COMMISSION MCIMETRO ACCESS TRANSMISSION ) SERVICES, INC., ) ) Complainant, ) ) vs. ) DOCKET NO. UT-971063 ) U S WEST COMMUNICATIONS, INC., ) VOLUME 6 ) PAGES 363 - 569 Respondent. ) --------------------------------- A hearing in the above matter was held on June 3, 1998 at 9:00 a.m., at 1300 Evergreen Park Drive Southwest, Olympia, Washington, before Administrative Law Judge LAWRENCE J. BERG. The parties were present as follows: U S WEST COMMUNICATIONS, INC., by LISA A. ANDERL and PETER J. BUTLER, Senior Attorney, 1600 Seventh Avenue, Room 3206, Seattle, Washington 98191. MCIMETRO, by CLYDE H. MACIVER, Attorney at Law, 601 Union Street, Suite 4400, Seattle, Washington 98101. MCIMETRO, by WILLIAM P. HUNT III, Senior Attorney, 707 17th Street, Suite 3600, Denver, Colorado 80516. MCIMETRO, by DEBORAH A. CHING, Attorney at Law, 201 Spear Street, 9th Floor, San Francisco, California 94105. TRACER, by JOEL PAISNER, Attorney at Law, 601 Union Street, Suite 5450, Seattle, Washington 98101. THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION STAFF, by SHANNON SMITH, Assistant Attorney General, 1400 South Evergreen Park Drive Southwest, Post Office Box 40128, Olympia, Washington 98513. Kathryn T. Wilson, CCR Court Reporter I N D E X WITNESS DIRECT CROSS REDIRECT RECROSS ROBERT IANNOTTA 380 384 549 563 EXHIBIT NO. MARKED ADMITTED T-40 384 41 384 42 (not admitted.) 43 384 44 384 C-45 384 C-46 384 47 384 C-48 384 C-49 384 C-50 384 51 384 C-52 384 C-53 384 C-54 384 C-55 384 EXHIBIT NO. MARKED ADMITTED 56 384 57 384 58 384 C-59 384 60 384 C-61 384 62 384 C-63 384 64 384 T-65 384 C-66 384 67 384 C-68 384 69 384 C-70 384 71 384 72 384 C-73 384 C-74 384 C-75 384 C-76 370 445 C-77 370 445 78 371 445 79 371 445 EXHIBIT NO. MARKED ADMITTED 80 371 445 81 371 C-82 371 83 371 (not offered.) 84 379 (not offered.) 85 380 86 569 569 P R O C E E D I N G S JUDGE BERG: This is the second day of hearings in the case captioned MCImetro Access Transmission Services, Inc., Complainant, versus U S West Communications Inc., Respondent, also designated as Washington Utilities and Transportation Commission Docket No. 971063. There are two matters to be handled on the record before beginning witness testimony today. First of all, at the conclusion of yesterday's hearing, there were a series of exhibits which were admitted in lieu of testimony of three specific witnesses, and just as a formality, the testimony of Ms. Dodie Osborn, Mr. Terry Dodd, and Ms. Colleen Coughlin were stipulated not to be necessary, and those witnesses are formally excused from this proceeding. I'll indicate for the record that at the conclusion of yesterday's hearing, we marked exhibits to be referred to in the testimony of Robert Iannotta, including Iannotta Exhibit No. 2, which was marked as Hearing Exhibit No. 42. Iannotta Exhibit 2 had been previously marked and admitted as Hearing Exhibit No. 10. Accordingly, at this point in time, my understanding is that Hearing Exhibit No. 42 will be withdrawn from the record. Is there anything that the parties would like to address on the record before Mr. Iannotta is called to the stand to take his oath? MS. ANDERL: Your Honor, I have an exhibit list of cross-examination exhibits for Mr. Iannotta, and I also have a packet or packets of those proposed exhibits if you want me to distribute those now. JUDGE BERG: Let's do that now. MS. ANDERL: The exhibit list is already shy two exhibits that I didn't have in my possession when I typed this up, but at least it's hopefully a starting point. JUDGE BERG: I appreciate it. It will help streamline the process today. We'll go off the record. (Discussion off the record.) JUDGE BERG: I've received an exhibit list from U S West that lists the exhibits that will be referred to in cross-examination that are known at this time. There will be three additional exhibits to be added to this list. Going down the list as presented, U S West Data Request No. 007 will be Exhibit 76. U S West Data Request No. 029 will be marked as Hearing Exhibit No. 77. MS. ANDERL: 76 and 77, your Honor, both were designated by MCI as confidential. 76 I don't really know about because Exhibit 123, which is attached, is designated as confidential, but it is substantially the same as what has been previously attached as MCImetro Exhibit 6. Both of them are copies of e-mails, and MCI had not previously designated that as confidential, so I don't know how they feel about it, but we're happy to treat it as confidential if we need to. MS. CHING: One moment, your Honor. Let me just look at that. I think the problem may be that the e-mails at the exhibit, that may be some confidential information. JUDGE BERG: I'm comfortable just for the sake of expediency of treating responses that have been identified at this time as confidential. I know parties are both responding to my prior direction to minimize the confidential designation of documents in this proceeding. I'm confident that the parties have made reasonable efforts to minimize that designation. If at some point MCI or U S West decides that a document previously identified as confidential can be treated as nonconfidential, you can follow up with me afterwards and we'll clean that up. The document U S West Data Request 007 will be marked as C-76, and the Data Request No. 0029 will be identified as C-77. Data request 031 will be Exhibit 78. Data Request No. 032 will be Exhibit 79. Data request 039 will be Exhibit 80. Data Request 05 -- please make that notation on your exhibit list if you intend to use that later -- MCM Request 05-194 will be marked as Exhibit 81. The May 29, 1998 letter from Lucent regarding provisioning interval will be marked as Exhibit C-82. Ms. Anderl, I'm looking for the 9/27 letter. MS. ANDERL: I'm sorry. The cover sheet is the fax dated just yesterday, but the connected page of that document says, "To Robert Iannotta." JUDGE BERG: Is the entire staple pack entered to be one exhibit? MS. ANDERL: Yes. JUDGE BERG: The 9/26/97 letter to Mr. Iannotta regarding forecasting consisting of a total of nine pages, including the fax cover sheet, will be marked as Hearing Exhibit 83. Ms. Anderl, you indicated to me that there were three other documents? MS. ANDERL: Potentially. The one for sure is the document that I just handed out, single sheet, and across the top of it, it says "Revised October 28th, 1996." JUDGE BERG: We'll mark that at this time and we'll mark the other exhibits in the event you use that. MS. ANDERL: I had a discussion with Mr. Hunt before going on the record this morning about whether and when we might admit Mr. Tews's deposition in its entirety. Mr. Iannotta's testimony has some pages from that deposition attached. We would either like time to designate additional pages of that deposition or just go ahead and admit the whole thing. We didn't know that would be appropriate to do through cross of Mr. Iannotta or just to Mr. Tews when he was on the stand, so that was one of the other issues. JUDGE BERG: I can mark it. The parties can make reference to it, but it wouldn't be admitted until Mr. Tews was qualified. Would that work for the parties? MS. CHING: That would be acceptable, your Honor. MS. ANDERL: Okay. I can distribute that then now too. I have copies with me. JUDGE BERG: That's the direct testimony of Mr. Tews? MS. ANDERL: His deposition. JUDGE BERG: I was thinking that this was the direct testimony. MS. CHING: Just for clarification, it's my understanding we're just going to mark the exhibit now, but you're going to deal with it when Mr. Tews takes the stand? MR. HUNT: Give you time to designate sections in response to what is in Robert's testimony instead of admitting the whole deposition. JUDGE BERG: I was confused, Ms. Anderl. I was thinking that you were referring to the prefile testimony of Mr. Tews. MS. ANDERL: Mr. Iannotta's exhibit, the first one in his rebuttal testimony, his Exhibit No. 25, consists of about six or seven excerpted pages from Mr. Tews's deposition, and we definitely either want additional pages or the entire document in if those pages are going to come in, so that's why I brought it up, because we didn't want to have to object to that exhibit prior to Mr. Iannotta's testimony if we could deal with it this way. JUDGE BERG: Mr. Hunt, if you would just explain to me what MCI's position is with regards to the deposition transcript as a whole. MR. HUNT: We would be opposed to its admission as an exhibit in this proceeding. I think it's not all particularly relevant. It's rather voluminous, about 100 pages or so. We've only cited, I think Ms. Anderl said, about 10 pages worth of material, and even though U S West would have had the opportunity -- no, they would not because we took the deposition after we filed their testimony. I have no problem with allowing U S West to designate the portions that they think put our responses in context, but I certainly don't think that's going to include the whole 100-page deposition. JUDGE BERG: How many pages might be relevant, Ms. Anderl? MS. ANDERL: There are 86 pages in the deposition total, and I didn't have it copied in its entirety. I have it in the condensed version so its not actually that long. I don't know how many pages, maybe as much as half the deposition. In offering the entire deposition, we were simply relying on Commission's procedural rule which states that at hearings, if portions of a deposition are admitted into evidence, other parties shall have the right to offer other portions of the deposition for purposes of offering a complete picture of the witness's testimony, and we felt the entire deposition, given that it wasn't 500 pages, did that. JUDGE BERG: Mr. Hunt, is there anything confidential contained in the deposition of Mr. Tews? MR. HUNT: Any information in the deposition that I recall is confidential relates to the attachment that U S West had designated as confidential when they attached it to his rebuttal testimony. JUDGE BERG: Is there any deposition transcripts, Ms. Anderl, pages in the transcript, that disclose confidential information? MS. ANDERL: No. JUDGE BERG: I'm going to go ahead and allow the condensed version in its entirety to be admitted. I assure the parties that I don't have any intent of reading any more of a deposition record than I have to, but at this point in time, for the purpose of expediency and getting today's proceeding under way, knowing that the parties want to finish by the end of Thursday, it just seems it's going to be easier to distribute the documents as already assembled. JUDGE BERG: Off the record for a moment. (Discussion off the record.) JUDGE BERG: There was a discussion among counsel and the Bench regarding the admissibility of the deposition of Jeffrey Tews in its entirety. While the admission of the deposition transcript in its entirety is not in strict compliance with the rule, I'm finding that it's substantially in compliance with the rule under the circumstances. Ms. Anderl has prepared copies of a compressed transcript which includes four pages from the deposition transcript on each single page of the compressed transcript. For the ease of reference in this proceeding, I'm going to allow the compressed transcript in its entirety to be marked as an exhibit and offered as an exhibit for admission into the record. U S West shall do a review of the compressed transcript with the complete transcript and report back to me no later than the start of the proceeding tomorrow, that being Thursday, June the 4th, as to whether the compressed transcript is consistent in its entirety with the official transcript. Also, I would ask that U S West, either at the conclusion of Mr. Tews's testimony, if it occurs today, to begin putting together a list of those pages which are relevant to this proceeding and report those page designations to me at the start of tomorrow morning, or if Mr. Tews's testimony is not concluded today, before the hearing as a whole is adjourned, U S West will designate those specific pages which it considers relevant to this proceeding. Only those pages which U S West designates as being relevant to this proceeding will be considered as part of the record upon which the parties may make argument or will be considered by the Commission in preparing orders. That compressed transcript will be marked as Exhibit 85. MR. MACIVER: May I address the Bench? You've used the phrase "relevant to this proceeding." I think the other pages of the deposition need to be established to be relevant to those pages offered by MCI. JUDGE BERG: Yes, that's correct. I'm sorry. Maybe I'm misunderstanding. It's relevant to the -- MR. MACIVER: -- parts of the deposition that MCI offered as an exhibit. They have, under WAC 480-09-480 (6)(C), and I'm quoting, "If portions of the deposition are admitted into evidence, other parties shall have the right at the time the deposition is admitted to offer other portions for the purpose of offering a complete picture of the witness's testimony." So it relates to portions that are being offered by the witness. There are other parts, I think, relate to that. They may do that. This is MCI's evidence, MCI's exhibit, and just because MCI offers a page or two of a deposition doesn't mean the other party has the right to offer the entire deposition into the record, only those that relate to that that was offered. JUDGE BERG: Ms. Anderl, why don't you go ahead and respond and make reference to that rule number for me. MS. ANDERL: It is 480-09-480 (6)(b)(ii)(C). Mr. MacIver reads the rule correctly in the second paragraph of that subsection, but clearly, the witness referred to there is the witness whose deposition was taken, not some witness who MCI chooses to offer pieces of somebody elses deposition through. So it seems to me that U S West, as a part of this proceeding, has a right to offer other portions of Mr. Tews's deposition for the purpose of offering a complete picture of Mr. Tews's testimony. And that's what we seek to do. I absolutely don't think we need to be limited to offering it to offer a complete picture of Mr. Iannotta's testimony. Although, arguably, the pages that would be made under either interpretation would be the same. I do think that Mr. MacIver is seeking a more restrictive reading of the rule in terms of what other portions of the dep could be admitted. MR. MACIVER: Perhaps to expedite matters, we could wait and see what portions are offered and then we can address this then if we think it's beyond the scope of the testimony offered by MCI. JUDGE BERG: All right. I'm willing to allow additional argument on this as we proceed. My main goal is to create a complete record of this proceeding, and that includes making a complete picture of the witness's testimony consistent with the rule that's been referred to here. If it's necessary for additional pages to be admitted into the record in order to create a complete picture, than I'm going to find some way to do it, and I'm just looking for the most expedient way to get there at this point in time. MR. MACIVER: We definitely share that desire. JUDGE BERG: Let's go ahead and then proceed, and at the appropriate time, Mr. MacIver, Ms. Ching, or Mr. Hunt, if you want to bring this issue back up, if it doesn't come up on its own, please bring it to my attention. I'm going to backtrack just to make sure that the document identified as a service interval guide access services with the heading "Revised October 28, 1996, Tab 1" is marked as Hearing Exhibit 84, and as noted at this time, the compressed transcript of Mr. Jeffrey L. Tews, dated 4/9/98, shall be marked as Hearing Exhibit No. 85. Are there any other issues the parties wish to address before I swear in Mr. Iannotta? In that case, Mr. Iannotta. (Witness sworn.) JUDGE BERG: Ms. Ching, I understand you will be proceeding with the qualification of Mr. Iannotta this morning. MS. CHING: Yes, your Honor. DIRECT EXAMINATION BY MS. CHING: Q. Good morning. Would you please state your name? A. Robert Iannotta. Q. By whom are you employed? A. MCI Communications. Q. What is your position at MCI? A. My current position is a senior engineer in the local services delivery organization. Q. What is your business address? A. My business address is Reston, Virginia. Q. Mr. Iannotta, have you read the protective order entered in this proceeding? A. Yes, I have. Q. Have you behaved as if the protective order applied to him during the pendency of this proceeding? A. Yes, I have. MS. CHING: Your Honor, I'd like the record to reflect that counsel for U S West has agreed this representation by Mr. Iannotta is sufficient. MS. ANDERL: Yes. JUDGE BERG: All right. And also I have received notice from the Commission records center that has received an executed copy of Mr. Iannotta's confidential agreement. Ms. Anderl, for the record, is U S West willing to accept the confidential agreement signed by Mr. Iannotta? MS. ANDERL: Yes. Q. (By Ms. Ching) Are you the same Robert Iannotta who prefiled direct and rebuttal testimony in this proceeding? A. Yes, I am. Q. In front of you are Exhibits T-40 through C-75. Are these exhibits the prefiled direct and rebuttal testimony you filed? A. Yes. Q. Do you have any other corrections to make to your prefile testimony? A. I have two corrections to make to my rebuttal testimony. On Page 16, Line 14; Page 27, Line 10, and Iannotta Exhibit 34. At the time of my testimony, the reference to order in question had not been re-FOC'd three times, though my testimony says it was re-FOC'd three times, and in actuality, at the time I did my testimony, it wasn't; and Page 21, Lines 2 to 3 -- MS. ANDERL: Excuse me. I guess I'm seeking what exact changes we are supposed to be making to Lines 14 and 15? THE WITNESS: The referenced order had not been re-FOC'd three times. MS. ANDERL: I'll ask your counsel, are we to going through the "three" and insert "two" or "four"? MS. CHING: Strike through the "three" and put "one." THE WITNESS: That also applies on Page 27, Line 10, and I do want to note that the install date still remains the same at October 15th, 1998, the due date. That has not changed, and it also applies in the notation on my Exhibit 34, and the last correction -- MS. CHING: Excuse me, Mr. Iannotta. For our purposes, Exhibit 34 is Hearing Exhibit C-75, and are you referring to the entry "FOC'd three times." You want us to change that to one time? THE WITNESS: That's correct. One last change is on Page 21, Lines 2 to 3 of my rebuttal testimony. The change is "U S West did not merely restate our forecast." JUDGE BERG: Could you please give me that reference once more? THE WITNESS: Page 21, Lines 2 to 3, where it says, "and it merely repeated the numbers in an earlier forecast." Change that to "U S West did not merely restate our forecast." MS. ANDERL: Should the "no" also be changed to a "yes" then? MS. CHING: I'll ask Mr. Iannotta. Should the no be changed to a yes then? THE WITNESS: That first statement is still correct. It was the only forecast I received was in January. JUDGE BERG: Mr. Iannotta, the correction to Exhibit C-75, is that also a change of three times to one time? THE WITNESS: That's correct. Q. (By Ms. Ching) Mr. Iannotta, with those changes, if I asked you the same questions in your prefiled testimony today, would your answers be the same? A. Yes, they would. Q. Are the answers contained in your prefiled testimony as corrected true and correct to the best of your knowledge? A. Yes, it is. MS. CHING: Your Honor, I move to admit Exhibits T-40 through C-75. JUDGE BERG: Any objections? MS. ANDERL: None, your Honor. MS. CHING: I have no further questions. MS. ANDERL: Except that 42 is not admitted. JUDGE BERG: Yes. It will be Exhibits T-40 through C-75, excepting Exhibit 42, which has been withdrawn, shall be admitted into the record. MS. CHING: I have no further questions. JUDGE BERG: Ms. Anderl, you may conduct cross-examination. CROSS-EXAMINATION BY MS. ANDERL: Q. Good morning, Mr. Iannotta. I'm Lisa Anderl, the attorney for U S West Communications. I'll be asking you some questions this morning. What was your job title at the time you filed your testimony in February of '97? A. I was the manager of the local services networking engineering organization. Q. Now you're a senior engineer in the local services delivery organization? A. Correct. Q. When did that change? A. That took place on April 1 of this year. Q. How long had you held the manager for local service network engineering position? A. Since June of '96. Q. By whom are you employed? A. MCI Communications. Q. MCI Telecommunications Corporation? A. Yeah. Q. Are you also an employee of MCImetro? A. Yes. Q. What's your position with MCImetro? A. The position with MCImetro was manager of the local service and engineering organization. Q. What were your duties in and responsibilities in the job that you held in February of '97? A. In February of '97, I had the responsibility of managing the traffic engineering, the network capacity planning, the network provisioning for the local interconnections with U S West and Pac Bell. Q. How many states were you responsible for? A. I was responsible for all the states, but in February of '97, also involved with transitioning the responsibility over to regional access management organization. Q. In the U S West and Pac Bell territory for which you were responsible, how many markets was MCI entering for local services? A. In Pac Bell, we had markets in three cities, and U S West, we had markets in about seven cities that I was responsible for. Q. Who reported to you in that position or how many people? A. I had about 12 engineers. Q. Can you name them? A. Today? Yes, I can. Q. Could you please? A. Wayne Henry, Chris Sorenson, a person by the name of -- Q. Maybe I could narrow this down for you. How about people who had responsibility for local service network engineering for the state of Washington? A. For the state of Washington, that was Judy Early and Wayne Henry. Q. In that position, to whom did you report? A. I report to my senior manager at the time was Bruce Scull. Q. To whom did he report? A. He reported to Laura Ajani-Inniss, who is the director, and then at that point -- are we talking the February time frame -- my director was Glen Berg because that directorship was transitioned over from Laura to Glen. Q. At any point during 1996 or 1997, did you report either directly or indirectly to Michael Beach? A. No, I have not. Q. In your responsibilities in 1996 and 1997 in the local service network engineering, what were your duties and responsibilities? A. My duties and responsibilities was to insure we had adequate capacity in the network support, our business plan for local, insure we had adequate net involved traffic engineering, traffic engineering network, capacity planning, both in terms of switch ports and terms of transport. Duties involved also provisioning of LEC for interconnection. I might want to add, my responsibilities were not limited to U S West and Pac Bell territories. I also had responsibilities in all seven LECs. Q. So is it fair to say that your primary duty was to insure adequate capacity in the network in order to implement MCI's business plan? A. In 1996 to the early part of '97, I had that responsibility for all local switches in the MCI network. In the later part of '97 on, my responsibilities transitioned out. I had responsibilities for U S West and Pac Bell primarily. Q. In order to insure adequate capacity in the network for all local switches, did you engage in any sort of a planning or forecasting process? A. Yes. Q. Tell me a little bit about the MCI forecasting process for local interconnection capacity needs. What do you do to insure that you forecast adequate capacity? A. The first step is you need to have an understanding about the growth requirements or what the business plan is going to be in terms of how much market penetration we plan on doing as a business in local, so one of our primary inputs is the sales marketing forecast of how many customers' trunks and lines that the sales team projects to sell, and that covers an extended period of two years out. The second input is in considering the existing traffic, what our existing traffic utilizations are and network capacities, and then what we basically do is take that forecast, overlay it with the existing traffic, scale up the traffic, and then resize the network based on a set of engineering principles. Q. Prior to the time that MCI offered local service, you weren't able to consider existing traffic; isn't that right? A. That is correct. Q. So at a certain point, you had to start with what you projected your business plan was going to be? A. Yes. Q. At that point then the only input that you really would have had would have been the marketing forecasts? A. Yes. Q. Are the types of customers to whom you're going to be offering services a relevant input to a marketing forecast; do you think? A. To some extent. Q. What was your working relationship during the time of '96 to '97 with Brad Hobert? A. Brad was the manager of operations in the Seattle local facilities, but the working relationship was a peer relationship. We would discuss a variety of network issues and network opportunities both in traffic engineering capacity, provision, day-to-day operations of the network in Seattle. Q. What was he responsible for? A. He had responsibility of the operations piece, making sure the switch was running, installing customers, installing network. He had the day-to-day operational responsibilities of maintaining the switch site. Q. Do you have any formal training in telecommunications engineering? A. Please clarify that. Q. Do you have any training in telecommunications engineering? A. Yes. Q. Can you tell me what that is? A. My training was primarily MCI sponsored training courses. The training was in traffic engineering. We have network planning that we're capacity type training. There is a variety of technical training that I've had as well as nontechnical training to manage engineers and manage business issues. Q. Was any of that training specific to local service or was any of it specific to long-distance provisions? A. The network engineering principles that you used to manage the local network also apply -- I mean, in the long-distance network are similar to network engineering principles to manage the local network. So the training that I had in the long-distance side is well applicable to the local side. Q. Your testimony indicates that from 1994 to 1996, you were a manager in switch network implementation. Would that have been on the long-distance side? A. That is correct. Q. What kind of responsibilities did you have there? A. The responsibilities I had there was I managed a group of traffic engineers and network provisioners to provision our inner machine tru