COMMISSION In the Matter of the Pricing ) Proceeding for Interconnection, )DOCKET NO. UT-960369 Unbundled Elements, Transport and ) Termination, and Resale ) -----------------------------------) ) In the Matter of the Pricing ) Proceeding for Interconnection, )DOCKET NO. UT-960370 Unbundled Elements, Transport and ) Termination, and Resale for ) U S WEST COMMUNICATIONS, INC. ) -----------------------------------) ) In the Matter of the Pricing ) Proceeding for Interconnection, )DOCKET NO. UT-960371 Unbundled Elements, Transport and ) Termination, and Resale for ) VOLUME 6 GTE NORTHWEST INCORPORATED ) Pages 116 - 135 -----------------------------------) A pre-hearing conference in the above matter was held at 2:10 p.m. on April 29, 1997, at 1300 South Evergreen Park Drive Southwest, Olympia, Washington before Chairman SHARON L. NELSON, Commissioners RICHARD HEMSTAD and WILLIAM R. GILLIS and Administrative Law Judge LARRY BERG. The parties were present as follows: GTE NORTHWEST INCORPORATED by RICHARD E. POTTER, (via bridge), Associate General Counsel, 1800 41st Street, (5LE) Everett, Washington 98201 and CHRIS HUTHER and SHAWN MOELLER, (via bridge), Attorneys at Law, 3050 K Street NW, Suite 400, Washington D.C. 20007. Cheryl Macdonald, Court Reporter APPEARANCES (Cont'd.) U S WEST COMMUNICATIONS, INC., by EDWARD T. SHAW, (via bridge) Corporate Counsel, 1600 Bell Plaza, Room 3206, Seattle, Washington 98181. AT&T COMMUNICATIONS, by DANIEL WAGGONER and RANDY GAINER, (via bridge), Attorneys at Law, 2600 Century Square, 1501 Fourth Avenue, Seattle, Washington 98101. THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION STAFF, by SHANNON SMITH, (via bridge) Assistant Attorney General, 1400 South Evergreen Park Drive Southwest, Olympia, Washington 98504-0128. MCI COMMUNICATIONS, MCIMETRO, TELECOMMUNICATIONS RESELLERS ASSOCIATION, and WORLDCOM, INC., by Brooks Harlow, (via bridge) Attorney at Law, 4400 Two Union Square, 601 Union Street, Seattle, Washington 98101. Also present was LOUISE TUCKER on behalf of BELLCORE. P R O C E E D I N G S JUDGE BERG: The hearing will please come to order. This is a pre-hearing conference in docket No. UT-960369. We are convened in Olympia, Washington before Administrative Law Judge Larry Berg and Commissioners William Gillis, Richard Hemstad and Chairman Sharon L. Nelson. Let's take appearances of the parties at this time, beginning with AT&T, then GTE, then U S WEST and then we'll let the rest of the parties speak up and introduce themselves. MR. WAGGONER: For AT&T Daniel Waggoner and Randy Gainer. JUDGE BERG: GTE? MR. POTTER: GTE, Richard E. Potter and then Chris Huther is on the line who will represent us. Chris. MR. HUTHER: Yes. Christopher Huther with the firm of Collier, Shannon, Rill and Scott, and with me also from my firm is Shawn Moeller. JUDGE BERG: And U S WEST. MR. SHAW: Yes, thank you. Ed Shaw for U S WEST. JUDGE BERG: I know this is difficult just to throw it open to all the other parties, but we appreciate your cooperation in introducing yourself one at a time. MR. HARLOW: Brooks Harlow from Miller Nash for MCI. MS. SMITH: Shannon Smith for Commission staff. MR. WAGGONER: You know, I don't know who is breathing deeply into the phone but there's somebody who has very heavy breathing. JUDGE BERG: It's probably someone crashing the proceeding. I'm sure it wouldn't be anyone of record. Representative from Bellcore who you asked to call in. MR. HUTHER: Yes. Also on this call is Louise Tucker who is counsel to Bellcore. MS. TUCKER: Yes, I'm here, Chris. JUDGE BERG: Please continue. Is there a representative from WITA? Is there a representative from public counsel? All right, then, we'll presume that those are all the parties who in fact are on the line and entering appearances. This matter comes up on AT&T's motion to compel production of GTE switching cost models. As at the prior hearing, I will just let the parties know that we would certainly appreciate their keeping their comments within a five-minute time period. We will try and give each interested party an opportunity to make a direct testimony regarding this matter. With regards to reply testimony there will be a reply by AT&T and then we will assess what other comments are appropriate from the parties. Furthermore, because this hearing is occurring remotely for the most part, we would ask that all speakers introduce themselves and identify themselves before speaking, and try to pace your delivery a little slower than you otherwise might if you were present in order to assist the reporter who is present here today. So, with that Mr. Waggoner, will you be making the initial presentation for AT&T? MR. WAGGONER: Yes, Your Honor. JUDGE BERG: Please proceed. MR. WAGGONER: This issue that we're before you on today is very similar to the issue that we talked about last week, which is situations where third party information is in the possession of one of the parties to the case and they are asked to turn over the information and they're willing to turn over the information but they are seeking some additional level of protective order. The motion before you today is brought by AT&T to compel GTE to turn over information on the switching cost information system, or SCIS as it's sometimes called, and if I've incorrectly identified the exact meaning of the acronym, I apologize. AT&T originally sought that access and was told by GTE that it would be provided but only subject to a protective order that provided for additional protection beyond the level of protection provided in the Commission's standard form protective order. We had extensive negotiations with GTE and have continued to do that in the last few days. We have indicated to GTE that we believe that this issue is essentially the same issue as the issue with regard to the third party information that was provided to Mr. Donovan and Mr. Fassett on the Hatfield model, and we have suggested to GTE that essentially the same protective order be adopted for both situations, and what we would do is we've agreed with GTE that we would no longer object to the language in their proposed protective order that provides for essentially an automatic injunction if there were found to be any violation. Second of all, we have agreed that we would not request any employee of AT&T to see these switching cost information system data, that we would only request that it be given to outside experts and lawyers. So what we're essentially willing to do is make the same protective order apply to both the switching cost information system data, which is apparently third party data, and also to the third party data that we talked about last week in terms of the Hatfield model inputs. I think that's about all I have for now. I would just note in terms of the Hatfield model supports that we've now sent that out on a redacted basis to all parties that have requested it, and so that's where we sit at this point. We're ready to go forward, obtain access to SCIS based upon the same protective order that we would offer on the Hatfield model inputs. JUDGE BERG: All right. Mr. Waggoner, am I to understand that from AT&T's perspective that this resolves all of the outstanding issues in the two motions to compel? MR. WAGGONER: This proposal we have made would have resolved all the issues from our perspective in both motions. JUDGE BERG: All right, thank you. Mr. Huther, why don't you go ahead and present GTE's position. MR. HUTHER: Yes, thank you, Your Honor. What is before the Commission today is related but not as Mr. Waggoner suggests similar to the issue that was argued last week by Mr. Williams on behalf of GTE. The proposal that AT&T has made as outlined by Mr. Waggoner certainly resolves the issues that have raised AT&T's motion to compel. Unfortunately, it does not resolve the issues that were raised in GTE's motion to compel. And unfortunately, I do not have the intimate knowledge of that motion that I do with this one, with the history surrounding this motion, but suffice it to say that it is -- for the reasons Mr. Williams enumerated last week, it is not sufficient to allow only GTE's in-house and outside counsel and outside consultants to review the information that AT&T appears willing to produce under these restrictions. JUDGE BERG: Mr. Huther, pardon me for interrupting. I think the commissioners have a good recollection of the arguments that were presented with regards to the GTE motion so I'm not going to open this back up to argument on that motion, but let me go back to Mr. Waggoner, and Mr. Waggoner, am I to understand that AT&T's proposal is an integrated proposal, that it will stipulate to the GTE proposed format only if there are these other restrictions on those parties who have access? MR. WAGGONER: Yes. Essentially our proposal is that we would add the same protective order, an integrated protective order as you describe it, for both the Hatfield model inputs that we discussed last week and the switching cost information system model. MR. HUTHER: This is Chris Huther again. Such an agreement would not be appropriate. AT&T has essentially agreed to be bound by the terms of the agreement that they negotiated and that they have signed on to in a number of other states copies of which I believe have been provided to the Commission. And they are insisting on enclosing similar, in fact greater, burdens in the production of their data that they contend is proprietary. They are not contractually bound to protect this information as GTE is. There has been no showing that the data that they seek to produce is proprietary, and again, as Mr. Williams noted in a number of instances last week, it is they who contend that their model is open and accessible. All we have here is anecdotal hearsay as to why this information should be protected and in the manner that they suggest. It is very much unlike the circumstances that GTE is confronted with, with contractual obligations to its vendors not to produce not only data and prices but in this instance an entire piece of computer software, software that AT&T already has. JUDGE BERG: Let's give the other parties an opportunity to share with us their perspective. At the same time, I would ask that the parties to whatever extent possible refrain from rearguing the issues that were raised in last week's pre-hearing conference currently under advisement with the commissioners. Mr. Shaw. MR. SHAW: Thank you, Your Honor. U S WEST has only two issues. I can be very brief. We would object to any conclusion that a special protective order is needed for AT&T's third party vendor information on the basis that any party has been shown to threaten to retaliation. We don't think there's any record evidence for that. As long as the protective order adopted by the Commission is not based upon anything such (inaudible), we have no objection to an integrated protective order that applies to third party vendor information as a class. And we would like -- we would like our limited in-house people to have access to that. Otherwise it is going to be inconvenient, but our bottom line is that we will not object to one protective order that applies to both parties' data, and we would request that GTE's approach of a limited number inside people be adopted. Thank you. JUDGE BERG: Mr. Harlow. MR. HARLOW: Thank you. We do support AT&T's position for the reasons discussed by Mr. Waggoner. JUDGE BERG: Ms. Smith, do you have anything that you would like to present. MS. SMITH: No. Commission staff is not taking a position on this motion. JUDGE BERG: And Ms. Tucker, would you like to make any presentation. MS. TUCKER: I think Mr. Huther covered our positions. Thank you, Your Honor. JUDGE BERG: Did I miss anybody? Mr. Waggoner, is there anything that you wish to state in conclusion? MR. WAGGONER: Just very briefly that we think -- I guess I agree with Mr. Shaw that it makes sense to have an integrated agreement for third party vendor information, and that's about all I have to say. JUDGE BERG: Commissioners, any questions? CHAIRMAN NELSON: Mr. Shaw, what does your integrated agreement idea look like? MR. SHAW: As I understand it, GTE has a contract that is agreeable to AT&T, at least in other jurisdictions, and the only issue seems to be over who would get to see it. As I understand, the parties are just simply split on whether or not any in-house people can see the data of either side. MR. WAGGONER: I think that's what it boils down to. This is Mr. Waggoner. I think at this point the only remaining issue is whether in-house employees get to see the third party vendor data. I would note that we did get another list from U S WEST just last Friday of a bunch more people, I guess seven or eight more, that have signed protective agreements, so they're now up to ten and GTE I think is up to more than that in terms of the number of people. So I think that's really what the issue boils down to at this point. MR. HUTHER: In fact, there is one other issue and that is in paragraph 1 as raised by AT&T. They would seek to change language in there to take it out of the affirmative and state that the information -- I'm summarizing here -- that is being produced either is confidential or is alleged to be confidential, and for the reasons stated, GTE would not be willing to agree that the information that AT&T seeks to produce in fact is confidential. This is very different from what GTE seeks to produce and which AT&T has acknowledged either expressly, by virtue of the license agreement it has signed with Bellcore in obtaining the SCIS model, and implicitly as well, so I think we need to make sure that that issue is also brought to the table. JUDGE BERG: Commissioner Hemstad has a question. COMMISSIONER HEMSTAD: Well, first, Mr. Waggoner. I listened carefully to your last statement. I thought the only issue in contention with regard to the data is who are the vendors. There's no question that the data itself would be available to -- MR. WAGGONER: I'm sorry, Commissioner Hemstad, you were breaking up and I had trouble hearing your question. COMMISSIONER HEMSTAD: I thought the issue with regard to the providing of data was not in dispute, that inside signers of the confidentiality agreements would have access to all the data. The only question at issue was would they have access to the name of the vendors. MR. WAGGONER: That's correct. And in the case, though, from the other direction of the GTE SCIS data it would be more than just identity in that direction, but, yes, as to the Hatfield model inputs the only thing we are claiming this super level of confidentiality for is the identity of the individuals of the vendors. COMMISSIONER HEMSTAD: And then to Mr. Huther, I'm looking at the suggested changes that AT&T has proposed in the disclosure agreement, and in paragraph 1 it merely is a change from a flat assertion that the information is sensitive to stating that the third party vendors contend that it is sensitive. That seems to be a rare minor point, isn't it? MR. HUTHER: Yes, it is, but it is important because there is a distinction between, as I say, what we're producing or willing to produce and what AT&T is seeking to produce. I don't think that there can be any showing -- there has not been any showing that what -- the proprietary information they claim of their vendors is anything approaching the level of the data that GTE possesses from its vendors. COMMISSIONER HEMSTAD: But isn't the issue what is the remedy, and the remedy would be that there would be a right to obtain an injunction without proving damages. That's the point, isn't it? MR. HUTHER: Yes, it does. It goes to paragraph 11, but GTE is not willing to go on record and say that the information that Hatfield is producing or AT&T is producing is of such a highly sensitive nature the disclosure would expose the vendors to an unreasonable risk of harm from its competitors. Recall that it is AT&T, and Hatfield itself has been contending their model is open and accessible, and this is the first time that GTE in over a year has been told that certain information within the model is not open and accessible and in fact is proprietary. If that's their claim that's fine, but GTE is not willing to concede that certainly without having seen the information. It is different from the material that GTE is producing that AT&T has agreed in other dockets this year and last that the information is in fact proprietary and would -- disclosure of it would expose our vendors to unreasonable risk of harm from their competitors. COMMISSIONER HEMSTAD: But in both instances does it come down to the nature of the remedy, whether it will be -- whether damages have to be shown as insufficient in order to get an injunction? Is that the consequence of all of this? MR. HUTHER: I'm sorry, you were breaking up there. Can you please restate? COMMISSIONER HEMSTAD: As a consequence of all of this in the form of the remedy that one need not establish that damages were insufficient in order to obtain an injunction. MR. HUTHER: No. It would not carry any effect on the paragraph 11, if I understand your question correctly. We would expect that paragraph 11 to remain as it is written in the GTE proposed agreement. JUDGE BERG: Anything else from the commissioners? All right. We're going to stand in recess. We will be back on the record at 3:00. We'll ask the parties to dial back in at that time. Thank you very much. (Recess.) JUDGE BERG: We'll be back on the record. This is Administrative Law Judge Larry Berg. Just to confirm the parties who are still present, would they please re-enter their appearances, starting with AT&T, then GTE, then U S WEST. MR. WAGGONER: Certainly. This is Dan Waggoner and Randy Gainer for AT&T. MR. POTTER: Richard Potter for GTE. MR. HUTHER: Chris Huther and Shawn Moeller. MR. SHAW: Ed Shaw for U S WEST. JUDGE BERG: Mr. Harlow, are you still present? MR. HARLOW: I'm here. JUDGE BERG: Looking for my notes from earlier, are there other parties that are present? MS. SMITH: This is Shannon Smith with Commission staff, and Tom Wilson and I are still present. JUDGE BERG: Is Ms. Tucker still with us? MR. HUTHER: No, she's not. She had to drop off the line. JUDGE BERG: All right. Thank you. The commissioners have reached a decision, and asked me to enter their decision on the record. This relates to both of the motions to compel which are presently pending before the Commission. The AT&T motion to compel is granted in part and denied in part, and the GTE motion to compel is granted in part and denied in part. AT&T and GTE shall work together to draft a single agreement regarding disclosure in use of third party confidential information. With regards to the proposed agreement by GTE the AT&T modifications to paragraph 1 shall be implemented. GTE's proposed paragraph 11 shall be implemented. With regards to parties who are entitled to access the third party confidential information, access shall be limited to attorneys, outside consultants and to in-house designees of the parties. Are there any questions with regard to that portion of the commissioners' decision? MR. WAGGONER: Not from AT&T. MR. HUTHER: Not from GTE. MR. SHAW: Can U S WEST see the agreement that the other parties negotiate? MR. WAGGONER: Oh, of course. JUDGE BERG: Absolutely. This is an agreement that is intended to be made available to other parties as well. MR. WAGGONER: Ed, could you could just leave us a message where you want it sent to? MR. SHAW: You can send it to my office. I will be back in Thursday morning. JUDGE BERG: Beyond those terms the Commission is confident that the parties can agree with regarding the other pertinent provisions of such an agreement. Furthermore, the Commission would like the parties to present that single unified agreement, uniform agreement, by the teleconference that is presently scheduled in this docket on May 7th. The Commission would also request that the parties designate their in-house representatives who will have access to the third party confidential information at or before that time. With regards to all scheduling decisions relating to the production of this confidential information as well as the scheduling of time periods within which the parties may file additional testimony, including the possible rescheduling of the hearing in chief, those matters will be discussed at the May 7 teleconference. There will be an amended notice of a telephone conference which will be sent to all of the parties on the distribution list informing them that the purpose of the May 7 conference has been expanded to include these scheduling issues. Are there any questions about this aspect of the Commission's order? MR. WAGGONER: No. JUDGE BERG: All right. Are there any other issues or matters that the parties want to raise before we go off the record? MR. WAGGONER: Not from AT&T. MR. POTTER: Not from GTE. JUDGE BERG: Thank you everyone for your help. We will now be off the record. MR. SHAW: Thank you. MR. WAGGONER: Thank you. MR. HUTHER: Thank you. (Hearing adjourned at 3:10 p.m.)