| STATE FILING
|
|
PUBLIC SERVICE COMMISSION Case 97-C-0271 Petition of New York Telephone Company For Approval of its Statement of Generally Available Terms and Conditions pursuant to Section 252 of the Telecommunications Act of 1996 and Draft Filing of Petition for InterLATA Entry pursuant to Section 271 of The Telecommunications Act of 1996 TELECOMMUNICATIONS RESELLERS ASSOCIATION Usher Fogel Roland, Fogel, Koblenz & Petroccione, LLP Its Attorney One Columbia Place Albany, New York 12207 (518) 434-8112 Of counsel: Andrew O. Isar Director – State Affairs Telecommunications Resellers Association 4312 92nd Avenue NW Gig Harbor, Washington 98335 Dated: Albany, New York August 17, 1999 The focus of this proceeding has been whether New York Telephone has opened its local markets to competition by compliance with the "Competitive Checklist" of Section 271. The pivotal point in that inquiry is whether New York Telephone has been able to demonstrate that it provides services, facilities, and support to its competitors in parity with that which it provides to its own customers. The extensive evidence in the record demonstrates New York Telephone has not complied with the absolute mandate of parity. TRA has participated actively in this proceeding from the outset. It has provided direct evidence on the "real world" experiences of its members which show that, notwithstanding NYT's claims to the contrary, the company is not provisioning, maintaining, and billing its services and facilities on an efficient, timely, or acceptable basis. That evidence is consistent with, and supported by, the experiences testified to by other competitors. The record thus contains overwhelming evidence that New York Telephone does not have the processes in place, has not dedicated the necessary resources, and lacks a corporate commitment, to actually comply with the checklist requirements in a manner which provides parity between itself and its competitors. The results of the extensive KPMG testing, by themselves, do not demonstrate New York Tel is, in the real world, meeting its obligations. The "military-style" format of the KPMG test, restricted to OSS, simply measured NYT's ability to comply with a particular standard at a single point in time. Actual, real world provisioning, maintenance and billing was not verified. There exists only one proper way for NYT to prove its full compliance. That is to require it to demonstrate, as required of Southwestern Bell by the Texas Public Utility Commission, sustained, real world performance over a three month period. Only then can this Commission be certain that NYT's individual "point in time" compliances are not as fleeting as its promises. PUBLIC SERVICE COMMISSION Case 97-C-0271 Petition of New York Telephone Company For Approval of its Statement of Generally Available Terms and Conditions pursuant to Section 252 of the Telecommunications Act of 1996 and Draft Filing of Petition for InterLATA Entry pursuant to Section 271 of The Telecommunications Act of 1996 TELECOMMUNICATIONS RESELLERS ASSOCIATION I. PRELIMINARY STATEMENT TRA is a nationwide trade association which represents more than 700 entities, and nearly 50 New York based members, engaged in, or providing products and services in support of, the provision of value-added telecommunications services. Many of these companies now operate, or in the near future expect to operate, in New York. TRA was created, and carries a continuing mandate, to foster and promote telecommunications resale, to support the telecommunications resale industry, and to protect and further the interests of entities engaged in the resale of telecommunications services. TRA's members provide service through traditional "total service" resale of incumbent local exchange carrier or competitive local exchange carrier retail service offerings, or by recombining unbundled network elements obtained from incumbent local exchange carriers, such as New York Tel, to create "virtual local exchange networks". They primarily serve small to mid-sized commercial, as well as residential, customers, and provide such entities and individuals with access to rates generally available only to much larger users. TRA's members also offer small to mid-sized commercial customers enhanced, value- added products and services, including a variety of sophisticated billing options, as well as personalized customer support functions, that major carriers generally reserve for large-volume corporate users. Because TRA members are smaller than major competitors such as AT&T or MCI WorldCom, and because they provide service to smaller customers not pursued by the larger carriers, they are in a unique position to report on what is occurring in the emerging "middle market" of local service competition. In this Brief, TRA shows that it would be premature to approve New York Telephone's Section 271 application, because the company has not yet demonstrated sufficient compliance with its obligations under Sections 251, 252 and 271 of the Act. And, in particular, NYT has not shown it provides services and facilities to its competitors in parity with what it provides to its own customers. While New York Telephone may have "passed" certain OSS tests, on a one-time basis, in a highly specialized environment, that does not demonstrate the consistent provisioning of reliable services, facilities, billing and support necessary to show the company is either capable of meeting, or intends to meet, its obligation to open the local exchange market to competition. II. LEGAL AND PROCEDURAL BACKGROUND Under Section 271 of the Telecommunications Act of 1996, New York Telephone must demonstrate that it is in full compliance with the "competitive checklist" of Section 271 (c)(2)(B), and that its provision of interLATA service would be "consistent with the public interest, convenience and necessity". Throughout this proceeding, the focus has been, and must be, on whether New York Tel has complied with the Telecom Act's mandate of actual, achieved parity necessary to allow competitors to provision, maintain, support and bill their services on a non- discriminatory basis. As the FCC has repeatedly emphasized, a demonstration of actual parity is an indispensable element of a BOC's proof. See In the Matter of Application of Ameritech Michigan Pursuant to Section 271 of the Communications Act of 1934, as Amended, to Provide In- Region, Inter-LATA Services in Michigan, CC Docket 97-137, "Memorandum, Opinion and Order", FCC 97-298, August 19, 1997. (Hereinafter, the Ameritech Order.) Accordingly, parity is, and must be, as essential an element as any other "test" to be passed by New York Tel. Unfortunately, the record evidence shows parity does not exist now, and has never existed. The burden of proof rests squarely on NYT. (Ameritch Order, para. 43). In TRA's view, that burden cannot be satisfied by a fleeting and momentary occurrence at a single point in time, but must instead be continuous and consistent. From the outset of this proceeding, TRA has been an active participant, and together with numerous CLECs, has presented evidence of the real world experience - and frustration - of competitors attempting to enter the local services market. Through that process, the record is replete with NYT's service failures, its inadequate processes, its lack of corporate commitment and - most critically - its absolute failure to comply with the parity prerequisite. New York Tel's original Petition for Section 271 Authority was filed on February 13, 1997. Since that date, despite New York Telephone's being given the opportunity in several technical conferences, and through the repeated submission of numerous "updates" and Affidavits, New York Telephone has been unable to demonstrate that it either has complied with the checklist in the past, or that it is currently in compliance. One of the most blatant failings was NYT's inability to offer access to its Operations Support Systems (OSS), an absolutely essential prerequisite for a competitors to be able to order and obtain services and facilities. In recognition of that problem, the Commission required NYT to participate in an independent, third party verification of NYT's OSS functions, with the Commission approving the selection of KPMG for that purpose. Unfortunately, the process followed by KPMG had serious deficiencies. The first problem is that it utilized a "military style" test, which identified numerous specific criteria which had to be met, and tested NYT's compliance with those individual criteria until such time, for each one, as New York Tel either "passed" or demonstrated a complete inability to pass. For those tests which were "passed", KPMG moved on to other matters, and did not revisit NYT's performance at a subsequent date to determine whether it continued to meet the required standard. Thus, if a particular standard were met once, it was considered acceptable for all purposes, and the issue was deemed "closed", regardless of what happened afterward. TRA respectfully submits that process is not appropriate by itself when the opening of local markets to competition depends upon New York Tel maintaining, for an indefinite time in the future, its ongoing compliance with the competitive checklist in full conformance with the parity required by the Act. The other difficulty with the process is that there has been no effective measurement of whether New York Telephone was actually capable of provisioning, maintaining and accurately billing for the services ordered through the OSS over an extended period of time. Notwithstanding KPMG's findings with respect to OSS, the question of whether New York Telephone properly received and acknowledged an Order from a competitor is one thing; it is a totally different issue as to whether NYT actually and accurately installs, maintains, and bills the services ordered through the OSS. Unfortunately, New York Telephone's ability to actually provision the services and facilities required by CLECs in the marketplace, in a manner in parity with what New York Tel provides to itself and its own customers, was not adequately tested. Absent such testing, as described below, §271 approval would be inappropriate. The final technical conference in this proceeding was held on July 30, 1999. On or about August, 1999, KPMG issued its Final Report entitled "Bell Atlantic OSS Evaluation Project". Shortly thereafter, an Order was issued closing the record on all issues. Unsurprisingly, parties have offered widely divergent views of what the record demonstrates. But parties with no proprietary or pecuniary interest in the outcome, particularly the New York State Department of Law, reached conclusions about the state of the record which support those who argue New York Telephone has not complied with its obligations. Specifically, in summarizing the state of the record at the close of the proceeding, the New York State Department of Law determined New York Telephone was deficient in the following areas: (1) NYT is not providing its competitors with access to bottleneck services and facilities at parity with what it provides to itself. (2) NYT cannot provision loops in a timely, reliable and acceptable manner. (3) NYT does not provide CLECs with adequate notice of changes in essential operational aspects. (4) NYT is unable to provide the information and processes for pre-ordering and ordering essential for CLECs to operate in the marketplace. Furthermore, and absolutely critical to the potential for developing competition in the local exchange market, was the Attorney General's conclusion that New York Telephone was failing to provide service to its competitors in parity with that which it provides to itself, with that lack of parity demonstrated by the latest carrier to carrier performance standards. The conclusions of the Department of Law match the real world experiences of competitors in this State. It is their testimony about real world conditions - and not theoretical statistic evaluations capable of manipulation - which should guide this Commission's evaluation. III. THE EXPERIENCE OF TRA MEMBERS AND OTHER COMPETITORS DEMONSTRATES NEW YORK TELEPHONE IS NOT COMPLYING WITH THE COMPETITIVE CHECK LIST Since the beginning of this process, TRA has, on several occasions, presented testimony and Affidavits of, and on behalf of, various member companies showing that New York Telephone has not been providing acceptable services and facilities to its competitors, either on an absolute basis, or in parity with that which New York Tel provides to itself. TRA's reports of real world experiences were supported and confirmed by the testimony of numerous CLECs, and together the record compiled shows NYT has not provided timely, reliable services in parity with what it provides to itself. On November 18, 1997, March 3, 1999, and again on April 28, 1999, TRA filed Affidavits or Comments with this Commission, highlighting a myriad of member concerns and the continuing problems they were experiencing with New York Telephone's ordering, provisioning, and maintenance. TRA's submissions were echoed by numerous individual competitors. Together, among the most crucial concerns addressed were NYT's account management; change management; provisioning;, maintenance and repair; billing accuracy; and billing dispute resolution. All of those problems were having immediate adverse effects on CLEC end users, and accordingly on the CLECs' ability to effectively compete in the market. Unfortunately, these submissions have had little apparent effect. The problems are continuing, and belie NYT's claims that it is providing competitors with service at parity with the level of service NYT provides to its own end users. Among the problems highlighted by TRA are the following: Account Management TRA members express continued frustration over account managers who are unresponsive, if not combative, when presented with issues requiring resolution. Typical inquiries to NYT's account managers regarding interconnection, coding information, and procedural questions are answered, in 75% of the cases, with instructions that the CLEC should merely "go look it up in the CLEC handbook". (Affidavit of Peter Parrinello, November 18, 1997). While NYT would have this Commission believe that account managers are there to assist CLECs in obtaining services and information, in reality they act as "gate keepers" who deny CLECs access to the NYT resources they really need; as such the account managers are frequently more of a problem than a solution. TRA members complain of account managers who do not possess sufficient service knowledge, experience, or interest to be able to suggest potential resolution of recurring problems, let alone assume responsibility for seeking a resolution. TRA members continue to express concern over the difficulty in scheduling timely account manager meetings due to account manager unavailability or extensive NYT "prerequisites" for a meeting. Members are desperately frustrated over an inability to rely on an established escalation list of responsible individuals, thus being forced to contend with the random availability of uncaring and/or untrained representatives. Notwithstanding what KPMG may have experienced with its dedicated account manager, the real world experiences of CLECs with their managers demonstrate a repeated pattern of limited support, indifference and ineffectiveness. TRA member inquiries and complaints are commonly rebuffed by NYT's near-uniform denial of responsibility, and its standard refrain of asserting that problems are the result of CLEC caused errors, the CLECs' lack of training, and the CLECs' failure to refer to NYT manuals. Undoubtedly, because this is a learning process, CLEC representatives will make errors, just as NYT's representatives will do. The problem, however, is that rather than accept responsibility and attempt to resolve issues in a businesslike manner, NYT invariably digs into its defensive mode and casts all blame on others. New York Tel Continues to Engage in Discriminatory Provisioning and Maintenance of CLEC Services TRA members, and other CLECs, remain frustrated by NYT's blatant disregard for pleas of assistance and, moreover, by NYT's policies and practices which make non-discriminatory provisioning of service a virtual impossibility. Every day, NYT rejects a significant number of CLEC orders, misses confirmed provisioning dates, fails to timely expedite installations and repairs, installs service incorrectly, erroneously disconnects service, and generally refuses to assist CLECs in resolving service problems, while not hesitating to point the finger at CLECs as the root cause of all problems. NYT's actions result in CLEC subscriber inconvenience and dissatisfaction, and frequent cancellation of CLEC service, even though the problem rests with NYT, and not the CLEC. A. Discriminatory Provisioning Despite NYT’s claim to be providing non-discriminatory service provisioning, TRA members and other CLECs continually suffer from NYT's discriminatory provisioning practices. NYT end-user service is typically provisioned to its customer in three days or less, while CLEC end users are held to longer installation intervals –five business days - if escalation is not requested. So egregious have NYT’s provisioning delays become, that at least one TRA member, in extreme cases, has been compelled to first order new NYT services on behalf of its end users as their agent, and then order that the account be transferred to the CLEC, instead of relying on NYT’s CLEC escalation procedures. B. Discriminatory Repair and Maintenance NYT discrimination is readily apparent in the Company’s repair and maintenance procedures as well. TRA members experience intermittent GUI malfunctions preventing them from submitting trouble tickets and being able to initiate customer repairs until the GUI malfunction is corrected. NYT is quick to point the finger at CLECs for GUI malfunctions, while refusing to accept verbal trouble tickets otherwise, making it impossible for any CLEC who relies on the GUI interface to pursue resolution of service outages, through no fault of its own. In the rare instances when NYT has accepted a trouble ticket directly from the CLEC, the CLEC is unable to view or track the ticket through the GUI. When a NYT end user whose account was about to be converted to one TRA member, experienced a service affecting problem, the end user contacted NYT for repair, only to be told to contact the CLEC as NYT no longer saw the customer as its own. When the CLEC attempted to call in the trouble on behalf of the end user, NYT refused to accept the trouble as the end user was not yet the CLEC's customer according to NYT’s records. This “Catch 22” prevented timely repair of the customers service. At best, CLEC end users are inconvenienced by lack of timely repair. At worst, they may suffer life-threatening risk when repairs are delayed. These end users hold the CLEC accountable for repair delays, not NYT. When faced with repair delays, end users begin to reconsider their decision to subscribe to a CLEC service. Billing Accuracy and Bill Dispute Resolution New York Tel represents to this Commission that it assumes full responsibility for correcting the billing errors without additional cost to the customer. Even if that statement were correct, which it is not, it ignores the significant efforts required by CLECs to: (1) Reconcile inaccurate billing, and (2) Obtain credits or refunds for inaccurate billing. Numerous CLECs continue to complain about the difficulty in correlating invoice line items to tariffed rates for ordered items and understanding what functions or services NYT is billing for. Uncovering those errors is only the first step. The CLEC must submit objections to bills or request for credits, and then continuously and vigorously pursue credits or refunds. Even verifying that the CLEC requests have been granted, after the fact, is extremely difficult. The plain fact is that TRA members continue to face a continual series of billing inaccuracies which demand a disproportionate effort to validate and correct. This is representative of a billing system that is not yet in parity with the level of billing NYT provides to its own large retail subscribers. TRA's submissions show that CLECs have consistently discovered errors in NYT's billing practices. And, critically, when NYT is informed of its incorrect billing, the startling response often is that it was the reseller's responsibility to resolve the billing error, despite the fact that the reseller was incapable of determining to whom the incorrectly billed traffic should have been billed. NYT continues to act in an arbitrary and heavy handed manner with respect to billing. Even when a reseller disputes significant portions of a NYT bill, and pays in good faith the undisputed portions of that bill, NYT almost immediately threatens to disconnect the reseller unless the entire outstanding balance - including disputed amounts - is paid. Very little has changed since last year with respect to NYT's inability to render accurate bills, and its obstinance in refusing to work with resellers to correct those deficiencies. Under these circumstances, the reseller is significantly handicapped in its ability to provide service to its own subscribers, thus generating a significant loss of good will and an inability to compete in the marketplace. IV. SECTION 271 APPROVAL SHOULD BE GRANTED ONLY AFTER A SUSTAINED DEMONSTRATION OF ADEQUATE PERFORMANCE In the end, the only true test of New York Tel's performance - and §271 compliance - is actual measurement of its delivery of services and facilities, and the delivery of maintenance, repair, billing and other critical support services, over a sufficient period of time to demonstrate that all processes and resources - and most importantly, the appropriate corporate mind-set - are in place. That is the only way to assure that NYT will be able - and committed - to sustaining the level of performance necessary to open local markets to competition. Regrettably, this required performance has not been tested by KPMG. The one-time OSS testing did not - and could not - measure actual "in-the-field" conduct. But it is that real world conduct which must determine checklist compliance. That has not happened. Compliance with the standards established in the Telecom Act and the Pre-Filing Statement cannot be achieved as a one-time occurrence at a single point in time. That is the conceptual failure of the KPMG test. What the Act requires is actual, achieved and sustained compliance, both on an absolute level and in parity with what NYT provides to itself. This Commission must distinguish between New York Telephone's promises and its actual performance. Reliance upon New York Telephone's statistics, with their repeatedly changing reference points, is not sufficient to meet the company's burden of proof. To the contrary, the only thing that actually matters is the real world experience of competitors in attempting to obtain provisioning, maintenance, support, and billing for services and facilities on a non-discriminatory basis. This Commission exercised major leadership when it required that New York Telephone's claims regarding OSS performance be actually measured and verified by an independent third party. That, however, is only the first step. What is absolutely critical is that no independent verification of New York Telephone's actual provisioning of any orders in the field has occurred. Thus, even if one of the artificial orders submitted by KPMG through its OSS was accepted and acknowledged by NYT, that does not mean that NYT would in fact have actually provisioned the service or facility in an efficient, timely, and non-discriminatory basis. Testing of OSS was only half the story. What remains as an absolutely essential element is testing of the actual provisioning of the services, facilities and support functions NYT is required to provide. And until that occurs, there can be no determination NYT is in compliance with Section 271. In TRA's view, only a test of NYT's ability and willingness to effectively provision services and facilities, over a sustained period of time, can demonstrate that the conditions for a successful opening of local exchange markets to competition exist. In this vein, this Commission should not approve any NYT application until it successfully passes a three month "road test" proving that it has the expertise, resources, and corporate commitment to actually provision and maintain the services and facilities needed by its competitors. That process would follow the requirement established by the Texas Public Utilities Commission that Southwestern Bell Telephone Company provide three months of validated data for all of the relevant performance measurements before §271 approval could be granted. See, Public Utility Commission of Texas, Project 16251, "Investigation of Southwestern Bell Telephone Company's Entry into the Texas InterLATA Telecommunications Market", Order issued April 29, 1999. As in the case of OSS, any claims by New York Telephone with respect to its consistent performance over this three month period must be verified by an independent third party. Absent a sustained and verified demonstration of performance and intent, through the type of test ordered by the Texas Commission, it cannot be concluded that markets in New York are open to competition. V. CONCLUSION Despite having been given numerous opportunities, New York Telephone has not demonstrated that it now provides, or in the future is likely to provide, the checklist items on a reasonable, commercial basis, and at parity with the services and facilities it provides to itself. Until such a demonstration is made by actual performance over a sustained period of time, properly verified, in the type of test ordered by the Texas Commission, the company will not have met its burden of proof. The Department of Law's conclusions match the observations of TRA, and that of numerous market competitors, that in the many months since this proceeding began, seemingly little has changed. Despite NYT's purported improvements and alleged efforts to open New York's local market to competition, the manner in which NYT treats competitors belies the company's rhetoric and undermines any potential improvements which may arguably have been experienced to date. Every day competitors continue to experience the daunting task of competing with NYT, while relying on NYT for non-discriminatory and effective provisioning, OSS access, repair and maintenance, and accurate and timely billing. Every day, competitors face a litany of problems, delays and frustrations with NYT, which have in the past, and continue today, to undermine their ability to offer competitive local services to anxious customers. The experiences related by TRA, and other CLECs, are not isolated instances that may easily be explained as unique or as an error by the CLEC. The fact that the impediments and problems identified continue to date, and fall into a recurring pattern, suggests the deep rooted nature of NYT operational problems, and the challenges which CLECs must endure. Earlier on in this proceeding, TRA stressed that a wide chasm existed between what NYT reports to have achieved in meeting its obligations under the Act and its Pre-Filing Statement, and what TRA members experience in reality. Regrettably, little has changed over the past two years. The chasm remains as wide as ever today. This Commission is at a historic crossroad. New York Telephone has undoubtedly made improvements to its process of providing checklist items to its competitors. But many of those changes have come at the very last minute, through application of an extraordinary amount of resources, under direct supervision of the most senior management, in order to cross the "finish line". But athletes who charge across the finish line with their last burst of energy frequently collapse after expending all their resources. In light of New York Tel's historical performance, and its past history of failing to honor commitments to both this Commission and marketplace competitors, reliance upon a single snapshot in time, and a single gasp at the wire, would not be wise public policy. Respectfully submitted, Telecommunications Resellers Association By: Usher Fogel Roland, Fogel, Koblenz & Petroccione, LLP Its Attorney One Columbia Place Albany, New York 12207 (518) 434-8112 Of counsel: Andrew O. Isar Director – State Affairs Telecommunications Resellers Association 4312 92nd Avenue NW Gig Harbor, Washington 98335 Dated: Albany, New York August 17, 1999 |