COMMISSION ________________________________________________________ ) MCI MCImetro ACCESS ) TRANSMISSION SERVICES, INC., ) ) Complainant, ) vs. ) DOCKET NO. UT-971063 ) U S WEST COMMUNICATIONS INC., ) VOLUME 3 ) Respondent. ) Pages 119 - 141 ________________________________) A pre-hearing conference in the above matter was held on October 20, 1997 at 9:30 a.m., at 1300 South 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, Corporate Counsel, 1600 Seventh Avenue, Room 3206, Seattle, Washington 98191. TRACER, by ARTHUR A. BUTLER, Attorney at Law, 601 Union Street, Suite 5450, Seattle, Washington 98101. MCI, MCImetro ACCESS TRANSMISSION SERVICES, INC., by BROOKS E. HARLOW, Attorney at Law, 601 Union Street, Suite 4400, Seattle, Washington 98101-2352. THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION STAFF, by DAVID GRIFFITH, Utilities Engineer, 1300 South Evergreen Park Drive Southwest, Olympia, Washington 98504-7250. THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION STAFF, by SHANNON SMITH, Assistant Attorney General, 1400 South Evergreen Park Drive Southwest, P.O. Box 40128, Olympia, Washington 98504-0128. Kathryn T. Wilson, CCR, Court Reporter P R O C E E D I N G S JUDGE BERG: This is a pre-hearing conference in Docket No. UT-971063 captioned MCI Metro Access Transmission Services, Inc. versus U S West Communications, Inc. The parties shall be referred to as MCI and U S West. Although, there is a temptation to refer to MCI as the company previously known as MCI, but I'm sure whatever happens, some things will stay the same. This pre-hearing conference comes up on adequate and sufficient notice. It's actually the second pre-hearing conference to be conducted in this docket. This pre-hearing conference arises pursuant to the Commission's order denying U S West Communications, Inc.'s motion to dismiss, dated October 2nd, 1997. In that order, the Commission directed that the administrative law judge assigned this proceeding shall reissue a notice of pre-hearing conference to consider formulating the issues in a proceeding and determining other matters to aid in its disposition as specified in WAC 480-09-460. This information is also reflected in the notice of pre-hearing conference itself. Today is October 20th, 1997. My name is Lawrence Berg. I'm the administrative law judge assigned to this proceeding. At this point in time we will take appearances, and I'll begin with MCI, then U S West, then the assistant attorney general, and then Mr. Butler. So why don't you start things off, Mr. Harlow. MR. HARLOW: Brooks Harlow, 601 Union Street, Suite 4400, Seattle, Washington 98101, appearing for the complainant MCI. MS. ANDERL: Lisa Anderl, appearing on behalf of U S West Communications, Inc. 1600 Seventh Avenue, Room 3206, Seattle, 98191. MS. SMITH: Shannon Smith, assistant attorney general for Commission staff. 1400 South Evergreen Park Drive Southwest, P.O. Box 40128, Olympia, Washington 98504-0128. MR. BUTLER: Arthur A. Butler appearing on behalf of Tracer. My address is 601 Union Street, Suite 5450, Seattle, Washington 98101-2327. JUDGE BERG: Thank you very much. The next order of business will be the petition to intervene on behalf of Tracer. Mr. Butler, I'm glad that you took me for my word that the Commission would reconsider the prior request for intervention which was denied. Why don't we take this from the top and have you state your position with regards to your request to intervene and also indicate whether or not this request to intervene is being made orally or whether there's also been a written request filed with the Commission. MR. BUTLER: This request is oral. There has been no written petition to intervene filed. Tracer is an association of large businesses which are heavy users of telecommunications services. They are large customers of U S West, potential customers of a new entrant as well, including MCI Metro. The address of the organization is the same as my firm. We do not seek to broaden the issues in this proceeding. We seek intervention because we believe that the issues, factual and legal in this proceeding, directly impact the interests of Tracer members, and in this regard, I invite your Honor's attention to Paragraph 3 of the relief requested, which specifically seeks entry of an order directing U S West to comply with applicable blocking standards, and in any event, to reduce the blocking experienced by MCI Metro's customers and by other end users when calling MCI Metro customers to a level no greater than the blocking experienced by U S West's own customers when calling other U S West customers. I also invite your Honors attention to the argument made by Mr. Shaw on behalf of U S West in connection with the motion to dismiss, which was resolved previously in this case, in which Mr. Shaw stated: "Now there is, I agree, a fundamental issue here that has not been addressed by the Commission, and that is the obligation of any interconnecting carrier to anticipate volume requirements of interconnecting carriers and have that capacity standing by." He also stated, there's no Commission policy on that and one has to be worked out, and there has to be some sort of reasonable standard that is not reasonable for expected carriers to invest in and have on standby capacity for any conceivable demand, facilities, and services for interconnecting carriers. So there is a policy issue there that resorts to the statutes that talk in terms, generally. That carriers shall have adequate facilities does not answer on the face the requirement should be flushed out here. This exhaustion of facilities issue is not just an MCI issue. This is an issue that relates to the exploding use of the network by internet service providers, by new and unanticipated demands of a budding carrier. Further, "So it is not a unique MCI issue. It is an issue that cuts across all users of a public switched network and affects all users of a public switched network." Further, "The public switched network is being faced with unprecedented and unusual demands that have put a strain on it and that the incumbent carriers are having to scramble to adapt. The networks easily demand both retail and wholesale." I think Mr. Shaw's statement illustrates clearly the interest that end users such as Tracer have in this proceeding since it is clear that necessarily the Commission will have to resolve the question of, what is the obligation of incumbent carriers to provision its network not only to meet the demands of new entrants, but what is their obligation to provide certain levels of service quality to all the users of the network? And as such users of the network, we would be impacted by whether those demands are being met, what the obligation is, and if we expect to have the benefits of competition, whether the competitor will be able to provide decent service quality of acceptable market standards, or even if we attempt to call a customer of a new entrant whether we will be able to get through. Those service quality issues are of extreme importance to end users and particularly to Tracer members, and it is on the basis of that that we seek to intervene in this proceeding. JUDGE BERG: Just for clarification on the record, Mr. Butler, I presume that Tracer would not consider itself to be one of those budding carriers? MR. BUTLER: No, we do not. JUDGE BERG: The other side of the coin, in not seeking to broaden the issues would be whether or not, in fact, Tracer can limit the issues to which it would be addressing in this proceeding. As you understand the issues now -- let me just preface this discussion. One of the things we're doing here this morning is to discuss which issues are going to be relevant to the proceedings, so I know it's sort of premature for me to ask you whether or not, in fact, Tracer's position would be limited to any issues that will come up in the proceeding, but let's just go on the basis of your understanding at this time. As revealed in the Complaint itself, the answer of U S West and any other comments by U S West, such as the transcript that you refer to, do you have the ability to limit the issues which Tracer would be seeking to be involved with? MR. BUTLER: Yes. I think we're only interested in and would intend to address only the issues about what is the appropriate obligation to provision the network; what is the status of the demand on the network; the ability of the company to satisfy those demands; what provisioning steps need to be made and what the appropriate marketing standards are; and what is causing problems with respect to the provisioning of the facilities requirement. We do not see a need to go beyond those specific items. JUDGE BERG: Would Tracer be planning to submit written testimony in this proceeding? MR. BUTLER: At this point, we are not positive, but we are inclined to do so. JUDGE BERG: If Tracer was to submit written testimony or to call witnesses in support of that testimony, who would Tracer be relying upon? MR. BUTLER: That's not entirely clear who our expert witness would be. It may be Dr. Zepp, but it may also be a technical engineering person. JUDGE BERG: Would Tracer intend on cross-examining witnesses called by other parties? MR. BUTLER: Yes. JUDGE BERG: Would you also intend to submit written arguments and or motions? MR. BUTLER: Yes, we would. JUDGE BERG: Ms. Anderl, would you like to comment on the petition, oral petition, to intervene? MS. ANDERL: U S West opposes Tracer's petition to intervene. I don't believe that Tracer has stated a substantial interest in the subject matter of the proceeding as required by the APA and the Commission's procedural rules. Tracer's interest is a general interest shared by perhaps all customers of the network, but insufficient to give it standing as an intervenor in this matter. I think the Commission's order -- or rather your order, your Honor -- of July 31st, 1996, initially denying the intervention is really just as applicable today as it was then, and that is that the issues raised in this Complaint are in nature very fact specific issues between the two parties involved, MCI and U S West, and that those parties are the ones who ought to be participating in and resolving those issues. I don't even necessarily think that the Commission will need to reach the issues of the general provisioning requirements that Tracer would like to see the Commission address in this matter. I believe that the interim and the permanent interconnection agreements between U S West and MCI really govern what the obligations are between the parties. Further, there are some fact specific issues that don't impact, necessarily, what U S West's provisioning obligations are at all because they're issues that have to be addressed before the provisioning obligation even kicks in, as it were. In other words, the requirements on MCI that they provide U S West with adequate forecasts, et cetera. Again, those are very fact specific issues between the parties, and I simply don't think that Tracer can add anything at all to help the Commission in finding those facts or making those decisions, and I would suggest that Tracer might indeed be seeking to broaden the issues and broaden the scope of this proceeding by seeking the general exploration of policy issues that they want the Commission to look at in this matter. I think the petition should be denied. JUDGE BERG: I know U S West sort of finds itself between that proverbial rock and a hard place in so far as Mr. Shaw did indicate from his perspective this was an issue that was bigger than just the relationship between U S West and MCI. Yet at the same time, U S West, from its perspective, sees itself being forced into this docket, this proceeding, with just one party rather than possibly the ideal forum to resolve this problem on a broader scale. How should I regard the comments that Mr. Shaw made about the fact that, as quoted by Mr. Butler, that this is a problem that impacts all the users of the public switched network? And again, having read those transcripts over and over, you know, I understand that there's a problem which may be bigger than just the parties here; but yet, this proceeding appears to have been properly brought before the Commission. MS. ANDERL: Well, your Honor, I think that's an interesting question, and I think that Mr. Shaw's remarks were correct in the sense that some of the questions raised are perhaps industry wide or consumer wide questions, but I don't necessarily think they either need to be or should be answered in this proceeding. All of the statutory provisions that are cited by MCI in their Complaint are statutory provisions involving betterments, provision of service on demand, provision of adequate and facilities equipment. All of those statutes apply to all telecommunications companies. They apply to U S West; they apply to MCI; they apply to GTE. As far as I know, they apply to every other registered telecommunications company in the state unless they have sought and obtained a waiver of statutory provision, and I'm not aware that any incumbent or new entrant has obtained a waiver of some of those essential provisioning and service requirements set forth in the RCWs. As such, if the Commission wants to address on a more broad reaching scale what the obligations are of the carriers, independent of what the obligations are under their interconnection agreements arbitrated under the federal act, then perhaps the right thing to do is for the Commission to initiate rule making, so that all of the carriers who are affected by the statutes that the Commission wants to interpret will, in fact, receive proper notice of the proceeding, will, in fact, have an opportunity to comment on it and will be equally bound by the result. I thing that if the Commission were to do that in the course of this proceeding, none of those things would happen. In other words, GTE and the other companies who might be affected by general policy and pronouncement of what the obligation to serve is are not here and probably should be involved in the proceeding if those general rights and obligations are going to be determined. I think a legislative format, such as a rule making, might be more appropriate to receive the comments from interested parties and understand the concerns raised by these issues that address them on a more global scale. So I don't disagree with Mr. Shaw that there were things raised by the Complaint in terms of what the general obligations for provisioning are, but I don't think that they need or should be addressed in the course of resolving the dispute between U S West and MCI in this matter. I think we can resolve that dispute with reference to the specific obligations under the interconnection agreements, and if the Commission wants to do a more broad based investigation, we'll make that the way to go. JUDGE BERG: Ms. Smith, as Commission counsel, I think that it would be appropriate for you to just share that perspective with Commission staff to be sure that they've fully reviewed all of the circumstances that may be involved with this issue. I'm not directing you to do that as part of this proceeding. I think it would be important to know just from an overall perspective that if, in fact, the position of staff has changed or if this is an issue that they have not fully considered, that if there is merit to what U S West has to say, that we all know about it as soon as possible. It's nothing that you have to positively report back on. Certainly, I would appreciate it if you would just make sure that your client has thought through this and considered the issues as mentioned by Ms. Anderl's perspective. I will say that -- and certainly the parties having reviewed the order denying the motion to dismiss understand that in this docket we are going to be focusing in on the contracts between the parties to the greatest extent possible to determine what the relevant rights and obligations of the parties are. That position was addressed in the section under, Does the Commission have jurisdiction over the Complaint? There was Commission discussion regarding the import of the Commission's 9th supplemental order, which is generally referred to as the interconnection docket, and I intend to keep this proceeding narrowed to the greatest extent possible on the specific agreements between the parties. My only other thought on this matter, Ms. Anderl, is if, in fact, the relative agreements between the parties set up some sort of a reasonableness standard as opposed to creating a defined obligation for service quality or for any of the other issues that Mr. Butler is concerned about, that the fact that there may be a reasonableness standard may be relevant to the termination of a request for intervention. Do you have any recollection as to whether or not, in fact, the agreements between the parties address these issues but leave them open to reasonableness? MS. ANDERL: I think I understand. JUDGE BERG: And I'm not really asking you to go back and review the agreements. It's just a general. MR. HARLOW: At some point, I would like to address the petition as well. MS. ANDERL: I don't recall. I'd have to review the agreements. I don't think that that necessarily -- the inclusion of a reasonableness standard necessarily opens the door to all intervenors either. Parties include requirements of reasonableness in private contracts all the time, and that doesn't mean that other people ought to be allowed to come in and say what they think is reasonable. JUDGE BERG: That's good. Thank you. Mr. Harlow, I will give you just a brief chance to comment. I will note for the record that both MCI and Commission staff supported requests for intervention pursuant to the prior pre-hearing conference. It's not necessary for the parties to state their support for the intervention. Mr. Butler has stated his position very well, and I think generally the concern from my perspective would be more to those parties that have objections, but go ahead and say what piece you have. MR. HARLOW: Thank you, your Honor, and I will be brief. We do not want to see this proceeding made into a generic proceeding, per se. MCI does support the intervention however. It believes that while this is not a generic proceeding, per se, since this is really the first proceeding of its kind, it will undoubtedly have precedential value. We have relied not just on statutes or the agreement, but also we've relied heavily on the orders in the interconnection Docket UT-941464, and to the extent that this involves interpretation of the words in that decision or application of those, we note that Tracer was granted party status in that docket as well. The ultimate issue, ultimate determination in this case, we believe, will heavily depend on whether the facilities and practices of U S West are considered fair, just, reasonable, or sufficiently in the public interest, and we think Tracer brings an important part in the public interest to the table here to help us resolve these issues. JUDGE BERG: All right. I'm going to take the request for intervention under advisement at this time, and the request for intervention will be resolved in the pre-hearing conference order that is based upon today's discussions. At this point in time, we'll go off the record to have a discussion regarding the scheduling of discovery between the parties and to also discuss the issues to be addressed in this proceeding. We'll be off the record. (Discussion off the record.) JUDGE BERG: We'll be back on the record. There's been discussion off the record regarding discovery schedule, hearing schedule, and issues to be addressed at hearing pursuant to the discussion among the parties. The following information is stated for the record. Opening testimony by MCI will be filed on February the 13th. In the event that Tracer's petition to intervene is approved and Tracer chooses to file opening testimony, it will also file on February 13th. To the extent that Commission staff intends to file opening testimony, it will file on February 13th. The Commission invokes its rule relating to methods for obtaining data in adjudicative proceedings. That is WAC 480-09-480. This shall provide for the parties to exchange interrogatories, conduct depositions, and make data requests between themselves. The parties are encouraged to use informal discovery, and I need to advise you that responses to Commission staff discovery requests need to be sent directly to counsel for Commission staff. That would be the assistant attorney general, Ms. Smith. Do not send those materials through the Commission secretary. U S West shall file its direct testimony on March 27th. Reply testimony may be filed by MCI, Commission staff, and Tracer -- if it is allowed to intervene -- on April the 24th. If the parties filing reply testimony did not file opening testimony, their reply testimony shall be limited in scope to the direct testimony filed by U S West. U S West shall be allowed to conduct relevant discovery subsequent to the filing of reply testimony. If, in fact, there are any unusual needs for additional discovery, then the parties shall contact the ALJ. Hearings on the complaints shall be conducted at the offices of Commission on the dates of June 1st through June 4th, if necessary. The parties shall file closing briefs in this proceeding. The schedule for filing closing briefs shall be determined at the close of the hearing. In the interim, if a dispute arises over U S West's duty to provide facilities or services to MCI, which may be dispositive on an ad hoc basis, the parties will notify the administrative law judge so this issue can be discussed in a subsequent status conference among the parties. I have also indicated to the parties that I have some concerns regarding whether or not the Commission has the authority to grant all of the relief requested by MCI, and while this does not require any immediate response by the parties, the parties should certainly consider this issue as they conduct discovery and we proceed to the evidentiary hearing. At a minimum, the parties should anticipate that they would be requested to brief that issue in their closing briefs. U S West has requested that a protective order be entered in this proceeding. The request for protective order is granted. It will be patterned after the Docket UT-901029, commonly known as the Electric Lightwave matter. The Commission will enter that order as soon as possible. I'll also remind the parties that protective materials need to be kept segregated upon receipt, and do not distribute anything that is protected material to anyone who has not signed the protective order. Confidential materials should be distributed on a colored paper that clearly indicates that it is of a confidential nature, or it should be clearly marked confidential, if it is some kind of an original document that is not susceptible to copying on colored paper. I haven't looked at the statutory deadline for concluding this matter, but I'm presuming that the dates we have set up are within those bounds. MR. HARLOW: No. The deadline would be 4/24 of '98. JUDGE BERG: All right. It seems then that it would be necessary for the parties to waive that deadline date in order for us to conduct this matter on the time schedule that we've outlined. MS. ANDERL: U S West waives it. MR. HARLOW: Are we waiving it to another specific time period? JUDGE BERG: I would be waiving the deadline to a date sufficient enough for the administrative law judge or the Commission to make a ruling at the conclusion of the hearing. If the hearing was to be concluded on June the 4th, I would imagine that the parties would need two to four weeks to submit briefs and that the Commission would likewise want to have 30 days within which to consider all the evidence at a minimum. I hate to put the ALJ in a box here, but it looks like it would need to be extended minimally to the first week of September and preferably to the middle of September. Now, that's not to say that the Commission is going to give this anything less than a high priority for resolution, but certainly if the parties do spend three or four days presenting a complex evidentiary record and then take 30 days within which to brief the matter, it would only be appropriate that the parties would want the Commission to have adequate time to make a well-reasoned decision. MR. HARLOW: I certainly recommend to MCI that we waive to September 1st of 1998, and I would like to make that subject to check with my client. I'll let you know in 48 hours if I don't get that authority, but otherwise you can assume that we waive. JUDGE BERG: All right. What we'll do is we'll just presume that the statutory deadline has been waived until -- let me take a quick look at the calendar. The statutory deadline is waived to Tuesday, September the 1st. Excuse me, Mr. Harlow, would it make any difference if we did waive that to Friday, September the 4th? MR. HARLOW: I doubt it. JUDGE BERG: All right. MR. HARLOW: We'll make that assumption. JUDGE BERG: Tentatively, the statutory deadline of April 24th, 1998, will be extended to September 4th, 1998. We will take at least 48 hours to issue a pre-hearing conference order in this matter. So that if you were to notify me of any objections by the end of Wednesday, 4:00, Wednesday, October the 22nd, if you find that you're unable to confirm this with your client, you may contact me and let me know, in fact, that you need additional time to confirm that tentative waiver. All right? MR. HARLOW: Yes. That would be fine, thanks. JUDGE BERG: I will do an assessment of the number of original copies, the original and copies that need to be filed with the Commission. I'll just advise the parties to be sure to check the pre-hearing conference order which issues so that they know what their filing obligation is. Ms. Mary Burgess has been present at the pre-hearing conference. Her attendance is upon behalf of AT&T. Ms. Burgess indicates that AT&T may consider filing a petition for intervention in this matter. Ms. Burgess was directed to review both the initial notice of pre-hearing conference as well as the order on pre-hearing conference and the notice of second pre-hearing conference as reference documents for framing any request to intervene that may be made after this date. Is there anything else from parties that we either need to cover or they wish to address on the record? All right. In that case, the pre-hearing conference will be adjourned. Thank you. (Pre-hearing conference adjourned at 11:15 a.m.)