Agenda Date: August 26, 1998 Item Number: Docket: A-970591 Company Names: Commission Procedural Rules; Enforcement of Interconnection Agreements Staff: Bob Wallis, Review Judge Recommendation: Adopt the proposed WAC 480-09-530 regarding the enforcement of interconnection agreements, with certain changes from the version noticed. Discussion: This proposal would provide a specific process for companies who have entered interconnection agreements to secure enforcement of those agreements. The Subject matter -- the Commission’s procedural rules -- is within the scope of a CR-101 filed August 14, 1997, at WSR 97-17-047, under Docket No. A-970591. Telecommunications interconnection agreements are provided for by federal law, and a process for mediation or Commission arbitration of the agreements is set by federal law. This rule would apply after an interconnection agreement becomes effective, when one party believes that the other is failing to meet its commitments under an agreement. It would provide a process tailored to the setting, in which the requirements of the agreement may be determined, behavior may be examined to see if it is in compliance with the terms of the agreement, and enforcement may be ordered if required by the agreement and the facts of the case. Commission Staff invited interested persons to a workshop on April 29, 1998. Attendees expressed comments both supporting and opposing parts of a Commission Staff proposal. The proposal received only three written comments -- from Worldcom, GST Telecommunications, and GTE. Worldcom and GST voiced support for the proposal but suggested changes; GTE expressed reservations about the proposal, contending that it is not needed, and opposing several parts of it. The following summarizes their concerns and the Commission Staff recommendations. We will not repeat concerns and responses that were voiced at earlier stages unless they are brought forward again. Derogation of ADR provisions GTE contends that the proposal should require enforcement of the ADR provisions in the interconnection agreement subject to Docket A-970591 August 26, 1998 Page 1 enforcement (many interconnection agreements provide for mediation or arbitration of disputes rather than Commission action). Commission Staff disagrees. The Commission, other jurisdictions, and the the federal district court in this context, and the state Supreme court in other contexts, all hold that parties cannot deprive an agency of its lawful jurisdiction via a private agreement. Advance notice of intent to file petition; time for answer. GTE continues to argue that the five-day deadline for filing an answer is insufficient. The rule also requires a ten-day advance notice of the filing of a complaint, so in practice there is a 15-day period to prepare the answer. Coupled with the relationships of the parties and anticipated familiarity with the subjects of the complaints, we believe that no change in rule language is warranted. Worldcom opposes the notice provided for, arguing that respondents already have notice of this type of complaint and that it might chill negotiations. GST, on the other hand, favors the proposal and believes that it will offer incentives for negotiation. On balance, Commission Staff believes that the proposal is likely to promote negotiations and settlement, rather than retard them, and that it facilitates both parties’ preparation for the petition for enforcement. GST also asks the flexibility to avoid the waiver period if there is a particularly exigent circumstance. Commission Staff understands the potential need, but recommends against the change because the Commission already has the power under the procedural rules to make changes where doing so is apporpriate. See, WAC 480-09-010(3) Service of the petition: Worldcom asks that service by mail should be accompanied by provision of an overnight copy, e-mail, or telefacsimile. GST asks that service by electronic means be allowed. Because of the limited time in which to respond to a petition, Commission Staff agrees that requiring same-day or next-day copies is appropriate, and proposes that clarification. However, the Commission cannot order some means of service, as GST requests, because of restrictions on statutory means of service. Amendment of pleadings: GST contends that parties need not be allowed to amend pleadings. GTE, on the other hand, argues for the same degree of opportunity to amend that is available in civil litigation. Staff disagrees with both approaches and asks the Commission to adopt the provision as drafted, which allows less opportunity for amendment than civil rules but does afford limited opportunity for amendment. Although we expect this to be seldom-used, we believe that it is necessary to meet exigent circumstances. Discovery: GST suggests that discovery should be limited to matters directly addressing the facts alleged, and that parties should be allowed to submit discovery requests when they file the petition and the answer. Commission Staff agrees with both suggestions. Discretion will remain with the presiding officer to meet unanticipated circumstances, but the limitation of discovery to matters directly at issue will expedite discovery while providing access to essential information. Allowing discovery requests to be filed with the complaint and answer will expedite responses without prejudicing other aspects of the case, particularly since discovery is within the presiding officer’s discretion. Time for Decision: GST and Worldcom expressed concern that the proposed process does not ensure timely resolution of disputes. Staff believes that the rule adequately balances the interests of the parties to achieve timely resolution of complaints with the Commission’s limited resources and with the requirements of fairness and due process. The time limitation is not a goal, it is a limit. We expect most matters to be concluded in less time than the limit requires. Worldcom also suggests that limitation be placed on the parties’ “submissions,” as a trigger for conclusion of the record, fearing that any party could make any submission at any time and thus extend the deadline. That has not happened in analogous proceedings under the APA in which a similar rule applies. We believe that only “authorized” or countenanced and procedurally appropriate submissions, such as answering briefs, will extend the deadline and do not recommend an amendment. GTE contends that a time limit for entry of the order is inappropriate and that merely requiring action within 21 days after the last hearing or submission is sufficient. Staff disagrees, noting the need for expeditious action in such disagreements and the provisions granting flexibility to extend the time for exigent circumstances prevent a “rush” to judgment that derogates parties’ rights. Good faith negotiations: Worldcom suggests that instead of representing that “the parties” negotiated in good faith, the petitioner need state only that it has negotiated in good faith. This point is well taken and should be accepted. Standards for oral hearings: GTE suggests that the rule adopt standards for deciding whether an oral hearing should be held. We agree that it is appropriate to list elements for consideration, and include some in the draft rule. Statement of authority: GTE recommends that section (8) of the proposal be deleted. Commission Staff earlier agreed with the recommendation on procedural grounds, believes that its inclusion was in error, and again recommends its deletion although Staff continues to believe that the statement is correct. In addition, GTE reiterated its objection that the record should contain the entire interconnection agreement because contracts must be considered as a whole. Staff disagrees, because the petition should focus on areas that give rise to the problem. To the extent other provisions are relevant, they may be raised in and attached to either the complaint or the answer. GTE also repeated its earlier argument against the need for sworn statements supporting the petition and the answer. Staff continues to believe sworn statements are needed, as they provide the factual basis for Commission action and provide assurance that the statements are accurate. Conclusion: Commission Staff recommends that the Commission adopt the rule with changes that are recommended in this memorandum. Draft rule text (New Section) Petitions for Enforcement of Interconnection Agreements 480-09-530 Petitions for Enforcement of Interconnection Agreements. (1) Petitions for enforcement. A telecommunications company that is party to an interconnection agreement with another telecommunications company may petition under this rule for enforcement of the agreement. (a) What the petition must contain. Each petition for enforcement must contain the following elements: (i) Statement of negotiations and remaining dispute. A statement, including specific facts, demonstrating that the parties petitioner engaged in good faith negotiations to resolve the disagreement, and that despite those negotiations the parties failed to resolve the issue. (ii) Copy of the agreement. A copy of the provision of the interconnection agreement that the petitioner contends is not being complied with. (iii) Statement of Facts. A description of facts demonstrating failure to comply with the agreement. The description must be supported by one or more affidavits, declarations or other sworn statements, made by persons having personal knowledge of the relevant facts. (b) How to serve the petition. The petitioner must serve the petition for enforcement on the responding party on the same day the petition is filed with the Commission. For purposes of this section, service must be effected on (i) the responding party’s authorized representative, attorney of record or designated agent for service of process; (ii) the responding party’s representatives with whom the petitioner conducted the negotiations addressed in paragraph (1)(a)(i); and (iii) all parties designated in the interconnection agreement to receive notices. If the petitioner chooses to serve the respondent by mail or parcel delivery service, it must deliver a copy of the petition for enforcement and all supporting documents must be faxed or hand-delivered by hand delivery, telefacsimile, or electronic mail to the responding party’s attorney of record, or if the party has no attorney, to the responding party, on the same day as filed with the commission. (c) Prior notice required. At least 10 days prior to filing a petition for enforcement at the commission, the petitioner must give written notice to the respondent that the petitioner intends to file a petition for enforcement. The notice must identify the contract provision the petitioner alleges was violated, and the exact behavior or failure to act that petitioner alleges violates the agreement. Service of the written notice must be accomplished in the same manner as set forth in paragraph(1)(b) of this section. The petitioner must include a copy of this notice with its petition. (2) Answering a petition. The respondent may answer the petition. The respondent waives the opportunity to present any matter that is not raised in the answer, except that the answer may be amended under subsection (3) of this rule. (a) Contents of the answer. The answer to a petition for enforcement must respond to each allegation of failure to comply with the terms of the interconnection agreement, stating relevant facts. Any facts relied upon must be supported by affidavits, declarations or other sworn statements by persons having personal knowledge of the facts. (b) Filing and service of the answer. The respondent must file the answer with the commission and serve it on the petitioner within five business days after service of the petition for enforcement. Service must be accomplished so that a copy of the response to the petition for enforcement and all supporting documents must reach the petitioner’s attorney, or the person who signed the petition, if petitioner has no attorney, on the same day the answer is filed with the Commission. If the respondent chooses to serve the petitioner by mail, a copy of the petition for enforcement and all supporting documents must be delivered to the person identified above on the same day as filed with the commission. (3) Amendment of petition and answer. In the discretion of the presiding officer, for good cause shown, and to avoid substantial prejudice to the responding party that is not caused by the fault of the responding party, the responding party may amend its answer to the petition. In the discretion of the presiding officer, either party may amend its petition or answer to conform to the evidence presented during the proceeding. In determining whether to permit amendment of the petition or answer to conform to the evidence, the presiding officer may refer to, but is not bound by, Civil Rule 15(b). (4) Prehearing conference. The commission will conduct a prehearing conference regarding each petition that is filed for enforcement of an interconnection agreement. (a) Schedule; mandatory attendance. The presiding officer will within ten days after the petition is filed schedule a prehearing conference. Both the petitioner and the respondent must attend the prehearing conference. At the discretion of the presiding officer, the prehearing conference may be conducted by telephone. (b) Procedural determination. At the prehearing conference, the presiding officer will determine, based on the petition and the answer, together with all supporting documents filed by the parties and the parties’ oral statements, whether the issues raised in the petition can be determined on the pleadings and submissions, without further proceedings. In determining whether to schedule an oral enforcement hearing session, the presiding officer will consider, but is not limited to considering, the preferences of the parties and the reasons they advance, the need to clarify statements by means of asking questions, whether the issues are largely factual, largely legal, or involve questions of fact and law, the apparent complexity of facts and issues, the need for speedy resolution, and the completeness of the information presented. The presiding officer may ask the parties to submit written briefs on the issues of the petition. (c) Means of obtaining additional information. If the presiding officer determines that further proceedings are necessary, the presiding officer will establish a schedule for receiving additional facts or evidence and may, in the discretion of the presiding officer, schedule an enforcement hearing session to explore the facts and issues raised in the petition and the answer. If shown to be essential to the requesting party, the presiding officer may, in his or her discretion, allow discovery of facts relating to matters directly at issue pursuant to WAC 480-09-480. The party filing the complaint or answer may file with the complaint or answer a request for discovery, stating specifically the matters to be inquired into and their relationship to matters directly at issue. To comply with the time lines of this rule, the presiding officer may alter the discovery time lines in WAC 480-09-480. (5) Appointment and powers of the presiding officer; recommended or final decision. The commission will appoint an administrative law judge to preside over the proceeding. The commissioners may, in their discretion, preside over the enforcement proceeding. (a) Presiding officer discretion. In any proceeding to enforce the provisions of an interconnection agreement, the presiding officer has broad discretion to conduct the proceeding in a manner that best suits the nature of the petition, including, but not limited to, converting the proceeding into a complaint proceeding under RCW 80.04.110. The presiding officer may limit the record in the enforcement proceeding to written submissions or may schedule an enforcement hearing session. The presiding officer may limit the number of exhibits and witnesses and the time for their presentation. (b) Conclusion of proceeding. The enforcement proceeding concludes when the presiding officer has sufficient information to resolve the issues. The presiding officer shall serve a recommended decision on the parties within 75 days of the date the petition for enforcement was filed, or 21 days after the last hearing session or submission, whichever is later. The recommended decision is subject to the approval of the commission. If the commission presides over the enforcement proceeding, it may serve a final decision within the time requirements applicable to recommended decisions. (6) Review of the recommended decision. After the presiding officer serves the recommended decision, the commission will hear the arguments or comments of the parties regarding the recommended decision at a regular or special open public meeting. The parties may submit written comments to the commission prior to the meeting on a schedule established in the initial order. The commission may, in its discretion, request a presentation at the meeting from commission staff. The commission will conduct this session within 10 days after the date of the recommended decision, or as soon thereafter as the commissioners’ schedules permit. (7) Commission decision on Petition for Enforcement (a) Extent of commission discretion. The commission will serve a final decision on the parties, in the form of a commission order, resolving the issues. The commission may adopt, modify or reject all or part of the recommended decision. (b) Time of service of order. The commission will serve its order on the petition for enforcement no later than 90 days of the date the petition is filed or 15 days after the meeting at which it reviews the recommended decision, whichever is later. The commission may extend this time for lack of resources or for other good cause. (c) Petition for reconsideration. Within 10 days after the commission serves its order on the petition for enforcement, the parties may petition for reconsideration. A petition for reconsideration is denied unless the commission by separate decision grants it within 10 days after the petition for reconsideration is filed, or such longer time established by the commission secretary. If a party files a petition for reconsideration, the commission may, in its discretion, request that an answer be filed or call for additional comments, briefing, evidence, or argument from the parties. Filing a petition for reconsideration of the order does not stay the effect of the order. (d) Failure to comply with the order. Any party who fails to comply with the terms of the Commission’s final order on petition for enforcement is subject to penalties under RCW 80.04.380 and any other penalties or sanctions as provided by law. A company against whom a penalty is assessed may challenge the penalty or the facts on which it is based, or seek mitigation of the penalty, pursuant to pertinent law and commission rules. (8) Nature of the proceeding. Because the commission is exercising authority consistent with federal law when resolving disputes involving interconnection agreements, the proceeding is in the nature of an arbitration and is not an adjudicative proceeding under the Washington Administrative Procedure Act, chapter 34.05 RCW.