BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



In the Matter of Determining Costs for Universal Service	)
	)
	)
	)
	)
	)
	)
	)	
		DOCKET NO.  UT-980311(a)
		
		U S WEST COMMUNICATIONS’ RESPONSE TO MOTION FOR CLARIFICATION OF THIRD 
SUPPLEMENTAL ORDER

  U S WEST Communications (“U S WEST”) submits its response to the Motion by 
WUTC Staff for clarification of the Third Supplemental Order.
 U S WEST disagrees that, after having its request for clarification of the 
Prehearing Conference Order on the proper scope of this phase of the proceeding 
granted by the ALJ, that the relief the Staff seeks is actually either 
clarification or necessary.  In fact, the Staff appears to be asking the 
Commission to reverse itself on the determination it made in response to the 
Staff’s Motion to Remove, by effectively restricting itself against using the 
information that was the subject of the prior motion, for the purpose of 
entering findings of fact on issues that are clearly part of this phase, such 
as the size of the Universal Service Fund.  U S WEST submits that the 
Commission has ruled on the motion, it has denied the motion, and the Staff’s 
attempt to achieve indirectly what it did not achieve directly, should be 
rejected.
 In one sense, the Staff’s motion betrays confusion about the proper roles of 
the adjudicative and rulemaking phases of this docket.  To that extent, further 
delineation of these roles by the Commission would be welcome.  However, the 
relief the staff seeks, that any evidence in specific categories would be 
deemed admissible for illustrative purposes only, should not be granted.  
Specifically, the Commission should not determine that evidence on the ultimate 
question of what the benchmark will be or exactly how many lines will be 
supported, should be admitted for illustrative purposes only.  
 There is an issue in this docket of whether the benchmark shall be revenue 
based or cost based.  That issue requires an analysis and construction of the 
statute, which is part of the proper role of adjudication.  The issue of how 
many lines will be supported involves the factual, cost-based issues of what do 
specific kinds of lines cost to provide, and how many are there, and in what 
locations they are.  Evidence should be received on these issues, without 
limitation on purpose.
 The staff’s motion confuses issues of timing of determinations between the two 
phases of the docket and use of determinations in one phase as inputs to the 
other, with issues of the proper scope of the phases.  Clearly the size of the 
fund which is an expected product of this phase of the docket, requires factual 
inputs in a number of areas, in order for the Commission to make the 
determination.  Some of these are cost based, and should themselves be decided 
in the adjudicative phase.  Examples include the determination of the 
methodology to measure cost, the inputs to measure cost, and the scope of the 
area over which cost should be measured to determine if the area is “high 
cost.”  
 Some of these inputs are policy issues, and may appropriately be determined in 
the rulemaking phase. Such issues may include the appropriate level of the 
benchmark (although some determination based on facts such as average cost or 
revenue may even be needed for this decision), whether it is determined to be a 
revenue or a cost based benchmark, and other issues such as whether and to what 
extent existing revenue streams of some providers of basic service should be 
used to reduce the difference between cost and benchmark.  There may be a need 
for the rulemaking phase to make decisions on these latter issues and for there 
to be a mechanism for those decisions to be reflected in evidence in the 
adjudicative phase, so that the “product” of this phase can be completed 
properly.  This does not require that evidence be admitted for a limited, 
illustrative purpose.  
CONCLUSION
 Based on the preceding argument, the Motion of the Staff that seeks an order 
determining that certain types of evidence will be admissible for a limited, 
illustrative purpose, should be denied.  U S WEST has no objection to any 
additional clarification by the Commission of its Third Supplemental Order.
 Respectfully submitted this 13th day of August, 1998.
      U S WEST COMMUNICATIONS, INC.

      ________________________________
      Lisa A. Anderl, WSBA No. 13236
      Senior Attorney


      LAW OFFICES OF DOUGLAS N. OWENS


      ________________________________
      Douglas N. Owens, WSBA No. 641
      Of Attorneys for U S WEST Communications