BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION


In the Matter of the Pricing Proceeding )
for Interconnection, Unbundled Elements ) DOCKET NO. UT-960369
Transport and Termination, and Resale )
) 
)
In the Matter of the Pricing Proceeding )
for Interconnection, Unbundled Elements ) DOCKET NO. UT-960370
Transport and Termination, and Resale )
for U S WEST COMMUNICATIONS, INC. )
) 
)
In the Matter of the Pricing Proceeding ) DOCKET NO. UT-960371
for Interconnection, Unbundled Elements )
Transport and Termination, and Resale ) NEXTLINK/TCG MOTION
for GTE NORTHWEST INCORPORATED ) FOR RECONSIDERATION OF
) ELEVENTH SUPPLEMENTAL ORDER
) OR ALTERNATIVELY FOR PARTIAL
) SUMMARY DISPOSITION


 NEXTLINK Washington, Inc. ("NEXTLINK") and TCG Seattle ("TCG")      To avoid 
confusion and because TCG Seattle remains the registered entity in Washington, 
"TCG Seattle" or "TCG" will be used to refer to this Party, rather than "AT&T 
Local Services on behalf of TCG Seattle" as indicated in prior pleadings. 
respectfully move that the Commission reconsider those portions of its Eleventh 
Supplemental Order in the above-captioned proceeding striking the Direct 
Testimony of Douglas Sobieski on behalf of NEXTLINK and attached Exhibits 
("NEXTLINK Testimony) and limiting the evidence that may be presented on 
whether cost estimates proposed by U S WEST Communications, Inc. ("U S WEST") 
and GTE Northwest Incorporated ("GTE") comply with federal law.  In the 
alternative, NEXTLINK and TCG move for partial summary disposition pursuant to 
WAC 480-09-426 that U S WEST has failed to satisfy its burden to prove the 
nature and magnitude of the collocation costs it seeks to recover and thus 
cannot demonstrate that any rates based on these costs would be just, 
reasonable, and nondiscriminatory in compliance with 47 U.S.C. § 251(c)(6), 
entitling NEXTLINK and TCG to judgment as a matter of law that the "interim" 
collocation rates in their arbitrated interconnection agreements will remain in 
place throughout the term of their respective agreements.
BACKGROUND
 The Telecommunications Act of 1996 ("Act") requires incumbent local exchange 
companies ("ILECs") to negotiate, and if necessary to arbitrate, agreements 
with any requesting competing local exchange carrier ("CLEC") for access to, 
and interconnection with, their networks, including the rates at which such 
access and interconnection will be provided. 47 U.S.C. § 251-52.  The 
Commission established this consolidated proceeding "to derive an accepted cost 
methodology and to establish prices or price ranges for use in pending and 
future arbitrations."  Order Instituting Investigations at 3.  The Commission 
"expected that those prices or price ranges will be applied in future 
arbitrations, and that parties will reform their contracts to adopt the 
Commission-approved prices."  Id.  NEXTLINK and TCG Seattle have the same 
interconnection agreement with U S WEST, which was the result of an arbitration 
before the Commission in Docket No. UT-960326 and includes interim rates for 
collocation in U S WEST central offices.  
 Following hearings in Phase I of these proceedings, the Commission established 
a costing methodology and costs for several unbundled network elements but did 
not establish costs for collocation.  Rather, the Commission required U S WEST 
and GTE to provide testimony in Phase II demonstrating that their cost 
estimates comply with the FCC's order in In re LECs' Rates, Terms, and 
Conditions for Expanded Interconnection Through Physical Collocation, CC Docket 
No. 93-162, FCC 97-208, Second Report and Order (June 13, 1997) ("Physical 
Collocation Order"), and directed Parties to address whether ILECs should allow 
CLECs to self-provision collocation site preparation and/or cap collocation 
prices at market rates.  Eighth Supp. Order ¶¶ 411-19.  The NEXTLINK Testimony 
was submitted pursuant to this second directive and included proposals for 
market rate caps based on price quotes NEXTLINK obtained from third party 
contractors and vendors.  On July 22, 1998, U S WEST filed a motion to strike 
this testimony, to which NEXTLINK and TCG responded on July 29, 1998.
 The Commission entered its Eleventh Supplemental Order on August 10, 1998, in 
which it granted U S WEST's motion, characterizing the NEXTLINK Testimony as a 
cost study that cannot be considered in this phase of the proceeding.  The 
Commission nevertheless required U S WEST to produce information about its 
collocation costs in response to NEXTLINK's data requests, but the order 
further provided that testimony concerning ILECs' cost studies is limited to 
whether those studies comply with the Physical Collocation Order.  The 
Commission also revised the Issues List for Phase II to restate one of the 
collocation issues, apparently making consideration of a market price cap on 
ILEC collocation rates contingent on a Commission decision not to fully allow 
CLECs to self-provision collocation site preparation.
DISCUSSION
 A. The Commission Should Reconsider the Eleventh Supplemental Order's Decision 
to Strike the NEXTLINK Testimony and to Restrict Evaluation of ILEC Cost 
Studies and Collocation Issues.

 The Eleventh Supplemental Order severely restricts Parties' ability to develop 
the factual record necessary to ensure that collocation rates established by 
the Commission in this proceeding comply with the requirements of the Act and 
the FCC.  The Eleventh Supplemental Order strikes the NEXTLINK Testimony as a 
"cost study," even though that testimony develops prices from contractor quotes 
without any attempt to estimate an ILEC's costs.  That order also unduly 
hampers Parties' ability to address whether the ILECs' proposed collocation 
rates comply with the Act by allowing testimony only on whether the cost 
studies are consistent with the FCC's Physical Collocation Order.  Finally, the 
order restates issue IX-3 in a form that appears to make consideration of 
market price cap issues contingent on whether the Commission fully allows 
requesting carriers to self-provision collocation site preparation.  These 
decisions in the Eleventh Supplemental Order should be reconsidered and 
modified to allow the Parties the opportunity to provide the Commission with 
sufficient evidence to establish collocation rates that are just, reasonable, 
and nondiscriminatory.

  1. The NEXTLINK Testimony Develops Market Prices for Collocation and Is Not a 
Cost Study.

 The Eleventh Supplemental Order states that the NEXTLINK Testimony "seeks to 
establish a prevailing market price for the purpose of capping ILEC charges . . 
. [but] the testimony does so in the form of a cost study."  Eleventh 
Supplemental Order at 4.  This statement is logically inconsistent.  A cost 
study estimates the costs a regulated company incurs to provide a service or 
facility on which the regulator bases the price the company may charge 
customers for that service or facility.  Mr. Sobieski, in sharp contrast, 
attempted to determine the prices that nonregulated companies would charge 
NEXTLINK as a customer for collocation site preparation in an ILEC central 
office.  Mr. Sobieski expressly states that the prices he obtained from 
contractor quotes are not equivalent to, nor an attempt to represent, an 
estimate of U S WEST's or any other ILEC's costs.  NEXTLINK Testimony at 17.  
To the contrary, those prices represent contractors' costs, overhead, and 
profit -- without any disaggregation of these amounts -- not ILEC costs to 
which overhead and profit have yet to be added.  
 Neither Commission rules nor prior orders in this proceeding define "cost 
study," and the Eleventh Supplemental Order does not explain how or why the 
Commission reached the conclusion that the NEXTLINK testimony is a "cost study" 
when that testimony does not estimate an ILEC's costs for ratemaking purposes.  
Nor does the Commission explain how a party could introduce any evidence on the 
market prices for collocation construction and facilities if a party cannot 
obtain quotes from the contractors and vendors who provide that construction 
and those facilities, as Mr. Sobieski has done.  Collocation is not a 
commodity, and the only way to obtain a market price is to describe to a 
contractor the activities and equipment that are required and ask the 
contractor how much it would charge to undertake those activities and provide 
that equipment.  Market price surrogates for these activities and equipment may 
exist, such as the R.S. Means Cost Data, but such surrogates represent only 
indirect evidence of market price and would have to be compiled into 
collocation elements --just as Mr. Sobieski has done with individual contractor 
quotes -- rendering use of such surrogates just as objectionable from the 
Commission's apparent perspective.
 The Eleventh Supplemental Order denies NEXTLINK and other Parties the 
opportunity to provide any evidence on the market rates for the construction 
and facilities used to provide collocation site preparation in an ILEC central 
office, while at the same time stating that consideration of such market rates 
-- including how they are determined -- will be at issue in this proceeding.  
Such a Catch-22 not only is a classic violation of due process but will prevent 
the Commission from establishing collocation rates that comply with federal 
law. Accordingly, the Commission should reconsider its decision to strike the 
NEXTLINK Testimony and should allow that testimony to be received.
  2. Evaluation of the ILEC Cost Studies Should Not Be Limited to Whether Those 
Studies Comply With the FCC Collocation Order.

 The Eleventh Supplemental Order provides that "to the extent NEXTLINK desires 
to criticize the ILEC studies for failing to comply with the FCC [Physical 
Collocation] order, it can do so by identifying deficiencies and suggesting 
remedies when it files its response to the ILEC assertion that the studies 
comply with the FCC order."  Eleventh Supp. Order at 4. Consistency with the 
Physical Collocation Order, however, is not equivalent to compliance with the 
Act, which is more demanding than the standards used in the Physical 
Collocation Order.  That order, for example, evaluates ILEC tariff rates 
pursuant to 47 U.S.C. § 201(b) to ensure that those rates are "just and 
reasonable" and based on the ILEC's actual costs.  See Physical Collocation 
Order ¶ 21.  The Act, on the other hand, requires that collocation rates are 
"just, reasonable, and nondiscriminatory" as mandated in 47 U.S.C. § 251(c)(6), 
including the requirement that underlying costs be based on a forward-looking 
methodology, not actual costs.  See 47 U.S.C. § 252(d)(1); In re Implementation 
of the Local Competition Provisions in the Telecommunications Act of 1996, CC 
Docket No. 96-98, FCC 96-325, First Report and Order ¶¶ 628-29 (Aug. 8, 1996) 
("Local Competition Order").  The Commission in this proceeding, therefore, 
must ensure that collocation rates comply with these standards, not just the 
Physical Collocation Order.
 The Eleventh Supplemental Order thus unduly limits Parties' ability to address 
the ILECs' compliance with the Act and the Local Competition Order, apparently 
because costs issues were supposed to have been addressed in Phase I.  
Insufficient evidence was admitted into the record in Phase I, however, to 
enable the Commission to find that the ILECs' cost estimates can form the basis 
of rates consistent with the Act and FCC requirements.  See NEXTLINK/TCG 
Opposition to U S WEST Motion to Strike Testimony at 3-7.  Neither U S WEST nor 
GTE provided any testimony to address the issue of whether their collocation 
cost estimates comply with the Act.  U S WEST, moreover, did not even provide a 
witness with personal knowledge to sponsor its collocation cost study, not only 
rendering that study unreliable hearsay but effectively denying NEXTLINK and 
TCG their right to cross-examine the assumptions, calculations, and estimates 
in that study.  Id. at 5-6; see, e.g., Beyene v. Coleman Security Servs., Inc., 
854 F.2d 1179, 1182-83 (9th Cir. 1988) (documents authored by others cannot be 
authenticated by an affiant without personal knowledge of the facts and such 
documents constitute inadmissible hearsay).  The only testimony on the 
reasonableness of U S WEST's collocation cost study was the uncontradicted 
evaluation by Mr. Montgomery that the resulting cost estimates are excessive 
and discriminatory.  Ex. 102 (TCG Montgomery Direct) at 47.
 U S WEST and GTE have not proven, nor can they prove based on the evidence of 
record, that their collocation cost estimates satisfy TELRIC principles or that 
the collocation costs the ILECs seek to impose on CLECs are nondiscriminatory, 
i.e., are no higher than the costs the ILECs incur to locate, provide power to, 
and condition their own transmission equipment and to connect that equipment to 
the rest of their network.  The Commission thus cannot rely on the ILECs' cost 
studies to establish rates in this proceeding if the Commission precludes 
Parties from addressing the ILEC cost studies' compliance with the Act and the 
Local Competition Order, as well as the Physical Collocation Order.  
Accordingly, the Commission at a minimum should reconsider its limitation on 
testimony addressing ILEC cost studies and should authorize Parties to address 
any failure of those studies to comply with the Act or FCC requirements.  The 
Commission more appropriately should reconsider its decision in paragraph 416 
of the Eighth Supplemental Order and initiate a separate collocation proceeding 
or phase of this docket in which U S WEST and GTE would be required to provide 
direct evidence sufficient to make a prima facie showing that their collocation 
cost estimates comply with federal law.  Such a showing is a prerequisite to 
any obligation of other Parties to produce their own evidence and would enable 
those Parties to respond to the ILECs' actual case, rather than to speculate on 
how the ILECs would have supported their position had the ILECs provided 
sufficient evidence.
  3. Market Price Caps Should Apply Regardless of Whether the Commission Fully 
Requires ILECs to Allow Self-Provisioning.

 The Eleventh Supplemental Order restates issue IX-3 in the Commission's Issues 
List, which formerly stated, "Should the Commission cap ILEC collocation 
charges at prevailing market rates, and if so, how should those rates be 
determined?"  The restatement divides this issue into two parts, with 3a 
providing "To what extent should the Commission require ILECs to allow 
self-provisioning?," and 3b stating, "If the Commission does not fully require 
ILECs to allow self-provisioning, should the Commission cap collocation charges 
at prevailing market rates?"  Eleventh Supp. Order at 4.  The Eleventh 
Supplemental Order offers no explanation for this change, which has two 
problematic results:  (1) Issue IX-3a now duplicates issue IX-6; and (2) the 
issue of the use of a market price cap on collocation rates appears to arise 
only if the Commission does not require ILECs to allow CLECs fully to 
self-provision collocation site preparation.
 Self-provisioning and market price caps are separate issues and are not 
mutually exclusive.  The FCC expressly requires ILECs to "permit a collocating 
telecommunications carrier to subcontract the construction of physical 
collocation arrangements," 47 C.F.R. § 51.323(j), and such subcontracting or 
self-provisioning enables a CLEC to control not just the amount it pays for 
collocation but the timing and quality of collocation site preparation. A 
market price cap ensures that an ILEC does not charge a CLEC any more for 
collocation site preparation than other providers would charge.  A CLEC thus 
may opt for self-provisioning for non-financial reasons, even if a market price 
cap is in place; conversely, a CLEC may have no interest in self-provisioning 
and should not be forced to do so to avoid paying an ILEC's excessive rates.  
The Eleventh Supplemental Order's revision of this issue, moreover, may 
eliminate the duplication between issue IX-3 and 4, but it creates a 
duplication between issues IX-3a and 6.  The Eleventh Supplemental Order's 
modification of Issue IX-3, therefore, is confusing and unduly restrictive.  
Accordingly, the Commission should reconsider this modification to the Issues 
List and either should not amend that list at all, or should eliminate the 
duplication between issues IX-3 and 4 by deleting from issue 3 the phrase "and 
if so, how should those rates be determined."
 B. If the Eleventh Supplemental Order Is Not Modified, the Commission Should 
Grant Summary Disposition Refusing to Modify the Interim U S WEST Collocation 
Rates in Previously Arbitrated Agreements.

 The Eleventh Supplemental Order prohibits NEXTLINK and any other Party from 
introducing evidence on the market prices for collocation in Washington.  That 
order also precludes all Parties from providing any further evidence on whether 
U S WEST's collocation cost study complies with the Act and the Local 
Competition Order, despite the fact that insufficient record evidence currently 
exists to support a finding that any rates based on those cost estimates would 
be consistent with federal law.  If the Commission denies reconsideration of 
that order, therefore, the Commission cannot establish just, reasonable, and 
nondiscriminatory collocation rates in this proceeding and should enter an 
order to that effect.
 The Act requires U S WEST to provide collocation to requesting carriers "on 
rates, terms, and conditions that are just, reasonable, and 
nondiscriminatory."  47 U.S.C. § 251(c)(6).  The FCC has interpreted this 
phrase to mean, "at a minimum, that whatever those terms and conditions are, 
they must be offered equally to all requesting carriers, and where applicable, 
they must be equal to the terms and conditions under which the incumbent LEC 
provisions such elements to itself," and must "provide an efficient competitor 
with a meaningful opportunity to compete."  Local Competition Order ¶ 315; 
accord id. ¶¶ 218 & 629.  The ILEC bears the burden to "prove to the state 
commission the nature and magnitude of any forward-looking cost that it seeks 
to recover in the prices of interconnection and unbundled network elements."  
Local Competition Order ¶ 680.  "[T]he ultimate burden of proof with respect to 
factual issues remains at all times with the [ILEC], even if no party opposes" 
the ILEC's filings.  In re Application of Ameritech Michigan Pursuant to 
Section 271, CC Docket No. 97-137, FCC 97-298, Memorandum Opinion and Order ¶ 
43 (Aug. 19, 1997); accord, e.g., Emerick v. Bush, 36 Wn.2d 759, 762-63, 220 
P.2d 340 (1950) ("the lack of affirmative proof of a vital fact may not be 
cured by the opposing litigant's failure to prove the negative thereof").
 U S WEST has not even approached providing the evidence necessary to prove 
that its collocation cost estimates could be used to establish just, 
reasonable, and nondiscriminatory rates.  U S WEST offered no evidence to prove 
that its collocation cost assumptions, calculations, and estimates are 
accurate, just, and reasonable, nor did U S WEST offer any evidence in response 
to Mr. Montgomery's testimony that U S WEST's collocation cost estimates are 
excessive.  U S WEST also offered no evidence to demonstrate that the costs it 
seeks to impose on collocating CLECs are no greater than, and are calculated 
consistently with, the costs U S WEST incurs to locate, provide power to, and 
condition its own transmission equipment in its central offices and to connect 
that equipment with the rest of its network.  The sole evidence U S WEST 
offered to support its collocation cost estimates was a cost study, attached 
without explanation along with several other cost studies, to the testimony of 
a witness who had no demonstrated connection with, or personal knowledge of, 
the collocation cost study's calculations or underlying assumptions.  See Tr. 
at 1868-69, 1886-90 & 1892-93 (USWC Reynolds Cross); Ex. 102 (TCG Montgomery 
Direct) at 47; Ex. 114 (Reynolds Direct) at 33-34; Ex. C-115 (USWC Cost 
Studies); NEXTLINK/TCG Opposition to U S WEST Motion to Strike at 3-7.
 The record evidence demonstrates that U S WEST has failed to carry its burden 
under the Act to prove the nature and magnitude of the collocation costs it 
seeks to impose on competing carriers or that any rates based on those costs 
would be just, reasonable, and nondiscriminatory.  If the Commission adheres to 
the Eleventh Supplemental Order's decisions restricting Parties' ability to 
provide further evidence on collocation costs and market prices, therefore, 
NEXTLINK and TCG are entitled to judgment as a matter of law that the 
Commission cannot and will not establish collocation rates in this proceeding, 
and that the collocation rates in the existing interconnection agreements 
between these Parties and U S WEST will remain unchanged for the remaining 
terms of those agreements.
REQUEST FOR RELIEF
 Based on the foregoing, NEXTLINK and TCG request the following relief:
 (1) That the Commission reconsider its decision to strike the NEXTLINK 
Testimony and allow that testimony to be received into evidence and considered 
by the Commission;
 (2) That the Commission reconsider its decision to limit criticism of ILEC 
cost studies based only on the FCC Physical Collocation Order and allow Parties 
to introduce testimony that addresses any and all deficiencies in the 
collocation cost estimates proposed by the ILECs;
 (3) That the Commission reconsider its decision to restate issue IX-3 and 
either not restate that issue or limit any restatement to deleting the phrase, 
"and if so, how should those rates be determined";
 (4) In the alternative, that the Commission find that U S WEST has failed to 
carry its burden to prove the nature and magnitude of its proposed collocation 
costs or to prove that any rates based on these proposed costs would be just, 
reasonable, and nondiscriminatory in compliance with federal law, and 
accordingly that the collocation rates established in the arbitrated agreements 

 between U S WEST and other carriers will not be modified for the remaining 
terms of those agreements.
 DATED this _____ day of August, 1998.

      DAVIS WRIGHT TREMAINE LLP
            Attorneys for NEXTLINK Washington, Inc., and TCG Seattle
    



      By        
       Gregory J. Kopta
       WSBA No. 20519