BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Pricing proceeding for Interconnection, Unbundled Elements, Transport and Termination, and Resale .......................................................................... …. In the Matter of the Pricing Proceeding for Interconnection, Unbundled Elements, Transport and Termination, and Resale for U S WEST COMMUNICATIONS, INC. ………………………………………………….. In the matter of the Pricing Proceeding for Interconnection, Unbundled Elements, Transport and Termination, and Resale for GTE NORTHWEST INCORPORATED ) ) ) ) ) ) ) ) ) ) ) ) ) ) PHASE II DOCKET NOS. UT-960369, UT-960370, UT-960371 U S WEST’S ANSWER TO NEXTLINK/TCG MOTION FOR RECONSIDERATION OR PARTIAL SUMMARY DISPOSITION U S WEST Communications, Inc. (U S WEST) hereby files its Answer to Motion for Reconsideration of the Eleventh Supplemental Order or Alternatively for Partial Summary Disposition filed by NEXTLINK and TCG Seattle on August 18, 1998. (The moving parties will hereafter be referred to as Nextlink/TCG.) This answer is filed pursuant to the Commission’s notice of September 2, 1998. U S WEST opposes both motions, as set forth herein. The Eleventh Supplemental Order properly determined to strike the testimony of Douglas Sobieski as an improperly filed and untimely cost study. No reconsideration of that order is necessary. Further, there is no basis for granting summary disposition as requested by NEXTLINK/TCG. U S WEST has presented a prima facie case in support of its costs for physical collocation, and that is all that is required. The fact that no other party came forward in timely manner to rebut that case cannot now be turned into a claim that there is not enough evidence to support U S WEST’s costs – there is. BACKGROUND This docket has been underway for almost two years. At this point, it is quite plain that Nextlink and TCG have waived their opportunity to present testimony and evidence on the costs of physical collocation. TCG’s only witness in Phase I was Mr. Montgomery, who is not a cost expert and who presented no substantive evidence to rebut U S WEST’s previously-filed cost studies. Nextlink offered no witnesses at all. These parties barely even discussed the issue in the 100 pages of briefing that each party was allowed on September 12, 1997. Now, belatedly, these parties come forward and seek to construct an entirely separate docket to deal with these issues, or seek to attack the cost evidence presented in Phase I. This is inappropriate, and their efforts should be denied. ARGUMENT Reconsideration of the Eleventh Supplemental Order is Not Warranted Nextlink/TCG seek reconsideration of the Eleventh Supplemental Order on the basis that the evidence offered (and stricken by that order) was not a cost study at all, but rather a list of price quotes from vendors without regard to ILEC costs. Unfortunately for these parties, they cannot prevail either way they look at it. If Mr. Sobieski’s testimony is a cost study, as the Commission concluded it was, it was properly stricken at this stage of the proceeding. If it is not a cost study, as these parties now claim, then it is also properly excluded, because the Eighth Supplemental Order clearly states that prices must be set based on costs, and that the costs are to be a price floor. (Eighth Supplemental Order at paragraph 20). Thus, Nextlink/TCG’s protestations that these are prices, not costs, are irrelevant and misleading. Prices must be based on the ILEC’s costs, and if this evidence does not illuminate what those costs are, as Nextlink/TCG candidly admit, it should not be considered. These parties claim denial of due process and potential violation of the Act if Mr. Sobieski’s testimony is not admitted. These dire predictions are without merit. Nextlink/TCG had all the ability to offer this data in Phase I, and have never presented any reason, much less a cogent one, for not having come forward with this testimony in January, March, or April 1997, when parties had an opportunity to prefile testimony in advance of the July 1997 hearings. Nor are Nextlink/TCG’s belated hearsay objections either proper or timely. (Motion at page 7). These parties interposed no objection to the admissibility of the cost studies when they were offered. A party who fails to make an objection at the time the testimony or evidence is offered has waived that objection. State v. Nist, 77 Wn.2d 227, 461 P.2d 322 (1969); Teglund on Evidence, sections 10-11. Further, Mr. Montgomery’s opinion as to whether the cost estimates were excessive or discriminatory is not binding on the Commission, even if no party had contradicted that opinion. However, U S WEST did in fact present its studies for evaluation, and did contradict Mr. Montgomery’s opinion. The Commission can conclude that the estimates are non-discriminatory simply by virtue of the fact that the charges will be applied to all collocating carriers. The Commission can conclude that the estimates are not excessive by virtue of the fact that no party presented lower cost estimates during the costing phase of the proceeding. Finally, Nextlink/TCG’s suggestions regarding self-provisioning and price caps must be rejected. These parties have the audacity to suggest that U S WEST’s prices should be capped at the rates of some subcontractor whose qualifications and ability no one can verify, and yet the CLEC should have the option of having either the subcontractor or U S WEST perform the work. This would enable a CLEC with “no interest in self-provisioning” to obtain U S WEST construction at prices that bear no relationship to U S WEST’ s costs. If the CLEC really has no interest in self-provisioning, then that means the CLEC has made the decision to accept U S WEST’s prices. U S WEST has already stated that it will permit third parties to construct cages as set forth in 47 CFR 51.323(j). The CLECs cannot have it both ways. Summary Disposition Should Not be Granted Nextlink/TCG next argue that if their evidence is not allowed in at this late stage, then the Commission should enter an order on Summary Disposition, refusing to modify the Nextlink and TCG arbitration agreements to include the new prices for physical collocation elements established in this proceeding. This request should be denied. This argument merely highlights that these parties have realized that they have missed their opportunity during Phase I to attempt to preserve the low rates established on a interim basis. U S WEST presented a prima facie case supporting its cost studies in Phase I of this proceeding. All of U S WEST’s cost studies, along with a narrative explanation of how the cost models work, were admitted into evidence as Exhibit C-115. U S WEST offered both Mr. Reynolds and Ms. Santos-Rach as witnesses on this subject. Mr. Kopta asked a multitude of questions of these witnesses. The only questions which they could not answer were questions concerning the FCC’s physical collocation order This order was well over 400 pages long, had been issued only a month prior to the hearing, and was not decided under the Act., and a few questions regarding self-provisioning by CLECs. Nextlink/TCG had ample opportunity to cross-examine on these studies. Summary disposition as requested by Nextlink/TCG is not appropriate. U S WEST has made a prima facie showing as required. In the alternative, summary disposition might well be appropriate to determine that U S WEST’s cost studies are unrebutted on this record; that no other party has presented evidence of U S WEST’s costs; and that U S WEST’s physical collocation cost studies must be used as a basis for the pricing decisions in Phase II. Respectfully submitted this 10th day of September, 1998. U S WEST Communications, Inc. By:_______________________________ Lisa A. Anderl, WSBA No. 13236