Exhibit No.___(JRL-T) Docket Nos. UT-960369, 370. 371 I. Introduction and Purpose of Testimony GTENW Rebuttal Langley - 1 1. PLEASE STATE YOUR NAME AND BUSINESS ADDRESS. A. My name is Rodney Langley. My business address is 600 Hidden Ridge, Irving. Q. BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY? A. I am employed by GTE Service Corporation as Manager - Costing. Q. ARE YOU THE SAME RODNEY LANGLEY WHO FILED TESTIMONY ON AUGUST 20, 1998 IN THIS PROCEEDING? A. Yes. B. WHAT IS THE PURPOSE OF YOUR TESTIMONY IN THIS PROCEEDING? A. The purpose of my testimony is to respond to the direct testimony of NEXTLINK’s witness, Mr. Douglas Sobieski. Revised Direct Testimony of Douglas Sobieski, NEXTLINK Washington, INC. , October 12, 1998; Docket Nos. UT-960369, -960370 and -960371. Q. WOULD YOU PLEASE SUMMARIZE YOUR TESTIMONY. A. I will begin with concerns I have with the overall methodology used by Mr. Sobieski in his direct testimony. Secondly, I will rebut his specific methodologies and assumptions relative to his assertion of “market price” as a component cost element of collocation non-recurring charges. II. General Concerns With Mr. Sobieski’s Methodology Q. WHAT GENERAL CONCERNS DO YOU HAVE REGARDING MR. SOBIESKI’S METHODOLOGY? A. I have a number of general concerns with Mr. Sobieski’s assumptions. Mr. Sobieski states in his testimony that he “made some basic assumptions about the activities and facilities that are required to prepare and construct physical collocation space... [I] then solicited bids from independent vendors and contractors for the amounts they would charge to undertake those activities and/or provide the necessary facilities.” Sobieski, page 2 at line 20 and continuing to page 3 at line 1. I understand that the response to those bids by vendors and contractors is Mr. Sobieski’s means to establish “market price,” and that he further defined “market price” as a reflection of “the total investment in construction and facilities necessary to accommodate physical collocation”. Sobieski, page 11 at line 4. Locating suitable firms to construct and install telephone plant and related facilities, more specifically collocation facilities, cannot be accomplished by letting one’s “fingers do the walking through the Yellow Pages.” GTE, US West and other ILECs, have a list of requirements for potential contractors to meet before they can be deemed industry appropriate. GTE Practice 007-017-010 Contractor Administration Procedures for Engineering, Construction, Installation, or Maintenance of Telephone Plant; Pages 9-10. Issued March 3, 1994. III. Concerns With Specific Collocation Components in Mr. Sobieski’s Testimony Q. WHAT ARE YOUR CONCERNS WITH SPECIFIC COLLOCATION COMPONENTS DETAILED IN MR. SOBIESKI’S TESTIMONY? A. There are a number of collocation components identified by Mr. Sobieski beginning on page 4 and continuing through page 8. I would like to briefly deal with each of those elements and Mr. Sobieski’s corresponding assumptions. And, where applicable, I would like to compare or contrast Mr. Sobieski’s proposed “market rates” with cost elements set forth in GTE’s new collocation cost study. GTE’s new collocation cost study has not been filed in Washington. It was only recently completed, and will be considered soon in California, Texas and Florida. A. Cage Construction Q. PLEASE IDENTIFY YOUR CONCERNS WITH MR. SOBIESKI’S RECOMMENDATION FOR CAGE CONSTRUCTION. A. Mr. Sobieski submitted, along with his RFP for cage construction, an accompanying diagram of the proposed cages. Sobieski, Exhibit No. C-_____(DS-2), Attachment A. A requirement Mr. Sobieski failed to include in his RFP was information indicating to the contractor, in this case a fencing contractor, where the “cages” were to be constructed. The wording of the RFP on record was not specific to make it clear that what was being asked for was the erection of a collocation cage. It simply asked that a “cage” be erected. U S WEST’S Fourth set of data requests, at page 2 at line 17. I will agree that physical collocation is not “rocket science.” Sobieski, page 3 at line 9. But, collocation cage construction is not the same “kind of construction that goes on outside of the telecommunications context,” as Mr. Sobieski alludes to in his testimony. Sobieski, page 3 at line 11. Collocation is defined by its environment as telephony and with that definition comes more requirements than simply constructing a chain-link fence enclosure. The environment of a central office is a highly controlled environment. When construction, equipment installation or even janitorial services take place in a telephone central office, there are concerns that must be taken into consideration. The primary concern is the watchful care not to jeopardize nor endanger the normal functioning of adjacently housed switching equipment and/or other sensitive telecommunications equipment so as to disrupt the network. I would cite a second example more specific to the question of collocation cage construction - that of making sure that dust and other debris generated in the construction process are kept away from that operating equipment. These minimal precautions as “exemplary purposes” as referred to by US West in their Request for Data, U S WEST’S fourth set of data requests, at page 3 line 3. must be met. But, they are not detailed nor even alluded to in Mr. Sobieski’s filed testimony. Sobieski, Exhibit No. C-_____(DS-2). “Scope of work: Construct two rows of five cages each for a total of ten (10) cages. To be constructed of galvanized cyclone fencing and fencing products.” These omissions result in figures that are skewed lower than appropriate. In the calculation of space used by the collocation area another element is missing. The FCC has allowed LECs to construct a separate partitioned area in their central offices for security. First Order and Report; FCC 96-325, August 8, 1996, ¶ 598. That partition is also usually constructed from chain-link fencing material. Sobieski, Exhibit No. C-_____(DS-2). Attachment A. Thus, necessary labor and material charges for partitioning, which should have been included by Mr. Sobieski in his RFP, were not taken into consideration. Mr. Sobieski has again omitted a necessary cost element and thus projected a lower “market price.” GTE acknowledges in its new collocation cost study that “due to the variability of collocation projects, ....not all costs elements will be incurred on each project. The fencing material that is used to separate the collocation area from GTE’s area,” GTE Expanded Interconnection Services, Physical/Virtual, Non-Recurring Cost Study; California Section 2; Page 4 of 9. is costed in 100 square feet of surface increments for 100 square foot partitioned areas and 25, 50 and 75 square foot partitioned areas. GTE offers a cost element that fits the requirements of individual collocation needs as opposed to a one-size-fits-all solution that is offered by Mr. Sobieski. Mr. Sobieski states on page 8 at line 5 that the area used for collocation in a given central office should be 1,000 ft2 , as shown in his diagram. In actuality, his diagram presents a collocation area with a footprint of 1,500 ft2, when the non-designated space as an aisle-way between the cage openings is taken into consideration as a part of the total partitioned space used for collocation. The non-designated space not taken into consideration is space in a GTE central office that we can no longer use to serve our customer base. This additional omission is another defect in Mr. Sobieski’s analysis. One other incorrect assumption is that in each and every case there is “sufficient HVAC to cover the entire collocation area.” Sobieski, page 4 at line 21 and continuing to page 5 at line 1. On occasion it may be necessary to adjust capacities, duct work and air-handler flow requirements to accommodate the increased heat generated by collocation equipment. Mr. Sobieski’s assumption here overlooks another possible cost consideration. B. Cable Racking GTE standard nomenclature for rack, ladder racks and risers is “super-structure.” Q. PLEASE IDENTIFY YOUR CONCERNS WITH MR. SOBIESKI’S RECOMMENDATION FOR CABLE RACKING. A. Mr. Sobieski’s assumptions on cable racking also falls short of the mark. On page 11 at line 16, he assumes that a LEC should construct “dual parallel ladder racking over the 1,000 square feet of collocation space to support telecommunications and power cabling sufficient to supply the equipment throughout the collocation area.” The failure of his assumption was not identifying the total requirements of this cost element. What he fails to take into consideration is the necessary cable racking from an available point of existing cable racking in the CO and ultimately connecting with the collocation cage and its necessary cable racking. This omission causes him to understate the cable racking cost element. This cost element, as identified in the new GTE collocation cost study, includes applicable engineering costs. Again, due to the variability of requirements for most collocation projects, labor and materials are calculated to 10 ft. lineal increments. GTE EIS Non-recurring Cost Study, California; Section 2, Page 6 of 9. C. Power Systems Q. PLEASE IDENTIFY YOUR CONCERNS WITH MR. SOBIESKI’S RECOMMENDATION FOR POWER SYSTEMS. A. Mr. Sobieski “assumed a battery plant and charger system sufficient to supply the DC power needs of the equipment collocated in the collocation area.” Sobieski, page 6 at line 9. When a new GTE central office is planned, power supplies are engineered on a forward-looking “Needs-Plus” (N+1) basis. This assures available capacities for future placement and utilization of additional equipment in the design phase of the CO. Available and present power capacities can be determined at any point along a life-cycle time line by calculating how far along the N+1 curve requirements have progressed. An available “sufficient supply of DC Power” is dependent on that calculation, and is therefore a variable in collocation cage construction. Augmentation of power supplies must be looked at on an as-needs-be basis per the requirements of the collocator at the time of the collocation request. Collocator’s equipment and power requirements are not typically included in the N + 1 requirements since their equipment configuration is undefined and un-forecasted. Irrespective of available power, the costs associated with the delivery of DC power are applicable to the collocator’s request and therefore appropriate. Mr. Sobieski assumes them away. D. Entrance Facilities Q. PLEASE IDENTIFY YOUR CONCERNS WITH MR. SOBIESKI’S RECOMMENDATION FOR ENTRANCE FACILITIES. A. Mr. Sobieski assumes that Entrance Facilities will need “600 feet of fiber and the necessary fiber splicing, fiber distribution frame, conduit, innerducts, and cable racking.” Sobieski, page 7 at line 3. I have a number of concerns here. GTE, in an effort to make the collocation process more cost efficient and to provide to our collocating customers quality service, pulls the collocator’s cable through the manhole to the cable vault where it is housed in innerduct, and continues on to the collocation cage. The result is a continuous length of cable or fiber with no unnecessary splices or block terminations from the CAP/CLEC’s point of presence directly to the collocation cage. This is a more practical and efficient solution and it accomplishes two important things. First, it greatly diminishes the possibility of trouble occurrences at termination points, (e.g., a fiber distribution frame). Second, it allows for more efficient through-put end-to-end testing capabilities for the CAP/CLEC. In addition, there is no need for “market rate” sub-components for a 600 ft. length of fiber (or copper) and necessary fiber splicing, nor a fiber (or copper) distribution frame. Mr. Sobieski’s assumption at page 13 line 12 that the “entrance facility accommodates four innerducts with 144 fibers per innerduct” is also incorrect. GTE does not provision vacant fiber to the first manhole. Given the standard GTE uses of through-put of continuous fiber (or copper), GTE prefers that the CLEC provide sufficient length of cable to be pulled from the manhole to the collocation cage. This minimizes splicing and intermediate connections. There is one additional minor concern dealing with innerducting. On paper and in conversation, four 1" innerducts seem to go into one 4" PVC conduit. But, because of the insulation around innerducting, only three innerducts can actually physically fit inside a four inch PVC conduit. So, in reality, costs reflect only three innerducts in each four inch PVC conduit. E. Engineering Services Q. PLEASE IDENTIFY YOUR CONCERNS WITH MR. SOBIESKI’S RECOMMENDATION FOR ENGINEERING SERVICES. A. Again, Mr. Sobieski did not prepare sufficient detail in his assumption of engineering services as a cost element. The process of placing a collocation cage includes pre-engineering work to determine if the space is available in a given CO for collocation access and facilities. Additional engineering services during the construction phase, as identified in GTE’s new collocation cost study, include planning and design work, installation, and testing from the following disciplines: Central Office Equipment Engineering, Central Office Equipment Installation Engineering, Outside Plant Engineering, and Land and Building Engineering. Each discipline has a specific role to play in the total task. Mr. Sobieski was not specific enough in the type or necessary qualification needed by his engineer to perform the required work. A general engineer with no specific exposure to telephone plant could just as well be hired for an average “market rate” of $50.00 per hour. Also see Sobieski, Exhibit No. _____(DS-1), page 2. The new GTE collocation cost study done for California uses 1997 National Composite labor rates. For Central Office Equipment Engineering and Land and Building Engineering, the composite rate is $67.64. Mr. Sobieski provides no support for the hourly rate ($50.00) for engineering services and understates typical telecommunication engineering rates by 26.1%. IV. Market Caps Q. SHOULD THE COMMISSION ADOPT NEXTLINK’S PROPOSAL FOR MARKET CAPS ON COLLOCATION PRICING? A. No. It is been demonstrated in this rebuttal testimony that NEXTLINK’s assumptions for “market based” rates are inaccurate and incomplete. Instead, GTE suggests that GTE witness Lee’s recommendation of interim pricing based on GTE’s FCC collocation tariff be approved See direct testimony of R. Kirk Lee in Docket Nos. UT-960369, 370, 371, filed July 9, 1998, Exhibit No. ____(RKL-T), page 39.. GTE could prepare and file its new collocation cost study for the State of Washington within 90 days of a Commission request to do so. Q. DOES THAT CONCLUDE YOUR TESTIMONY? A. Yes. Table Of Contents I. Introduction and Purpose of Testimony 1 II. General Concerns With Mr. Sobieski’s Methodology 2 III. Concerns With Specific Collocation Components in Mr. Sobieski’s Testimony 3 A. Cage Construction 3 B. Cable Racking 7 C. Power Systems 8 D. Entrance Facilities 9 E. Engineering Services 10 IV. Market Caps 12 BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Pricing Proceeding ) for Interconnection, Unbundled ) DOCKET NO. UT-970369 Elements, Transport, and Termination, ) and Resale ) _____________________________________ ) ) In the Matter of the Pricing Proceeding ) DOCKET NO. UT-960370 for Interconnection, Unbundled ) Elements, Transport, and Termination ) and Resale for U S WEST ) COMMUNICATIONS, INC. ) _____________________________________ ) ) In the Matter of the Pricing Proceeding ) DOCKET NO. UT-960371 for Interconnection, Unbundled ) Elements, Transport, and Termination ) and Resale for GTE NORTHWEST ) INCORPORATED ) _____________________________________ ) REBUTTAL TESTIMONY OF J. RODNEY LANGLEY ON BEHALF OF GTE NORTHWEST INCORPORATED SUBJECT: COLLOCATION NOVEMBER 9, 1998