BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION Investigation of Universal Service Issues ) and the Development of Suitable Processes ) UT-980311 to Accomplish the Investigation. ) COMMENTS OF GTE NORTHWEST INCORPORATED May 20, 1998 Pursuant to the discussions at the May 15, 1998 prehearing conference in this matter, GTE Northwest Incorporated (GTE) submits these Comments on the issue of expediting discovery, and on the cost model GTE intends to support. DISCOVERY During the conference AT&T volunteered to distribute its data request responses from a Minnesota docket concerning the version of the Hatfield or HAI cost model expected to be sponsored by Commission Staff in this case (HAI 5.0a). The idea is to expedite the distribution of HAI information to the parties in this Washington case and to reduce the need for the parties to propound data requests concerning the HAI model. Provided the parties -- including particularly the HAI sponsor(s) and proponent(s) --agree that the Minnesota information can be used for this Washington case, including being introduced into evidence (to the extent it is relevant), AT&T=s proposal could be useful and should be accepted. GTE understands that this proposal is not meant to foreclose the parties from propounding new or additional discovery, and GTE agrees that provision of the Minnesota material could not be a total substitute for discovery in this docket. While it should cut down on data requests, additional inquiries will need to be made. For example, since the Minnesota proceedings, it has come to light that certain information from a geographic location data provider used by HAI may have a fundamental flaw in its clustering algorithm. According to documents filed by Sprint with the Federal Communications Commission (AFCC@), the HAI 5.0a model builds only 60%-70% of the minimum plant necessary to connect customers in its clusters. Obviously, new discovery on this issue would be appropriate. In addition, since this proceeding will determine the forward-looking cost of providing universal service in Washington, not Minnesota, some discovery requests related to Washington-specific data will be necessary in order to analyze the HAI model. Therefore, GTE supports AT&T=s proposal with the understanding that the Minnesota data can be used as evidence in this Washington proceeding and that additional discovery is not precluded. GTE=S MODEL SELECTION RECOMMENDATION At the conference GTE was asked whether it has decided which cost model it will propose the Commission select in this proceeding. Due to the schedule currently proposed for this matter, GTE will support the use of BCPM as an interim measure until GTE can provide its company-specific model, ICM, to the Commission for universal service support purposes. GTE does not intend to be a Asponsor@ of BCPM in the sense of providing technical testimony in support of that model. GTE understands that U S WEST and Sprint will sponsor BCPM in this manner. For purposes of testimony filing, however, GTE will consider itself a Aproponent@ of BCPM and submit testimony on BCPM=s adoption and use for interim purposes on the first testimony prefiling date, e.g., the June 15, 1998 date proposed in the Commission=s May 4, 1998 Notice of Prehearing Conference. As GTE will discuss in its testimony, ultimately the Commission must calculate the universal service support needs for each incumbent local exchange carrier (AILEC@) using each company=s own costs as determined by each company=s forward-looking cost models and inputs. It is inappropriate for the Commission to use a single statewide model or one-size-fits-all approach. Rather, the Commission should use both company-specific models and inputs to produce company-specific cost studies, and aggregate the results in a consistent manner across the state. Only company-specific cost studies recognize both the inputs and methods that reflect the actual serving areas and production technologies used by the given company. GTE=s company-specific engineering cost model (the Integrated Cost Model or AICM@) will ultimately be the best model for determining universal service support in GTE=s service territory in Washington. Unfortunately, GTE cannot have a Washington ICM universal service cost run and presentation prepared by the June 15, 1998 date proposed for the submission of cost studies. GTE could have such a presentation ready approximately thirty days later, but assuming that the Commission will maintain the current schedule, GTE will submit a BCPM run populated with as many company-specific inputs as possible in the time allotted. Until ICM is ready, BCPM with GTE=s company-specific inputs can be used on an interim basis to quantify the universal service support needed for GTE in Washington. The use of BCPM with company-specific inputs will produce more accurate results than the HAI Model and, in turn, comply with the mandates of both the 1996 Act and the state and federal constitutions. GTE reserves the right to submit ICM at the earliest opportunity.