BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



MCI TELECOMMUNICATIONS  ) 
CORPORATION,     ) DOCKET NO. UT-970653
                            ) 
      ) MOTION OF GTE NORTHWEST
  Complainant,   ) INCORPORATED TO DISMISS
      ) 
 v.     ) 
      )
GTE NORTHWEST, INC.    )
      )
  Respondent.   )


 GTE Northwest Incorporated  (“GTE” or “Company”) requests that the Washington 
Utilities and Transportation Commission ("Commission") dismiss the Formal 
Complaint and Petition for Declaratory Order of MCI (“Complaint”).   If the 
Complaint is not dismissed, all allegations will be deemed denied pursuant to 
WAC 480-09-420(9)(a) and 480-09-425(3)(a).  MCI seeks fundamental changes in 
the Commission’s "traditional regulation" approach to setting access charges.  
As GTE has stated in several forums, it also believes that the Commission needs 
to reform the regulatory approach to access charges, but such reform must be in 
the context of a comprehensive rebalancing of all rates and the institution of 
explicit universal service and competitive transition support mechanisms. The 
one-issue approach of MCI’s Complaint would fail to achieve the necessary 
overall reform and would instead contribute to regulatory confusion and effect 
an unlawful taking of GTE’s property.  Moreover, as these issues transcend GTE 
and instead impact the entire telecommunications industry in Washington, a 
complaint procedure is particularly unsuited to their resolution.  While a 
petition for declaratory judgment might be more useful for such a case, the 
best approach is for the Commission to initiate a docket in which it will 
comprehensively reevaluate its policies and accomplish the necessary overall 
rebalancing of GTE’s -- and other local exchange carriers’ -- rates.
REGULATORY REFORM AND RATE REBALANCING
1. MCI’s Complaint contains inaccuracies   For example, it is plainly not 
accurate to imply that GTE "devised" the current access rate structure.  
Complaint at p. 2.  Rather, it was formally created through a Commission 
proceeding several years ago, U-85-23.  It is not true that the Commission has 
taken companies’ claimed costs "as a given" and then set rates to recover such 
amount.  Complaint at p. 6.  Rather, in rate cases the Commission has always 
scrutinized costs for prudency and reasonableness., irrelevancies   It is, for 
example, irrelevant that a company entirely separate from GTE Northwest -- GTE 
Card Services, Inc. d/b/a/ GTE Long Distance -- provides interLATA long 
distance service. Complaint at pp. 2-3. It is also irrelevant that GTE 
Northwest shareholders (i.e., GTE Corporation) might use lawfully received 
dividends to make other investments.  Complaint at p. 2. and half-truths   It 
is true that GTE Long Distance competes in the interLATA toll market, but MCI 
neglects to mention that GTE Long Distance operates as a reseller and incurs 
the same access charges as MCI., but it does touch on the need for a 
fundamental reevaluation of a number of the Commission’s traditional regulatory 
policies and practices. 
2. Since their inception in Docket U-85-23, the Commission has set the access 
charges of GTE and other local exchange carriers on the basis of a separated, 
fully allocated cost approach.   See 18th and 19th Supplemental Orders, Docket 
No. U-85-23; WAC 480-80-047.  MCI’s Complaint calls for a materially different 
approach.
3. The Commission has so far taken the policy position that the costs of the 
local loop shall not be considered a direct cost of local exchange service, but 
rather a shared or common cost  to be, in effect, partially allocated to access 
and toll services.   Washington Utilities and Transportation Commission v. U S 
WEST Communications, Inc., Docket No. UT-950200, Fifteenth Supplemental Order, 
pp. 83-85, 113.  The Hatfield Model proposed by MCI, on the other hand, does 
not treat the local loop as a common cost partially allocable to access and 
toll service.
4. MCI advocates the use of the Hatfield Model, but that very issue is before 
the Commission in its generic costing methodology proceeding.
5. The Commission has long acknowledged its responsibility under constitutional 
and statutory requirements to establish a rate design for regulated 
telecommunications providers that allows them to recover their full actual 
costs.   E.g., UT-950200, Fifteenth Supplemental Order, supra, p. 30.  MCI’s 
single issue, massive revenue reduction proposal would violate these legal 
requirements.
6. As GTE has stated in its testimony in the pending generic cost docket, these 
issues should be addressed in a comprehensive manner:
What is needed is a comprehensive "competition transition proceeding" that 
deals with all relevant and interrelated issues at once. A piecemeal approach 
simply will not do -- it will only result in protracted litigation and 
unnecessary delays to full, fair, economically sound competition.

This comprehensive proceeding should address pricing flexibility, rate 
rebalancing (including access charges), universal service support funding, 
recovery of stranded costs, and wholesale prices for interconnection, unbundled 
network elements and various services.  Such a proceeding should begin 
immediately, although some interim measures might be possible   In the Matter 
of the Pricing Proceeding for Interconnection, Unbundled Network Elements , 
Transport and Termination, and Resale, Docket Nos. UT-960369, -960370, -960371, 
prefiled Direct Testimony of Meade Seaman, pp. 15-17.; an unbalanced plunge in 
access revenues would not, however, be a lawful or appropriate interim measure.
UNSUITABILITY OF THE COMPLAINT PROCESS
7. The complaint process is intended to address allegations of unlawful conduct 
by a given person or company regulated by the Commission.   E.g., "Complaint 
may be made * * * setting forth any act or thing done or omitted to be done by 
any public service corporation in violation, or claimed to be in violation, of 
any provision of law or of any order or rule of the commission."  RCW 
80.04.110(1).
8. While MCI casts many aspersions on GTE’s motives and actions, its ultimate 
assertion is that GTE’s current commission approved access charges are unjust, 
unreasonable, etc. because they are not "cost-based" as MCI would define it.   
MCI’s quarrel is plainly with the Commission’s regulatory policies and 
practices.   E.g., Complaint at pp. 6-8.
9. MCI’s cursory invocation of various statutory provisions does not alter the 
fact that it raises policy issues rather than legitimate allegations of 
violations of law by GTE.   Complaint at pp. 9-10.  While the reasonableness of 
rates issue may be encompassed by RCW 80.04.110, 80.36.080 and 80.36.140, MCI 
wholly fails to make clear the relevance of 80.36.090 (service on demand), 
80.36.130 (published rates to be charged), 80.36.160 (physical connections), 
80.36.186 (pricing or access to noncompetitive services), 80.36.200 and -.220 
(transmission/sending of messages), and 80.36.340 (banded rates).  As such, MCI’
s complaint against an individual member of the telecommunications industry is 
nothing more than an impermissible collateral attack on the Commission’s policy 
decisions in Docket U-85-23.
10. While GTE is also anxious for a timely overall resolution of rate 
rebalancing and related issues, the statutory time limits on processing 
complaints   RCW 80.04.110(3). would be an inappropriate restriction on the 
Commission’s consideration of these issues.
DECLARATORY ORDER PROCEDURE
11. While the declaratory order procedure is somewhat more flexible than the 
complaint process,   WAC 480-09-230. it is still not appropriate for the type 
of comprehensive regulatory reform proceeding the Commission should conduct, 
because MCI’s request for a declaratory order is too narrow.
CONCLUSION
12. MCI’s complaint contains no legitimate allegations of unlawful conduct by 
GTE. Rather, MCI’s grievance is with the Commission’s "traditional regulation" 
policies and practices.  MCI’s Complaint and request for declaratory order does 
not cover the breadth of interrelated issues that the Commission would have to 
resolve before ordering access revenue reductions even approaching the 
magnitude advocated by MCI.  Granting the relief requested by MCI would deprive 
the Commission of the ability to fashion a comprehensive solution and would 
effect an unconstitutional taking of GTE’s property.
WHEREFORE, GTE requests that the Commission dismiss the Complaint.
Date: May 7, 1997.
       GTE NORTHWEST  INC.
                                                                    
       Richard E. Potter
       Timothy J. O’Connell
       Its Attorneys