COMMISSION MCIMETRO ACCESS TRANSMISSION ) DOCKET NO. UT-971158 SERVICES, INC., ) ) VOLUME 1 Complainant, ) Pages 1-37 ) U S WEST COMMUNICATIONS, ) INC., ) ) Respondent. ) _____________________________) A hearing in the above matter was held on September 18, 1997, at 1:38 p.m., at 1300 Evergreen Park Drive Southwest, Olympia, Washington, before Administrative Law Judge LARRY BERG. The parties were present as follows: The Complainant, MCIMETRO ACCESS TRANSMISSION SERVICES, INC., by Clyde H. MacIver, Attorney at Law, Miller, Nash, Wiener, Hager & Carlsen, 4400 Two Union Square, 601 Union Street, Seattle, Washington 98101-2352. The Respondent, U S WEST COMMUNICATIONS, INC., by Lisa A. Anderl, Attorney at Law, 1600 Seventh Avenue, Seattle, Washington 98101. THE COMMISSION, by Shannon E. Smith, Assistant Attorney General, 1400 South Evergreen Park Drive Southwest, Olympia, Washington 98504-0128. Barbara L. Spurbeck, CCR Court Reporter P R O C E E D I N G S JUDGE BERG: The prehearing conference will please come to order. This is a prehearing conference in Washington Utility and Transportation Commission Docket Number UT-971158, captioned MCImetro Access Transmission Services, Inc., Complainant, versus US West Communications, Inc., Respondent. The parties will be respectively referred to during the course of this proceeding as MCI and US West. The Commission set this prehearing conference by notice, which was served on August 22nd, 1997. Today is September 18th, 1997. My name is Larry Berg. I am the Administrative Law Judge assigned to this proceeding. As is indicated on the notice of prehearing conference, we will be taking appearances of the parties, formulating issues, and setting further proceedings and evidentiary hearings, if appropriate. At this point in time, I will take appearances of the parties as they appear in the caption of the proceeding, beginning with MCI. MR. MacIVER: Thank you, Your Honor. My name is Clyde H. MacIver. I'm with the law firm of Miller Nash. My address is 4400 Two Union Square, 601 Union Street, Seattle, Washington, 98101. My telephone number is (206) 622-8484. My fax number is (206) 622-7485. My e-mail address is MacIver@MillNash.com. JUDGE BERG: All right. Ms. Anderl. MS. ANDERL: Yes, Your Honor. Lisa Anderl, appearing on behalf of US West Communications Inc. My business address is 1600 7th Avenue, room 3206, Seattle, Washington, 98191. My phone is (206) 343-4052. My fax is (206) 343-4040. And my e-mail address is, all lower case, landerl, L-a-n-d-e-r-l, @uswest.com. JUDGE BERG: Thank you. And for Commission Staff? MS. SMITH: Shannon Smith, Assistant Attorney General. My address is 1400 South Evergreen Park Drive, S.W., P.O. Box 40128, Olympia, Washington, 98504-0128. My phone number is (360) 664-1192. My fax is (360) 586-5522. JUDGE BERG: Thank you very much. Let the record reflect that there are no parties present in the hearing room intending to intervene, and so let's just move directly to a discussion of where the parties are at. And I'll just let it be known, in as straightforward a fashion as possible, that I find the necessity for the Commission to deal with a complaint of this nature to be a real waste of resources everybody. And it gives me a lot of concern as to what we have to look forward to in the future between these parties, as well as for the rest of the development of interconnection between the incumbent LECs and competitive LECs. And I find reasons to be concerned on the part of both parties in the way that the pleadings have been described -- the behavior of the parties have been described in pleadings brought forward, but perhaps there's still an opportunity for the parties to work this out between themselves, and so let me turn it over to the parties. I'll particularly start with you, Mr. MacIver, unless you want to defer to Ms. Anderl to bring me up to speed on where we're at here. MR. MacIVER: Well, I might just comment, Your Honor, there has been, which isn't apparent from the pleadings, a great deal of dialogue and correspondence between the parties concerning this matter. I've got a whole file full of letters and correspondence where they have been engaged in discussing these issues. They may be issues of greater weight than is apparent from the complaint, because they are having trouble dealing -- or resolving these issues between themselves, not only before the arbitrated agreement, but after the arbitrated agreement. I was on the phone this morning with my client and have gotten the names of the individuals within our organization who are dealing with people within US West on this issue, have given those to Ms. Anderl for her use, as she deems fit, but I just wanted to dispel the notion that neither US West nor MCI are ignoring this issue between themselves. They are in a dialogue on the issue, but they have not been able to work it out. I don't think either I or Ms. Anderl know exactly why yet, but they are engaged and have been engaged, in fact, have been litigating these issues in other jurisdictions, and have been negotiating these issues in other jurisdictions as well. So for your edification, at least to the best of my knowledge, Your Honor, both parties -- not just MCI, but US West and MCI have been engaged in trying to resolve these issues, but there are some, to my understanding, some significant disagreements both on the law and the facts concerning some of these issues that they have not yet been able to resolve, which is why we're here. We had discussed, prior to you coming in, as giving some lead time between now and the beginning of discovery, and then have a very -- in the hopes that the parties will continue to engage, and maybe with Ms. Anderl's assistance and my assistance they can come to terms, but if they can't, then have an expedited proceeding to bring the issue before you. JUDGE BERG: Ms. Anderl. MS. ANDERL: Thank you, Your Honor. I concur with much of what Mr. MacIver said. I think that our take on the issues are a little bit different in the sense that we think that these issues really should be resolved between the parties under the agreements that are in place, either the interim one or the permanent one, the interconnection agreement, and to the extent that those agreements provide for resolution of the issues or do not impose obligations on US West, about which MCI is complaining, you know, perhaps we don't belong here at all. But since we are here and absent, you know, dismissal by the Commission and direction to go forth and negotiate, we are certainly confident that if the parties were given time to do that, there are good chances of resolving the issues between the parties, and we're hopeful of some time in the schedule to do that. I did just talk with Mr. MacIver. We do have some names. I'm confident that he and I working together can at least bring the parties together and see what issues remain, if there are any. I do tend to agree that, in working out the complicated business of interconnection, there are going to be a lot of disputes between the parties and it could very easily begin to be a huge drain on the resources of the Commission, and I would like to see some general direction to the parties that there are other ways to resolve these kinds of disputes. But when we talk scheduling, as I said, I would like to specifically ask for some time, if Mr. MacIver does not object, for the parties to work together before any testimony is filed or any hearings are scheduled. JUDGE BERG: My understanding of the primary basis for rejecting the prior requests of MCI for the testing orders that it had placed, both for a resale of certain residential services and for a combination of unbundled elements, was on the basis that there was no approved interconnection in Washington at the time. And there was some indication from US West that as soon as there was an approved interconnection agreement in effect, that they would begin responding to these orders. And at that point, it seemed to me that, from the way the issues were being framed, was whether or not it was, depending which side of the coin you look at, whether it's reasonable to expect MCI to agree to some sort of regionwide testing processes or whether it's reasonable to expect US West to conduct these tests on a state-by-state basis. MS. ANDERL: Yes, I believe we did state in our answer that as soon as there was an interconnection agreement that required us to, you know, do certain things, such as accept orders for testing, we would be doing that. And I had a discussion with Mr. MacIver before we started today actually trying to determine with him whether, post Commission-approved interconnection agreement, we still had issues. And I was suggesting to him that perhaps if his client thought that they did, I would be considering asking for an amended complaint so that those allegations were set forth with some particularity, so I knew what we would be responding to or what we needed to be prepared to defend or respond to in the context of those new allegations, because the complaint, of course, does not contain any allegations about post-interconnection agreement testing orders. JUDGE BERG: Do the parties happen to have a copy of those pertinent provisions that are contained in the new approved agreement for service operation readiness testing? MR. MacIVER: I do not have it here. MS. ANDERL: I don't think I have my interconnection with me, no. JUDGE BERG: All right. I made a copy of paragraph 2.1.21.2, and that comes up in paragraph two of US West's answer and affirmative defenses. In that paragraph two, US West states that even if the pending agreement could be enforced before it is effective, the proposed agreement in attachment five, paragraph 2.1.21.2 provides that the testing of services and unbundled network elements provided under the agreement shall be by mutual agreement of the parties. And while it may be unfair to you not to have a copy of this in front of you while I'm referring to it, I fail to see where, in fact, the parties have agreed to provide for testing of services of unbundled network elements by mutual agreement. All I see here under the section is that US West and MCI shall mutually agree on the schedule for such testing. Now, when I go further down to Section 2.1.21.4, it states, During the term of this agreement, US West shall participate in cooperative testing requested by MCI whenever it is deemed necessary by MCI to ensure service performance reliability and customer serviceability. So I just want to point out to the parties that, in terms of their commitment under the agreement that's now in effect, that it may be, in fact, that to the extent that the parties are mutually required to compromise may not be the way that US West frames it in their answer. I'd like you to look those sections over carefully and discuss among you exactly what the obligations of the parties are, because there's a lot of the use of the word "shall" sprinkled throughout the section, which should give the parties a strong directive as to what their respective rights and obligations are. MS. ANDERL: Well, I appreciate those comments, Your Honor, and I think that the point that I was trying to make merely was that I'm not aware that the complaint, as it's currently written, alleges violations of that agreement, because that agreement was not effective at the time the complaint was brought. And if the Complainant does want to allege that US West is failing to meet its obligations under the Commission-approved interconnection agreement, I think what we would be doing would be asking for an amended complaint so that we had some idea, with a certain degree of particularity, what types of violations we needed to respond to, what kinds of allegations were out there. JUDGE BERG: All right. I'm not going to go into this in more detail. I am aware that there was an interim agreement that was pending at the time, as well, that has not been discussed. I hope we don't have to get to that point in time. So let's see if we can't get some certain definition into the agreement between the parties as to who will meet, when they will meet, what they will discuss, and how that information will be brought back to the Commission. MR. MacIVER: I think Ms. Anderl and I started that process, and I think the people that are engaged between our two companies on these issues -- and I want to state, Your Honor, they are very important issues, that they are not light issues. That doesn't mean they can't be resolved. At least to MCI they're extremely important. We wouldn't be here otherwise. But I think we can meet your request. JUDGE BERG: Are the parties aware of who specifically are actually involved in these discussions? MR. MacIVER: Yes, I've given the names of the individuals that I'm aware of, both in her company and my company, that are engaged in these issues. They're both in Denver and -- JUDGE BERG: Let's get those names on the record. MR. MacIVER: Okay. Mr. -- and I don't know the spelling of this name. On behalf of US West, I was told this morning Mr. Oglesby (phonetic), and I don't know the spelling, on behalf of US West. JUDGE BERG: Ms. Anderl? MS. ANDERL: I do not. JUDGE BERG: We'll just spell it phonetically. MR. MacIVER: And Ms. Karen Clausen, C-l-a-u-s-e-n, of MCI, are knowledgeable about the dealings of the Company on these issues and what's going on in other states on these issues, to the best of my knowledge. Those are the names I gave Ms. Anderl this morning, and hopefully -- I can't tell you whether they're going to be able to resolve the issues without some -- as I said, there's been a lot of correspondence, a lot of dealings between the companies on this before and after the agreements. JUDGE BERG: Ms. Anderl, do you know who's working on behalf of US West? MS. ANDERL: I do not. JUDGE BERG: All right. MS. ANDERL: But I certainly will confirm the information that Mr. MacIver gave me and follow up internally and determine who the right people are. He and I had spoken earlier this week about attempting to work this issue. JUDGE BERG: All right. MS. ANDERL: So we are just now starting to do that. JUDGE BERG: As soon as you can identify the parties, the technical experts within your company who will be involved in working through these problems, would you please inform the Commission and all the parties involved here, as well as exchanging names with MCI? MS. ANDERL: Yes. JUDGE BERG: All right. Have the parties been able -- Mr. MacIver, have you and Ms. Anderl been able to discuss this matter in any sufficient detail to put any sort of proposed commitment of the parties into the record at this time, or is that something we can do while we're sitting here? MR. MacIVER: No, we discussed a proposed hearing schedule that was going to allow some lead time for the parties to engage their experts on this issue, as we were discussing. JUDGE BERG: All right. Why don't you go ahead and share with me what you have discussed so far. MS. ANDERL: Well, Your Honor, I think what I had proposed was that we wait until January for formal discovery to begin and allow the parties the fall and early winter to try to negotiate this, of course subject to either party's right to come back and ask for something more accelerated, if there seems to be a need for that. But bearing in mind the workload of the attorneys and the companies and the Commission, based on some schedules that have just recently been established, it seemed as though we could wait to start formal discovery in January. And that would give the parties enough time to see if they couldn't resolve these issues formally. And I think that testimony could still be filed and a one or two-day hearing scheduled in time for the Commission to meet the ten-month deadline on complaints. JUDGE BERG: Only courtroom I've ever been where there's not a calendar on the wall. MR. MacIVER: The complaint was filed July 16, which would give until May. JUDGE BERG: I actually have it served as July 17th. MR. MacIVER: I was just referring, Your Honor, to the notice of prehearing conference, which indicated a July 16th filing date, but it didn't indicate the service date. JUDGE BERG: All right, a filing date of the 16th, okay. We're not going to cut it that close. So the date by which we would have to complete everything -- MR. MacIVER: Would be the end of May -- May 16th. MS. ANDERL: Which is Monday, the 18th of May. JUDGE BERG: My preference is that we actually set some dates here. MR. MacIVER: Yes. MS. ANDERL: Certainly. MR. MacIVER: That was our wish, as well. JUDGE BERG: All right. So again share with me your proposal for a window for testimony to be filed. MS. ANDERL: I don't know how much time MCI would want for discovery or when they would be comfortable filing their first round of testimony as complainants. Maybe I'll let Mr. MacIver speak to that. Perhaps in February. JUDGE BERG: Mr. MacIver, if we were to begin formal discovery in, say, the second week of January? MR. MacIVER: If we had, say, 30 days for discovery and then two weeks thereafter to file our opening prefiled, I would hope that two weeks would be adequate to do that. And Your Honor, I do agree -- I mean, I am certainly not going to oppose what is proposed by Ms. Anderl, but keeping in mind that I do agree with what she said, subject to either party having the option to seek a more expedited schedule if it's deemed necessary as we get into this down the road. But absent that, I think the schedule is consistent with other things going on at the Commission and workloads and whatnot, so I will -- you know, I do not believe what she has proposed is unreasonable on its face, but I would like just the caveat in the event circumstances suggested that one or the other of us could ask for a more expedited resolution. JUDGE BERG: All right. It sounds like you don't feel it necessary to get an any more definite commitment regarding the negotiation phase between the parties' technical representatives, so long as you have that option open to you; is that correct? MR. MacIVER: Yes, I -- you know, Ms. Anderl and I have worked together off and on for quite a while, and I have no doubt that we will try to do our very best to get our clients together and discussing these issues. I don't see any unwillingness, certainly on our part, nor on our client's part, to do this. Indeed, there has been a lot of dialogue already. What we're not sure of is exactly where they are. JUDGE BERG: All right. Well, for what it's worth, I'm assuming my performance gets evaluated on my basis to get the parties to commit to specific dates, so that we don't wind up in a situation where the parties misunderstood what was intended or when things would happen, so -- MR. MacIVER: Would you like to have a specific date to report back the status of discussions? That would be fine. MS. ANDERL: Sure. JUDGE BERG: I think that would be appropriate. I think you could even do that in an informal filing in the docket number, a joint filing. Or if the parties could not make a joint filing, they could each file their own separate status requirements. MS. ANDERL: Would a joint letter be acceptable? JUDGE BERG: Oh, yes. Absolutely. Yeah, it doesn't have to be what captioned pleadings require. MR. MacIVER: That would be good. JUDGE BERG: If the parties, like I say, felt that they were compromised -- if the parties are unable to comfortably file a joint letter, they could each file separate letters. MS. ANDERL: Sure. We could commit now probably to do that by October 15th, a Wednesday. MR. MacIVER: Yes. JUDGE BERG: Great. I appreciate that. And in your joint letter or separate letters, if you would include any other specific dates which have already been scheduled for the parties to continue working together, I'd appreciate it. MR. MacIVER: Is this going to be covered in an order? I'm furiously taking notes here. JUDGE BERG: Sure. Yes, I'll pick this up off the transcript and I'll include this in the order. MR. MacIVER: All right. JUDGE BERG: So if the parties would also continue to look down the road through November and December, and to the extent that they, between themselves, can make the commitments necessary to resolve -- to give the parties every opportunity to resolve this between themselves, then I'd appreciate it. I know how time can fly by, and I imagine the technical personnel are just as strapped for time as the representatives, legal representatives. So make sure that you get commitments from your technical people, to the fullest extent possible, as to when they will be getting together, and try and get them to set up milestones as to when certain threshold issues will be dealt with and hopefully resolved. MR. MacIVER: Okay. So we will report back to you the status of these continued efforts to resolve this, in either a joint letter or separate letters, on or before October 15th; is that -- what day of the week is that? MS. ANDERL: It's a Wednesday. JUDGE BERG: Great. At that point in time, it's very likely that I would issue another procedural order providing the parties with another date upon which they should report back, based upon what's disclosed to me in that filing. Also, I'd like to make it clear that this Commission and my office is at the parties' disposal. To the extent that I can help the parties while this negotiation is in process without in any way conflicting with my duties and role as the ALJ presiding over the case, I'm available to the parties. And if it's necessary to bring in some other ALJ or a third party to try and help the parties mediate, the Commission would do everything it could to assist the process. I know that we have done that for the parties in the arbitration docket, as well as other dockets for other parties. I'm not certain at this point, you know, to what extent I can perform that role without compromising my ability to sit as the ALJ in the event this goes to hearing. However, if in fact I cannot play that role, then hopefully we can assist in finding someone else who you have confidence in to help get the result that the parties most prefer. MR. MacIVER: That's appreciated. It may be useful. JUDGE BERG: All right. In the meantime, I want to have the parties help me here, because I did neglect to bring a specific calendar with me. Before I go any further, Ms. Smith, was there anything that you want to add to the discussion so far? MS. SMITH: No, other than the Staff's general preference that this matter be disposed of with the least process that it possibly can be. So I think Staff would be very much in favor of the parties resolving this matter between themselves or perhaps some other way to resolve this short of a formal hearing. If that means mediation with one of the Commission ALJs, the Staff would be supportive of that. JUDGE BERG: Good. MS. SMITH: If that meant disposing of it. JUDGE BERG: Thanks. Also, I'd indicate to the parties that as they are working with their technical staff on a schedule for their getting together, I think that this is a situation where the sooner the parties dedicate whatever resources are necessary to solving the problem, the better, because the more time goes on, the more peoples' patience are going to wear thin and the more your respective clients may project that the other party is not proceeding in good faith. It seems eventually the resources are going to get dedicated to this problem to resolve it, and I'd like to see at least the two of you go back and encourage your clients to make that allocation of resources here at the front end, rather than at the back end. MS. ANDERL: Thanks for that, Your Honor. Could I just make a couple of remarks? I've been thinking about this, you know, for a little while, about this docket particularly, and thinking about one of the goals of the prehearing conference being to try to narrow the issues. It occurs to me that it really is rather important as to whether or not MCI is alleging violations of the new, quote, permanent, unquote, interconnection agreement or not. Their complaint really doesn't allege that. And it seems to me that if we are just looking at the, you know, pre-August issues, in other words, the facts up to July of 1997, when this complaint was filed, the complaint might actually lend itself to some type of a summary determination, just as a question of law and policy, both interpretations of federal and state law, because I don't think that there are significant facts in dispute, at least my brief rereading of the complaint and answer for today doesn't seem to me to indicate material facts in dispute. And if there are allegations post-August that, after the interconnection agreement is in place and approved by the Commission, that US West is nonetheless in violation of that and MCI wants to bring that forward, there may well be significant questions of fact that we would need evidentiary hearings on. So maybe it would be a good idea to talk a little bit about that and maybe get some sort of a time line for MCI to make a decision as to just what the nature and scope of the complaint is going to be, whether they are going to file an amended complaint or whether they would somehow view the allegations they set forth in this complaint to encompass events that happened after August, if you understand what I'm saying. MR. MacIVER: I can respond to that. Yes, I was advised, as of 11:00 this morning, that there are still disputes, both -- there were disputes before the agreement, there are significant agreements subsequent to the agreement, and that our technical people, when they get together, will be more than happy to clearly indicate -- in fact, there are people in US West that know exactly what those disputes are. We don't at this table, but that is not a secret. And we agree, too, that if we can come to an undisputed set of facts that we can agree on of what's going on, we would be happy to tee this up and resolve it on a motion. We are not sure at this point whether we can agree on those facts. That's another thing that these meetings will hopefully get to, because as soon as we can get an agreed statement of facts that we both agree here are the set of facts we both agreed we're operating off of, then we can tee up the legal issues. JUDGE BERG: All right. I mean, just looking at the pleadings, it's pretty apparent that, whether it's a pre-approved agreement or a post-approved agreement, that there's an issue between the parties as to whether or not a -- let's see if I can use the language out of the pleadings itself -- whether or not a, number one, an individual state trial constitutes an unreasonably expensive manual process to perform. US West has stated that one of its reasons for seeking a regionwide testing process is because it involves the same people, the same basic processes, that what should work in one state should work in another, but there may be more complex facts and issues behind that, you know. I'm certainly not prepared to make an assessment of whether or not, in fact, a test in Minnesota will demonstrate the operability of systems that are in place in the state of Washington. So those are things I think the parties will have to work out for the issue of whether or not, in fact, it's reasonable to require the parties, post-arbitration agreement, to submit to regionwide testing as opposed to in-state testing. I see one issue already here that would indicate that there's -- I won't call it ongoing violation, but that there's an issue that's been presented relating to post-arbitration agreement effective date. MR. MacIVER: And perhaps after we get this first status report back to you, you know, we'll get a better handle on where the parties are on this. JUDGE BERG: Am I thoroughly confusing Ms. Anderl? MS. ANDERL: No, Your Honor. It's just that MCI -- you know, I'm not aware that MCI's complaint contains allegations that, post-August 20th, we refused to conduct in-state Washington testing in violation of the agreement. I'm simply not aware of that. And I think that pre-August 20th, which is the time frame of this complaint, our contention would be that there simply was no obligation whatsoever to do any testing, and we were willing to do it on a regionwide basis. So that, to me, is -- and so we agree on that, that we didn't want to do it in Washington, and we think it's simply a question of law as to whether or not -- or contract interpretation or interpretation of federal or state law as to whether there was any such obligation. And that's where I'm trying to kind of struggle with, you know, if this is simply a complaint surrounding issues that go up to August 20th, then it may be ripe for motions for summary determination, because there are no real material facts in dispute. And if it is post-August 20th issues, then I think that we probably need an amended complaint for those, because they can't allege violations of the August -- the interconnection agreement that was effective on August 20th, because the complaint was filed in July. And if they want this to be ongoing and address facts and circumstances and events that happened after the filing of the complaint, I think