COMMISSION MCIMETRO ACCESS TRANSMISSION ) DOCKET NO. UT-971063 SERVICES, INC., ) ) VOLUME 4 Complainant, ) Pages 142-194 ) US WEST COMMUNICATIONS, ) INC., ) ) Respondent. ) _____________________________) A hearing in the above matter was held on May 8, 1998, at 10:08 a.m., at 1300 Evergreen Park Drive Southwest, Olympia, Washington, before Administrative Law Judge LAWRENCEY BERG. The parties were present as follows: The Complainant, MCIMETRO ACCESS TRANSMISSION SERVICES, INC., by William P. Hunt, III, and Rogelio E. Pena, Attorneys at Law, 707 17th Street, Suite 4200, Denver, Colorado, 80202. The Respondent, US WEST COMMUNICATIONS, INC., by Lisa A. Anderl, Attorney at Law, 1600 Seventh Avenue, Room 3206, Seattle, Washington 98191. THE COMMISSION, by Shannon E. Smith, Assistant Attorney General, 1400 South Evergreen Park Drive Southwest, Olympia, Washington 98504-0128. Barbara L. Spurbeck, CSR Court Reporter JUDGE BERG: The hearing will please come to order. This is a prehearing conference in Washington Utility and Transportation Commission Docket Number UT-971063. The caption of this case is MCImetro Access Transmission Services, Inc. versus US West Communications, Inc. During the course of this hearing, we will refer to MCImetro Access Transmission Services, Inc. as MCI and US West Communications, Inc. as US West. The purpose of this hearing is to review procedures to be followed at the upcoming hearing, to discuss any issues that the parties have presently raised to be resolved, and to discuss any other issues that the parties wish to discuss at this stage of the proceeding. Hopefully, there will be time at the conclusion of today's hearing to discuss the positions of the parties, as presented in prefiled testimony, and to talk somewhat about the issues which will have to be resolved at the hearing itself. A notice of this hearing was served on all parties on April 16, 1998. Today is May the 8th, 1998. This hearing is taking place at the Commission headquarters in Olympia, Washington. My name is Lawrence Berg, B-e-r-g. I am the Administrative Law Judge who has been assigned to this proceeding. At this point in time, we'll go ahead and take appearances of the parties. We'll begin with MCI, then US West, then Commission Staff. MR. HUNT: Good morning. For the record, my name is William Patrick Hunt, III. I'm Senior Attorney with MCI Telecommunications Corporation. Office address, 707 17th Street, Suite 4200, Denver, Colorado, 80202. My direct dial number is 303-390-6109. My fax number is 303-390-6333. My e-mail address is William.P.Hunt@MCI.com. MR. PENA: Good morning. My name is Rogelio Pena. I'm Senior Attorney with MCI. And my address is 707 17th Street, Suite 3600, Denver, Colorado. My phone number is area code 303-390-6106. My fax number is 303-390-6333. And my e-mail address is Rogelio.Pena@MCI.com. Thank you. MS. ANDERL: Lisa Anderl, appearing on behalf of US West Communications. I have provided my address, phone, fax and e-mail previously on this record, and it is unchanged. MS. SMITH: Shannon Smith, for Commission Staff. And I also have provided my address, phone number, fax number and e-mail address on this record, and it is also unchanged. JUDGE BERG: All right. Thank you very much. Probably the first thing I should inform the parties of is that the hearing which is presently scheduled in this case will be presented to a presiding officer of one. The commissioners will not be sitting in this case. I will be producing an initial order, which will be circulated to the parties. There will be, in accordance with both the RCW and the WACs in the state of Washington, codes in the state of Washington, there will be an opportunity for petitions of review and for answers to be filed to the petitions for review, at which time the Commission will proceed to review the initial order and issue a final order. At a previous prehearing conference, the hearing dates were set up, I believe for June the 1st through June the 4th. You may have noticed in a prior notice that was sent to the parties that those dates have shifted. The hearing will actually begin on Tuesday, June the 2nd, and I've gone ahead and reserved the main hearing room, so we can continue through Friday, June the 5th, if necessary. At this point in time, does that present any problems to any of the parties? MR. HUNT: Not for MCI. MS. ANDERL: No, not for US West. JUDGE BERG: Okay, thank you. The proceeding will follow closely to the procedures that are outlined in the WAC code, so I won't -- I don't feel it necessary to review those procedures here today, but I will want the parties to be familiar with 480-09-736 and the other WAC provisions around that for controlling the hearing procedure. The evidence to be presented in this case will follow by the Complainant's case first, to be followed by the Respondent's case, to be followed by Commission Staff. There is one Intervenor in this case. Mr. Butler, of Ater Wynne, has entered his appearance on behalf of Tracer. I did have a contact from Mr. Kennedy in Mr. Butler's office informing me that Mr. Butler was not feeling well today, and he asked to be excused from the prehearing conference. Insofar as Tracer has played a fairly passive role up to this point in time, I certainly didn't feel that there was any need to compel them to have counsel present here. I would not anticipate that they would have direct evidence to present in this case, but they will be participating as an intervening party on cross-examination. Does that comply with the understanding of the parties? MS. ANDERL: Your Honor, I would like to ask for a modification to the order of presentation of witnesses and have us -- I would like to ask that Staff's witness follow MCI's witness, since the testimonies of those witnesses seem to be aligned and they've all filed on the same schedule. In other words, Staff has filed with the Complainants, and it seems appropriate that their testimony be presented in conjunction with the Complainants. And US West's testimony, which is responsive to both the Complainants and Staff, could then follow that. MS. SMITH: No objection. JUDGE BERG: That does make sense. I appreciate you bringing that up at this point in time. So that's what we will do. We'll go with the presentation of witnesses by MCI; Staff will present its testimony through its witnesses; and then US West will follow. MS. ANDERL: Thank you. JUDGE BERG: You're welcome. Let's talk about witnesses a little bit, to begin with. At this point in time, if the parties feel that they're in a position to prepare witness lists for exchange among themselves, can we produce a list of witnesses that will be called at the hearing itself? And if not today, when might we be able to present a list? MS. ANDERL: Well, Your Honor, it would be my understanding that only the witnesses who had prefiled either direct or rebuttal testimony would be offered up, and then only for cross. JUDGE BERG: Well, sure. MS. ANDERL: So I guess maybe we -- JUDGE BERG: Part of it goes to an order of witnesses. MS. ANDERL: Order of witnesses. JUDGE BERG: As well as whether there are any witnesses who've filed testimony who will not be testifying at the hearing. MR. HUNT: On behalf of MCI, the witnesses who filed their testimony will, as of today, will attend the hearing and will be available for cross. The order that we anticipate that they will testify is Mr. Drew Londgron will go first. He'll be followed by Michael Beach. Robert Iannotta will be our third witness, and Colleen Coughlan will be the fourth witness. I don't anticipate many changes, changes to that order, but of course we reserve the right to change it if scheduling problems develop. That's how I see it happening right now. JUDGE BERG: Okay. If there are some changes at a later date, if you would be sure to share that information with myself and the parties, I'd appreciate it. MR. HUNT: We will. JUDGE BERG: Ms. Anderl. MS. ANDERL: To the best of my recollection, we have five witnesses. Victoria Aguilar, Craig Wiseman, Jeffrey Tews, Dodie Osborn, and Terry Dodd, and we have not formalized the order in which we're going to present those witnesses. We do -- or did want to talk today about whether we could schedule a date and, hopefully, time certain for one of our witnesses, who has a very constrained schedule that week, but I'm sure that we can offer up an order of presentation, you know, within a day or two or by the end of next week, certainly, after we've had a chance to talk with our witnesses and find out whether -- you know, confirm whether they have any conflicts on any days. JUDGE BERG: That sounds great. I would appreciate that. I understand that there may be some shift in strategic presentation of the parties' cases. And in the same fashion that MCI's reserved the right to change its order of witnesses as it needs to, in order to present its case in the best light, I'd certainly extend the same to US West. But it will help all parties to have a picture of how the case is going to be presented and to organize and schedule their materials and witnesses, as well. MR. HUNT: Excuse me. I would ask if US West knows which witness they may have to schedule the specific time, and if they could let us know who it is today? MS. ANDERL: I'm sorry? MR. HUNT: Which witness has the time constraint? MS. ANDERL: Oh, that's Dodie Osborn. And actually, what we were just going to do was, you know, try to estimate when we think we'll be done crossing your witnesses and then suggest that maybe we try to take her, you know, at 1:00 on Wednesday or 9:00 a.m. on Thursday or a date and time certain so that -- MR. HUNT: We have no objection to that. JUDGE BERG: All right. And also, in terms of estimating time for witness testimony and rebuttal, I won't ask the parties to estimate their time for witnesses and cross-examination and rebuttal at this point in time, but if -- when might be a date where the parties might be able to submit a letter estimating the time that they would spend on direct, cross and rebuttal? MS. ANDERL: I'm certain that we could do it a week before the start of the hearing, which I think is, like, Tuesday, the 26th of May. MR. HUNT: I would agree with that. MS. SMITH: That sounds good. JUDGE BERG: Good. I'll expect to see that on Tuesday, May 26th, by the close of business. MR. HUNT: Just for my own clarification, could you tell me specifically what it is you're looking for? I don't want to leave anything out. JUDGE BERG: It's strictly a time estimate, just based upon the case that you've prepared, you know, a ballpark estimate of the time that you intend to spend on direct examination of witnesses, then based upon, you know, likewise, what you know of the other party's case, time that you would spend on cross-examination for opposing witnesses, and also estimates for follow-up testimony, if you can. It's, again, just a matter of trying to get another handle of time management for the case and helping the parties have a picture of what's going to transpire over the course of the three or four days that we're together. MR. HUNT: If I could just clarify, earlier we were talking about the order of the witnesses. We didn't really talk about any of the rebuttal by MCI after -- I guess, in this case now, after US West, since we're going to flip the order. I understand in the rules that is generally the order of the proceeding. So MCI would have a rebuttal period after US West. JUDGE BERG: Ms. Anderl. MS. ANDERL: My understanding of the procedures before the Commission is that MCI's rebuttal is what it filed in this last round of testimony, and we cross on both the direct and rebuttal and the witnesses are to be on the stand only for purposes of cross, so there really wouldn't be any point in putting those witnesses up. Again -- and that, typically, the party who carries the burden, while they're allowed to file two rounds of testimony, both direct and rebuttal, those witnesses only get one opportunity on the stand. That's been my experience in all the contested cases that I've appeared in, including US West's most recent rate case and some others where US West, in fact, carried the burden and filed both direct and rebuttal testimony, but in fact its witnesses only appeared on the stand once. MR. HUNT: I would -- MS. ANDERL: And were not allowed to do oral rebuttal. JUDGE BERG: Mr. Hunt, and then I'll hear from Ms. Smith, if she has anything to say. MR. HUNT: I would just point that 480-09-735, subsection D, which sets out the order of procedure for formal complaints, clearly provisions a round of rebuttal by the Complainant. That rebuttal, I think, would be limited to what comes up in US West's presentation. JUDGE BERG: Ms. Smith. MS. SMITH: I don't have any comment on that. I think that the rules are certainly flexible enough for the presiding officer to allow for some limited rebuttal testimony at the hearing if it's deemed appropriate. JUDGE BERG: Under 480-09-735, (d) lists the order of procedure upon formal complaints. It does indicate a rebuttal by Complainant at the conclusion of the evidence by the Complainant, Respondent, and Commission Staff. I'd just indicate that the parties should just keep in mind that my objective, first and foremost, would be to try and create as complete a record as possible, while maintaining fairness among all the participants to the hearing. I think, at this point in time, it is consistent with 480-09-375 to inform the parties that rebuttal by Complainant at the conclusion of the Complainant's, Respondent's and Commission Staff's case is appropriate. While the part two of that code section does provide for modifications of procedures by the presiding officer, I will allow for rebuttal by the Complainant. I will be looking to limit rebuttal by the Complainant to issues that may be raised upon cross-examination and that were not fully presented during direct testimony. The fact that the parties have had an opportunity to file rebuttal testimony, I would expect that they would combine relevant rebuttal testimony, which has been prefiled, with their prefiled direct testimony, to make as complete a presentation as possible. Did you follow that, Ms. Anderl? I know you were consulting with your client at the same time. MS. ANDERL: Yes. JUDGE BERG: All right. So please combine your prefiled rebuttal testimony with your prefiled direct testimony to make as complete a case as possible on the direct presentation of evidence of the hearing. To the extent that there are new issues that come up during cross-examination that should be further explored by the parties, I will allow for rebuttal. I will also allow for re-cross-examination on that basis. Rebuttal is not intended to allow parties an opportunity to reargue the positions that have already been presented to the Commission, but is intended to either elaborate or to clarify issues that arise as the result of cross-examination. Is that all right, Mr. Hunt? MR. HUNT: That's perfectly all right. JUDGE BERG: Is that understood, Ms. Anderl? MS. ANDERL: It is understood. JUDGE BERG: Anything else on this issue that you'd like to address? MS. ANDERL: No, thank you. JUDGE BERG: All right. And the parties will get used to my style. I'm going to continue to take your temperatures throughout the proceeding, to make sure that everything's being covered. Don't read anything else into that, other than the fact that I just want to be sure that we've addressed everything and the parties have a chance to raise any other issues that they may have. Ms. Anderl, would you put a date certain on that follow-up with the tentative list of your witnesses? MS. ANDERL: I think, at this point, we can tell you that our plan is to present Ms. Osborn first, and Mr. Tews, then Ms. Aguilar, then Mr. Dodd, and then Craig Wiseman. And we're willing to be held to that unless we advise you otherwise, which we would do by, you know, barring anything unforeseen, we can certainly make that commitment by a week from today. JUDGE BERG: That's unnecessary. With that tentative order -- you know, on the same basis, if either parties have a change, I just want everybody to be apprised of that as soon as possible. I probably mentioned to the counsel present on prior occasions that I really don't like surprises. I'm not going to be obsessive about trying to order and structure this process, but I think if I know that the parties are sharing as much information as possible leading into the hearing, there's less likelihood that there will be any abuse of the process to try and gain some strategic advantage. If everybody knows what we're going to be dealing with going in, I think it will just remove that element from the mix. I think there will probably be enough controversy and tension when we move into the hearing that we -- to the great extent possible, I want to remove all procedural details that I can. If the parties find themselves in the unenviable position where they are being required to cooperate and compete with each other at the same time, that's not an easy dance to learn, much less continue for any prolonged period of time. I think we're moving towards that point. This is part of that process. I think that we all understand the difficulty of positions that the parties find themselves in. I'd just encourage the parties to continue to try and find ways to resolve as many of these problems between themselves as they can. Likewise, I want counsel to know that I am approaching this case by alternatively putting myself in their client's position, trying to step into their shoes and understand where they're coming from, what their concerns are, and I'll just ask counsel to continue to do that for themselves, as well. Trying to imagine where your opposing counsel's coming from, where the opposing client is coming from. There's very likely going to be some issues where the parties just don't agree, but I think that we should be able to identify those issues and present them with as little anger over about the position the parties find themselves in. I think that, not to anthropomorphize the corporate cultures of the parties, but both companies come from a place where they're used to doing things their own way, and it makes it difficult to make find that middle ground. There's probably some justification for being upset with each other, but this is all part of the process of finding some kind of a solution that will resolve the problems that exist. I'll try not to get on my soapbox too much during the process. With regards to motions, I would like to have any issues that come up that need to be resolved after today's prehearing conference to be presented in writing as a motion. I was looking for a code or a reg that set forth a time within which motions need to be presented prior to hearing. Although I've been verbally told that there was a five-day requirement in the past, just in looking things over before coming into the hearing this morning, I didn't find that code or regulation. Ms. Smith or Ms. Anderl or Mr. Hunt, if any of you have any more familiarity with that requirement, I'd sure appreciate the benefit of your experience. MS. ANDERL: I bet I can find it for you, Your Honor. I know it's in there and I think I've got one or two sections that I'm going to look in right now. JUDGE BERG: I was verbally told that there was a five-day requirement for filing motions after prehearing with a three-day reply prior to hearing. The only thing that I found on the short time that I had tracked this down before coming in was as it relates to motions for summary determination. MS. ANDERL: Your Honor, there is a section in 480-09-736, on hearing guidelines, sub two, that motions related to evidence or the procedural course of the hearing must be stated and argued at the start of the day. So of course, that's not the five-day deadline that I know you're talking about, but I think that that would certainly be a guideline for the parties. JUDGE BERG: I did see that. MS. ANDERL: And then -- MS. SMITH: There is subsection 14, addressing motions to dismiss, and there is a -- there are timelines in that one. I'm reading them now. JUDGE BERG: All right, good. That does relate to the verbal information that I have been provided. Good. So I'll ask both parties to refamiliarize themselves -- all parties to refamiliarize themselves with both section 736(2) and 736(14) with regards to motions. My preference is that, in addition to anything that's brought up and resolved here today, that if the parties determine that some motion is necessary, that it be brought to my attention as soon as possible. My personal style is that I feel like I make better decisions the more time I have to think about things. There's certainly a limit to what is reasonable to take in order to arrive at a decision. I'll always be guided by principals of equity and what's the most fair between the parties, but certainly the more complex the issue, the more time it deserves. And I think the parties will be well served, if they know of issues that need to be addressed, to bring them up at the earliest possible time. Are there any questions about that? Okay. With regards to exhibits, I would like to number exhibits in the order of witness appearances, beginning with the witness' direct testimony and the direct prefiled testimony, the prefiled exhibits to direct testimony, then the rebuttal testimony of witnesses, exhibits to rebuttal testimony, and then number exhibits in order of their intended use or presentation during the course of the hearing. I think what we'll do is, before each witness is called to the stand, we will take a break, at which time we will exchange exhibits and number exhibits to be used during the course of direct examination and cross-examination. If, in fact, there are some exhibits that the parties realize should be submitted after the testimony has begun or concluded, I'll certainly entertain submission of those exhibits, as well. My preference is that the parties exchange all documents, all exhibits that they intend to refer to during the direct examination and cross-examination on a witness-by-witness basis. Are there any other suggestions about the exhibit process? Any questions? MR. HUNT: That's a great one. JUDGE BERG: Okay. With regards to numbers of exhibits, in addition to providing a copy to each of the parties of the proceeding, we'll need one copy for the court reporter, and I would like to have four copies. I'll leave it to the parties to do the math. MS. SMITH: Is that for -- does that include the testimony that's been prefiled already or is that just the exhibits that are going to be introduced for the first time at the hearing? JUDGE BERG: Thanks. That will not relate to any of the prefiled exhibits or prefiled testimony. It will just relate to exhibits that are being introduced for the first time. And then I want to, just at this point in time, get the parties' thinking about a briefing schedule. If we just project that we will take up the full four days for a hearing and the hearing concludes on June the 5th, we have a waiver of statutory deadline by MCI of September 4th, 1998, or to September 4th, 1998. While this isn't a situation where there's a tariff which will otherwise go into effect, I believe that to be in compliance with the Federal Telecommunications Act. It is necessary for this Commission to issue a final order in this case on or before September the 4th. Now, if we work our way backwards from there, this is a case where there will be an initial order with an opportunity for petitions for review and answers. Working back, it will require 30 days to review petitions and to draft and file a final order. We'll have 20 plus 10 days for petitions and answers, and I'm going to need 30 days to file -- to write and file an initial order, which, in working back, doesn't leave much time for the parties to prepare briefs subsequent to the hearing and to -- much less to consider reply briefs. So I want the parties to start thinking about that on -- and if, in fact, this means that we need to push that September 4th date out, I'd appreciate MCI considering it and consulting with other counsel about that. MR. HUNT: We will, and I got lost in your backtracking from the days. JUDGE BERG: All right. MR. HUNT: Based on what you had -- time frames you were listing, what would have been the time -- when would a brief have to have been filed in that? JUDGE BERG: Probably -- MR. HUNT: Before the hearing. JUDGE BERG: On the date before the hearing concludes. MR. PENA: That will be a challenge. JUDGE BERG: While I think there will be some issues that we'll be able to identify before the end of the hearing that the parties could probably start working on immediately, I think if, in fact, we're going to produce a schedule that, again, allows enough time to write a good initial order and for the Commission to spend a reasonable amount of time reviewing petitions and preparing the final order, that there may not be much time. We can certainly, you know, compromise the existing schedule somewhat to provide for a time for closing briefs to be filed, but then the parties need to think about whether or not they want an opportunity to file a reply brief in closing. I think it's, you know, something that I'd like the parties to discuss among themselves. And we don't have to work this out before the end of the hearing itself. MS. SMITH: If I may, perhaps the parties can get together before the hearing and perhaps Mr. Hunt can find out how flexible MCI is on that September date, and perhaps we can present a joint schedule at the beginning of the hearing for briefing, and we may be able to work that out pretty well among ourselves. JUDGE BERG: I know Mr. Harlow, in representing MCI, was certainly concerned about delays in reaching some kind of final resolution. I know that he had to consult with his client in order to arrange for a waiver of the deadline to September the 4th. I don't want to see this matter extended any longer than necessary, but I think it's important for MCI to look at the situation and likewise think about what it needs to present its case the way it needs to present it. In looking at the -- in allowing 30 days to write an initial order and 30 days for review and final order, you know, it might be possible to carve 10 or 15 days out of that to give the parties to file a closing brief at conclusion of the hearing without extending that date. At the same time, if the parties feel they need more time themselves to obtain a transcript and do a thorough job of briefing their case, then that's something for them to consider, and we can talk about that at the start of the hearing. And hopefully, by the time the hearing concludes, we'll have some kind of a consensus about what makes sense for all parties. MS. ANDERL: Your Honor, I don't know if we've had this discussion before or even today, and I just didn't hear it, but I just would point out to you that the 10-month deadline can be extended for cause, in terms of the deadline for an order of formal complaints. And it seems to me that the Commissioner or the presiding officer might be able to make that determination even without the consent of the complaining party. Now, I say that very cautiously. JUDGE BERG: Why don't you give me the reference to the section you're looking at? I'll study that in the interim. It's something that I would always be somewhat reluctant to do, but it's something that if, in fact, that's the situation, I'll consider that when the time comes. MS. ANDERL: RCW 80.04.110, subsection three. JUDGE BERG: Okay. MS. ANDERL: About halfways through or two-thirds of the way through. JUDGE BERG: All right. That takes care of most of the procedural items I had on my checklist. Before we address this MCI request to depose witness and the possibility of US West's request for surrebuttal, are there any other routine procedural matters that the parties can think of that should be addressed at this time? Ms. Anderl. MS. ANDERL: Do you want to establish a start time for the May 2nd -- or the June 2nd? Nine-thirty? JUDGE BERG: I think on June 2nd, why don't we start at 9:00, because I think we'll have some administrative matters to take care of in the morning and we'll just want to do a short review of the procedures to be followed. And on the successive dates, we'll start at 9:30. We'll work out a closing time based upon the -- or a daily ending time based upon the estimates that the parties develop for testimony and cross-examination and rebuttal, and then we'll try not to leave ourselves in a pinch on the last day, whenever that might be. Anything else? All right. Why don't we go ahead and address some of the issues that the parties have previously raised in correspondence with each other and the Commission. And Ms. Anderl, just to touch on the first point, has US West decided whether it wants to request the opportunity to file surrebuttal testimony? MS. ANDERL: We've looked at that and we're not making that request at this time. JUDGE BERG: Okay. If you deem that necessary at some later point in time, just follow the process that we've discussed by filing a written motion and, again, if that's something that US West deems necessary, the sooner that the request is made, the more likely it will receive favorable treatment. MS. ANDERL: There may, of course, be an oral request for oral surrebuttal at the