BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION


In the Matter of

COVAD COMMUNICATIONS COMPANY

Petition for Arbitration of Interconnection Rates, Terms, Conditions and 
Related Arrangements with U S WEST Communications, Inc. Pursuant to Section 
252(b) of the Telecommunications Act of 1996	)
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	)	DOCKET NO.  UT-970316
		
		U S WEST Communications, Inc.'s Response to COVAD's Petition for Arbitration

 U S WEST Communications, Inc. ("U S WEST"), by its attorneys, submits the 
following response to the Petition for Arbitration of Interconnection Rates, 
Terms Conditions and Related Arrangements ("Petition") filed by Covad 
Communications Company ("Covad").
I.  OVERVIEW
 Covad ostensibly filed its Petition for the purpose of having the Commission 
arbitrate various outstanding issues between U S WEST and Covad pertaining to a 
contemplated interconnection agreement.  A brief review of Covad's filing, 
however, reveals that Covad also used its Petition to set forth a skewed 
version of the parties' negotiations up to this point to seemingly lay the 
groundwork for a bad faith claim against U S WEST.
 U S WEST objects, in the strongest possible terms, to any inference that it 
has negotiated with Covad in bad faith.  What follows is a brief recapitulation 
of the negotiations between U S WEST and Covad, with an aim towards correcting 
the more obvious examples of Covad's distortions of the record.  As will be 
demonstrated, U S WEST has satisfied its duty to negotiate in good faith with 
Covad.  Thereafter, U S WEST will address each of the issues raised by Covad 
and, to the extent necessary, explain why U S WEST's position should be ordered 
over that of Covad.  Upon review, U S WEST believes that the Commission will 
agree that its positions are the more balanced of the two.  Accordingly, U S 
WEST requests the Commission to order the parties to execute an interconnection 
agreement along the lines proposed by U S WEST.
II.  THE PARTIES' NEGOTIATIONS
 Covad's Petition spends seven pages describing the parties' negotiation of a 
preliminary nondisclosure agreement, as well as the subsequent negotiation of 
the pending Interconnection Agreement.  A review of the pertinent facts, shorn 
of Covad's rhetoric, reveals that U S WEST has dealt with Covad forthrightly 
and in the utmost good faith.
A. The Nondisclosure Agreement
 At the outset, it is necessary to dispel Covad's intimation that the 
requirement of a nondisclosure agreement smacks of bad faith by U S WEST (See 
Petition at p. 6, fn. 8). Covad's contention is spurious.  In fact, Covad began 
the negotiations by presenting U S WEST with Covad's own nondisclosure 
agreement.  (See Petition at Exh. 1).  Covad, by submitting a nondisclosure 
agreement before beginning negotiations, cannot claim that U S WEST's desire 
for one constitutes bad faith.
 U S WEST found Covad's nondisclosure agreement inadequate.  For example, 
Covad's proposed nondisclosure agreement failed to define "Confidential 
Information" in any readily discernible way.  (Compare Petition Exh. 1 with 
Petition Exh. 4).  In fact, Covad initially contended that any and all 
communication, whether oral or written, were confidential; clearly an overly 
broad and unacceptable definition of confidentiality under the law of most 
jurisdictions, including Washington.  Indeed, Covad's proposed nondisclosure 
agreement failed to address certain issues which Covad later deemed essential. 
For example, Covad later insisted that certain oral communications could be 
designated as "Confidential Information" if the revealing party made a written 
designation within thirty (30) days.  (See Petition at Exh. 4, p. 2, ¶ 2).  
Covad's proposed nondisclosure agreement had no such provision.  Accordingly, U 
S WEST and Covad agreed to use U S WEST's form of nondisclosure agreement as 
the basis for negotiation.
 Thereafter, on July 1, 1997, U S WEST sent Covad a discussion draft of U S 
WEST's proposed interconnection agreement, along with U S WEST's form of a 
nondisclosure agreement.  (See Petition at Exhs. 2 and 3). Covad's Petition is 
somewhat unclear as to the date it received U S WEST's proposed nondisclosure 
agreement.  On page 4 of the Petition, Covad contends that it received the 
proposed nondisclosure agreement at the same time it received "Template 5" of 
the draft interconnection agreement.  On the next page, however, Covad asserts 
it received U S WEST's "in late July."  (See Petition at p. 5, fn. 7).  
Notably, Covad does not explain the discrepancy.  The Petition's Exhibits, 
however, tell a different story.  Covad was informed, on July 2, 1997, that it 
would receive ". . . a copy of our Version 5 Comprehensive Agreement and the 
USWC nondisclosure for your review."  (See Petition at Exh. 2).  The promised 
documents, however, had actually been sent out the day before.  (See Id. at 
Exh. 3).  Therefore, Covad's contention that it did not receive U S WEST's 
proposed nondisclosure agreement until late July would seem to be incorrect.  
We further note that in cases where an exhibit conflicts with an allegation, 
the exhibit controls.  Nichols v. Severtsen, 39 Wn.2d 836, 239 P.2d 349 
(1951).  Covad's Vice-President and General Counsel, Dhruv Khanna, waited over 
four weeks – until July 30, 1997 – to submit his comments to U S WEST regarding 
the nondisclosure agreement.  (See Petition at Exh. 4).  Significantly, Mr. 
Khanna offers no explanation for his nearly month-long delay.
 Covad's Petition contends that Mr. Khanna's suggested changes to the 
nondisclosure agreement were "disregarded" by U S WEST.  (See Petition at p. 5, 
fn. 7).  This is patently and demonstrably false.  A brief comparison between 
Mr. Khanna's proposed changes (Petition Exh. 4) and U S WEST's subsequent draft 
(Petition Exh. 5) shows that nearly all of Mr. Khanna's suggested changes were 
made by U S WEST. For example, Mr. Khanna's suggested Preamble was added to the 
draft; Mr. Khanna's expansion of "Confidential Information" was made; the term 
of the agreement was extended from two (2) to three (3) years, at Mr. Khanna's 
request; and the governing law of the agreement was changed.  A revised draft 
of the nondisclosure agreement incorporating Mr. Khanna's comments was sent to 
Covad on August 6, 1997 – one week after Covad gave U S WEST its comments.
 After U S WEST had made most of Covad's suggested changes, only two issues 
regarding the nondisclosure agreement separated the parties.  The first was 
Covad's bizarre insistence that the parties notify each other if an 
unauthorized disclosure had occurred.  (See Petition at Exh. 4, p. 3, ¶ 2 and 
at Exh. 10).  Covad, perhaps sensing how untenable its position on this subject 
was, abandoned its position and no such language was included in the executed 
nondisclosure agreement.
 Second, Covad insisted that the nondisclosure agreement specify that 
"Confidential Information" be used only in connection with the negotiation and 
execution of an interconnection agreement and that such use be unreasonably 
narrow and restrictive.  (See Petition at Exh. 7).  U S WEST submitted that 
such language was not necessary: the whole point of the nondisclosure agreement 
was to prevent the unauthorized use of "Confidential Information."  However, 
the agreement could not unreasonably prevent authorized use, as Covad wanted.  
To the extent that such language was necessary, it was already present in the 
nondisclosure agreement.  After Covad refused to change its position, U S WEST 
agreed to insert some modified nondisclosure language from an interconnection 
agreement U S WEST had previously executed with AT&T. 
 Finally, on August 27, 1997 – four weeks after Covad informed U S WEST of its 
comments regarding the nondisclosure agreement – U S WEST sent Covad an 
execution copy of the nondisclosure agreement.  (See Petition at Exh. 9).  
Covad, however, refused to sign the agreement, insisting certain "typographical 
errors" be corrected.  No explanation was offered as to why such changes could 
not be written on the face of the agreement and initialed by Covad.  U S WEST 
made the requested revisions and sent a final execution copy to Covad on 
September 3.  The net result of Mr. Khanna's charges was to delay the execution 
of the agreement by a further nine days.
 Even taking into account the delay occasioned by Mr. Khanna's proofreading, 
the above demonstrates that U S WEST and Covad were able to conclude a 
nondisclosure agreement within five weeks of receiving Covad's initial 
comments.  Covad, itself, admits that it usually takes weeks to conclude such 
agreement.  (See Petition at p. 7, fn. 10).  Accordingly, U S WEST's 
negotiation of and execution of the nondisclosure agreement has been consistent 
with Covad's previous experiences and in the utmost good faith.
B. The Negotiation of the Interconnection Agreement.
 As noted, U S WEST sent Covad its form of interconnection agreement on July 
1,1997.  (See Petition at Exh. 3).  U S WEST also informed Covad that it had 
concluded ten (10) separate interconnection agreements in Washington.  U S WEST 
sent two of these agreements – those with MFS and TCG – to Covad for its 
review.  Thus, at the earliest stages of the negotiating process, Covad was 
provided with ample materials from which to identify U S WEST's negotiating 
positions and to prepare its own counterproposals.
 Paradoxically, and in direct conflict with Covad's erroneous "bad faith" 
claim, Covad did not schedule an initial interconnection negotiation conference 
call with U S WEST until nearly seven (7) weeks after the execution of the 
nondisclosure agreement.  Notably, Covad offers neither an explanation for this 
delay in commencement of negotiations (other than an undocumented statement 
that it made "numerous attempts" to schedule such a meeting) nor an 
acknowledgment that Covad's actions caused it to run out of time prior to the 
statutory deadline for filing an arbitration petition.
 A conference call was held between representatives of U S WEST and Covad on 
October 21, 1997. In a form letter confirming the conference call, U S WEST 
inadvertently submitted a nondisclosure agreement.  Obviously, the reference to 
the nondisclosure agreement was inapplicable to Covad, insofar as the parties 
had already executed a nondisclosure agreement.  After this initial conference 
call, U S WEST sent Covad a revised form of its proposed interconnection 
agreement, as well as a copy of U S WEST's agreement with Sprint.  (See 
Petition at pp. 5-7).  Covad sent U S WEST its revisions and comments to the 
proposed interconnection agreement on October 29, 1997.  (Id.)  Notably, Covad 
stated its comments and revisions were "not comprehensive," despite the fact 
that U S WEST had provided Covad with its proposed agreement almost three (3) 
months earlier.
 The parties have had several good faith negotiating conferences during the 
month of November.  Id.  While progress has been made, the negotiations have 
not proceeded as quickly as Covad had apparently hoped.  There are two primary 
reasons for this.  First, Mr. Khanna's negotiating style is particularly 
laborious: he insists that each section of the interconnection agreement be 
examined; he discusses every provision line-by-line; and repeats, ad nauseam, 
Covad positions which have been rejected by U S WEST.  Mr. Khanna's negotiating 
tactics have prevented the parties from discussing the balance of the Agreement 
even one time.  Second, U S WEST is currently negotiating scores of similar 
agreements with many different companies over its entire fourteen state 
region.  U S WEST simply does not have the ability or the resources to ignore 
these other agreements and focus solely on Covad.
 Despite the strains placed upon U S WEST, U S WEST negotiated with Covad in 
the utmost good faith.  Moreover, U S WEST wishes to continue to negotiate with 
Covad, notwithstanding Covad's request for arbitration.  For example, even 
before Covad filed for arbitration, U S WEST informed Covad of its desire to 
continue negotiations.  Even after Covad filed for arbitration, U S WEST sent a 
letter to Covad requesting Covad to resume negotiations.  (See letter dated 
November 26, 1997 from U S WEST to Covad, attached hereto as Exhibit "A").  
Prompted by U S WEST's repeated requests to negotiate, Covad agreed to 
participate in a three-hour conference call scheduled for December 11, 1997.  U 
S WEST's policy has favored, and continues to favor, the private negotiation of 
interconnection agreements, rather than pursuing arbitration.  Nevertheless, U 
S WEST sets forth its positions on various issues raised by Covad, pursuant to 
47 U.S.C. § 363(b)(4).
III.  U S WEST'S POSITIONS
Issue A. Whether USWC should promptly undertake reasonable modifications to its 
use of central office space – including retiring unused, underutilized or 
otherwise obsolete equipment, reclaim space used for administrative or other 
non-CO-essential functions – to make space available in any central office 
where Covad seeks physical collocation and USWC contends that the CO lacks 
available space at the time of Covad's request.

Issue B. Whether USWC should establish and maintain Covad's position in the 
queue for collocation space based on the first-come first-served requirement.

Issue C. Whether USWC should provide shared collocation and microwave 
collocation facilities similar to the facilities it is providing to other 
CLECs.  Based on a call received by Covad from USWC on November 14, 1997, the 
issue of microwave collocation appears to be resolved, or is close to 
resolution, by Covad and USWC.  (Petition at p. 5, fn. 11).

Issue D. Whether USWC should provide cage-less physical collocation to Covad 
where it claims it does not have sufficient space for cage-based physical 
collocation.

Issue E. Whether USWC should set forth an average nonrecurring charge for 
collocation throughout Washington and what should such nonrecurring charge be.

Issue G. Whether Covad may virtually collocate any equipment that it may 
physically collocate, including remote switching equipment, and other equipment 
used in connection with Covad's accessing unbundled network elements such as 
loops and dedicated transport.

 These six issues pertaining to collocation are the subject of a separate 
proceeding before the Commission.  See In the Matter of MFS Communications 
Company, Inc.'s Petition for Arbitration, etc., et al., Docket Nos. UT-960323, 
UT-960326, UT-960337.  To the extent that Covad seeks to arbitrate this issue 
before the Commission has had an opportunity to rule in the other case, U S 
WEST submits that Covad's request is premature.
 Suffice it to say that U S WEST's position regarding collocation remains 
consistent with the position it took in the earlier proceeding.  A copy of U S 
WEST's Physical Collocation Policy is attached hereto as Exhibit "B".  The 
policy is consistent with the requirements of the Telecommunications Act of 
1996 and the applicable rules issued by the FCC.  Moreover, this policy is 
known to Covad through the above-referenced docket, which is cited by Covad in 
its own Petition.  Accordingly, for Covad to suggest that it is not aware of U 
S WEST's position (as it does in its Petition) is patently absurd.
 Briefly, U S WEST's policies for space determination and space reclamation are 
as follows:
  i. Space Determination
 U S WEST will make vacant space available for collocation in its central 
offices.  Upon a valid request for physical collocation, U S WEST will be 
responsible to identify all vacant space within a central office which is 
currently available and suitable for physical collocation.  If there is no 
vacant space available for physical collocation, U S WEST will offer virtual 
collocation in the office subject to the terms and requirements of the 
telecommunications act and the FCC rules.  If the party requesting physical 
collocation does not desire virtual collocation, the party may request, and U S 
WEST will conduct, at the requesting party's expense, a reclamation review to 
determine whether there is space which may be reclaimable through equipment 
removal, space consolidation, and/or space conditioning.  U S WEST will make 
the initial determination of space availability based on central office floor 
plans, verified by an on-site review of the central office by the common 
systems planner.
 When physical collocation can be accommodated in a central office, U S WEST 
will make the physical collocation space available to requesting carriers on a 
first come, first served basis. This would include maintaining a collocator's 
space "in queue" while waiting for physical space to become available.  U S 
WEST will allow existing collocators who seek to expand their collocated space 
to use contiguous space where available.  U S WEST will not lease or construct 
additional space to provide physical collocation to interconnectors when 
existing space has been exhausted.  U S WEST will take collocator demand into 
account when renovating existing facilities and constructing or leasing new 
facilities in the same way that U S WEST would consider demand for other 
services when undertaking such projects.  
 U S WEST's process for determining whether space is available for physical 
collocation consists of an initial floor plan review to determine whether is 
vacant space available, a subsequent on-site inspection of the central office 
and, depending on whether the determination is positive or negative, U S WEST 
will either proceed with implementation of the physical collocation request or 
notify the requester of the availability of virtual collocation or a 
reclamation review.
 An initial determination that vacant space is available for physical 
collocation must be verified by an on-site inspection to ensure that the 
available space meets both the size and the technical requirements of the 
requester and that the "vacant" space is not currently used for other central 
office functions.  Finally, "vacant" space which will be required for 
identified future growth needs will not be made available for physical 
collocation.  Such growth needs include switch growth and/or replacement on a 
3-year planning horizon, transmission equipment deployment on a 12-month 
planning horizon and space necessary for trunk/line termination and/or 
cross-connect frame expansion.

 Space necessary for switch growth must be contiguous, or adjacent, to the 
existing switching modules.  Switch growth in a given central office would be 
very difficult to forecast and that such growth had, in the past, been both 
explosive and unpredictable.  As such, it is reasonable for U S WEST to use a 
36-month planning horizon for switch growth and to hold vacant space for those 
future needs.  Switch growth is essential both for U S WEST's continued service 
to its existing customers and for service to the collocators and their end 
users.  The decision in this case should not compromise the ability of U S WEST 
to meet those demands by its customers, both end users and competitors.  
 If an on-site inspection of the central office either verifies or establishes 
that physical collocation space is not available, U S WEST will prepare a set 
of floor plans which are color-coded in the manner set forth in the policy 
statement and submit those floor plans to the Commission in accordance with its 
obligations under the Act and the FCC's rules.  Those floor plans will be 
submitted to the Commission after the requesting carrier has declined virtual 
collocation or has submitted a request for reclamation review and such 
reclamation review has also established that physical collocation space is not 
available.
  ii. Space Reclamation
 If there is no vacant space available in the central office, U S WEST will 
allow the requesting carrier to submit a request for space reclamation.  U S 
WEST is in the process of establishing a "preparation fee" for this process.  
The space reclamation process involves a determination of reclamation 
opportunities and the preparation of a quote for the cost involved with the 
reclamation and preparation of this reclaimed space for physical collocation.  
The criteria for determining whether space is available for reclamation include 
a minimum 100 square foot area.  The space reclamation process involves the 
determination of when and whether transitional areas will become available, an 
identification of the cost to remove, move or reconfigure equipment which is 
either not currently in use or which may be consolidated, and a determination 
of the costs to rehabilitate and/or condition building space which is not 
currently conditioned for telecommunications equipment.  For example, certain 
areas of the building may not have adequate heating, ventilating and air 
conditioning equipment (HVAC) necessary for environmental control to maintain a 
suitable environment for telecommunications equipment.  A reclamation review 
would involve a determination of the costs to make the space suitable for 
telecommunications equipment, including the installation of any necessary 
HVAC.  Additionally, areas where no overhead cable racking currently exists 
would require the installation of such racking and any other facilities which 
are currently lacking in the unconditioned space.
 On a determination that space may be made available through the reclamation 
process, and an acceptance by the requesting carrier of the responsibility to 
pay the costs associated with that reclamation, U S WEST will proceed with 
space reclamation and physical collocation in the reclaimed space. 
 These policies adequately set forth U S WEST's position regarding collocation 
space availability and reclamation.  
  iii. Remaining Collocation Issues
 Costs:
 U S WEST strongly opposes Covad's desire to have an average nonrecurring 
charge for collocation throughout Washington of $40,000.  Individual case basis 
pricing is the only way U S WEST can ensure it recovers its costs incurred in 
collocation.  The fact that the TCG agreement contains an average nonrecurring 
charge in their interconnection agreement is inapposite.  That term was imposed 
by arbitration, and was not a term offered or agreed to by U S WEST in 
negotiation.  Covad cannot "pick and choose" favorable aspects of U S WEST's 
other interconnection agreements.  Iowa Utilities Board v. FCC, 120 F.3d 753, 
800-01 (8th Cir. 1997).  Covad, however, is free to assume all of the terms of 
U S WEST's agreement with TCG, if it so chooses.
 Equipment:
 Covad further argues that it "should be permitted the ability to virtually 
collocate any equipment that it may physically collocate as a part of its 
effort to compete against USWC's monopoly."  The Telecommunications Act of 1996 
and the FCC regulations, however, do not grant Covad the expansive right to 
collocate any equipment it chooses.  
 Rather, 47 U.S.C. § 251(c)(6) imposes upon U S WEST the duty to provide 
virtual collocation of "equipment necessary for interconnection or access to 
unbundled network elements."  The Code of Federal Regulation, in turn, defines 
virtual collocation as ". . . an offering by an incumbent LEC that enables a 
requesting telecommunications carrier to . . . [d]esignate or specify equipment 
to be used for interconnection or access to unbundled network elements . . ."  
47 CFR 51.5.  For purposes of interconnection, such equipment is defined as 
"the equipment used to interconnect with an incumbent local exchange carrier's 
network for the transmission and routing of exchange telephone service, 
exchange access service, or both."  Id.  For purposes of access, such equipment 
is defined as ". . . the equipment used to gain access to an incumbent local 
exchange carrier's unbundled network elements for the provision of a 
telecommunications service."  Id.  Under these definitions, only equipment 
necessary for interconnection or access to unbundled network elements may be 
virtually located; Covad's RSU's (and other equipment) are neither.  Notably, U 
S WEST is appealing all decisions in which a state PUC has ordered physical 
collocation of RSUs.  

 Cageless Collocation:
 Cageless physical collocation is actively under review by U S WEST.  U S 
WEST's decision on this issue will be presented to the Commission in written 
prefiled testimony to be served in accordance with the Commission's scheduling 
order in this matter.
Issue F. Whether USWC should provide a reasonable and proportional 
self-executing remedy for any failure to timely turnover a collocation facility.

 Covad submits that it is entitled to receive liquidated damages of 1% per day 
for each day that U S WEST is late in delivering a cage to Covad.  Covad 
falsely claims that this is the only way it can ensure U S WEST's performance.
 Covad's proposal for a draconian remedy for construction delays is patently 
unreasonable. Covad has adequate remedies in both basic contract law for 
damages and before the Commission.  Such disproportionate liquidated damages 
clauses are unconscionable in light of the deregulation wrought by the 
Telecommunications Act of 1996, and the consequent stresses it has put upon 
ILECs.  This Commission has rejected proposals for penalties and/or liquidated 
damages in previous arbitrations.  See In the Matter of the Petition of an 
Interconnection Agreement Between AT&T Communications of the Pacific Northwest 
and U S WEST Communications, Inc., Docket No. UT-960309 (hereafter "AT&T/U S 
WEST Arbitration Decision") at pp. 37-38.  Indeed, the Commission has 
explicitly rejected penalty clauses because the imposition of such penalties 
would undermine the nondiscrimination policies of the Telecommunications Act of 
1996:
One substantial problem with [CLEC's] proposal from a public policy standpoint 
is that it would tend to elevate [the CLEC] and its needs to a status superior 
to other USWC customers.  With insufficient means to accomplish immediately all 
capital and expense projects, it would be tempted to defer needs of other 
ratepayers and to meet those of [the CLEC], to avoid payments in the event of 
missed schedules.  All customers, including [the CLEC] and other resellers, 
have the benefit of Commission rules and standards and the right to complain 
formally or informally in the event of service failure.  [The proposal for 
performance standards with remedies] is therefore rejected.

In the Matter of the Petition for Arbitration of an Interconnection Agreement 
Between TCG Seattle and U S WEST Communications, Inc., Docket No. UT-960326 
(hereinafter "TCG/U S WEST Arbitration Decision") at p. 4.
 U S WEST believes that the Commission's analysis of this issue is both correct 
and compelling.  Covad has not presented any reason as to why the Commission 
should revise its earlier decisions.
Issue H. What are the reasonable intervals for the provisioning of virtual 
collocation and related tasks.

 Covad asserts that U S WEST has taken the position that 90 days is required 
for collocation, as well as certain other tasks.  This is not U S WEST's 
position.
 Rather, the time interval required depends upon the specific task.  For 
instance, installation of line cards and other minor modifications on virtually 
collocated equipment would take considerably less than ninety days.  Such tasks 
would be performed in parity with U S WEST's own standards provided on a 
nondiscriminatory basis, in the same manner it provides similar services to 
other CLECs and U S WEST's own subsidiaries and affiliates.  On the other hand, 
virtual collocation is a far more complex task and may require more than 90 
days.  These tasks would take place in parity with U S WEST's performance of 
similar tasks on behalf of other CLECs, which, for purposes of virtual 
collocations, is ninety days.
Issue I. What is a reasonable definition of the term Dedicated Transport and 
what should be the specified interval for the installation of Dedicated 
Transport, and the appropriate remedies for failure of USWC to timely perform. 

 Covad submits that it should be allowed to pick and choose terms relating to 
Dedicated Transport from U S WEST's agreements with other CLECs.  Again, U S 
WEST notes that the Eight Circuit has banned such practices.  See Iowa 
Utilities Bd., supra.
 Based on a call between Covad and U S WEST held on November 14, 1997, the term 
"Dedicated Transport" was resolved by the parties.  Covad has agreed to U S 
WEST's definition without any changes.  (See Petition at Exh. 17 and Exh. 18 at 
Article 5).  
 U S WEST will provide direct transport to Covad on a nondiscriminatory basis, 
in the same manner it supplies dedicated transport to other CLECs and U S 
WEST's own subsidiaries and affiliates.
 U S WEST opposes the imposition of any penalties or liquidated damages clauses 
and this position has been affirmed by the Commission in other arbitration 
proceedings.  See AT&T/U S WEST Arbitration Decision at pp. 37-38; TCG/U S WEST 
Arbitration Decision at p. 4.
Issue J. Whether Covad must wait until cage construction completion before 
placing an order for Dedicated Transport.

 Covad accuses U S WEST of preventing the ordering of Dedicated Transport prior 
to cage construction completion.  Covad misstates U S WEST's position.  CLECs 
may order Dedicated Transport ten days prior to cage construction completion, 
allowing CLECs to have Dedicated Transport at the time a cage is turned over to 
Covad.  Also, Covad may order Dedicated Transport at any time, subject to 
standard intervals, if the service is to be connected to Covad via an external 
facility.
Issue K. Whether USWC should unbundle, set forth a cost-based price for, and 
provide within a specific interval (with accompanying remedies for failure of 
USWC to timely perform), SONET-based Dedicated Transport to Covad.

 U S WEST will offer SONET-based dedicated transport to Covad on a 
nondiscriminatory basis, in the same manner and at the same price it supplies 
SONET-based dedicated transport to other CLECs and U S WEST's own subsidiaries 
and affiliates.  U S WEST will present its position on cost-based rates in 
testimony to be filed in this arbitration proceeding.
 U S WEST opposes the imposition of any penalties or liquidated damages clauses 
and this position has been affirmed by the Commission in other arbitration 
proceedings.  See AT&T/U S WEST Arbitration Decision at pp. 37-38; TCG/U S WEST 
Arbitration Decision at p. 4.
Issue L. What is the definition of "loop conditioning," should such 
conditioning include the addition of any repeaters and suitable digital line 
cards as needed in the outside loop plant, and what should be the specified 
time interval (and the appropriate remedy for failure to perform) for USWC's 
installation of digital-capable loops to Covad.

 "Loop conditioning" takes into account any cable unloading that would need to 
occur to qualify a metallic loop for a CLEC-provisioned service.  If 
bridged-tap is identified by the CLEC during their engineering review of the 
design layout record, the bridged-tap exceeding the allowable tolerance level 
would be removed.  This activity also qualifies as part of loop conditioning.  
U S WEST must be able to recover the cost for performing any loop 
conditioning.  Other se