June 12, 1998



VIA FACSIMILE (360) 586-1150
ORIGINAL VIA FEDEX

Carole J. Washburn, Secretary
Washington Utilities and
 Transportation Commission
1300 S. Evergreen Park Dr. S.W.
P.O. Box 47250
Olympia, WA  98504-7250

 Re: Universal Service/Access Charge Reform, Docket No. UT-970325

Dear Ms. Washburn:

 TCG Seattle ("TCG") provides the following comments in the above-referenced 
docket in response to the Commission's Opportunity to Submit Written Comments 
on Proposed Rule (June 12, 1998).  TCG applauds the intent of the proposed rule 
to move toward the “a minute is a minute” concept.  However, TCG has 
substantial concerns about the means by which the proposed rule would implement 
that reform.  TCG communicated these concerns informally to staff earlier in 
the rulemaking process, but the proposed rule has remained essentially 
unchanged.  TCG, therefore, is taking this opportunity to provide formal 
comments to the Commission.

 The proposed rule links terminating switched access rates to the rates charged 
for local interconnection.  Yet the Commission has approved interconnection 
agreements that require compensation for the exchange of local traffic not only 
through explicit compensation but also through bill and keep arrangements.  The 
rule thus requires a LEC to set its access charges either at the LEC's lowest 
rate for local interconnection established through negotiation or arbitrationor 
at "cost" for carriers with only bill and keep compensation.  The proposed rule 
poses problems for CLECs under either scenario.

 First, rates for explicit compensation for the exchange of local traffic 
generally are reciprocal and based on the ILEC's costs.  Thus, a CLEC's 
reciprocal local interconnection rate with GTE, for example, may be higher than 
the CLEC's reciprocal local rate with U S WEST.  If the proposed rule requires 
the CLEC to set a statewide terminating access rate at its U S WEST local rate, 
GTE would pay less to the CLEC to terminate its interexchange traffic than to 
terminate its local traffic.  The proposed rule, therefore, should be modified 
to allow LECs to charge different terminating access rates in the different 
incumbent LECs’ service territories.  

 Second, under the proposed rule, CLECs with bill and keep arrangements must 
file cost studies to support their access rates.  This requirement, which is 
both expensive and unnecessary for CLECs, is entirely inconsistent with the 
"minimal regulation" to which CLECs (like TCG) are subject when classified as 
competitive.  See RCW 80.36.320(2).  Such carriers may file price lists, rather 
than tariffs, and have been granted waivers of various regulatory requirements, 
including the type of rate of return regulation the proposed rule seems to 
contemplate.  See, e.g., In re Petition of TCG Seattle, Docket No. UT-941204, 
Order Granting Petition (June 30, 1995).

 Proposed sections (4) and (5) apparently are included to eliminate this cost 
study requirement for CLECs that are "small businesses."  However, many CLECs 
may not be "small businesses" as defined by the statute.  These sections of the 
proposed rule, therefore, do not serve the purpose for which they were 
included.  The proposed rule, therefore, should be revised to exempt 
competitively classified carriers from the requirement to file cost studies.

 Please contact me if you have any questions about these comments or if you 
need any additional information.  I am the contact person for TCG for this 
rulemaking.

      Sincerely yours,

      


      Karen Notsund
      Regulatory Director, Western Region
      Voice: 925.949.0620
      Facsimile: 925.949.0658
      E-mail: notsunk@tcg.com