*Pages 1--10 from D:\Pdf2Text\Ready4Text_in\pdf\21053.pdf* Richard T. Ellis Director – Federal Affairs August 30, 2002 1300 I Street, NW Suite 400 West Washington, DC 20005 (202) 515- 2534 (202) 336- 7866 (fax) Ex Parte Marlene H. Dortch Secretary Federal Communications Commission 445 12 th H Street, SW, Portals Washington, DC 20554 Re: Joint Application by Verizon for Authorization To Provide In- Region, InterLATA Services in States of Delaware and New Hampshire, Docket No. 02- 157 Dear Ms. Dortch: Verizon has previously demonstrated in its application in this proceeding that Verizon has satisfied the requirements of Section 271 of the Act, and the Delaware commission has agreed based on the results of its own extensive investigations. Likewise, the United States Department of Justice recommends approval. As Verizon also previously demonstrated, the Delaware commission has adopted a full suite of rates for unbundled elements that it has concluded are TELRIC- compliant. Consequently, the voluntary measure that Verizon is implementing, as described below, is not in any way necessary to demonstrate compliance with Section 271, other sections of the Act, or the Federal Communications Commission’s rules. Nonetheless, because an issue has been raised regarding the level of Verizon’s non- loop rates, Verizon is voluntarily modifying its unbundled switching rates in Delaware to eliminate any possible argument that these rates exceed the TELRIC range. Specifically, Verizon is reducing its originating unbundled switching rate from $. 003634 to $. 002507, and its terminating unbundled switching rate from $. 001927 to $. 001330. As indicated in the attached letter to the Delaware commission, the new switching rates are applicable to all CLECs operating in Delaware, and will remain in effect until the Delaware commission otherwise modifies the rate. See Attachment 1. These rate reductions are effective immediately. Additionally, Verizon notified CLECs of the new switching rates today by email via the normal change management process. 1 As the chart in Attachment 2 demonstrates, with these rate reductions, the Delaware non- loop rates benchmark to the New York non- loop rates using the FCC’s USF Model. Specifically, the relative level of non- loop costs in Delaware, as determined by the FCC’s USF model, are 11 percent more than the cost level in New York, while the statewide average non- loop rate for Delaware is also 11 percent higher than the statewide non- loop rates in New York. This analysis uses state- specific assumptions, including DEM minutes of use, as outlined in Attachment 3 to the Martin/ Garzillo/ Sanford Decl. Because the reduced Delaware switching rates result in the Delaware non- loop rates benchmarking to the New York non- loop rates, which the long distance carriers have repeatedly championed, there should be no question that the Delaware non- loop rates are within the range that a reasonable application of TELRIC would produce. Please let me know if you have any questions. The twenty- page limit does not apply as set forth in DA 02- 1497. Sincerely, cc: H. Thaggert V. Schlesinger G. Remondino T. Wilson 2 ATTACHMENT 1 3 Julia A. Conover Vice President and General Counsel- Delaware 901 Tatnall Street 2nd Floor Wilmington, DE 19801 Tel. 215- 963- 6001 Fax 215- 563- 2658 August 30, 2002 Via Hand Delivery Ms. Karen Nickerson Commission Secretary Delaware Public Service Commission 861 Silver Lake Boulevard Cannon Building, Suite 100 Dover, DE 19904 Re: In the Matter of the Inquiry Into Verizon Delaware Inc. ’s Compliance With the Conditions Set Forth in 47 U. S. C. § 271( c), Docket No. 02- 001 Dear Ms. Nickerson: In Phase I of its proceeding setting rates for Verizon Delaware Inc’s (Verizon DE’s) Unbundled Network Elements, the Commission adopted rates for unbundled switching using the TELRIC methodology. 1 Certain parties have raised concerns about Verizon DE’s switching rates in the proceeding before the Federal Communications Commission to consider Verizon’s application for long distance authority in Delaware. While Verizon DE continues to believe that its UNE switching rates are TELRIC-compliant, in order to resolve those concerns, Verizon DE is reducing its unbundled switching rates 31%. Specifically, Verizon is reducing its originating unbundled switching rate from $. 003634 to $. 002507 and its terminating unbundled switching rate from $. 001927 to $. 001330. These rate reductions will be effective immediately. These new switching rates will be applicable to all CLECs operating in Delaware and shall remain in effect until the Commission otherwise modifies the rates. All CLECs will be notified of this change by a change management notice that will be distributed via E- MAIL. 1 In the Matter of the Application of Bell Atlantic- Delaware, Inc. for Approval of Its Statement of Terms and Conditions under Section 252( f) Of The Telecommunications Act of 1996, PSC Docket No. 96- 324, Findings, Opinion and Order No. 4542, dated July 8, 1997 (“ Phase I Order”). This portion of the Commission’s Phase I was affirmed on appeal by the United States District Court for the District of Delaware. Bell Atlantic- Delaware, Inc. v. McMahon, 80 F. Supp. 2d 218 (D. Del. 2000). 4 Please do not hesitate to contact the undersigned should the Commission require further information about this matter. Very truly yours, Julia A. Conover JAC/ meb Enc. Via E- Mail and UPS Overnight Delivery cc: Attached Certificate of Service 5 CERTIFICATE OF SERVICE PSC Docket No. 02- 001 I, Julia A. Conover, Esquire, hereby certify that I have on this day served Verizon Delaware Inc. ’s letter to Karen Nickerson, Commission Secretary, upon the participants below. Dated at Philadelphia, Pennsylvania, this 30 th day of August, 2002. Via Electronic Mail and UPS Overnight Delivery Hearing Examiner Consultant To The Hearing Examiner *William F. O’Brien John Antonuk Delaware Public Service Commission The Liberty Consulting Group 861 Silver Lake Blvd. P. O. Box 237 Suite 100 65 Main Street Dover, DE 19904 Quentin, PA 17083 Telephone: 302- 739- 3232 Telephone: 717- 270- 4500 Facsimile: 302- 739- 5258 Facsimile: 717- 270- 0555 Staff Case Manager Division Of The Public Advocate *Patricia A. Stowell *G. Arthur Padmore Delaware Public Service Commission Division of the Public Advocate 861 Silver Lake Blvd. 820 N. French Street, 4 th Floor Cannon Bldg., Suite 100 Wilmington, DE 19801 Dover, DE 19904 Telephone: 302- 577- 5077 Telephone: 302- 739- 3227 Ext. 10 Facsimile: 302- 577- 3297 Facsimile: 302- 739- 4849 Staff Counsel Court Reporter *Gary A. Myers, Esq. Corbett & Associates Delaware Public Service Commission 1400 French Street 861 Silver Lake Blvd. Wilmington, DE 19801 Suite 100 Telephone: 302- 571- 0510 Dover, DE 19904 Facsimile: 302- 571- 1321 Telephone: 302- 739- 4247 Facsimile: 302- 739- 4849 Public Advocate’s Consultant AT& T Comm. Of Delaware, Inc. Ralph Smith Wendie C. Stabler, Esquire Larkin & Associates Saul, Ewing, Remick & Saul 15728 Fannington Road Post Office Box 1266 Livonia, MI 48154 Wilmington, DE 19899- 1266 Telephone: 734- 522- 3420 Telephone: 302- 421- 6865 Facsimile: 734- 522- 1410 Facsimile: 302- 421- 6813 6 Cable Telecomm. Assoc. Cavalier Telephone, L. L. C. Of Md, De & Dc Stephen Perkins John Conwell Cavalier Telephone, L. L. C. Cable Telecommunications 2134 W. Laburnum Ave. Assoc. of MD, DE & DC Richmond, VA 23227 2530 Riva Road, Suite 316 Telephone: 804- 422- 4517 Annapolis, MD 21401 Facsimile: 804- 422- 4392 Telephone: 410- 266- 9111 Facsimile: 410- 266- 6133 Martin Arias, Esq. Wayne O’Dell, President 965 Thomas Drive Cable Telecommunications Warminster, PA 18974 Assoc. of MD, DE & DC Telephone: 267- 803- 4002 2350 Riva Road, Suite 316 Facsimile: 267- 803- 4147 Annapolis, MD 21401 Telephone: 410- 266- 9111 Facsimile: 410- 266- 6133 AT& T MCI Worldcom, Inc. Michael A. McRae, Esq. William A. Denman, Esq. AT& T Communications of Delaware, Inc. Parkowski & Guerke, P. A. 3033 Chain Bridge Road, 3 rd Floor 116 W. Water Street Oakton, VA 22185 Dover, DE 19903 Telephone: 703- 691- 6047 Telephone: 302- 678- 3262 Facsimile: 703- 263- 2698 Facsimile: 302- 678- 9415 Sprint Comm. Company, L. P. Wood & Wood Jennifer A. Duane, Esquire Don J. Wood Sprint Communications Company, L. P. 4625 Alexander Drive 401 9 th Street, NW, Suite 400 Suite 125 Washington, DC 20036 Alpharetta, GA 30022 Telephone: 202- 585- 1937 Telephone: 770- 475- 9971 Facsimile: 202- 585- 1894 Andrew O. Isar Dena Alo- Colbeck, Esq. Association of Communications Enterprises 7901 Skansie Avenue, Suite 240 Gig Harbor, WA 98335 Telephone: 253- 851- 6700 Facsimile: 253- 851- 6474 7 Staff Counsel in DE PSC 96- 324, Phase II Consultant To The Hearing Examiner Francis J. Murphy, Esquire in DE PSC 96- 324, Phase II Murphy, Spadaro & Landon Robert Stright 824 Market Street The Liberty Consulting Group P. O. Box 8989 P. O. Box 237 Wilmington, DE 19899 65 Main Street Telephone: 302- 654- 4600 Quentin, PA 17083 Facsimile: 302- 654- 4775 Telephone: 717- 270- 4500 Facsimile: 717- 270- 0555 * Hand service and e- mail _____________________________ Julia A. Conover 8 ATTACHMENT 2 9 State Statewide Model Non-Loop Cost Statewide Average Non- Loop Rate Cost Ratio to New York Rate Ratio to New York Compliant? NY $3.50 $5.63 100% 100% -- DE $3.87 $6.23 111% 111% Yes 10