NOTICES

Procedural Order

[30 Pa.B. 6508]

Public Meeting held
November 29, 2000

Commissioners Present: Robert K. Bloom, Vice Chairperson, Nora Mead Brownell, Aaron Wilson, Jr., Terrance J. Fitzpatrick.

Consultative Report on Application of Verizon Pennsylvania, Inc., for FCC Authorization to Provide In-Region, InterLATA Service in Pennsylvania; Doc. No. M-00001435

Procedural Order

By the Commission:

   Section 271(d)(1) of the Telecommunications Act¹ (TA-96) provides Verizon Pennsylvania, Inc. (f/k/a Bell Atlantic-Pennsylvania, Inc.) (Verizon), with the opportunity to apply to the Federal Communications Commission (FCC) for authority to provide in-region interLATA service in Pennsylvania. However, Section 271(d)(2) of TA-96 provides that the FCC, before making its decision on any such application, is required to consult with the United States Department of Justice (DOJ) and this Commission to verify Verizon's compliance with the requirements of Section 271(c) of TA-96 within Pennsylvania. In general, the requirements of Section 271(c) include a 14-point competitive checklist for access and interconnection on fair and nondiscriminatory terms, as well as non-discriminatory access to Verizon's Operations Support Systems (OSS) and the existence of appropriate OSS performance measures and remedies.

   In the Global Order,² the Commission has previously set forth an outline of the process and procedure we intend to follow during a 100-day review period in developing our consultative report to the FCC under Section 271(d)(2). The process and procedure outlined in the Global Order included the following elements: a final independent third-party OSS test, a determination that Verizon has passed the third-party OSS test, the commencement of a 90-day commercial availability period, the opportunity to submit comments or written testimony, en banc hearings, and submission of this Commission's consultative report to the FCC. Global Order at 254-260.

   Although the Global Order sets forth the above-referenced process and procedure, many further details remain open. The purpose of this Procedural Order is to add further details regarding the process and procedure we intend to follow during our evaluation of Verizon's compliance with Section 271. This Procedural Order is provided as a guide to the method by which the Commission will gather the information necessary for its Section 271 consultative report to the FCC. The Commission will, where necessary, make adjustments to this procedure during the course of this matter.

   Our goal is to invite, collect, sort, record, and evaluate, in a fair and organized manner, information from Verizon and interested participants in order to make a credible, comprehensive, and up-to-date consultative report to the FCC regarding Verizon's application to provide in-region interLATA service in Pennsylvania. We intend to insure that the process is conducted in a manner that is fair to all participants, thorough in its examination of the relevant issues, and appropriate to the fundamental question presented.

   We view the fundamental question as whether Verizon has fully and irreversibly opened the local telecommunications market in Pennsylvania to competition for both business and residential customers via the three (3) modes of entry contemplated by TA-96: facilities-based entry, the use of unbundled network elements (UNEs), and resale. Moreover, we also view as within the scope of Section 271(c) requirements: (a) non-discriminatory access to Verizon's OSS and (b) the existence of appropriate OSS performance measures and remedies.

   We anticipate a high level of interest and welcome widespread participation by competitive local exchange carriers (CLECs) and other interested persons. The Commission expects that the participants will utilize this process to present relevant information to be used in the Commission's Section 271 consultative report. The Commission cautions that this process may not be used to discover information irrelevant to this proceedings.

   The Commission's consultative report is not an ''adjudication'' within the meaning of that term under the Administrative Agency Law, 2 Pa.C.S. § 101 (defining ''adjudication'') because the FCC is the administrative agency with the statutory authority to determine whether Verizon meets the requirements of Section 271(c). In the Commission's opinion, no rights of appeal will arise from issuance of this Procedural Order or the Commission's consultative report to the FCC under these circumstances. Any available rights of appeal would arise only from the FCC's determinations and must be pursued in a federal forum.

   Finally, it is appropriate to note here the status of the independent third-party OSS test (Docket No. M-00991228) and the proceeding to establish OSS performance measures, standards, and remedies (Docket No. P-00991643).³ In Docket No. M-00991228, on November 9, 2000, KPMG Consulting issued and made public its Draft Final Report of the OSS Evaluation Project for Pennsylvania. The cover letter states that none of the items remaining in the ''Not Satisfied'' or ''Not Completed'' categories ''are likely to produce a material adverse effect on competition.'' As such, and pursuant to the procedures set forth in the July 20, 2000 Project Manager letter, the Commission will allocate at least 30 days for technical workshops to permit input by interested parties before issuance of a Final KPMG Report. Based upon that Final KPMG Report, the Commission will determine whether Verizon has passed the third-party OSS test.

   By order entered on November 14, 2000, the Commission acted on Verizon's petition to modify certain performance measures and standards at Docket No. P-00991643. Upon review of Verizon's petition and responses thereto, the Commission granted, in part, the petition to modify the performance measures and standards, directed Verizon to file updated Carrier-to-Carrier Guidelines within 15 days of entry, and further directed that '' the performance measures and standards established herein shall be those used to evaluate Verizon's post-OSS commercial operations in the context of its anticipated 100-day notice of intent to file for Section 271 approval with the FCC.'' As explained in that order, we now view these performance measures and standards as final for commercial availability purposes.⁴

   We now address in further detail the process and procedures to be used in our evaluation of whether Verizon has fully and irreversibly opened the local telecommunications market in Pennsylvania to competition for both business and residential customers.

When Verizon Files Its Notice Initiating Section 271 Process For Pennsylvania

   Under the Global Order, Verizon may initiate the Section 271 approval process for Pennsylvania upon the occurrence of two triggering events related to the independent third-party OSS test being conducted by KPMG Consulting. First, KPMG Consulting must file its final report. Second, the Commission must determine that Verizon has ''passed'' the test. Global Order at 254-260.

   The Commission will determine whether Verizon has passed shortly after the final report is received from KPMG Consulting. The Commission's determination will be communicated in a Secretarial Letter addressed to Verizon, with a copy to those on the OSS test service list at Docket No. M-00991228, and posted on our WebSite.

   Thereafter, as set forth in the Global Order, if Verizon has passed the OSS test, the Section 271 process in Pennsylvania can begin with Verizon's filing of a notice of intent to file its Section 271 application (Verizon's notice of intent). The Commission's Section 271 proceeding will remain open until the Commission completes the submission of its full consultative report to the FCC. The report may recommend approval or rejection of Verizon's anticipated Section 271 application at the FCC. Whether our recommendation is favorable will depend on what is learned during the process.

   In the event that the process reveals any significant problems, Verizon will have several options at its disposal. For example, it could continue with the process and risk an adverse recommendation; it could seek to suspend the proceeding to allow time for a ''fix'' to be implemented; it could attempt to resolve the issue within the allotted time period of this process and prove compliance with a particular checklist item; or, it could withdraw its filing without prejudice. Moreover, the Commission always reserves its right to suspend, revise, or extend the 100-day review period as appropriate to deal with any subsequent developments.

What Verizon Needs To File With This Commission

   The Commission's evaluation of Verizon's compliance with the 14-point checklist, and any related matters, requires access to sufficient and timely information from both Verizon and its competitors. Verizon's notice of intent to file a Section 271 application must be accompanied by information of sufficient detail to allow a full and meaningful evaluation of Verizon's compliance with the Section 271 requirements. Verizon's initial filing with this Commission must be comprehensive, complete and auditable. In other words, Verizon's initial filing before this Commission must be accompanied by all the information presently available at the time of the filing that it intends to file with its application to the FCC. Affidavits are expected to support the auditable data. The comprehensive nature of the initial filing will allow all interested persons the opportunity to develop meaningful input, which in turn will allow the Commission to fully study the relevant issues.

   Relevant issues will include, but are not limited to, Verizon's performance with respect to hot cuts, two-way trunking, dark fiber, subloop unbundling, line sharing, line splitting, and all aspects of digital subscriber line (DSL) services. We believe it is incumbent upon Verizon to explain and demonstrate the manner in which it intends to provide these services. In particular, we are cognizant of the DOJ's concerns regarding Verizon New England, Inc.'s provision of nondiscriminatory access to DSL loops in Massachusetts⁵ and want to be satisfied that DSL loops are being provisioned appropriately in Pennsylvania. We are also aware of the New York Public Service Commission's recent findings that Verizon New York, Inc.'s failure to provide access to line splitting impairs both voice and data competitors' ability to provide customers with desired services.⁶ We recognize that explicit federal standards governing the delivery of line splitting have not yet been developed or imposed on the states. Nevertheless, we believe that line splitting appears to be a critical component in the provision of competitive telecommunications services today. Consequently, we conclude that line splitting should be evaluated as part of our determination as to whether Verizon's local markets are open to competition. An evaluation of line splitting, in light of the New York experience and evolving regulatory expectations brought about by technological change, gives us a better degree of assurance that Verizon's voice and data competitors are able to provide Pennsylvania customers with equivalent service and that Verizon is not hindering the deployment of such advanced services to Pennsylvania customers.

   We have had a favorable experience with the procedure used in the OSS test to record CLEC submission of comments to exceptions and Verizon's responses to exceptions. A similarly ordered submission of information in the Section 271 proceeding would be most useful to all concerned.⁷ Verizon's initial filing should be organized by checklist item and other related category. Any comments from CLECs or other participants on matters relevant to Verizon's worthiness for Section 271 approval or other responses must be similarly organized by checklist item and relevant matter for ease of review.

   Performance data supporting Verizon's filing may be filed on an aggregated basis. Such data, however, must also be provided simultaneously on a disaggregated basis to both the Commission and the relevant competitor. The obligation to provide this data upfront to the CLECs is a modification of Verizon's normal practice of providing competitor-specific data only upon request. All proprietary data must be submitted under seal and otherwise handled appropriately.

   One original, nine (9) hard copies, and thirty (30) electronic copies (CD-ROM) of Verizon's initial filing should be filed with the Secretary's Office using the docket number referenced above. A hard copy of the filing should also be provided to the following: the Commission's consultant for commercial availability reports, the DOJ, the Office of Small Business Advocate, the Office of Consumer Advocate, and the Office of Trial Staff. Verizon shall file notice of its filing to all parties in the OSS test and the PMO dockets and to all CLECs with which it does business in the Commonwealth. The filing also must be posted on Verizon's WebSite. The Commission's WebSite will have a link or reference to Verizon's filing.

   Except for formal Commission Orders, any document that Verizon or interested parties rely upon during the process shall be submitted in hard or electronic copy or referenced to a WebSite from which it can be downloaded. The Commission will take official notice of any Commission proceeding necessary to provide the basis for its report to the FCC. Any out-of-state document relied upon, however, must be submitted in its entirety or be referenced by citation to a WebSite where the document can be downloaded. In either scenario, a pinpoint legal citation must be submitted.

   If Verizon produces additional information that significantly alters the initial notice, the Commission can accept the information filing but reserves the right to extend or restart the schedule on the Section 271 inquiry. We will be most inclined to exercise our discretion to restart the 100-day time period in those instances where the new information had been available for submission with the original filing.

Participation in the Docket

   Interested persons seeking to participate in the Commission's Section 271 inquiry must file a ''Notice of Participation'' with the Secretary of the Commission explaining with specificity their interest and the extent to which they would like to participate. Active participants may participate in discovery, the technical conferences, briefing and the en banc hearings. Inactive participants will receive copies of all filings and may attend public sessions. The notice of participation should be so captioned and reference this docket number. It should be brief and must include the names, telephone numbers and e-mail addresses for (1) the company representative who will be contact person for official Commission documents, and (2) the point person for discovery requests, and (3) any expert witnesses. The Notice of Participation should include all pertinent e-mail addresses since the Commission contemplates an electronic exchange of information during the process.

   The Commission will create and publish a service list on its WebSite and update it periodically. The Commission will not accept a Notice of Participation after Day 35, absent a petition to intervene.

Discovery Process

   An exchange of information between Verizon and the participants will be necessary to fully explore the relevant issues. We will facilitate the exchange of information by naming one or more administrative law judges (ALJ) to oversee a modified form of discovery appropriate to this inquiry. Electronic discovery will be permitted.⁸

   An ALJ will manage all discovery matters. If a participant is dissatisfied with a discovery ruling, it may note its objection on the record. Commission staff will review the objection and make a recommendation as to whether the disallowed discovery request should be included in the Commission's discovery requests. Accordingly, the Commission will not accept any discovery matters for interlocutory review. Consistent with its practice, the Commission reserves the right to issue its own discovery requests at any time. In addition to informal exchanges of information through the technical conferences and otherwise, the participants may submit discovery requests regarding Verizon's filing between Day 1 and Day 27. Verizon may submit discovery requests regarding the participants' comments between Day 36 and Day 62. All responses to discovery requests are due, in hand or electronically, within 10 days of the date the discovery request was received. Discovery will conclude by Day 62. All electronic filings shall be in PDF format to the extent feasible.

Response to Verizon's Filing

   All participants may comment on Verizon's notice and Section 271 supporting documentation. Each participant must organize its comments by checklist items. If a particular participant has no comment on a checklist item, its comments must state that. Also, comments by participants must be accompanied by auditable supporting documentation and affidavits. The comprehensive nature of the comments will allow all interested persons the opportunity to develop meaningful input, which in turn, will allow the Commission to fully study the issues. Comments are due by Day 35.

Technical Conferences

   Technical conferences will be held to facilitate discovery and the informal exchange of information and to assist Verizon and the participants in reaching stipulations on checklist items and related matters. We, therefore, expect the technical conferences to narrow the number of checklist items and related matters to be considered during the en banc hearings. Commission staff members, including one or more ALJs, will manage the technical conferences; they will be designated on or about Day 10.

   There will be a minimum of two technical conferences working simultaneously. There may be sub-groups within each technical conference. One technical conference (Track A) will examine Verizon's initial filings and compliance with Section 271(c) checklist items as well as any comments and responses thereto. The second technical conference (Track B) will focus on the OSS issues, including performance measures, and post-OSS test commercial operation data. One staff member for each technical conference will be identified and assigned responsibility for resolving any discovery disputes, administering an oath to all persons offering testimony, and insuring the creation of a record, including a transcript where appropriate. Additional technical conferences and/or subgroups may be formed as necessary.

   The staff will ensure that the issues are properly identified and categorized for the record. The staff will also facilitate consideration of stipulations or a resolution of any disputed issue. If the participants reach resolution (partial or whole) of any issues supporting compliance with the Section 271 checklist items or related matters, the participants will prepare a written stipulation to be presented into the record on or before Day 70. If the group cannot reach agreement, then staff will submit into the record, on or before Day 80,⁹ a one-page report that identifies the issue and summarizes the divergent viewpoints. The summary should also contain a recommendation on whether the issue should be scheduled for the en banc hearings and, if so, how much hearing time is preferred.

   All applicable process or time requirements set forth in this order and the Global Order will be adhered to. In all other respects, the conferences may be run with the level of flexibility appropriate to meet the goals of the group.

Ex Parte Rules

   The purpose of ex parte rules is to avoid unilateral influence on a decision-maker in an adjudication. However, as mentioned previously, this is not an adjudication. Nonetheless, to insure a fair and orderly process, we shall impose modified ex parte prohibitions on Verizon and the participants after Day 70. Day 70 is the point at which the technical conferences are scheduled to end and we will know what checklist items or related matters will be contested in the en banc hearings. After such time, the Commission and its staff (including our consultant) retain the discretion to initiate communications, but we shall not permit Verizon or the participants to initiate ex parte communications after that time. Any communications initiated by the Commission, staff or the consultant after Day 70 will be noticed in advance to Verizon and the participants.

Commercial Availability Data

   We recognize that the KPMG test of Verizon's OSS was conducted in an artificial environment created solely for the purpose of the OSS test. The OSS test results are very valuable to our evaluation, but the ''most probative evidence that OSS functions are operationally ready is actual commercial usage.'' Application by Bell Atlantic New York for Authorization Under Section 271, CC Docket No. 99-295, Memorandum Opinion and Order (Dec. 22, 1999) at para. 89. Accordingly, we have prepared for the submission of three months' worth of such data following the completion of the OSS test and we intend to retain a consultant to assist our evaluation of such data.

   The commercial operation data reports should be submitted consistent with the PMO proceeding and in a format that enables a CLEC to reasonably reconcile its internal data with the reports. CLEC responses should be consistent with the metrics and submetrics in the PMO proceeding and in a format that enables our consultant to reasonably evaluate the CLECs' data. If there are difficulties, they should be brought to our attention at the earliest possible date. We do require, additionally, that Verizon provide our staff or a requesting CLEC with the raw data files and other backup documentation to support any given company-specific data report.¹⁰ Also, we order a limited-time exception to the practice of distributing the reports only upon request. For purposes of the Section 271 Docket, Verizon must distribute the reports to the individual companies immediately upon the availability of the reports, even absent a request for the information, to insure adequate opportunity for review and comment. Verizon commercial availability data reports must also include the applicable remedies reports.

Briefs

   Briefs, written materials, and affidavits from the parties will be due on Day 80 of the Section 271 inquiry. Parties may include arguments and affidavits to support their position that compliance with certain checklist items has, or has not, been achieved by Verizon.

En Banc Hearings

   The purpose of the en banc hearings is to hear argument on checklist items and related matters which may remain unresolved after the technical conferences and to address information suggesting that Verizon has not met one or more of the Section 271(c) mandates. At the present time, the Commission expects that the hearings will be presided over by an ALJ with cross-examination by the Commissioners, staff, and active participants.

   The Commission anticipates issuing a subsequent notice concerning the scheduling, briefing, and organization of the en banc hearings.

Proprietary Data

   A confidentiality agreement similar to the one used in the Global Order or OSS test proceedings will be provided to the parties who give notice that they wish to participate in this proceeding. Verizon shall submit its proposed confidentiality agreement to the Commission within 10 days of the date of entry of this Procedural order. The parties must sign and return a confidentiality agreement to receive copies of any confidential or proprietary data.

Schedule for Discovery, Comments, Technical Conferences, and Briefs

   In the Global Order, we set forth a schedule that focused mainly upon issuance of the Final KPMG Report, the collection of post-OSS commercial availability data and CLEC responses thereto, written materials for en banc hearings, the en banc hearings, and issuance of the Commission's consultative report to the FCC. Global Order at 258. None of those elements are disturbed by this Procedural Order. However, we find that we need to establish additional process and procedure details to ensure a full and fair evaluation of Verizon's Section 271 application. This Procedural Order provides for, among other things, discovery of Verizon's filing, the submission of CLEC comments to the filing, discovery of CLEC comments, treatment of proprietary information, the conduct of technical conferences, and the scope of final briefs and/or comments prior to the en banc hearings.

   Below is a timeline version of our schedule for creating a consultative report to the FCC on the matter of Verizon's worthiness to obtain authority to provide in-region, inter-LATA service in Pennsylvania. This is the Commission's schedule, and we reserve the right to suspend, revise or extend the schedule as necessary to achieve the purposes of this process.

	Track A: 14-Point Checklist	Track B: OSS Issues, Performance Metrics, and
	And Related Issues	Review of Commercial Operations Data
Day 1 Day 1-27	VZ files notice Discovery of VZ filing	Start collection of CA data
Day 10	PUC commences tech conferences	PUC commences tech conferences
Day 20-29 Day 27	Tech conferences continue Discovery of VZ filing ends	Tech conferences continue
Day 35 Day 35 Day 36-62	CLECs file comments Last day for interventions Discovery of CLEC comments	VZ submits results of first 30 days of CA data
Day 45	Tech conferences continue	CLECs respond to first 30 days of CA data Tech conferences continue
Day 50-59	Tech conferences continue	Tech conferences continue
Day 62 Day 65	Discovery of CLEC comments ends	VZ submits results of second 30 days of CA data
Day 70	Tech conferences end Participants file stipulations Ex parte rules apply	Tech conferences end Participants file stipulations Ex parte rules apply
Day 75		CLECs respond to second 30 days of CA data
Day 80	Participants file Final Comments
Day 90 Day 95	PUC holds en banc hearings	VZ submits results of third 30 days of CA data
Day 100 Day 105	VZ files Section 271 w/FCC	CLECs respond to third 30 days of CA data
Day 120	PUC files Consultative Report w/FCC

Therefore,

   It Is Ordered:

   1.  That this Procedural Order be posted on the Commission's WebSite and published in the Pennsylvania Bulletin.

   2.  That this Procedural Order be served on the Consumer Advocate, the Small Business Advocate, the Office of Trial Staff, the United States Department of Justice, Verizon Pennsylvania, Inc., and all parties on the service lists of Docket Nos. M-00991228, P-00991643, P-00991648, and P-00991649.

   3.  That Verizon Pennsylvania, Inc., submit a proposed confidentiality agreement to the Commission within 10 days of entry of this Procedural Order to be used during our process of evaluating the company's Section 271 notice.

By the Commission,

JAMES J. MCNULTY,   
Secretary

[Pa.B. Doc. No. 00-2183. Filed for public inspection December 15, 2000, 9:00 a.m.]

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¹  Telecommunications Act of 1996, Pub.L. No. 104-104, 110 Stat. 56, codified at 47 U.S.C. §§ 151, et seq., (TA-96).

²  Joint Petition of Nextlink Pennsylvania, Inc., et al., for Adoption of Partial Settlement Resolving Pending Telecommunications Issues and Joint Petition of Bell Atlantic Pennsylvania, Inc., et al., for Resolution of Global Telecommunications Proceedings, Docket Nos. P-00991648 and P-00991649 (Opinion and Order entered Sept. 30, 1999, as clarified by order entered Nov. 5, 1999) (Global Order).

³  Joint Petition of Nextlink, et al., Docket No. P-00991643: Performance Metrics Order (PMO) (Dec. 31, 1999); PMO Reconsideration Order (July 21, 2000); PMO Exceptions Order (Sep. 1, 2000); PMO Remedies Order (Oct. 16, 2000); and PMO Modification Order (Nov. 14, 2000).

⁴  The technical conferences and workshops, as provided for in the PMO, to consider subsequent marketplace experience, technological considerations, and potential refinement of the performance measures and standards, will not take place until after the conclusion of the commercial operations period. PMO Modification Order at 6, and 17-18.

⁵  Application by Verizon New England, Inc., FCC's CC Docket No. 00-176, ''Evaluation of the United States Department of Justice'' (Oct. 27, 2000).

⁶  Proceeding on Motion of the Commission to Examine Issues Concerning the Provision of Digital Subscriber Line Services, NY PSC Case 00-C-0127, Opinion No. 00-12 (Oct. 31, 2000).

⁷  See, e.g., http://puc.paonline.com/Telephone/OSSTesting/Exceptions/exceptions 23c00age.asp

⁸  All parties are encouraged to cooperate in discovery by initiating discovery as early as reasonably possible and by exchanging information on an informal basis. Such cooperation is preferable to numerous or protracted discovery disagreements. Further, there are limitations on discovery and sanctions for abuse of the discovery process.

⁹  Except for the results and responses of the third 30-day period of commercial availability.

¹⁰  A CLEC will receive only its own raw data files. The Commission will receive all raw data files.

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