC will be given ten (10) Days to comply with the requirements or remove the equipment from the collocation space. I f the parties do not resolve the dispute, the Parties may file a complaint at die Commission seeking a formal resolution ofthe dispute. While the dispute is pending. Sprint will not prevent or otherwise delay installation ofthe disputed equipment in the Collocation space; however, CLEC will not activate the equipment during the pendency of the dispute.
85.4 CLEC must notify Sprint in writing that collocation equipment installation is complete and is operational with Sprint's network. I f CLEC fails to place operational telecommunications equipment in the collocated space and connect with Sprint's network within one-hundred-eighty (180) Days of CLECs acceptance of Sprint's price quote, or other time period mutually agreed to by the CLEC and Sprint, Sprint may terminate the applicable Collocation Space upon
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written notice. CLEC will reimburse Sprint for any actual expenses incurred and not already paid, wliich may include incidental equipment costs, material ordered, provided or used; labor; transportation, DSO, DSl and DS3 cable and all other associated costs.
86 AUGMENTS AND ADDITIONS
86.1 When CLEC modifies the Collocation Arrangement or adds equipment that requires no additional space preparation work on the part of Sprint, Sprint may not impose additional charges or additional intervals that would delay the CLECs operation. CLEC will notify Sprint of the modifications or additional equipment prior to installation.
86.2 In the event CLEC desires to modify or decommission the use ofthe' Collocation Space in a manner that requires additional engineering or preparation work by Sprint, CLEC will complete a subsequent Application detailing all information regarding the modification to the Collocation Space. Such modifications to the Premises may include but are not limited to, floor loading changes, changes necessary to meet HVAC requirements, changes to power plant requirements, and equipment additions. A major or minor Augments fee will apply. Major Augments include adding or removing power cables, entrance cables, cross-connect cables and switchboard cables. Minor Augments include changes to DC power fuses and extensions of occasional use AC power circuits used temporarily for outlets and light.
86.3 CLEC must submit an Application and applicable Application fee to obtain a price quote. CLEC must provide an accurate front equipment view (a.k,a, rack elevation drawing) specifying bay(s) for the CLECs point of termination. The price quote will contain the charges and the construction interval for that application. The construction interval for augments will not exceed ninety (90) Days from BFFO. If special or major construction is required. Sprint will work cooperatively with CLEC to negotiate mutually agreeable construction intervals for augments.
87 USE OF COMMON AREAS
87.1 CLEC, its employees, agents and invitees shall have a non-exclusive right to use those portions of the common area of the Building as are designated by Sprint from time to time, including, but not limited to, the right to use rest rooms in proximity to the Collocation Space, corridors and other access ways from the entrance to the Building, the Collocation Space, and the parking areas for vehicles of persons while working for or on behalf of CLEC at the Collocation Space; provided, however, that Sprint shall have the right to reserve parking
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spaces for Sprint's exclusive use or use by other occupants ofthe Building. Sprint does not guarantee that there is or will be sufficient parking spaces in parking areas to meet CLECs needs. Sprint does not guarantee that restroom facilities or water will be available. All common areas shall remain under the exclusive control and management ofSprint, and Sprint shall have the right to change the level, location and arrangement of parking areas and other common areas, as Sprint may deem necessary. Use of all common areas shall be subject to such reasonable rules and regulations as Sprint may from time to time impose, consistent with CLECs right to access its Collocation Space.
87.2 Sprint, where water is available for its own use, shall fumish running water from regular Building outlets for drinking, lavatory and toilet purposes drawn through fixtures installed by Sprint, for the nonexclusive use of CLEC, Sprint and any other building occupant. CLEC shall not waste or permit the waste of water.
87.3 Sprint shall fumish Building and Premises security in accordance with its normal business practices. Other than the locks on the entrances to the Collocation Space, Sprint shall provide no security specific to CLECs Collocation Space. Sprint shall not be liable to CLEC or any other party for loss of or damage to the Collocation Space or CLEC equipment unless Sprint has failed to provide Building and Premises security in accordance with its normal business practices.
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87.4 Sprint shall fumish passenger elevator service as necessary to reach the Collocation Space or common areas to which CLEC has access pursuant to the terms of this Agreement 24 hours a day, seven days a week. Freight elevator service when used by CLECs contractors, employees or agents shall be provided in a non-discriminatory manner as reasonably determined by Sprint.
88 CO-CARRIER CROSS CONNECTION
88.1 Co-carrier cross-connects ("CCXCs") are connections between CLEC and another collocated Telecommunications Carrier other than Sprint, and are only available when both collocation arrangements (either caged, cageless, and/or virtual) being interconnected are within the same Sprint Premises, provided that the collocated equipment is also used for interconnection with Sprint and/or for access to Sprint's unbundled Network Elements. Sprint shall provide such CCXCs from CLECs collocation arrangement to the collocation arrangement of another Telecommunications Carrier in the same Sprint premises under the terms and conditions of this Agreement. CCXC is provided at the same transmission level from CLEC to another Telecommunications Carrier.
88.1.1 Sprint will provide such CCXCs for non-adjacent collocation arrangements at the expense of CLEC per CLECs request. Sprint will provide connections between CLECs own non-adjacent virtual and/or physical collocation arrangements within the same central office at the expense of CLEC and provisioned per CLECs order.
88.1.2 Sprint, at its sole discretion, shall permit CLEC to self-provision CCXCs to interconnect its network with that of another adjacently collocated Telecommunications Carrier in the same Sprint Premises without application.
88.1.3 In those cases where CLECs Virtual and/or Physical Collocation space is adjacent in the Central Office, CLEC may have the option, at Sprint's sole discretion, of using CLECs own technicians to deploy direct connections ("DCs") using either electrical or optical facilities between the collocation spaces and constructing its own dedicated cable support structure according to Sprint's technical and safety standards.
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88.2 The term "Adjacent" in this Section SSrefers to collocation arrangements in the same Premises that have a common border, and is not referring to the form of Physical Collocation as described in 47 C.F.R. 5i.323(k)(3).
89 RATES
89.1 The rates for collocation are listed on Table Two.
89.2 If CLEC is the first collocator in the Sprint premises, CLEC will not be responsible for the entire cost of site preparation and security. However, ancillary charges for unique collocator requests for collocation options directly attributable to the requesting collocator will not be prorated. Examples include power arrangements, remote switch module related options and POT bay-related options.
89.3 The rates and charges in this Agreement do not include costs for any Americans with Disability Act (ADA) construction generated or caused by the physical collocation space request. I f required, ADA construction will be provided on an ICB. I f Sprint is required to upgrade a Premises, or portion of the Premises to comply with the ADA which arises as a direct result of CLECs Collocation Arrangement, Sprint will prorate the total forward-looking economic cost ofthe upgrade, and allocate the charge to each CLEC collocated within the Premises, based on the total space utilized by each collocated CLEC- Should Sprint benefit in any way whatsoever from the ADA upgrades, it shall share in the proration of costs. Should Sprint be the sole beneficiary of an upgrade (e.g.,- an upgrade would have had to be made regardless of whether or not a CLEC was collocated in the Premises), Sprint shall absorb all ofthe costs related to such an upgrade.
89.4 Facility Modifications
89.4.1 To the extent that a modification is made for the specific benefit of any particular party, costs of modification are to be proportionately bom by those who directly benefit including the ILEC. The cost is allocated using the proportion ofthe new space occupied to the total new space made available.
89.4.2 I f a non-requesting party benefits from the modification, e.g. using the opportunity to bring their equipment or arrangement into compliance with certain standards, or making adjustments leading to improvement, then the party will be deemed to be sharing. This party will be responsible for its share ofthe modification costs.
89.4.3 None of the costs will be allocated to a third party that gains incidental benefit, but did not cause the modification or modify their facilities.
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89.4.4 If a current user of space subsequently initiates new uses of the modified facility by other parties to avoid modification costs or i f new entrants use the facility, they will share in the modification costs. The modifying party(s) may recover a proportionate share ofthe modification costs from parties that later are able to obtain access as a result of the modification. If measurable depreciation has occurred as a result ofthe modification, the subsequent party may pay a lower cost.
89.4.5 Parties requesting or joining in a modification also will be responsible for resulting costs to maintain the facility on an ongoing basis.
90 SPRINT SERVICES AND OBLIGATIONS
90.1 Sprint shall fumish air conditioning and/or other environmental controls for the area in which the Collocation Space is located in a manner consistent with those provided elsewhere in the building. Sprint shall fumish air conditioning and/or other environmental controls for the Collocation Space based on information provided by CLEC to Sprint in its Application which CLEC hereby represents to Sprint is sufficient to allow the CLEC equipment to function without risk of harm or damage to the Collocation Space, the building or any equipment or facilities of Sprint or any other occupant of the building. These environmental conditions shall adhere to Telcordia Network Equipment Building System (NEBS) standards GR-63-CORE Issue 2 or other mutually agreed upon standards.
90.1.1 If CLEC locates equipment or facilities in the Collocation Space which Sprint determines, in the exercise of its sole discretion, affect the temperature or other environmental conditions otherwise maintained by Sprint in the building, Sprint reserves the right to provide and install supplementary air conditioning units or other environmental control devices in the Collocation Space, and the cost of providing, installing, operating and maintaining any such supplementary air conditioning units or other environmental control devices made necessary solely by CLECs equipment or facilities shall be paid by CLEC to Sprint. If supplementary air conditioning units or other environmental control devices are required for more than one CLEC each CLEC will pay a pro-rata share of such costs, in proportion to the space occupied by each as compared to the total space available for collocation.
90.2 I f Sprint, in the exercise of its reasonable business judgment, determines that the electricity provided to CLEC pursuant to this Section is insufficient to support the activity being carried on by the
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CLEC in the Collocation Space, Sprint may require the installation of additional electrical circuits to provide CLEC with additional electricity and CLEC shall reimburse Sprint for any expenses incurred in making such additional electrical circuits available to CLECs Collocation Space. CLEC shall also pay for additional electricity provided via these circuits.
90.2.1 CLEC covenants and agrees that Sprint shall not be liable or responsible to CLEC for any loss, damage or expense which CLEC may sustain or incur i f either the quality or character of electrical service is changed or is no longer suitable for CLECs requirements.
90.2.2 CLEC agrees to request in writing, via a complete and accurate Application, all electrical needs to power its equipment. The Application shall contain the total power needs, the date needed, and the exact location where tennination of the electrical power shall occur. Actual power usage of the CLECs equipment shall not exceed the requested capacity.
90.2.3 Central office power supplied by Sprint into the CLEC equipment area shall be supplied in the form of power feeders (cables) on cable racking into the designated CLEC equipment area. The power feeders (cables) shall efficiently and economically support the requested quantity and capacity of CLEC equipment. The termination location shall be as agreed by the parties.
90.2.4 Sprint shall provide power as requested by CLEC to meet CLECs need for placement of equipment, interconnection, or provision of service.
90.2.5 Sprint power equipment supporting CLECs equipment shall:
90.2.5.1 Comply with applicable industry standards (e.g., Telcordia, NEBS and IEEE) or manufacturer's equipment power requirement specifications for equipment installation, cabling practices, and physical equipment layout or at minimum, at Parity with that provided for similar Sprint equipment;
90.2.5.2 Have redundant power feeds with physical diversity and battery back-up as required by the equipment manufacturer's specifications for CLEC equipment, or, at minimum, at parity with that provided for similar Sprint equipment;
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90.2.5.3 Provide, upon CLECs request and at CLECs expense, the capability for real time access to power performance monitoring and alarm data that impacts (or potentially may impact) CLEC traffic;
90.2.5.4 Provide central office ground, connected to a ground electrode located within the Collocated Space, at a level above the top of CLEC equipment plus or minus 2 feet to the left or right of CLECs final request; and
90.2.5.5 Provide feeder cable capacity and quantity to support the ultimate equipment layout for CLECs equipment in accordance with CLECs collocation request.
90.2.6 Sprint shall provide cabling that adheres to Telcordia Network Equipment Building System (NEBS) standards GR-63-CORE Issue 2; \
90.2.7 Sprint shall provide Lock Out-Tag Out and other electrical safety procedures and devices in conformance with the most stringent of OSHA or industry guidelines.
90.2.8 Sprint will provide CLEC with written notification within ten (10) business days of any scheduled AC or DC power work or related activity in the collocated facility that will or might cause an outage or any type of power disruption to CLEC equipment located in Sprint facility. Sprint shall provide CLEC immediate notification by telephone of any emergency power activity that would impact CLECs equipment.
90.3 Subject to the provisions of Section 90.3.3 hereof. Sprint may fumish an existing Halon 1301 Fire Suppression System, or may, but is not obligated to, provide its equivalent, to provide fire protection in the Collocation Space designed to comply with the National Fire Protection Association ("NFPA") 12A Standard on Halon 1301 Fire Extinguishing Systems or with NFPA standard 2001 dealing with alternative fire suppression agents. Sprint shall fumish fire and smoke detection systems designed to comply with the NFPA 72E Standard on Automatic Fire Detectors in effect as of the collocation date.
90.3.1 Stand alone fire extinguishers will be provided in and about the Building and the Collocation Space by Sprint as required by applicable fire codes.
90.3.2 Sprint and Sprint's insurance carriers will perform regular inspections of fire protection systems, and CLEC hereby
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agrees to provide Sprint and Sprint's insurance carriers access to the Collocation Space for purposes of such inspections, via pass key or otherwise. Sprint agrees to provide CLEC with notice of its intent to access CLECs Collocation Space where, in Sprint's sole discretion, such notice is practicable; provided, however, that no failure of Sprint to give such notice will affect Sprint's right of access or impose any liability on Sprint. Sprint will, at its expense, maintain and repair the fire and smoke detection systems unless maintenance or repair is required due to the act or omission of CLEC, its employees, agents or invitees, in which case CLEC shall reimburse Sprint for the cost of such repair or replacement. I f a Halon or alternative fire suppression system is in place, the CLEC shall, i f at fault, and at Sprint's option, replace Halon or other fire extinguishing material discharged as a result of CLECs act or omission. CLEC shall have no duty to inspect fire protection systems outside the Collocation Space; provided, however, i f CLEC is aware of damage to the fire protection systems it shall promptly notify Sprint.
90.3.3 CLEC is aware the Collocation Space will contain a fire detection system and may contain a fire suppression system. In the event of discharge, Sprint is relieved of all liability for damage to equipment or personal injury except in cases where such damage to equipment or personal injury is due to the willful misconduct ofSprint, its officers, agents or employees.
90.4 Sprint shall, at its sole expense, except as hereinafter provided, provide repair and maintenance of heating, cooling and lighting equipment and regularly scheduled refurbishment or decorating to the Collocation Space, building and Premises, in a manner consistent with Sprint's nornial business practices.
90.4.1 Sprint shall not be obligated to inspect the Collocation Space, make any repairs or perform any maintenance unless first notified of the need in writing by CLEC. I f Sprint shall fail to commence the repairs or maintenance within twenty (20) Days after written notification, provided that the delay are not caused by CLEC, CLECs sole right and remedy shall be, after further notice to Sprint, to make such repairs or perform such maintenance and to deduct that cost and expenses from the physical collocation fees payable; provided, however, that the amount of such deduction shall not exceed the reasonable value of such repairs or maintenance.
90.4.2 Sprint shall, where practical, provide CLEC with twenty-
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four (24) hours prior notice before making repairs and/or performing maintenance on the Collocation Space; provided, however, that Sprint shall have no obligation to provide such notice i f Sprint determines, in the exercise of its sole discretion, that such repair or maintenance must be done sooner in order to preserve the safety of the Building or the Collocation Space, or i f required to do so by any court or governmental authority. Work shall be completed during normal working hours or at other times identified by Sprint. CLEC shall pay Sprint for overtime and for any other expenses incurred i f such work is done during other than normal working hours at CLECs request. CLEC shall have the right, at its sole expense, to be present during repair or maintenance of the Collocation Space.
90.4.3 The cost of all repairs and maintenance performed by or on behalf of Sprint to the Collocation Space which are, in Sprint's reasonable judgment, beyond normal repair and maintenance, or are made necessary as a result of misuse or neglect by CLEC or CLECs employees, invitees or agents, shall be paid by CLEC to Sprint within ten (10) Days after being billed for the repairs and maintenance by Sprint.
90.5 Sprint shall provide CLEC with notice via email three (3) Business Days prior to those instances where Sprint or its subcontractors perform work which is known to be a service affecting activity. Sprint will inform CLEC by e-mail of any unplanned service outages. Notification of any unplanned service outages shall be made as soon as practicable after Sprint learns that such outage has occurred.
90.6 Sprint reserves the right to stop any service when Sprint deems such stoppage necessary by reason of accident or emergency, or for repairs, improvements or otherwise; however, Sprint agrees to use its best efforts not to interfere with CLECs use of Collocation Space. Sprint does not warrant that any service will be free from interruptions caused by labor controversies, accidents, inability to obtain fuel, water or supplies, governmental regulations, or other causes beyond the reasonable control of Sprint.
90.6.1 No such interruption of service shall be deemed an eviction or disturbance of CLEC s use of the Collocation Space or any part thereof, or render Sprint liable to CLEC for damages, by abatement of CLEC Fees or otherwise, except as set forth in the Tariff, or relieve CLEC from performance of its obligations under this Agreement. CLEC hereby waives and releases all other claims against Sprint for damages for interruption or stoppage of service.
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90.7 For physical collocation, subject to reasonable building rules and any applicable Security Arrangements, CLEC shall have the right of entry twenty-four (24) hours per day seven (7) days a week to the building, common areas, Collocation Space and common cable space.
90.7.1 Sprint reserves the right to close and keep locked all entrance and exit doors of the Premises during hours Sprint may deem advisable for the adequate protection of the Premises. Use ofthe Premises at any time it is unattended by appropriate Sprint personnel, or on Sundays and state and federal or other holidays recognized by Sprint, or, i f CLECs Collocation Space is not fully segregated from areas of the Premises containing Sprint equipment, shall be subject to such reasonable rules and regulations as Sprint may from time to time prescribe for its own employees and third party contractors.
90.7.2 To require all persons entering or leaving the Premises during such hours as Sprint may from time to time reasonably determine to identify themselves to a watchman by registration or otherwise and to establish their right to leave or enter, and to exclude or expel any solicitor or person at any time from the Collocation Space or the Premises. Sprint is not responsible and shall not be liable for any damage resulting from the admission or refusal to admit any unauthorized person or from the admission of any authorized person to the Premises, unless the damage is the result of gross negligence or willful misconduct on the part ofSprint.
90.8 Sprint shall have access to CLECs Physical Collocation Space at all times, via pass key or otherwise, to allow Sprint to react to emergencies, to maintain the space (not including CLECs equipment), and to monitor compliance with the rules and regulations ofthe Occupational Health and Safety Administration or Sprint, or other regulations and standards including but not limited to those related to fire, safety, health, and environmental safeguards. If a secure enclosure defining the location of the CLECs Collocation Space has been established, and i f conditions permit, Sprint will provide CLEC with notice (except in emergencies) of its intent to access the Collocation Space, thereby providing CLEC the option to be present at the time of access. CLEC shall not attach, or permit to be attached, additional locks or similar devices to any door or window, nor change existing locks or the mechanism thereof.
90.8.1 To enter the Collocation Space for the purposes of examining or inspecting same and of making such repairs or alterations as Sprint deems necessary. CLEC hereby
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waives any claim for damage, injury, interference with CLECs business, any loss of occupancy or quiet enjoyment of the Collocation Space, and any other loss occasioned by the exercise of Sprint's access rights, except in the event such damages result solely from the willful misconduct ofSprint.
90.8.2 To use any means Sprint may deem proper to open Collocation Space doors or enclosures in an emergency. Entry into the Collocation Space obtained by Sprint by any such means shall not be deemed to be forcible or unlawful entry into or a detainment of or an eviction of CLEC from the Collocation Space or any portion thereof.
91 CLECS OBLIGATIONS
91.1 CLEC shall regularly inspect the Collocation Space to ensure that the Collocation Space is in good condition. CLEC shall promptly notify Sprint of any damage to the Collocation Space or ofthe need to perform any repair or maintenance of the Collocation Space, fixtures and appurtenances (including hardware, heating, cooling, ventilating, electrical, and other mechanical facilities in the Collocation Space). CLEC shall provide regular janitorial service to its Collocation Space and keep the Collocation Space clean and trash free.
91.2 CLEC agrees to abide by all of Sprint's security practices for non-Sprint employees with access to the building, including, without limitation:
91.2.1 CLEC must obtain non-employee photo identification cards for each CLEC employee or vendor. Temporary identification cards may otherwise be provided by Sprint for employees or agents, contractors and invitees of CLEC who may require occasional access to the Collocation Space.
91.2.2 CLEC will supply to Sprint the completed access form for employees or approved vendors who require access to the Premises. Sprint may reasonably deny access to any person into the building. Sprint's objections will be consistent with the grounds for denying access to personnel of its own contractors or for denying employment directly with Sprint. Sprint may issue security cards, codes, or keys to CLECs listed employees or vendors where such systems are available and their use by CLEC will not otherwise compromise building security. The rate for the issuance of security cards is listed on Table Two.
91.2.3 CLEC is responsible for returning identification and
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security cards, codes, or keys of its tenninated employees or its employees who no longer require access to the Collocation Space. All cards, codes, or keys must be returned upon termination ofthe applicable Collocation Space. CLEC will reimburse Sprint actual costs due to unretumed or replacement cards, codes, or keys.
91.2.4 In the event that a key is lost, CLEC is responsible for costs associated with recoring locks and reissuing keys to Sprint and other parties authorized to access the Premise.
91.2.5 CLECs employees, agents, invitees and vendors must display identification cards at all times.
91.2.6 CLEC will assist Sprint in validation and verification of identification of its employees, agents, invitees and vendors by providing a telephone contact available twenty-four (24) hours a day, seven (7) days a week to verify identification.
91.2.7 Removal of all furniture, equipment or similar articles will be based on local Sprint security practices. These security practices will not be more stringent for CLEC than Sprint requires for its own employees or Sprint's contractors.
91.2.8 Before leaving the Collocation Space unattended, CLEC shall close and securely lock all doors and windows and shut off unnecessary equipment in the Collocation Space. Any injury to persons or damage to the property of Sprint or any other party with equipment in the Building resulting from CLECs failure to do so shall be the responsibility of CLEC. CLEC will defend and indemnify Sprint from and . against any claim by any person or entity resulting in whole or in part from CLECs failure to comply with this section,
91.2.9 CLEC agrees that Sprint may provide a security escort for physical collocation, at no cost or undue delay to CLEC, to CLEC personnel while on Sprint Premises. While such escort shall not be a requirement to CLECs entry into the Building, CLEC must allow the security escort to accompany CLEC personnel at all times and in all areas of the Building, including the Collocation Space, i f so requested.
91.2.10CLEC shall post in a prominent location visible from the common building area, the names and telephone numbers of emergency contact personnel along with names and telephone numbers of their superiors for 24 hour emergency use by Sprint. CLEC shall promptly update this infonnation as changes occur.
91.3 CLEC will provide Sprint with written notification within ten (10)
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business days of any scheduled AC or DC power work or related activity in the collocated facility that will or might cause an outage or any type of power disruption to Sprint equipment located in CLEC facility. CLEC shall provide Sprint immediate notification by telephone of any emergency power activity that would impact Sprint equipment.
91.4 CLEC shall not provision and/or install Uninterruptible Power Supply ("UPS") systems within the Sprint premises. The customer is permitted to install Inverted Power Systems i f and only i f documented compliance with National Equipment Building Standards (NEBS) III and Listing by Underwriters Laboratory (UL) has been met.
91.5 CLEC shall not place Electro-Chemical Storage Batteries of any type inside the Collocation Space.
91.6 CLEC shall provide Sprint with written notice three (3) Business Days prior to those instances where CLEC or its subcontractors perform work, which is to be a known service affecting activity. CLEC will inform Sprint by e-mail of any unplanned service outages. The parties will then agree upon a plan to manage the outage so as to minimize customer interruption. Notification of any unplanned service outage shall be made as soon as practicable after CLEC leams that such outage has occurred so that Sprint can take any action required to monitor or protect its service.
91.7 CLEC may, at its own expense, install and maintain regular business telephone service in the Collocation Space. I f requested by CLEC and at CLEC's expense, Sprint will provide basic telephone service with a connection jack in the Collocation Space.
91.8 CLEC shall, with the prior written consent ofSprint, have the right to provide additional fire protection systems within the Collocation Space; provided, however, that CLEC may not install or use sprinklers or carbon dioxide fire suppression systems within the building or the Collocation Space.
91.8.1 I f any governmental bureau, department or organization or Sprint's insurance carrier requires that changes or modifications be made to the fire protection system or that additional stand alone fire extinguishing, detection or protection devices be supplied within that portion of the building in which the Collocation Space of CLECs in general are located, such changes, modifications, or additions shall be made by Sprint and CLEC shall reimburse Sprint for the cost thereof in the same proportion as the size of the CLECs Collocation Space as compared to the total available collocation space in the affected portion of the building.
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91.9 CLEC shall identify and shall notify Sprint in writing of any Hazardous Materials CLEC may bring onto the Premises, and will provide Sprint copies of any inventories or other data provided to State Emergency Response Commissions ("SERCs'*), Local Emergency Planning Committees ("LEPCs"), or any other governmental agencies i f required by the Emergency Planning and Community Right to Know Act (41 U.S.C. 11001, et seq.), CLEC, its agents and employees shall transport, store and dispose of Hazardous Materials in accordance with all applicable federal, state or local laws, ordinances, rules and regulations. CLEC will promptly notify Sprint of any releases of Hazardous Materials and will copy Sprint on any notification of or correspondence with any governmental agency which may be required by any environmental law as a result ofsuch release.
91.9.1 CLEC shall provide Sprint copies of all Material Safety Data Sheets ("MSDSs") for materials or chemicals regulated under the OSHA Hazard Communication Standard (29 C.F.R. 1910.1200) that are brought onto the property. All such materials shall be labeled in accordance with 29 C.F,R. 1910.1200 and applicable state regulations i f such regulations are more stringent.
91.9.2 I f Sprint discovers that CLEC has brought onto Sprint's Premises Hazardous Materials without notification, or is storing or disposing of such materials in violation of any applicable environmental law, Sprint may, at Sprint's option and without penalty, terminate the applicable Collocation Space or, in the case of pervasive violation, this Agreement or suspend performance hereunder. CLEC shall be responsible for, without cost to Sprint, the complete remediation of any releases or other conditions caused by its storage, use or disposal of Hazardous Materials. CLEC shall also be responsible for removing and disposing of all Hazardous Materials on its Collocation Space at the tennination of the applicable Collocation Space or this Agreement. IfSprint elects to terminate the applicable Collocation Space or this Agreement or discontinue the performance of services hereunder due to the storage, use or disposal of Hazardous Materials contrary to the terms of this Agreement, CLEC shall have no recourse against Sprint and shall be responsible for all costs and expenses associated with such termination or suspension of service in addition to being responsible for any remedies available to Sprint for defaults under this Agreement.
91.9.3 CLEC shall indemnify and hold harmless Sprint, its
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successors and assigns against, and in respect of, any and all damages, claims, losses, liabilities and expenses, including, without limitation, all legal, accounting, consulting, engineering and other expenses, which may be imposed upon, or incurred by, Sprint or asserted against Sprint by any other party or parties (including, without limitation, Sprint's employees and/or contractors and any governmental entity) arising out of, or in connection with, CLECs use, storage or disposal of Hazardous Materials.
91.9,4 For purposes of this Section, "Hazardous Materials" shall mean any toxic substances and/or hazardous materials or hazardous wastes (including, without limitation, asbestos) as defined in, or pursuant to, the OSHA Hazard Communication Standard (29 C.F.R. Part 1910, Subpart Z), the Resource Conservation and Recovery Act of 1976 (42 U.S.C. Section 6901, et seq.), or regulations adopted pursuant to those statutes, the Toxic Substances Control Act (15 U.S.C. Section 2601, et seq.), the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601, et seq.) or any other federal, state or local environmental law, ordinance, rule or regulation. The provisions of this Section shall survive the termination, cancellation, modification or recession of this Agreement.
91.10 CLEC shall not do or permit anything to be done upon the Collocation Space, or bring or keep anything thereon which is in violation of any federal, state or local laws or regulations (including environmental laws or regulations not previously described), or any rules, regulations or requirements ofthe local fire department, Fire Insurance Rating Organization, or any other similar authority having jurisdiction over the building. CLEC shall not do or permit anything to be done upon the Collocation Space which may in any way create a nuisance, disturb, endanger, or otherwise interfere with the Telecommunications Services of Sprint, any other occupant of the building, their patrons or customers, or the occupants of neighboring property, or injure the reputation of the Premises.
91.10.1CLEC shall not exceed the Uniformly Distributed Live Load Capacity. Sprint shall evaluate and determine Live Load Capacity rating on a site specific basis prior to equipment installation. CLEC agrees to provide Sprint with equipment profile information prior to installation authorization.
91.10.2CLEC shall not paint, display, inscribe or affix any sign, trademark, picture, advertising, notice, lettering or direction on any part of the outside or inside of the building, or on the Collocation Space, without the prior written consent of
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Sprint.
91.10.3CLEC shall not use the name ofthe building or Sprint for any purpose other than that of the business address of CLEC, or use any picture or likeness of the building on any letterhead, envelope, circular, notice, or advertisement, without the prior written consent of Sprint.
91.10.4CLEC shall not exhibit, sell or offer for sale, rent or exchange in the Collocation Space or on the Premises any article, thing or service except those ordinarily embraced within the use ofthe Collocation Space specified in Sections 3 and 11 of this Agreement without the prior written consent ofSprint.
91.10.5CLEC shall not place anything or allow anything to be placed near the glass of any door, partition or window which Sprint determines is unsightly from outside the Collocation Space; take or permit to be taken in or out of other entrances ofthe building, or take or permit to be taken on any passenger elevators, any item normally taken through service entrances or elevators; or whether temporarily, accidentally, or otherwise, allow anything to remain in, place or store anything in, or obstruct in any way, any passageway, exit, stairway, elevator, or shipping platform. CLEC shall lend its full cooperation to keep such areas free from all obstruction and in a clean and neat condition, move all supplies, furniture and equipment directly to the Collocation Space as soon as received, and move all such items and waste, other than waste customarily removed by employees ofthe building.
91.10.6CLEC shal 1 not, without the prior written consent of Sprint install or operate any lead-acid batteries, refrigerating, heating or air conditioning apparatus or carry on any mechanical business in the Collocation Space. Sprint may, in its sole discretion, withhold such consent, or impose any condition in granting it, and revoke its consent at will.
91.10.7CLEC shall not use the Collocation Space for housing, lodging or sleeping purposes.
9t.l0.8CLEC shall not permit preparation or warming of food, presence of cooking or vending equipment, sale of food or smoking in the Collocation Space.
91.10.9CLEC shall not permit the use of any fermented, intoxicating or alcoholic liquors or substances in the Collocation Space or permit the presence of any animals except those used by the visually impaired.
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91.11 CLEC, its employees, agents, contractors, and business invitees shall:
91.11.1 comply with all rules and regulations which Sprint may from time to time adopt for the safety, environmental protection, care, cleanliness and/or preservation of the good order of the building, the Premises and the Collocation Space and its tenants and occupants, and
91.11.2comply, at its own expense, with all ordinances which are applicable to the Collocation Space and with all lawful orders and requirements of any regulatory or law enforcement agency requiring the correction, prevention and abatement of nuisances in or upon the Collocation Space during the Term of this Agreement or any extension hereof.
91.12 CLEC shall not make installations, alterations or additions in or to the Collocation Space without submitting plans and specifications to Sprint and securing the prior written consent of Sprint in each instance. Sprint's consent shall not be unreasonably withheld or unduly delayed for non-structural interior alteration to the Collocation Space that do not adversely affect the building's appearance, value, structural strength and mechanical integrity. Such work shall be done at the sole expense of CLEC.
91.12.1A11 installations, alterations and additions shall be constructed in a good and workmanlike manner and only new and good grades of material shall be used, and shall comply with all insurance requirements, governmental requirements, and terms of this Agreement. Work shall be performed at such times and in such manner as to cause a minimum of interference with Sprint's transaction of business. CLEC shall permit Sprint to inspect all construction operations within tiie Collocation Space.
91.12.2A11 installations, alterations and additions which take the form of fixtures, except trade fixtures, placed in the Collocation Space by and at the expense of CLEC or others shall become the property of Sprint, and shall remain upon and be surrendered with the Collocation Space. Upon termination of this Agreement, however, Sprint shall have the right to require CLEC to remove such fixtures and installations, alterations or additions at CLECs expense, and to surrender the Collocation Space in the same condition as it was prior to the making of any or all such improvements, reasonable wear and tear excepted.
91.12.3AI1 fixtures and other equipment to be used by CLEC in, about or upon the Collocation Space shall be subject to the prior written approval ofSprint, which shall not be
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unreasonably withheld.
91.13 Fireproofing Policy. CLEC shall not cut or drill into, drive nails or screws into, install conduit or wires, or in any way deface any part ofthe Collocation Space or the Building, outside or inside, without the prior written consent ofSprint. IfCLEC desires signal, communications, alarm or other utility or service connections installed or changed, the same shall be made by and at the expense of CLEC. Sprint shall have the right of prior approval ofsuch utility or service connections, and shall direct where and how all connections and wiring for such service shall be introduced and run. In all cases, in order to maintain the integrity of the Halon space for proper Halon concentration, and to ensure compliance with Sprint's fireproofing policy, any penetrations by CLEC, whether in the Collocation Space, the building or otherwise, shall be sealed as quickly as possible by CLEC with Sprint-approved fire barrier sealants, or by Sprint at CLECs cost.
91.14 Equipment Grounding. CLEC equipment shall be connected to Sprint's grounding system.
91.15 Representations and Warranties. CLEC hereby represents and warrants that the information provided to Sprint in any Application or other documentation relative to CLECs request for telecommunications facility interconnection and Central Office building collocation as contemplated in this Agreement is and shall be true and correct, and that CLEC has all necessary corporate and regulatory authority to conduct business as a telecommunications carrier. Any violation of this Section shall be deemed a material breach of this Agreement.
92 BUILDING RIGHTS
92.1 Sprint may, without notice to CLEC:
92.1.1 Change the name or street address of the Premises;
92.1.2 Install and maintain signs on the exterior and interior of the Premises or anywhere on the Premises;
92.1.3 Designate all sources fumishing sign painting and lettering, ice, mineral or drinking water, beverages, foods, towels, vending machines or toilet supplies used or consumed in the Collocation Space;
92.1.4 Have pass keys or access cards with which to unlock all doors in the Collocation Space, excluding CLECs safes;
92.1.5 Reduce heat, light, water and power as required by any mandatory or voluntary conservation programs;
92.1.6 Approve the weight, size and location of safes, computers and all other heavy articles in and about the Collocation Space and the Building, and to require all such items and
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other office furniture and equipment to be moved in and out of the Building or Collocation Space only at such times and in such a manner as Sprint shall direct and in all events at CLECs sole risk and responsibility;
92.1.7 At any time, to decorate and to make, at its own expense, repairs, alterations, additions and improvements, structural or otherwise, in or to the Collocation Space, the Premises, or any part thereof (including, without limitation, the permanent or temporary relocation of any existing facilities such as parking lots or spaces), and to perform any acts related to the safety, protection or preservation thereof, and during such operations to take into and through the Collocation Space or any part ofthe Premises all material and equipment required, and to close or suspend temporarily operation of entrances, doors, corridors, elevators or other facilities. Sprint shall limit inconvenience or annoyance to CLEC as reasonably possible under the circumstances;
92.1.8 Do or permit to be done any work in or about the Collocation Space or the Premises or any adjacent or nearby building, land, street or alley;
92.1.9 Grant to anyone the exclusive right to conduct any business or render any service on the Premises, provided such exclusive right shall not operate to exclude CLEC from the use expressly permitted by this Agreement, unless Sprint exercises its right to terminate this Agreement with respect to all or a portion of the Collocation Space;
92.1 .lOClose the Building at such reasonable times as Sprint may determine, under such reasonable regulations as shall be prescribed from time to time by Sprint subject to CLECs right to access.
92.2 If the owner ofthe Building or Sprint sells, transfers or assigns any interest in the Building, or there is any material change in the Lease to which the Building is subject, and such sale, transfers assignment or material change in the Lease gives rise to an obligation which is inconsistent with this Agreement, Sprint's performance under this Agreement shall be excused to the extent ofthe inconsistency. Sprint hereby agrees that it will use its reasonable efforts to avoid any such inconsistency; provided, however, that this obligation shall in no way obligate Sprint to incur any out of pocket expenses in its efforts to avoid such inconsistencies.
92.3 This Agreement shall at all times be subject and subordinate to the lien of any mortgage (which term shall include all security instruments) that may be placed on the Collocation Space and CLEC agrees, upon
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demand, to execute any instrument as may be required to effectuate such subordination.
93 INSURANCE
93.1 During the term of this Agreement, CLEC shall carry, and shall cause any subcontractors to carry, with financially reputable insurers which are licensed to do business in all jurisdictions where any property is located, not less than the following insurance:
93.1.1 Commercial General Liability with limits of not less than $1,000,000 combined single limit per occurrence and aSgregate for bodily injury, property damage and personal and advertising injury liability insurance to include coverage for contractual and products/completed operations liability, naming Sprint as additional insured;
93.1.2 Business Auto liability, including all owned, non-owned and hired automobiles, in an amount of not less than $1,000,000 combined single limit per accident for bodily injury and property damage liability, naming Sprint as additional insured;
93.1.3 Workers Compensation as provided for in the jurisdiction where the Property is located, with an Employer's Liability limit of not less than $500,000 per accident or disease; and
93.1.4 Umbrella or excess liability in an amount not less than $5,000,000 per occurrence and aggregate in excess of the above-referenced Commercial General, Business Auto and Employer's Liability, naming Sprint as additional insured; and
93.1.5 "All Risk" property insurance on a full replacement cost basis insuring CLECs property situated on or within the Property, naming Sprint as loss payee. CLEC may elect to insure business interruption and contingent business interruption, as it is agreed that Sprint has no liability for loss of profit or revenues should an interruption of service occur.
93.2 Nothing contained in this Section shall limit CLECs Uability to Sprint to the limits of insurance certified or carried.
93.3 All policies required ofthe CLEC shall contain evidence ofthe insurer's waiver ofthe right of subrogation against Sprint for any insured loss covered thereunder. All policies of insurance shall be written as primary policies and not contributing with or in excess of the coverage, i f any, that Sprint may carry.
93.4 CLEC shall fumish to Sprint a certificate or certificates of insurance, satisfactory in form and content to Sprint, evidencing that the above
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coverage is in force and has been endorsed to guarantee that the coverage will not be cancelled or materially altered without first giving at least 30 days prior written notice to Sprint
93.5 Sprint will carry not less than the insurance coverages and limits required of CLEC.
94 INDEMNIFICATION
94.1 CLEC shall indemnify and hold Sprint harmless from any and all claims arising from:
94.1.1 CLECs use ofthe Collocation Space;
94.1.2 the conduct of CLECs business or from any activity, work or things done, pennitted or suffered by CLEC in or about the Collocation Space or elsewhere;
94.1.3 any and all claims arising from any breach or default in the performance of any obligation on CLECs part to be performed under the terms of this Agreement; and
94.1.4 any negligence of the CLEC, or any o f CLECs agents, and fees, expenses and liabilities incurred in the defense of any such claim or any action or proceeding brought thereon.
94.2 If any action or proceeding is brought against Sprint by reason of any such claim, CLEC, upon notice from Sprint, shall defend same at CLECs expense employing counsel satisfactory to Sprint.
94.3 CLEC shall at all times indemnify, defend, save and hold harmless Sprint from any claims, liens, demands, charges, encumbrances, litigation and judgments arising directly or indirectly out of any use, occupancy or activity of CLEC, or out of any work performed, material fumished, or obligations incuired by CLEC in, upon or otherwise in connection with the Collocation Space. CLEC shall give Sprint written notice at least ten (10) Business Days prior to the commencement of any such work on the Collocation Space in order to afford Sprint the opportunity of filing appropriate notices of non-responsibility. However, failure by Sprint to give notice does not reduce CLECs liability under this Section.
94.3.1 I f any claim or lien is filed against the Collocation Space, or any action or proceeding is instituted affecting the title to the Collocation Space, CLEC shall give Sprint written notice thereof as soon as CLEC obtains such knowledge,
94.3.2 CLEC shall, at its expense, within thirty (30) Days after filing of any lien of record, obtain the discharge and release thereof or post a bond in an amount sufficient to accomplish such discharge and release. Nothing contained herein shall prevent Sprint, at the cost and for the account
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of CLEC, from obtaining such discharge and release if CLEC fails or refuses to do the same within the thirty-day period.
94.3.3 If CLEC has first discharged the lien as provided by law, CLEC may, at CLECs expense, contest any mechanic's lien in any manner pennitted by law.
95 LIMITATION OF LIABILITY
95.1 SPRINT SHALL BE LIABLE FOR DAMAGE TO OR DESTRUCTION OF CLECS EQUIPMENT AND OTHER PREMISES ONLY IF SUCH DAMAGE OR DESTRUCTION IS CAUSED BY SPRINT'S SOLE NEGLIGENCE OR WILLFUL MISCONDUCT.
96 PARTIAL DESTRUCTION
96.1 I f the Collocation Space or a portion thereof sufficient to make the Collocation Space substantially unusable shall be destroyed or rendered unoccupiable by fire or other casualty, Sprint may, at its option, restore the Collocation Space to its previous condition. CLECs rights to the applicable Collocation Space shall not terminate unless, within ninety (90) Days after the occurrence ofsuch casualty, Sprint notifies CLEC of its election to terminate CLECs rights to the applicable Collocation Space. If Sprint does not elect to terminate CLECs rights to the applicable Collocation Space, Sprint shall repair the damage to the Collocation Space caused by such casualty.
96.2 Notwithstanding any other provision of this Agreement to the contrary, i f any casualty is the result of any act, omission or negligence of CLEC, its agents, employees, contractors, CLECs, customers or business invitees, unless Sprint otherwise elects, the CLECs rights to the applicable Collocation Space shall not terminate, and, i f Sprint elects to make such repairs, CLEC shall reimburse Sprint for the cost of such repairs, or CLEC shall repair such damage, including damage to the building and the area sunounding it, and the License Fee shall not abate.
96.3 I f the building shall be damaged by fire or other casualty to the extent that portions are rendered unoccupiable, notwithstanding that the Collocation Space may be directly unaffected, Sprint may, at its election within ninety (90) Days of such casualty, terminate CLECs rights to the applicable Collocation Space by giving written notice of its intent to terminate CLECs rights to the applicable Collocation Space. The termination as provided in this paragraph shall be effective thirty (30) Days after the date ofthe notice.
97 EMINENT DOMAIN
97.1 I f the Premises, or any portion thereof which includes a substantial part ofthe Collocation Space, shall be taken or condemned by any competent
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authority for any public use or purpose, CLECs rights to the applicable Collocation Space shall end upon, and not before, the date when the possession of the part so taken shall be required for such use or purpose. If any condemnation proceeding shall be instituted in which it is sought to take or damage any part of the Premises, or i f the grade of any street or alley adjacent to the Premises is changed by any competent authority and such change of grade makes it necessary or desirable to remodel the Premises to conform to the changed grade, Sprint shall have the right to terminate CLECs rights to the applicable Collocation Space upon not less than 30 days notice prior to the date of cancellation designated in the notice. No money or other consideration shall be payable by Sprint to CLEC for such cancellation, and the CLEC shall have no right to share in the condemnation award or in any judgment for damages caused by such eminent domain proceedings.
98 BANKRUPTCY
98.1 I f any voluntary or involuntary petition or similar pleading under any section or sections of any bankruptcy act shall be filed by or against CLEC, or any voluntary or involuntary proceeding in any court or tribunal shall be instituted to declare CLEC insolvent or unable to pay CLECs debts, or CLEC makes an assignment for the benefit of its creditors, or a trustee or receiver is appointed for CLEC or for the major part of CLECs property, Sprint may, i f Sprint so elects but not otherwise, and with or without notice of such election or other action by Sprint, forthwith terminate this Agreement.
99 ASBESTOS
99.1 CLEC is aware the Premises in which the Collocation Space is located may contain or have contained asbestos or asbestos containing building materials, and CLEC is hereby notified that the Premises in which the Collocation Space is located may contain asbestos or asbestos containing building material (ACBM). CLEC agrees that it is responsible for contacting the appropriate Sprint manager responsible for the Premises to determine the presence, location and quantity of asbestos or ACBM that CLECs employees, agents, or contractors may reasonably expect to encounter while performing activities in the Premises. CLEC shall not have responsibility or liability for any damages, expenses, costs, fees, penalties of any kind arising out of, or in connection with, or resulting from the disturbance of asbestos or ACBM in the Premises unless such disturbance arises out of or in connection with, or results from CLECs use of the Collocation Space or placement of equipment onto ACBM or into areas containing asbestos identified by Sprint, Sprint agrees to provide CLEC reasonable notice prior to undertaking any asbestos control, abatement, or other activities which may disturb asbestos or ACBM that could potentially affect CLECs equipment or operations in the Collocation Space, including but not limited to the contamination of
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such equipment. Sprint will not have responsibility or liability for any damages, expenses, costs, fees, penalties of any kind arising out of, or in connection with the presence of asbestos in Sprint Premises.
100 MISCELLANEOUS
100.1 CLEC warrants that it has had no dealings with any broker or agent in connection with this Agreement, and covenants to pay, hold harmless and indemnify Sprint from and against any and all cost, expense or liability for any compensation, commissions and charges claimed by any broker or agent with respect to this Agreement or the negotiation thereof
100.2 Submission of this instrument for examination or signature by Sprint does not constitute a reservation of or option for license and it is not effective, as a license or otherwise, until execution and delivery by both Sprint and CLEC.
100.3 Neither Sprint nor its agents have made any representation or warranties with respect to the Collocation Space of this Agreement except as expressly set forth herein; no rights, easements, or licenses shall be acquired by CLEC by implication or otherwise unless expressly set forth herein.
100.4 In the event of work stoppages, Sprint may establish separate entrances for use by personnel of CLEC. CLEC shall comply with any emergency operating procedures established by Sprint to deal with work stoppages.
100.5 The individuals executing this Agreement on behalf of CLEC represent and warrant to Sprint they are fully authorized and legally capable of executing this Agreement on behalf of CLEC.
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ISSUE 3- Interconnection Methods/Collocation
Part A- Definitions
Entrance Facility - An inter-network facility (i) between an ILEC Wire Center and a CLEC switch or other CLEC equipment, (ii) which is wholly within the ILEC's local serving area, and (iii) is used for carrying 251(c)(2) Interconnection traffic or 251 (c )(3) UNE traffic. In offering Entrance Facility service to Core, Embarq does not waive its right to argue that the FCC has determined (1) that carriers are not impaired without access to ELEC provisioned Entrance Facilities in any instance, and (2) that such facihties may be provisioned in a variety of ways, including without limitation, self-provisioning by the CLEC, a third party or by Embarq. An Entrance Facility is considered part of the CLECs network.
Highlighted clauses reflect agreed upon/settled language Non-highlighted clauses reflect EQ PA's proposed language for a Final Offer and includes language that is currently in dispute in this arbitration, as well as EQ PA's proposed language to settle issues.
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PART F - INTERCONNECTION
54. LOCAL INTERCONNECTION TRUNK ARRANGEMENT
54.1 The Parties shall reciprocally terminate Local Traffic and IntraLATA/interLATA toll calls originating on the other Party's network as follows:
54.1.1 The Parties shall make available to each other two-way trunks for the reciprocal exchange of combined Local Traffic, and non-equal access IntraLATA toll traffic. Neither Party is obligated under this Agreement to order reciprocal trunks or build facilities in the establishment of interconnection arrangements for the delivery of Internet traffic. The Party serving the Internet service provider shall order trunks or facilities from the appropriate tariff of the other Party for such purposes and will be obligated to pay the full cost of such facility.
54.1.1.1 The Parties agree to initially use two-way trunks (one-way directionalized). The Parties shall transition from directionalized two-way trunks upon mutual agreement, absent engineering or billing issues. The Parties shall transition all oneway trunks established under this Agreement.
54.1.2 Separate two-way trunks will be made available for the exchange of equal-access InterLATA or IntraLATA interexchange traffic.
54.1.3 Separate trunks will be utilized for connecting CLECs switch to each 911/E911 tandem.
54.2 Points of Interconnection
54.2.1 Point of Interconnection. Unless interconnecting with Sprint on an indirect basis subject to Section 61, CLEC must establish a minimum of one POI within each LATA, at any technically feasible point, on Sprint's network. To the extent Sprint's network contains multiple tandems in the LATA, CLEC must interconnect at each tandem where it wishes to exchange (i.e. receive or terminate) traffic with Sprint.
54.2.1.1 CLEC will be responsible for engineering and maintaining its network on its side ofthe POI. Sprint will be responsible for engineering and maintaining its network on its side ofthe POI. Each Party is financially responsible for transport on its side of the POI.
• Highlighted clauses reflect agreed upon/settled language o Non-highlighted clauses reflect EQ PA's proposed language for a Final Offer and
includes language that is currently in dispute in this arbitration, as well as EQ PA's proposed language to settie issues.
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54.2.1.2 Each Party is financially responsible for transporting its originated traffic to the POI.
54.2.1.3 For construction of new facilities when the Parties choose to interconnect at a mid-span meet. CLEC and Sprint will jointly provision the facilities that connect the two networks. Sprint will be the "controlling carrier" for purposes of MECOD guidelines, as described in the joint implementation plan. Sprint will provide fifty percent (50%) of the facilities or to its exchange boundary, whichever is less. The construction of new facilities for a mid-span meet is only applicable when traffic is roughly balanced. Notwithstanding any provision in this Agreement to the contrary, when the Parties interconnect using a mid-span meet, each Party will be financially responsible for the facilities on its side of the mid-span meet and will not bill the other Party for any portion of those facilities.
54.2.1.4 If third party (i.e. Competitive Access Provider or "CAP") leased facilities are used for interconnection, the POI will be defined as the Sprint office in which the third party's leased circuit terminates.
54.2.1.5 CLEC may order Entrance Facilities and Dedicated Transport links from Sprint that are wholly within Sprint's serving territory from the rates found in Table One.
54.2.1.6 I f CLEC chooses to interconnect with Embarq using a meet-point arrangement (i.e., facilities jointly provisioned by Embarq and another LEC), CLEC will order those facilities that are wholly within Embarq's serving territory from Embarq's access tariff.
54.3 Technical Requirements for Interconnection
54.3.1 Interconnection at the Sprint Tandem
54.3.1.1 Interconnection to Sprint Tandem Switch(es) will provide CLEC local interconnection for local service purposes to the Sprint end offices and NXXs which subtend that tandem(s), where local
Highlighted clauses reflect agreed upon/settled language Non-highlighted clauses reflect EQ PA's proposed language for a Final Offer and includes language that is currently in dispute in this arbitration, as well as EQ PA's proposed language to settle issues.
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trunking is provided, and access to the toll network.
54.3.1.2 Interconnection to a Sprint Tandem for transit purposes will provide access to telecommunications carriers which are connected to that Tandem Switch.
54.3.1.3 Where a Sprint Tandem Switch also provides End-Office Switch functions, interconnection to a Sprint tandem serving that exchange will also provide CLEC access to Sprint's end offices.
54.3.2 Interconnection at the Sprint End Office
54.3.2.1 Interconnection to Sprint End Office Switch will provide CLEC local interconnection for local service purposes to the Sprint NXX codes served by that end office and any Sprint NXXs served by remotes that subtend those End Offices.
Highlighted clauses reflect agreed upon/settled language Non^highlighted clauses reflect EQ PA's proposed language for a Final Offer and includes language that is currently in dispute in this arbitration, as well as EQ PA's proposed language to settle issues.
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Section 55- Intercarrier Compensation (Arbitration Issues 5, 6, 7 and 8) (If Bill & Keep is Ordered by the Commission)
55. Intercarrier Compensation
55.1. Compensation for Local Traffic Transport and Termination
55.1.1 The Parties agree to bill & keep for Local and ISP-Bound Traffic as set forth in Table One. The Parties agree that by executing this Agreement, neither Party waives any of its rights, and expressly reserves all of its rights under the Order on Remand and Report and Order, FCC 01-131, CC Dockets No. 96-98 and 99-68, adopted April 18 2001 (the "ISP Compensation Order"). Should the FCC issue a subsequent order addressing this issue, the Parties agree to amend this Agreement to comply with the FCC order on a prospective basis only, from the effective date thereof, and no "true-up" shall be required in connection with the FCC's order, unless such FCC order explicitly requires retroactive payments. Such interim bill & keep treatment has been formulated based upon numerous factors and considerations, including without limitation, current regulatory uncertainty, technological capabilities, the existence of various licit and illicit traffic routing practices within the industry, resource allocation issues, and other circumstances. Both Parties reserve the right to advocate any position with regard to the appropriate compensation for ISP-bound traffic before all relevant forums, and the terms of this Agreement shall not be deemed or considered to have any probative value as to the substance of either Party's rights or advocacy positions nor shall this Agreement be deemed to constitute the acquiescence by either party, or a waiver by either party, to the future treatment of such traffic, outside the context of this Agreement.
55.2 To validate the geographic area CLEC must provide documentation supporting the following:
55.2.1 that CLECs switch serves a geographic area that is roughly the same size as the area served by the Sprint Tandem Switch;
55.2.2 that CLEC has obtained NPA/NXX codes to serve the exchanges within the geographic area; and,
55.2.3 that CLEC is serving the area using its own switch with its own facihties or a combination of its own facilities and leased facilities connected to its collocation arrangements.
55.3 Compensation for the termination of toll traffic and the origination of 800 traffic between the interconnecting parties shall be based on the applicable
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access charges in accordance with FCC and Commission Rules and Regulations and consistent with the provisions of Part F of this Agreement. If CLEC is acting as an IXC and a competitive local exchange carrier, CLEC must have a unique CIC for each type of service order. Specifically, CLEC must have two CICs, one that is used for ordering DCC facilities for interexchange toll traffic and one that is used to order facilities for local exchange traffic.
55.4 The Parties have been unable to agree as to the appropriate compensation for VNXX traffic. However, without prejudice to either Party's position concerning the application of reciprocal compensation, access charges or any other rate treatment for VNXX traffic, the Parties agree that charges for such traffic shall be bill and keep for purposes of this Agreement only and on an interim basis only until the earlier of (i) the expiration or termination of this Agreement or (ii) until the FCC issues an Order addressing the proper charges for VNXX traffic. Should the FCC issue an order addressing these issues, the Parties agree to amend this Agreement to comply with the FCC order on a prospective basis only, from the effective date thereof, and no "true-up" shall be required in connection with the FCC's order, unless such FCC VNXX order explicitly requires retroactive payments. Such interim treatment has been formulated based upon numerous factors and considerations, including without limitation, current regulatory uncertainty, technological capabilities, the existence of various licit and illicit traffic routing practices within the industry, resource allocation issues, and other circumstances. Both Parties reserve the right to advocate any position with regard to the appropriate compensation for VNXX traffic before all relevant forums, and the terms of this Agreement shall not be deemed or considered to have any probative value as to the substance of either Party's rights or advocacy positions nor shall this Agreement be deemed to constitute the acquiescence by either party, or a waiver by either party, to the future treatment of such VNXX traffic, outside the context of this Agreement.
55.5 The Parties have been unable to agree as to the appropriate compensation for non-local VOIP traffic. Parties agree that charges for local VOIP traffic shall be bill and keep for purposes of this Agreement only and on an interim basis only until the earlier of (i) the expiration or termination of this Agreement or (ii) until the FCC issues an Order addressing the proper charges for VOIP traffic. Without prejudice to either Party's position concerning the application of reciprocal compensation, access charges or any other rate treatment, the Parties agree that charges for such traffic shall be handled in the manner set forth herein for purposes of this Agreement only and on an interim basis only until the earlier of (i) the expiration or termination of this Agreement or (ii) until the FCC issues an Order addressing the proper charges for VOIP traffic. Should the FCC issue an order addressing these issues, the Parties agree to amend this
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Agreement to comply with the FCC order on a prospective basis only, from the effective date thereof, and no "true-up" shall be required in connection with the FCC's order, unless such FCC VOIP order explicitly requires retroactive payments. Such interim treatment has been formulated based upon numerous factors and considerations, including without limitation, current regulatory uncertainty, technological capabilities, the existence of various licit and illicit traffic routing practices within the industry, resource allocation issues, and other circumstances. Both Parties reserve the right to advocate any position with regard to the appropriate compensation for VOIP traffic before all relevant forums, and the terms of this Agreement shall not be deemed or considered to have any probative value as to the substance of either Party's rights or advocacy positions nor shall this Agreement be deemed to constitute the acquiescence by either party, or a waiver by either party, to the future treatment of such VOIP traffic, outside the context of this Agreement.
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Embarq PA Cross Exhibit ^_
Before the FEDERAL COMMUNICATIONS COMMISSION
Washington, D.C. 20554
WC Docket No. 03-171
In the Matter of
Core Communications, Inc.
Petition for Forbearance Under 47 U.S.C. § 160 (c) From Application ofthe ISP Remand Order
REPLY COMMENTS OF CORE COMMUNICATIONS, INC.
Core Communications, Inc. ("Core"), by its attorneys, hereby submits these Reply
Comments in support of its Petition for Forbearance ("Petition") filed with the Federal
Communications Commission (the "Commissiotf*) in the above-captioned proceeding. For the
reasons discussed herein, the Commission is compelled to exercise its forbearance authority
under Section 10 of the Communications Act of 1934, as amended (the "Act'*). 47 U.S.C. § 160,
and accordingly, to forbear from further apphcation of the interim intercarrier compensation
regime for ISP-bound traffic promulgated under the ISP Remand Order.1
I . INTRODUCTION AND SUMMARY
The Petition filed by Core in this proceeding clearly demonstrates that the
intercarrier compensation provisions of the ISP Remand Order, as applied to the exchange of
ISP-bound traffic between carriers, unreasonably discriminates against competitive local
exchange carriers ("CLECs"), on one hand, in favor ofthe Bell Operating Companies ("BOCs"),
and on the other hand, in favor of a distinct class of CLECs that commenced telecommunications
In the Matter ofImplementation of the Local Competition Provisions in the Telecommunications Act of1996 (CC Docket No. 96-98) and Intercarrier Compensation for ISP-Bound Traffic (CC Docket No. 99-68), Order on Remand and Report and Order, FCC01-131 (rel.Apr.27,2001),renwzmferfwi/Aoa/vacamr, WorldCom, IfDtt/SGr*.. 288 F.3d 429 (D.C. Cir. 2002) ("ISP Remand Order**). C G fc / \ / p n
J{jL "2-cc; De01/FREEB/210565.1 DA r,,.^.
operations prior to the arbitrarily-selected effective date the of the Commission's interim regime.
The disparate impact ofthe ISP Remand Order on new telecommunications businesses
undoubtedly has chilled competitive market entry in a manner that is wholly inconsistent with
the policy goals of the Act, and in turn, has limited the availability of innovative service options
to telecommunications consumers. Accordingly, the forbearance relief requested by Core is
appropriate, and in fact compelled by the plain language ofthe Act.
The initial comments filed by die BOCs in this proceeding offer nothing more
than a blanket denial of Core's claims, and an unimpressive restatement ofthe BOCs'
manufactured, stale "regulatory arbitrage" rhetoric. First, the BOCs dispute the obvious
anticompetitive harm and financial distress disproportionately suffered by new market entrants
that are precluded entirely from collecting reciprocal compensation for terminating traffic to their
end user customers that are ISPs. Second, the BOCs shift blame for the disastrous effects of the
ISP Remand Order on CLECs to the CLECs themselves, suggesting that the disparities occurring
under the Commission's interim intercarrier compensation regime for ISP-bound traffic must be
the result of flawed business planning by the CLECs, and not result of flawed reasoning by the
Commission. Of course, the BOCs collectively refuse to acknowledge that the profitability of
their own business plans fundamentally depend on their on-going ability to collect billions of
dollars in intercarrier compensation payments from interexchange carriers and other local
exchange carriers. At bottom, the BOCs make no credible claim to refute that the Commission's
on-going application of the interim intercarrier compensation regime for ISP-bound traffic
promulgated under the ISP Remand Order would harm the interests of telecommunications
carriers and consumers.
DC01/FREEB/210565.1
Rather ironically, the BOCs also deny that the Petition filed by Core in this
proceeding satisfies the statutory requirements for exercise of the Commission's forbearance
authority under Section 10 of the Act. To the contrary. Core's request for forbearance relief is
entirely consistent with any reasonable application of Section 10 to the ISP Remand Order, and
moreover, the Commission's grant of Core's Petition is not otherwise foreclosed by the same
deficiencies suffered by the BOCs' recent Petition for Forbearance From the Current Pricing
Rules for the Unbundled Network Platform.2 Of further importance, unlike the pricing rules at
issue in the BOCs' forbearance petition, the rules promulgated under the ISP Remand Order
currently are sheltered from review on their merits. Accordingly, this is the only forum in wliich
the Commission may review the anticompetitive effects ofthe interim intercarrier compensation
regjme for ISP-bound traffic, and the ruinous impact of the ISP Remand Order on CLECs and
the competitive telecommunications industry. As required by Section 10 ofthe Act, the
Commission must exercise its forbearance authority where, as here, the on-going application of
the Commission's existing rules is harmful to the public interest.
II. CORE'S PETITION CLEARLY SATISFIES THE REQUIREMENTS FOR EXERCISE OF THE COMMISSION'S FORBEARANCE AUTHORITY UNDER SECTION 10
As required by Section 10 of the Act, the Petition for Forbearance filed by Core in
this proceeding clearly demonstrates that the Commission's rules promulgated under the ISP
Remand Order are not necessary to prevent unjust or unreasonable discriminatory treatment of
telecommunications carriers, nor to protect the interests of telecommunications consumers. To
the contrary. Core has shown that the Commission's application ofthe interim intercarrier
2 See In the Matter ofJoint Petition of Qwest Corporation, BellSouth Telecommunications, Inc. and SBC Communications Inc. For Expedited Forbearance From the Commission's Current Pricing Rules, WC Docket No. 03-189 (filed Jul. 31,2003); In the Matter of Petition ofthe Verizon Telephone Companies For Expedited Forbearance From the Commission's Current Pricing Rules, WC Docket No. 03-157 (filed Jul. 1,2003).
DC01/FREER/210565.1
compensation regime for ISP-bound traffic has placed new market entrants at a crippling
competitive disadvantage as compared to the ubiquitous, rate-payer-financed BOCs, and in fact,
has provided the BOCs a prominent opportunity to maximize the amount of the intercarrier
compensation payments that they collect, and to minimize the amount of intercarrier
compensation payments that they make to CLECs. In turn, the regulatory environment created
by the ISP Remand Order has deterred financial investment in new telecommunications
businesses, chilled new market entry, and stifled product and service innovation, all to the
detriment of telecommunications consumers. The relief requested by Core would remove a
substantial bairier to competition among providers of telecommunications serviceSi and
accordingly, the Commission's exercise of its forbearance authority under Section 10 of the Act
is entirely consistent with the public interest
A. The Commission's Application Of Its Rules Promulgated Under the ISP Remand Order Is Not Necessary To Prevent Unjust Or Unreasonable Discriminatory Treatment Of Telecommunications Carriers
The Petition filed by Core in this proceeding clearly demonstrates that the interim
intercarrier compensation regime for ISP-bound traffic promulgated under the ISP Remand
Order is not necessary to prevent unjust or unreasonable discriminatory treatment of
telecommunications carriers, and in fact, is the source of regulatory disparities that severely
disrupt competitive market conditions. On its face, the ISP Remand Order permits the BOCs to
unilaterally determine the intercarrier compensation rates applicable to all traffic, and
accordingly to maximize the amount of intercarrier compensation payments that they collect, and
to minimize tiie amount of intercarrier compensation payments that they make to CLECs.
Moreover, the effective date of the growth cap and new market bar provisions promulgated
under the ISP Remand Order arbitrarily requires new market entrants to recoup their terminating
DC0I/FREEB/2I0565.1 A
switch costs only from their end user customers, or to absorb those costs entirely, while at the
same time permitting the BOCs and a small number of CLECs to recover such costs through
reciprocal compensation payments. In spite of the Commission's efforts to achieve a different
result, the interim intercarrier compensation regime for ISP-bound traffic promulgated under the
ISP Remand Order blatantly discriminates among telecommunications carriers in manner wholly
inconsistent with the policy goals ofthe Act.
In opposing Core's Petition, the BOCs note only that the ISP Remand Order
requires payment of reciprocal compensation for termination of ISP-bound traffic at the same
rates, and pursuant to the same terms, for all carriers.3 However, the so-called "mirroring rule"
permits the BOCs to unilaterally determine the intercarrier compensation rates applicable to ISP-
bound traffic, and to all other traffic exchanged pursuant to Section 251(b)(5) of the Act 4 Under
the ISP Remand Order, CLECs are accorded no similar opportunity to select or even to negotiate
such intercarrier compensation rates, and accordingly must accept those rates established at the
whim of the BOCs. As demonstrated by Core's Petition,5 and by the Comments of Consumer
Advocate of the West Virgmia Public Service Commission,6 the "mirroring rule" presents a
prominent opportunity to "game" or otherwise "arbitrage" the ISP Remand Order. Meed, there
can be no doubt that the BOCs have used their "superior bargaining position" to further their
market dominance and to block competitive entry into local telecommunications markets.7
See Opposition of Verizon at 6. See ISP Remand Order at K 89. See Petition at 2,6.
See Comments of the Consumer Advocate ofthe West Virginia Public Service Commission at 7,10,11-14.
ISP Remand Order at f 89.
DC01/FREEB/2t0565.1
The comments filed by the BOCs in this proceeding also suggest that the new
market bar and growth cap provisions promulgated under the ISP Remand Order do not
arbitrarily discriminate among telecommunications carriers, but at the same time concede that
certain carriers acted in reliance on reciprocal compensation revenues and thus are not similarly
situated to carriers who were not exchanging traffic pursuant to interconnection agreements on
the effective date of tiie interim intercarrier compensation regime.8 However, as demonstrated
by Core's Petition, the Commission critically discounted the substantial financial investments
made by CLECs prior to the Commission's implementation of the ISP Remand Order, on the
basis of sound business plans, and with the reasonable expectation that CLECs would continue to
recoup their operating costs and maintain their profitability through the collection of reciprocal
compensation for termination of traffic to their end user customers that are ISPs.9 It would
appear that the BOCs, which enjoy full use of their rate-payer-financed, embedded networks, are
willing to ignore the flawed reasoning that plagues the interim intercarrier compensation regime,
and instead to search for some ulterior motive underlying the legitimate business plans of carriers
that do not serve "other customers" in the same way that "Verizon and others do."10
In this proceeding, Verizon has the audacity to argue that Core offers no evidence
to support its claim that-Core reasonably expected to recoup a portion of its initial financial
investment through the collection of reciprocal compensation.11 The Commission already has
concluded that Verizon unreasonably delayed Core's request for interconnection in the
Washington Metropolitan LATA, submitted to Verizon in February 2000, for a period of four
8
9
10
I I
See Opposition of SBC Communications Inc. at 4. See Petition at 8. See Opposition of Verizon at 7. Id at 8.
DC01/FREEB/210565.1
months, during which Verizon's own traffic "continued to flow freely."12 Moreover, Core
demonstrated to the Commission in its Petition for Waiver ofthe Growth Cap/New Market Bar
in Delaware, New York, and Pennsylvania that Core's requests for interconnection with Verizon
for the Philadelphia, Pittsburgh, and New York City markets, also dating back to February 2000,
were delayed as long as fourteen months, and thus were not completed until after the effective
date ofthe Commission's ISP Remand OrderP With respect to Core, Verizon's pronounced
efforts to unreasonably prolong interconnection for the purpose of delaying new market entry is
clear - and the anticompetitive result of Verizon's conduct is perpetuated by the ISP Remand
Order.
In attempting to discredit Core's claims that the on-going application ofthe
interim intercarrier compensation regime for ISP-bound traffic has produced widespread
anticompetitive harm, the BOCs rely heavily on the "regulatory arbitrage" rhetoric echoed by the
Commission throughout the ISP Remand Order to suggest that the Commission has reasonably
selected the lesser of two evils.14 However, in spite of the Commission's efforts to achieve a
different result, the interim intercarrier compensation regime for ISP-bound traffic has provided
the BOCs a multitude of new opportunities for regulatory arbitrage.15 Now, over two years
following the Commission's adoption of the ISP Remand Order, the BOCs continue to collect
literally billions of dollars in intercarrier compensation payments using their embedded, rate-
u
13
14
IS
Core Communications, Inc. v. Verizon Maryland Inc., File No. EB-01-MD-007, Memorandum Opinion arid Order at 119 (rel. Apr. 23,2003). See In the Matter ofPetition of Core Communications, Inc. for Waiver of the Growth Cap/New Market Bar in Delaware, New York and Pennsylvania, CPD Docket No. 01-20 (filed Aug. 17,2001), Core-Verizon Interconnection Timeline attached hereto as Exhibit A.
See Opposition of BellSouth Corporation at 6-7,10-12; Opposition of Qwest Communications International Inc. at 2-4,10-12; Opposition of SBC Communications Inc. at 1-3,4; Opposition of Verizon at 3-4, 8-9,10-11.
See Petition at 2.
DC01/FREEB/210565.1
payer-financed plant, while new entrants are denied the ability to recover similarly the cost of
their investments.
B. Continned Application Of The Commission's ISP Remand Order Rules Is Not Necessary For The Protection of Consumers
The Petition filed by Core in this proceeding clearly demonstrates that the interim
intercarrier compensation regime for ISP-bound traffic promulgated under the ISP Remand
Order is not necessary for the protection of consumers, and in fact, has produced anticompetitive
harms that have limited the innovative, competitively-price telecommunications service options
available to consumers.16 As noted above, and as discussed more fully in Core's Petition, the
growth cap and new market bar provisions of the ISP Remand Order entirely preclude new
market entrants from collecting reciprocal compensation for terminating traffic to their ISP
customers, and accordingly, requires such carriers to recoup their terminating switch costs only
from their end users or to absorb them entirely.17 As a result, the telecommunications services
offered to consumers by new market entrants are made available only at higher prices than those
offered by the BOCs, or are otherwise limited by the higher operating costs that such service
providers must endure.18 Moreover, the inabihty of new market entrants to offer competitively
priced telecommunications services to consumers has deterred financial investment essential to
the development of new telecommunications businesses, and thus has chilled competitive entry
into local telecommunications markets, diminished the availability of telecommunications
service options available to consumers,- and slowed the pace of telecommunications service and
product innovation.19
1 6 fee Petition at 10-11. 1 7 See id. at 5-6. 18 See id. 1 9 See id. at 8-9,10-U.
DC01/FREEB/210565.1
C. The Commission's Forbearance From Farther Application Of Its Rules Promnlgated Under The ISP Remand Order is Consistent With The Public Interest
The Petition filed by Core in this proceeding clearly demonstrates that the
Commission's forbearance from further application of the interim intercarrier compensation
regime for ISP-bound traffic promulgated under the ISP Remand Order is entirely consistent
with the public interest, and will enhance competition among providers of telecommunications
services. Indeed, Core's Petition illustrates, in great detail, the manner in which the
discriminatory treatment of CLECs under the ISP Remand Order has chilled new market entry,
diminished competition in local telecommunications markets, and deterred investment in new
telecommunications businesses. At bottom, the interim intercarrier compensation regime for
ISP-bound traffic promulgated under the ISP Remand Order is a substantial barrier to the
development of competitive market conditions, and a substantial impediment to achieving the
policy objectives ofthe Act. Accordingly, for the reasons set forth in Core's Petition and
discussed herein. Core submits that the Commission's forbearance from further application of
the interim intercarrier compensation regime for ISP-bound traffic promulgated under the ISP
Remand Order would enhance competition among providers of telecommunications services, as
is consistent with the public interest.
D. The Petition Filed By Core In This Proceeding Does Not The Same Deficiencies As The BOCs' Petition For Forbearance From The Current Pricing Rules For The Unbundled Network Element Platform
The Petition filed by Core in this proceeding does not suffer the same deficiencies
as the BOCs' Petition For Forbearance From The Current Pricing Rules For The Unbundled
DC01/FREEB/210565.1
Netwoik Element Platform recently filed with die Commission.20 The Commission's grant of
the Petition filed by Core in this proceeding is entirely consistent with Section 10 of the Act, and
is not subject to any limitation thereunder. The issues of law raised by Core's Petition currently
are not before the Commission as part of any notice-and-comment rulemaking proceeding, and
are not otherwise under review by the Commission or by any court. Accordingly, the
Commission's grant of the petition filed by Core in this proceeding is not precluded by the Act
or by the Commission's rules, and is not otherwise inconsistent with the public interest.
The Commission's forbearance from further application of its rules promulgated
under the ISP Remand Order is not subject to limitation under Section 10(d) of the Act, which
provides that "the Commission may not forbear from applying the requirements of Section
251 (c) or 271.. .until it determines that those requirements have been fully implemented."21
Unlike die Commission's TELRIC pricing rules for unbundled netwoik elements at issue in the
BOCs' Petition,22 the rules promulgated under the ISP Remand Order do not impUcate any ofthe
requirements set forth in Section 251(c) or Section 271 ofthe Act Accordingly, the
Commission's forbearance from further application of its rules promulgated under the/SP
Remand Order is not similarly barred under Section 10(d) of the Act.
20
21
22
See-In the Matter ofJoint Petition of Qwest Corporation, BellSouth Telecommunications, Inc. and SBC Communications Inc. For Expedited Forbearance From the Commission's Current Pricing Rules, WC Docket No. 03-189, (filed Jul. 31,-2003); In the Matter of Petition of the Verizon Telephone Companies For Expedited Forbearance From the Commission's Current Pricing Rules, WC Docket No. 03-157 (filed Jul. 1,2003).
47 U.S.C. § 160(c).
The Commission's TELRIC pricing rules are essential to requirements of Section 251(c) and Section 271 of Act, both of which require that the BOCs provide CLECs nondiscriminatory access to unbundled network elements. However, the Commission has not yet determined that these requirements of the Act have been fully implemented by the BOCs. Accordingly, the BOCs* request that the Commission forbear from fiirther application of the TELRIC pricing rules to the unbundled network element platform is barred under Section 10(d) of the Act.
DC01/FREEB/210565.I \Q
The D.C. Circuit's remand of the ISP Remand Order currently is not expressly
subject to review as part of any notice-and-comment rulemaking proceeding before the
Commission, and in fact, as discussed more fully below, the "interim regime'* is sheltered
entirely from review by any court To the contrary, the TELRIC pricing rules at issue in the
BOCs* Petition are the focus a Notice of Proposed Rulemaking recently issued by the
Commission, and accordingly will be reviewed as part of a complete notice-and-comment
rulemaking proceeding.23 Accordingly, unlike the TELRIC pricing mles, the merits of the
Commission's rules promulgated under the ISP Remand Order would not otherwise be subject to
any meaningful review by the Commission outside of this proceeding.
III. THE DECISION OF THE D.C. CIRCUIT IN WORLfiCOM V. FCC FULLY SUPPORTS THE COMMISSION'S EXERCISE OF ITS FORBEARANCE AUTHORITY IN THIS PROCEEDING
The Petition filed by Core in this proceeding notes that the D.C. Circuit already
has rejected the Commission's proclaimed statutory basis for the interim intercarrier
compensation regime promulgated under the ISP Remand Order?4 Importantly, the Court did
not address the merits of the ISP Remand Order, but instead remanded the ISP Remand Order to
the Commission, and directed that the Commission identify a suitable statutory basis for its
efforts prior to any consideration of those rules on the merits.25 The Commission's utter
passivity in response to the D.C. Circuit's remand has foreclosed any meaningful review ofthe
ISP Remand Order to which aggrieved parties, such as Core, are entitled. As noted by MCI,
Section 402 of the Act, 47 U.S.C. § 402(h), expressly requires that the Commission "carry out
23 See In the Matter of Review of the Commission's Rtdes Regarding the Pricing of Unbundled Network Elements and the Resale of Service by Incumbent Local Exchange Carriers, WC Docket No. 03-173, Notice of Proposed Rulemaking, FCC 03-224 (rel. Sep. 15,2003).
2 4 See Petition at 3-4; see also Worldcom, Inc. v. FCC, 288 F.3d 429,434 (D.C. Cir. 2002). 2 5 See Worldcom, 288 F.3d at 434.
DC01/FREEB/210565.1 11
the judgment ofthe court."26 Nonetheless, the Commission has pennitted the interim intercarrier
compensation regime promulgated under the -ISP Remand Order to remain in full force and
effect for eighteen months following the D.C. Circuit's remand in Worldcom, and appears
nowhere near addressing the statutory basis for its mles, which the Commission must articulate
before the D.C. Circuit will consider the merits ofthe Commission's ostensibly interim regime.
As such, the interim intercarrier compensation regime currently is sheltered from any substantive
review in that proceeding. Thus, this is the only forum in which the parties adversely affected by
the Commission's application of the ISP Remand Order may obtain the substantive review of
Commission's rules to which they are legally entitled.
IV. CONCLUSION
For the foregoing reasons, the Commission is compelled to exercise its
forbearance authority under Section 10 of the Act, and accordingly, to forbear from further
application ofthe interim intercarrier compensation regime for ISP-bound traffic promulgated
under the JSP Remand Order.
Respectfully submitted.
Christopher Van de Verg General Counsel CORE COMMUNICATIONS, INC. 209 West Street, Suite 302 Annapolis, Maryland 21401 (410) 216-9865 (telephone)
September 22,2003
Jonathan £. Canis Michael B. Hazzard Brett Headier Freedson KELLEY DRYE & WARREN LLP 1200 Nineteenth Street, N.W. Suite 500 Washington, D.C. 20036 (202) 955-9600 (telephone) (202) 955-9792 (fecsimile).
Counsel for Core Communications, Inc.
2 6 See Comments of MCI at 1.
DC01/FREEB/210565.1 12
EXHIBIT A
DC01/FREEB/210565.1
CORE-VERIZON INTERCONNECTION TIMELINE
1999
February 2000
June 2000
March 2001
April 2001
April 2001
June 2001
April 2003
Core begins substantial investment for implementation of its business plan in Delaware, New York and Pennsylvania.
Core requests interconnection with Verizon in Philadelphia.
Core requests interconnection with Verizon in Pittsburgh and New York City.
Core files complaint with FCC regarding Verizon's failure to complete interconnection in D.C. LATA.
FCC issues ISP Remand Order - growth cap and new market bar apply for all carriers that were not exchanging traffic pursuant to an interconnection agreement prior to April 18,2001.
14 months after Core's request, Verizon completes interconnection with Core in Philadelphia. Core begins to offer service in Philadelphia.
12 months after Core's request, Verizon completes interconnection with Core in Pittsburgh and New York City. Core begins to offer service in Pittsburgh and New York City.
FCC grants Core's interconnection complaint against Verizon. FCC finds that Verizon unlawfully delayed interconnection with Core in the D.C. LATA by 4 months - implicitly finds that interconnection should have been completed in 5 months, and not in 9 months.
DC01 /FREEB/206735.1
Embarq PA Cross Exhibit
Set 1-19: Has Core in any of their interconnection agreements with such carriers, agreed to any of the disputed points raised in Core's arbitration petition against United PA? If yes, please provide a list specifying the issue that was agreed to and the applicable carrier and interconnection agreement for which Core previously agreed to such issue with another carrier.
OBJECTION: Core Objects to this Interrogatory on the following grounds: (1) the request is vague, overly broad and unduly burdensome; (2) the request seeks infonnation that is neither relevant to this proceeding nor reasonably calculated to lead to the discovery of admissible evidence; and (3) the request seeks confidential infonnation that can not be produced without an appropriate protective order.
RESPONSE: Sponsored by Christopher Van de Verg, General Counsel, Core Communications, Inc.
Notwithstanding the foregoing objections, Core hereby states as follows:
Attached hereto for United PA's review and analysis are Core's two current ICAs for Pennsylvania: Core-Verizon Pennsylvania Inc. and Core-Verizon North Inc. Core does not believe that either ICA constitutes Core's substantive "agreement" to concede any of the points in the disputed issues list in this proceeding. However, the ICAs speak for themselves. Further, since both ICAs are section 252(i) opt-ins, their mere. execution by Core does not constitute Core's "agreement" on any specific issue.
19 SLI 639076v 1/100826.00003
Breanna S Burleson Contract Performance and Administration
VIA DHL (27637820151)
August 29, 2005
Chris Van de Verg General Counsel, Core Communications, Inc. 209 West Street Suite 302 Annapolis, MD 21401
Dear Chris:
Network Services
HQE03O40 600 Hidden Ridge P. O. Box 152092 Irving, TX 75038 (972)718-1256 FAX (972) 719-1519
ffipWtf
MAY 26 2005
rrevENs a LEL Enclosed is the original executed document for the agreement between Core Communications, Inc. and Verizon North Inc. within the Commonwealth of Pennsylvania. A copy of this document will be filed with the State Commission.
If you do not already have an assigned Verizon Account Manager or Customer Focus Manager, please visit www.verizon.com/wholesafe and select "Establish & Maintain Account". The information found at this site will cover what you need to know about Verizon to begin doing business and/or to maintain your account information as your business changes and grows.
If you have any questions, please contact your Negotiator.
Sincerely,
Breanna S Burleson
:bsb
Enclosure
Ref: 15930
Jeffrey A. Masoner Vice President Interconnection Services Policy and Planning Wholesale Markets
1310 N Courthouse Rd 9th floor, RM 9E104 Arlington, VA 22201
Phone 703 974-4610 Fax 703 974-0314 [email protected]
August 19, 2005
Bret Mingo President Core Communications, Inc. 209 West Street Suite 302 Annapolis, MD 21401
Dear Mr. Mingo:
Verizon North Inc. ("Verizon"), a Wisconsin corporation, with principal place of business at 1717 Arch Street, Philadelphia, PA 19103, has received your letter stating that, under the terms of the Pennsylvania Public Utility Commission's (the "Commission") Order Approving the Merger of Bell Atlantic Corporation and GTE, dated November 4, 1999, in Docket Nos. A310200F0002, A-310222F0002, A 310291F0003, and A-311350F0002 (the "Commission Order), Core Communications, Inc. ("Core"), a District of Columbia corporation with principal place of business at 209 West Street, Suite 302, Annapolis, MD 21401, wishes to provide services to customers in Verizon's temtory, which is the former GTE service territory, by adopting the non-price terms of the Interconnection Agreement between Sprint Communications Company L.P. ("SPRINT") and Verizon Pennsylvania Inc. ("Verizon PA") that was approved by the Commission as an effective agreement in the Commonwealth of Pennsylvania, as such agreement exists on the date hereof (including any effective and approved amendments thereto) after giving effect to operation of law (the "Verizon PA Terms"). I understand Core has a copy of the Verizon PA Terms. In addition, a copy of Verizon's pricing terms, which includes (without limitation) rates for reciprocal compensation, is attached. Please note the following with respect to Core's adoption ofthe Verizon f^A Terms:
Core PAw MFN OOR 072905.doc
1. By Core's countersignature on this letter, Core hereby represents and agrees to the following six points:
A. Pursuant to the Commission's Order, dated November 4, 1999, in Docket Nos. A-310200F0002, A-310222F0002, A-310291F0003, and A-311350F0002, Core agrees that the Verizon PA Terms made available for adoption hereunder do not include: (1) any pricing terms from the Interconnection Agreement between SPRINT and Verizon PA (and, instead, Verizon's attached pricing terms will be used); (2) any arbitrated terms from the Verizon PA Terms 1; (3) any non-price Verizon PA Terms that Verizon cannot technically accommodate with its current network configuration; nor (4) any terms from the Verizon PA Terms that would purport to require Verizon to provision a UNE-P in Verizon's service territory. Subject to the foregoing, Core adopts in the service territory of Verizon, the Verizon PA Terms, as in effect on the date hereof (including any effective and approved amendments thereto) after giving effect to operation of iaw, and in applying the Verizon PA Terms, agrees that Core shall be substituted in place of Sprint Communications Company L.P. and SPRINT in the Verizon PA Terms wherever appropriate.
B. For avoidance of doubt, adoption of the Terms does not include adoption of any provision imposing an unbundling obligation on Verizon that no longer applies to Verizon under the Report and Order and Order on Remand (FCC 03-36) released by the Federal Communications Commission ("FCC") on August 21, 2003 in CC Docket Nos. 01-338, 96-98, 98-147 ("Triennial Review Order"), the Order on Remand in WC Docket No. 04-313 and CC Docket No. 01-338, released by the FCC on February 4, 2005 (the "TRO Remand Order"), or that is otherwise not required by both 47 U.S.C. Section 251(c)(3) and 47 C.F.R. Part 51. Moreover, Verizon, on February 26, 2004, filed a petition at the Commission to arbitrate amendments to interconnection agreements (including the Terms) with respect, to the Triennial Review Order ('TRO Arbitration"). If SPRINT is a party to the TRO Arbitration at the time the Commission issues an effective order approving an amendment with respect to the Triennial Review Order in the TRO Arbitration (an "Approved Amendment"): 1) the terms of such Approved Amendment shall be deemed to amend this adoption effective on the effective date of such Commission order, 2) Core agrees to be bound by the terms of such Approved Amendment effective on the effective date of such Commission order, and 3) Verizon and Core shall execute an amendment to this adoption to memorialize that this adoption is amended by the terms of such Approved Amendment effective on the effective date of such Commission order; provided, however, failure by either party to do so shall not be cited as a basis for contesting the effectiveness ofthe provisions in 1) and 2) above.
1 Please contact Verizon at your earliest convenience to amend Core's adoption regarding any arbitrated tenns.
Core PAw MFN OOR 072905.doc
C. Notice to Core and Verizon as may be required under the Terms shall be provided as follows:
To: Core Communications, Inc. Attention: Chris Van de Verg General Counsel 209 West Street, Suite 302 Annapolis, MD 21401 Telephone Number: 410-216-9865 Facsimile Number: 410-216-9867 Internet Address: [email protected]
To Verizon: Director-Contract Performance & Administration Verizon Wholesale Markets 600 Hidden Ridge HQEWMNOTICES Irving, TX 75038 Telephone Number: 972-718-5988 Facsimile Number: 972-719-1519 Internet Address: [email protected]
with a copy to: Vice President and Associate General Counsel Verizon Wholesale Markets 1515 N. Court House Road Suite 500 Arlington, VA 22201 Facsimile: 703-351-3664
D. Core represents and warrants that it is a certified provider of local telecommunications service in the Commonwealth of Pennsylvania, and that its adoption of the Verizon PA Terms will only cover services in Verizon North's service territory in the Commonwealth of Pennsylvania.
E. In the event an interconnection agreement between Verizon and Core is currently in effect in the former GTE service territory within the Commonwealth of Pennsylvania (the "Original ICA"), this adoption shall be an amendment and restatement of the operating terms and conditions of the Original ICA, and shall replace in their entirety the terms ofthe Original ICA. This adoption is not intended to be, nor shall it be construed to create, a novation or accord and satisfaction with respect to the Original ICA. Any outstanding payment obligations of the parties that were
Core PAw MFN OOR 072905.doc
incurred but not fully performed under the Original ICA shall constitute payment obligations ofthe parties under this adoption.
F. Verizon's standard pricing schedule for interconnection agreements in the Commonwealth of Pennsylvania (as such schedule may be amended from time to time) (attached as Appendix A hereto) shall apply to Core's adoption of the Terms. Core should note that the aforementioned pricing schedule may contain rates for certain services the terms for which are not included in the Terms or that are otherwise not part of this adoption, and may include phrases or wording not identical to those utilized in the Terms. In an effort to expedite the adoption process, Verizon has not deleted such rates from the pricing schedule or attempted to customize the wording in the pricing schedule to match the Terms. However, the inclusion of such rates in no way obligates Verizon to provide the subject services and in no way waives Verizon's rights, and the use of slightly different wording or phrasing in the pricing schedule does not alter the obligations and rights set forth in the Terms.
2. Core's adoption of the Verizon PA terms shall become effective on August 15, 2005. Verizon shall file this adoption letter with the Commission promptly upon receipt of an original of this letter, countersigned by Core as to the points set out in Paragraph One and Paragraph Two hereof. The term and termination provisions of the SPRlNTA/erizon PA agreement shall govern Core's adoption of the Verizon PA Terms. The adoption of the Verizon PA Terms is currently scheduled to expire on September 14, 2005.
3. As the Verizon PA Terms are being adopted by you pursuant to your rights under the Commission's Order, Verizon does not provide the Verizon PA Terms to you as either a voluntary or negotiated agreement. The filing and performance by Verizon of the Verizon PA Terms does not in any way constitute a waiver by Verizon of its position as to the illegality or unreasonableness of the Verizon PA Terms or a portion thereof, nor does it constitute a waiver by Verizon of all rights and remedies it may have to seek review of the Verizon PA Terms, or to seek review in any way of any provisions included in these Verizon PA Terms as a result of Core's election under the Commission Order.
4. Nothing herein shall be construed as or is intended to be a concession or admission by Verizon or Verizon PA that any provision required by the Commission in Docket No. A-310183F0002 (SPRlNTA/erizon VA) or any provision in the Verizon PA Terms complies with the rights and duties imposed by the Act, the decisions of the FCC and the Commission, the decisions of the courts, or other law, and Verizon expressly reserves its full right to assert and pursue claims arising from or related to the Verizon PA Terms.
Core PAw MFN OOR 072905.doc
5. Verizon reserves the right to deny Core's application of the Verizon PA Terms, in whole or in part, at any time:
A. if the provision of the Verizon PA Terms to Core is not technicalfy feasible;
B. to the extent negotiations which led to the Interconnection Agreement between SPRINT and Verizon PA, from which the Verizon PA Terms derive, were commenced on or before July 29,1999;
C. to the extent that any terms from the Verizon PA Terms purport to require Verizon to provision a UNE-P in Verizon's service territory; and/or
D. if Verizon otherwise is not obligated to permit such adoption and/or application under Commission Order or under applicable law.
6. For avoidance of doubt, please note that adoption of the Verizon PA Terms will not result in reciprocal compensation payments for Internet traffic. Verizon has always taken the position that reciprocal compensation was not due to be paid for Internet traffic under section 251(b)(5} of the Act. Verizon's position that reciprocal compensation is not to be paid for Internet traffic was confirmed by the FCC in the Order on Remand and Report and Order adopted on April 18, 2001 ("FCC Internet Order"), which held that Internet traffic constitutes "information access" outside the scope of the reciprocal compensation obligations set forth in section 251(b)(5) of the Act. 2
Accordingly, any compensation to be paid for Internet traffic will be handled pursuant to the terms of the FCC Internet Order, not pursuant to adoption of the Verizon PA Terms.3 Moreover, in light of the FCC Internet Order, even if the Verizon PA Terms include provisions invoking an intercarrier compensation mechanism for Internet traffic, any reasonable amount of time permitted for adopting such provisions has expired under the FCC's rules implementing section 252(i) of the Act.4 In fact, the FCC internet Order made clear that carriers may not adopt provisions of an existing interconnection agreement to the extent that such provisions provide compensation for Internet traffic.5
Order on Remand and Report and Order, In the Matters oft Implementation of the Local Competition Provisions in the Telecommunications Act of 1996 and Intercamer Compensation for ISP-Bound Traffic, CC Docket No. 99-68 (rel April 27 2001) ("FCC Remand Oniei*) $44, remanded, WorfdCom, Inc. v. FCC, No. 01-1218 (D.C. Cir. May 3, 2002). Although the D.C. Circuit remanded the FCC Remand Order to pennit the FCC to clarify its reasoning, it left the order in place as governing federal law. See WorldCom, Inc. v. FCC, No. 01-1218, slip op. at 5 (D.C. Cir. May 3,2002)
For your convenience, an industry letter distributed by Verizon explaining its plans to implement the FCC internet Order ran be viewed at Verizon's Customer Support Website at URL www.verizon.com/wise fseled Verizon East Customer Support, Business Resources, Customer Documentation, Resources, Industry Letters, CLEC, May 21 2001 Order on Remand). ' See, e.g 47 C.F.R. Section 51.809(c). These rules implementing section 252(i) of the Act apply to interstate adoptions under the Merger Conditions as well. See, e.g.. Merger Conditions^ (such adoptions shaU be made available "under the same rules that would apply to a request under 47 U.S.C. Section 252(1)') 5 FCC Internet Order 1182.
Core PAw MFN OOR 072%5.doc
7. Terms, conditions and prices contained in tariffs cited in the Verizon PA Terms shall not be considered negotiated and are excluded from Core's adoption.
8. Should Core attempt to apply the Verizon PA Terms in a manner that conflicts with Paragraph Three through Paragraph 7 above, Verizon reserves its rights to seek appropriate legal and/or equitable relief.
9. In the event that a voluntary or involuntary petition has been or is in the future filed against Core under bankruptcy or insolvency laws, or any law relating to the relief of debtors, readjustment of indebtedness, debtor reorganization or composition or extension of debt (any such proceeding, an "Insolvency Proceeding"), then: (i) all rights of Verizon under such laws, including, without limitation, all rights of Verizon under 11 U.S.C. § 366, shall be preserved, and Core's adoption of the Verizon PA Terms shall in no way impair such rights of Verizon; and (ii) ail rights of Core resulting from Core's adoption of the Verizon PA Terms shall be subject to and modified by any Stipulations and Orders entered in the Insolvency Proceeding, including, without limitation, any Stipulation or Order providing adequate assurance of payment to Verizon pursuant to 11 U.S.C. § 366.
Core PAw MFN OOR 072905.doc
SIGNATURE PAGE
Please arrange for a duly authorized representative of Core to sign this letter in the space provided below and return it to Verizon.
Sincerely,
VERIZON NORTH INC.
asoner esitlent-lnterconnection Services Policy & Planning
(DATE)
Reviewed and countersigned as to points A, B, C, D, E, and F of Paragraph 1 and as to Paragraph 2:
CORE COMMUNICATIONS, INC.
Brett Mtngo President
(OATE)
Attachment
c: K. Robertson - Verizon (w/out attachments)
Core PAw MFN OOR 072905.doc
APPENDIX A 1 2
V1.5
Rates and Charges for Transport and Termination of Traffic 3
A. Reciprocal Compensation Traffic Termination
Reciprocal Compensation Traffic End Office Rate: SO.0030000* per minute of use.
Reciprocal Compensation Traffic Tandem Rate: $0.0079536* per minute of use.
B. The Tandem Transit Service Charge is $0.0047856* per minute of use.
Transit Service Billing Fee - Five percent (5%) of the Tandem Transit Traffic Service Charges assessed during the billing period for Tandem Transit Traffic exchanged with the relevant third party carriers.
Transit Service Trunking Charge (for each relevant third party carrier) - For each DSI equivalent volume4 (or portion thereof) of Tandem Transit Traffic exchanged with the relevant third party carrier during a monthly billing period: an amount equal to the total monthly rate for 24 channels (DS1 equivalent) for Switched Access, Access Tandem Dedicated Trunk Port DSI , as set forth in Verizon Tariff FCC No. 14, as amended from time to time.
C. Entrance Facility and Transport for Interconnection Charges: See Intrastate Special Access Tariff
This Appendix may contain rates for (and/or reference) services, facilities, arrangements and the like that Verizon does not have an obligation to provide, under the Agreement (e.g., services, facilities, arrangements and the like for which an unbundling requirement does not exist under 47 U.S.C. Section 251(c)(3)). Notwithstanding any such rates (and/or references) and, forthe avoidance of any doubt, nothing in this Appendix shall be deemed to require Verizon to provide a service, facility, arrangement or the like that the Agreement does not require Verizon to provide, or to provide a service, facility, arrangement or the tike upon rates, terms or conditions other than those that may be required by the Agreement.
All rates and charges set forth in this Appendix shall apply until such time as they are replaced by new rates and/or charges as the Commission or the FCC may approve or allow to go into effect from time to time, subject however, to any stay or other order issued by any court of competent jurisdiction. In addition ta any rates and charges set forth herein, Verizon, effective as of March 11, 2005, may, but shall not be required to, charge (and Core shall pay) any rates and charges that apply to a CLECs . embedded base of certain UNEs pursuant to the FCC's Order on Remand, Unbundled Access fo Network elements; Review ofthe Section 251 Unbundling Obligations of Incumbent Local Exchange Carriers, WC Docket No. 04-313, CC Docket No. 01-338 (FCC rel. Feb. 4,2005) (the TRRO"), the foregoing being without limitation of other rates and charges that may apply under subsequent FCC orders or otherwise. In addition, as set forth in Industry Notices, surcharges may apply to certain rates contained herein in order to appiy a rate equivalent to the resale discount rate for certain facilities and arrangements that are no longer available as unbundled network elements or combinations thereof.
2 Certain of the rates and charges set forth within, as indicated by a "diamond" (•), are arbitrated rates token from the
previously arbitrated Interconnection, Resale and Unbundling Agreement between GTE and AT&T Communications, which was approved by the Commission in an Interim Order dated December 5,1996, in Docket A-310125F0002. Verizon has agreed to use and to incorporate herein such arbitrated rates subject to the following: The Parties expressly agree (1) that such arbitrated rates shall not be deemed to have been voluntarily negotiated by the Partes, and (2) that, for purposes of calculating Reciprocal Compensation Traffic, the arbitrated rates shall not apply to Internet Traffic, as set forth more fully in the Interconnection Attachment of this Agreement The foregoing shall not, in any way, limit any other term, condition, limitation or reservation of right in me Agreement that applies to rates, including, but not limited to the Reservation of Rights language of the General Terms and Conditions. The Parties further agree that the Commission's Order in Docket A-310125F0002, to the extent such Order established the arbitrated rates, shall be deemed an "arbitration decision associated with this Agreement" under the General Terms and Conditions.
3 All rates and charges specified herein are pertaining to the Interconnection Attachment
4
A CCS busy hour equivalent of 200,000 combined minutes of use.
Core PAw appa-comp-pa.doc 1 Pennsylvania (West) Comprehensive - 06/15/05
II. Services Available for Resale
The avoided cost discount for all Resale services is 22.80%.
Non-Recurring Charges (NRCs) for Resale Services
Pre-ordering
CLEC Account Establishment Per CLEC $273.71 Customer Record Search Per Account $ 11.72
Ordering and Provisioning
Engineered Initial Service Order (ISO) - New Service $282.17 Engineered Initial Service Order - As Specified 5103.84 Engineered Subsequent Service Order $ 61.73 Non-Engineered Initial Service Order - New Service $ 38.02 Non-Engineered Initial Service Order - Changeover $ 21.01 Non-Engineered Initial Service Order - As Specified $ 68.20 Non-Engineered Subsequent Service Order $ 18.84
Central Office Connect $ 5.42
Outside Facility Connect $ 67.77
Manual Ordering Charge $ 11.93
Product Specific
NRCs, other than those for Pre-ordering, Ordering and Provisioning, and Custom Handling as listed in this Appendix, will be charged from the appropriate retail tariff. No discount applies to such NRCs.
Custom Handling
Service Order Expedite:
Engineered $ 36.65 Non-Engineered $ 11.07
Coordinated Conversions:
ISO $ 14.33 Central Office Connection $ 9.61 Outside Facility Connection $ 8.12
Hot Coordinated Conversion First Hour:
ISO $ 24.22 Central Office Connection $ 38.44 Outside Facility Connection $ 32.49
Core PAw appa-comp-pa-doc 2 Pennsylvania (West) Comprehensive - 06/15/05
Hot Coordinated Conversion per Additional Quarter Hour:
' S 0 $ 4.95 Central Office Connection $ 9 g i Outside Facility Connection c g"i2
Core PAw appa-comp-pa.doc q Pennsylvania (West) Comprehensive - 06/15/05
Application of NRCs
Pre-ordering:
CLEC Account Establishment is a one-time charge applied the first time that Core orders any service from this Agreement.
Customer Record Search applies when Core requests a summary of the services currently subscribed to by the end-user.
Ordering and Provisioning:
Engineered Initial Service Order - New Service applies per Local Service Request (LSR) when engineering work activity is required to complete the order, e.g. digital loops.
Non-Engineered initial Service Order - New Service applies per LSR when no engineering work activity is required to complete the order, e.g. analog loops.
Initial Service Order - As Specified (Engineered or Non-Engineered) applies only to Complex Services for services migrating from Verizon to Core. Complex Services are services that require a data gathering form or has special instructions.
Non-Engineered Initial Service Order - Changeover applies only to Basic Services for services migrating from Verizon to Core. End-user service may remain the same or change.
Central Office Connect applies in addition to the ISO when physical installation is required at the central office.
Outside Facility Connect applies in addition to the ISO when incremental fieldwork is required.
Manual Ordering Charge applies to orders that require Verizon to manually enter Core's order into Verizon's Secure Integrated Gateway System (SIGS), e.g. faxed orders and orders sent via physical or electronic mail.
Custom Handling (These NRCs are in addition to any Preordering or Ordering and Provisioning NRCs):
Service Order Expedite (Engineered or Non-Engineered) applies if Core requests service prior to the standard due date intervals.
Coordinated Conversion applies if Core requests notification and coordination of service cut over prior to the service becoming effective.
Hot Coordinated Conversion First Hour applies if Core requests real-time coordination of a service cut-over that takes one hour or less.
Hot Coordinated Conversion Per Additional Quarter Hour applies, in addition to the Hot Coordinated Conversion First Hour, for every 15-minute segment of real-time coordination of a service cut-over that takes more than one hour.
Core PAw appa-comp-pa.doc 4 Pennsylvania (West) Comprehensive - 06/15/05
III. Prices for Unbundled Network Elements 5
Monthly Recurring Charges
Local Loop
2 Wire Analog Loop (inclusive of NID) Density Cell 3 $ ' 11.76 • Density Cell 4 $ 15.10 •
4 Wire Analog Loop (inclusive of NID) $ 52.99 2 Wire Digital Loop (inclusive of NID)
Density Cell 3 $ 11.76 • Density Cell 4 $ 15.10 •
4 Wire Digital Loop (inclusive of NID) $ 52.99 DS-1 Loop $ 81.68 DS-3 Loop $ 816.76
Supplemental Features: ISDN-BRI Line Loop Extender $ 5.00 DS1 Clear Channel Capability $ 23.81
Sub-Loop
2-Wire Feeder $ 13.46 2-Wire Distribution $ 29.80 4-Wire Feeder $ 28.31 4-Wire Distribution $ 51.85 2-Wire Drop $ 6.60 4-Wire Drop $ 6.87 Inside Wire BFR
Network Interface Device (leased separately)
Basic NID: $ 0.59 • Complex (12 x) NID $ 1.10
Switching
Port Basic Analog Line Side Port $ 3.90 Coin Line Side Port $ 7.57 ISDN BR1 Digital Line Side Port $ 15.02 DS-1 Digital Trunk Side Port $ 104.32 ISDN PRI Digital Trunk Side Port $ 131.26
o For the avoidance ot any doubt, in addition to any rates and charges set forth herein, Verizon, effective as of March 11.
2005, may, but shall not be required to, charge (and Core shall pay) any rates and charges that apply to a CLECs embedded base of certain UNEs pursuant to the TRRO, the foregoing being without limitation of other rates and charges that may apply under subsequent FCC orders or otherwise; in addition, as set forth in Industry Notices, surcharges may apply to certain rates contained herein in order to apply a rate equivalent to the resale discount rate for certain factiilies and arrangements that are no longer available as unbundled network elements or combinations thereof.
Core PAw appa-comp-pa.doc 5 Pennsylvania (West) Comprehensive - 06/15/05
Usage Charges (must purchase Port) Locaf Central Office Switching
(Overall Average MOU) $ 0.0030000 Common Shared Transport
Transport Facility (Average MOU/ALM) $ 0.0000560 Transport Termination (Average MOU/Term)$ 0.0001680 Tandem Switching (Average MOU) $ 0.0045000
Terminating to Originating Ratio 1.00
Dedicated Transport Facilities
CLEC Dedicated Transport CDT2Wire $ 13.55 CDT4Wire $ 21.70 CDT DSI $ 42.03 CDT DS3 Optical Interface $ 703.38 • CDT DS3 Electrical interface $ 762.00 •
Interoffice Dedicated Transport IDT DSO Transport Facility per ALM $ .30 IDT DSO Transport Termination $ 10.55 IDT DS1 Transport Facility per ALM $ 5.30 IDT DS1 Transport Termination $ 51.05 IDT DS3 Transport Facility per ALM $ 24.32 IDT DS3 Transport Termination $ 65.52
Multiplexing DSI to Voice Multiplexing $ 191.11 DS3 to DSI Multiplexing $ 425.00 •
DSI Clear Channel Capability $ 23.81
Unbundled Dark Fiber
Unbundled Dark Fiber Loops/Sub-Loops Dark Fiber Loop $ 67.13 Dark Fiber Sub-Loop - Feeder $ 53.17 Dark Fiber Sub-Loop - Distribution $ 13.96
Unbundled Dark Fiber Dedicated Transport Dark Fiber IDT -Facility $ 24.80
Dark Fiber IDT -Termination $ 6.34
Intermediate Office Cross Connect TBD
Core PAw appa-comp-pa.doc 6 Pennsylvania (West) Comprehensive - 06/15/05
UNE-P Pricing 6
MRCs. The MRC for a UNE-P will generally be equal to the sum of the MRCs for the combined UNEs (e.g. the total of the UNE loop charge plus the UNE port charges in the Agreement (see Note A) plus: UNE local switching (per minute originating usage plus T/O factor to determine terminating minutes) based on UNE local switching rates in the Agreement plus UNE shared transport and tandem switching (based on factors for percent interoffice and tandem switch usage, plus assumed transport mileage of 10 miles and 2 terms) based on UNE shared transport rates in the Agreement plus UNE Vertical Services charges (optional per line charges, if allowed by the Agreement).
(Note A): UNE platforms are available in four loop/port configurations as shown below. Ifthe price for any component of these platforms is not set forth herein, Verizon will use the ICB process to determine the appropriate price and TBD pricing shall apply.
UNE Basic Analog Voice Grade Platform consists of the following components: UNE 2-wire Analog loop; and UNE Basic Analog Line Side port
UNE ISDN BR1 Platform consists of the following components: UNE 2-wire Digital loop; and UNE ISDN BR1 Digital Line Side port
UNE ISDN PRI Platform consists ofthe following components: UNE DSI loop; and UNE ISDN PRI Digital Trunk Side port
UNE DSI Platform consists ofthe following components: UNE DSI loop; and UNE DSI Digital Trunk Side port
NRCs. Optional NRCs will apply as ordered by the CLEC including such charges as Expedites, Coordinated Conversions, loop Conditioning, etc.
E E L Pricing 6
MRCs. The MRCs for an EEL will generally be equal to the applicable MRCs for UNEs and Multiplexing that comprise an EEL arrangement (e.g. UNE Loop, IDT, CDT, Multiplexing, & Clear Channel Capability).
For the avoidance of any doubt, in addition to any rates and charges set forth herein, Verizon, effective as of March 11, 2005, may. but shall not be required to, charge (and Core shall pay) any rates and charges that apply to a CLECs embedded base of certain UNEs pursuant to the TRRO, the foregoing being without limitation of other rates and charges that may apply under subsequent FCC orders or otherwise; in addition, as set forth in Industry Notices, surcharges may apply to certain rates contained herein in order to apply a rate equivalent to the resale discount rate for certain facilities and arrangements that are no longer available as unbundled network elements or combinations thereof.
Core PAwappa-comp-pa-doc 7 Pennsylvania (West) Comprehensive - 06/15/05
Line Splitting7
Except as noted in the following paragraph, the provider of voice services in a Line Splitting arrangement ("VLEC") will be billed for all charges associated with the Network Elements and other Verizon services, facilities and arrangements, used in conjunction with the Line Splitting arrangement ("Line Splitting Arrangement"), regardless of which CLEC in the Line Splitting Arrangement orders the Network Elements or other Verizon services, facilities or arrangements. These charges include, but are not limited to, all applicable non-recurring charges and monthly recurring charges related to such Line Splitting Arrangement, including but not limited to UNE-P (2-wire digital UNE loop or 2-wire ADSL capable UNE loop, UNE switch port, UNE local switching usage, UNE local transport and usage rates), testing, pre-qualification, OSS, line conditioning, CLEC account establishment and misdirected trouble charges.
The CLEC with the applicable collocation arrangement will be billed for splitter establishment and collocation related charges.
Rates for the indivitiuai line splitting components are contained in existing terms for Unbundled Network Elements and Collocation.
Core PAw appa-comp-pa.doc 8 Pennsylvania (West) Comprehensive - 06/15/05
NON-RECURRING CHARGES - LOOP AND PORT
Service Ordering {Loop or Port) Initial Service Order, per order $ 41.50 Transfer of Service Charge, per order $ 24.00 Subsequent Service Order, per order $ 24.00
Installation Unbundled Loop, per loop $ 29.50 Unbundled Port, per port $ 29.50 Loop Facility Charge, per order (See Note 1) $ 71.25
Customer Service Record Search $ 4.21
CUSTOM HANDLING
Coordinated Conversions:
ISO $ 13.95 Central Office Connection $ 9.61 Outside Facility Connection $ 8.12
Hot Coordinated Conversions First Hour:
ISO $ 23.52 Central Office Connection $ 38.44 Outside Facility Connection $ 32.49
Hot Coordinated Conversions per Additional Quarter Hour:
'SO $ 4.79 Central Office Connection $ g.61 Outside Facility Connection $ 8.12
Note 1: The Loop Facility Charge will apply when fieldwork is required for establishment of a new unbundled loop service.
Core PAwappa-comp-pa.doc 9 Pennsylvania (West) Comprehensive - 06/15/05
NON-RECURRING CHARGES
LOCAL WHOLESALE SERVICES
UNBUNDLED NID
Exchange - Basic
UNBUNDLED SUBrLOOP
Exchange - FDI Feeder Interconnection - Initial Exchange - FDI Feeder Interconnection - Subsequent Exchange - FDI Distribution Interconnection - Initial Exchange - FDI Distribution Interconnection - Subsequent Exchange - Serving Terminal Interconnection - Initial Exchange - Serving Terminal Interconnection - Subsequent UNBUNDLED DARK FIBER
Advanced - Service Inquiry Charge Advanced - Interoffice Dedicated Transport - Initial Advanced - Unbundled Loop - Initial Advanced - Sub-Loop Feeder - Initial Advanced - Sub-Loop Distribution - Initial Dark Fiber Records Review (with reservation) Intermediate Office Cross Connect Dark Fiber Optional Engineering Services
ENHANCED EXTENDED LOORS (EELs) Loop portion (.In additic applicable to the EEL arrangement
Advanced - Basic (2-wire and 4-wire) - Initial Advanced - Basic i2-wire and 4-wire) - Subsequent DS1/DS3 - Initial DS1/DS3 - Subsequent DS3 to DSI Multiplexer DSl to DSO Multiplexer
CHANGEOVER1 CHARGE - (Conversion from Special Access to EEUs or Transport) • Advanced - Basic (2-wire and 4-wire) Changeover (As Is) Advanced - Basic (2-wire and 4-wire) Changeover (As ls)-Additronal MOG (Mass Order Generator) Only Advanced - Complex (DSI and above) Changeover (As Is) Advanced - Complex (DSl and above) Changeover (As ls)-Additional MOG (Mass Order Generator) Only
Ordering 100% Manual
Ordering Semi-Mech.
Provisioning Initial Addfl Unit Unit
$ 27.06 $ 18.83 $ 33.99 N/A
$ 36.32 $ 26.88 $ 46.20 $ 24.97 $ 15.01 $ 11.83 $ 16.99 $ 7.22 $ 36.32 $ 26.88 $ 61.90 $ 30.36 $ 15.01 $ 11.83 $ 16.99 $ 7.22 $ 36.32 $ 26.88 $ 28.99 $ 15.51 $ 15.01 $ 11.83 $ 13.23 $ 6.41
$405.87 $405.65 N/A N/A $ 64.80 $ 64.57 $267.28 $224.68 $ 64.80 $ 64.57 $261.86 $220.43 $ 64.80 $ 64.57 $261.86 $220.43 $ 64.80 $ 64.57 $264.84 $216.19
TBD TBD TBD
, IDT and CDT charges apply if
$ 88.39 $ 56.13 $ 29.50 N/A $ 38.02 $ 21.89 $ 29.50 N/A $ 97.94 $ 65.68 $ 29.50 N/A $ 38.02 $ 21.89 $ 29.50 N/A
N/A N/A $450.00 N/A N/A N/A $800.00 N/A
$161.87 $ 99.77 $ 41.64 N/A $ 7.52 $ 4.56 $ 41.64 N/A
$179.37 $117.27 $ 41.64 N/A $ 7.52 $ 4.56 $ 41.64 N/A
Core PAwappa-comp-pa.doc 10 Pennsylvania (West) Comprehensive - 06/15/05
LOOP CONDITIONING 8
(No charge for loops 12,000 feet or less)
Loop Conditioning - Bridged Tap N/A N/A $318.71 $ 34.88 Loop Conditioning - Load Coiis N/A N/A $249.91 N/A Loop Conditioning - Load Coils / Bridged Tap N/A N/A $568.62 $ 34.88
UNE PLATFORM
Exchange - Basic - initial $ 31.57 $ 22.13 $ 28.23 $ 26.58 Exchange - Basic - Subsequent $ 16.44 $ 13.26 $ 1.08 $ 1.08 Exchange - Basic - Changeover $ 19.93 $ 15.54 $ 0.90 $ 0.90 Exchange - Complex Non-Digital - Initial $ 41.35 $ 27.53 $162.41 $ 31.70 Exchange - Complex Non-Digital - Subsequent (Port Feature) $ 16.44 $ 13.26 $ 5.89 $ 5.89 Exchange - Complex Non-Digital - Subsequent (Switch $ 20.82 $ 13.26 $ 22.73 $ 22.73 Feature Group) Exchange - Complex Non-Dtgitai - Changeover (As Is) $ 22.35 $ 17.96 $ 3.61 $ 3.61 Exchange - Complex Non-Digital - Changeover (As Specified) $ 30.08 $ 21.31 $ 20.97 $ 3.61 Exchange - Complex Digital - Initial $ 41.35 $ 27.53 $205.75 $ 28.18 Exchange - Complex Digital - Subsequent (Port Feature) $ 16.44 $ 13.26 $ 5.15 $ 5.15 Exchange - Complex Digital - Subsequent (Switch Feature $ 20.82 $ 13.26 $ 22.73 $ 22.73 Group) Exchange - Complex Digital - Changeover (As is) $ 22.35 $ 17.96 $ 4.18 $ 4.18 Exchange - Complex Digital - Changeover (As Specified) $ 30.08 $ 21.31 $ 80.98 $ 4.18 Advanced - Complex - Initial $ 48.35 $ 34.53 $681.24 $303.66 Advanced - Complex - Subsequent $ 20.82 $ 13.26 $ 65.81 $ 48.47 Advanced - Complex - Changeover (As Is) $ 24.06 $ 19;67 $ 51.51 $ 34.17 Advanced - Complex - Changeover (As Specified) $ 37.08 $ 28.31 $ 82.31 $ 64.97
INTEROFFICE DEDICATED TRANSPORT(IDT) (Also applies to IDT portibn of an EEL arrangement
Advanced - Basic (2-wire and 4-wire) - Initial $ 95.49 $ 63.01 $428.58 N/A Advanced - Basic (2-wire and 4-wire) - Subsequent $ 45.12 $ 28.77 $ 58.20 N/A Advanced - Complex (DSI and above) - Initial $105.04 $ 72.56 $584.49 N/A Advanced - Complex (DS1 and above) - Subsequent
CLECjpEpICATED i ;TRANSPO^ applies td;CDT . •
$ 45.12 $ 28.77 $ 86.80 N/A
"poilipniqf an EEU'arranj^ " > ' ' r , \ ,.
Entrance Facility/Dedicated Transport DSO - Initial $ 95.49 $ 63.01 $390.08 N/A Entrance Facility/Dedicated Transport DSO - Subsequent $ 45.12 $ 28.77 $ 58.20 N/A Entrance Facility/Dedicated Transport DS1/DS3 - Initial $105.04 $ 72.56 $515.03 N/A Entrance Facility/Dedicated Transport DS1/DS3 - Subsequent $ 45.12 $ 28.77 $ 86.80 N/A Clear Channel Capability N/A N/A $ 90.00 N/A
These charges are interim and subjec*. to refcoac&ve tnje-up back to the Effeciive Date of Bits Agreement
Core PAw appa-comp-pa.doc 11 Pennsylvania (West) Comprehensive - 06/15/05
SIGNALING SYSTEM 7 {SS7)
Facilities and Trunks - Initial $237.67 $205.19 $568.54 N/A Facilities and Trunks - Subsequent (with Engineering Review) $ 71.58 $ 55.23 $213.12 N/A Facilities and Trunks - Subsequent (w/o Engineering Review) $ 71.58 $ 55.23 $ 67.28 N/A Trunks Only - Initial $126.13 $ 93.65 $505.41 N/A Trunks Only - Subsequent (with Engineering Review) $ 49.46 $ 33.11 $202.03 N/A Trunks Only - Subsequent (w/o Engineering Review) $ 49.46 $ 33.11 $ 67.28 N/A STP Ports (SS7 Links) $237.67 $205.19 $438.81 N/A
CUSTOMIZED ROUTING BFR BFR BFR BFR
EXPEDITES
Exchange Products $ 3.36 $ 3.36 N/A N/A Advanced Products $ 25.80 $ 25.80 N/A N/A
OTHER*
Design Change Charge - EELs and Transport $27.00 $27.00 N/A N/A CLEC Account Establishment (per CLEC) $166.32 $166.32 N/A N/A
LINE SHARING - CLEC OWNED SPLITTER*
CLEC Splitter Connection - Initial $ 32.19 $ 22.52 $ 53.04 $ 47.29 CLEC Splitter Connection - Subsequent $ 13.24 $ 9.83 $ 14.49 $ 13.53
Core PAw appa-comp-pa-doc 12 Pennsylvania (West) Comprehensive - 06/15/05