Sage Telecom - Proposed Batch Cut Process andSDT

Transcription

1 Lansing, Michigan Office: 2455 Woodlake Circle Okemos, MI Tel. (517) Fax (517) Haran C. Rashes Phone: (517) January 23, 2004 Ms. Mary Jo Kunkle Executive Secretary Michigan Public Service Commission 6545 Mercantile Way PO Box Lansing, MI Re: On the Commission s Own Motion, to investigate and to implement, if necessary, a batch cut migration process. MPSC Case No. U Dear Ms. Kunkle: Enclosed for filing please an original and four (4) copies of the Direct Testimony and Exhibits of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. in the above-captioned proceeding. Proof of Service upon the parties of record is also enclosed. These pleadings have been filed electronically with the Michigan Public Service Commission s Electronic Case Filing System. Very truly yours, CLARK HILL PLC HCR:kmt Enclosures Haran C. Rashes cc: Parties of Record Ms. Stephanie G. Timko Mr. Robert McCausland v1 Detroit, Michigan Birmingham, Michigan Lansing, Michigan

2 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter, on the Commission s Own Motion, to investigate and to implement, if necessary, a batch cut migration process. ) ) ) Case No. U DIRECT TESTIMONY OF LYNDALL WAYNE NIPPS ON BEHALF OF SAGE TELECOM, INC. Pre-Filed: January 23, v1

3 TABLE OF CONTENTS Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 2 of 46 I. INTRODUCTION... 3 II. III. IV. SBC S PROPOSED BATCH CUT PROCESS DOES NOT COMPLY WITH THE DIRECTIVES OF THE TRO... 8 A. Matrix Issue B. Matrix Issues 28 and C. Matrix Issue D. Matrix Issue E. Matrix Issue F. Matrix Issue 13.1 and G. Matrix Issue SBC S PROPOSED BATCH CUT PROCESS DOES NOT ADEQUATELY PROTECT OR SERVE CONSUMERS A. Matrix Issues 24.5 and SBC S PROPOSED BATCH CUT PROCESS PROMOTES AN ANTI- COMPETITIVE TELECOMMUNICATIONS ENVIRONMENT A. Matrix Issue B. Matrix Issues 4.2, 44 and C. Matrix Issues 5.0 and D. Matrix Issue V. APPROPRIATE PERFORMANCE MEASUREMENTS AND ENFORCEMENT PLANS A. Matrix Issue VI. ANTI-COMPETITIVE BATCH CUT RATES A. Matrix Issues 57.4 and VII. ADDITIONAL ISSUES A. Matrix Issue B. Matrix Issue C. Matrix Issue VIII. CONCLUSION EXHIBITS LWN-1 (I-_) Educational and Professional Background LWN-2 (I-_) 13-State Collaborative Matrix LWN-3 (I-_) Excerpt from Telcordia s Notes on the Networks v1

4 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 3 of 46 1 I. INTRODUCTION Q. PLEASE STATE YOUR NAME AND ADDRESS. A. Lyndall Wayne Nipps. My business address is 845 Camino Sur, Palm Springs, California, Q. FOR WHOM ARE YOU FILING THIS TESTIMONY? A. I am filing this testimony on behalf of Sage Telecom, Inc. ( Sage ) Q. PLEASE DESCRIBE YOUR EDUCATIONAL BACKGROUND AND RELEVANT WORK EXPERIENCE. A. I began my career in the telecommunication industry in 1979 as a customer service representative in the Napa Valley office with Pacific Bell/SBC. During my 20-year career with Pacific Bell/SBC, I was promoted within the wholesale services organization. I specialized in pre-order, order, provisioning, billing and collections, methods and procedures, interconnection performance measures, improving results, and personnel management. I was eventually promoted to Director of the Local Wholesale Service Center (LSC-Southern Ca.). I joined Allegiance Telecom in September of I began my five-year career at Allegiance by developing and implementing back-office methods and procedures for the sales organization. I moved to the Regulatory Department where I v1

5 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 4 of was promoted to Vice President, Industry Affairs. My responsibilities included 271 process issues, negotiating performance measures, establishing benchmarks, filing testimony, state level regulatory compliance, rates and tariffs, assessments, policy, and legislation. I am now an independent consultant on telecommunications issues. I hold a Bachelor of Science degree in Business Management from the University of Phoenix and a Certificate in Marketing Leadership from the University of California at Berkeley, SF-Extension Campus. I also hold training certificates for TQM Team Leader Training and ISO9000. I am attaching a complete description of my educational and professional background as Exhibit LWN-1 (I-_) Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY? A. The purpose of my testimony is to address this Commission s responsibility to establish an incumbent batch hot cut process as mandated by the Federal Communication Commission s ( FCC s ) Triennial Review Order ( TRO ) and to emphasize the Commission s authority within the purview of the TRO. Further, I discuss Sage s concerns about SBC s proposed batch cut process and its inherent shortcomings by discussing elements that need to be added, changed, and why it will not work. I discuss performance measurements and proper enforcement. I also propose a pricing methodology for SBC s batch cut process v1

6 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 5 of Q. DOES YOUR TESTIMONY ADDRESS SPECIFIC ISSUES? A. Yes. The parties developed a matrix of contested issues during the 13 state collaborative process on batch cuts. (See Exhibit LWN-2 (I-_)) My testimony supports Sage s positions within that matrix Q. WHAT WAS THE FCC S FINDING REGARDING UNBUNDLED LOOP PROVISIONING? A. In paragraphs 487 of the TRO, the FCC stated as follows: We have found that a seamless, low-cost batch cut process for switching mass market customers from one carrier to another is necessary, at a minimum, for carriers to compete effectively in the mass market. We conclude that the loop access barriers contained in the record may be mitigated through the creation of a batch cut process by spreading loop migration costs among a large number of lines, decreasing per-line cut over costs. (Footnotes omitted.) Furthermore, in paragraph 512, the FCC stated as follows: Loop Provisioning. We have found on a national basis that the delays and costs associated with loop provisioning those specifically arising from the hot cut process impair a requesting carrier s entry into the mass market v1

7 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 6 of Q. WHAT IS THE ROLE OF THIS COMMISSION IN DEVELOPING A BATCH CUT PROCESS FOR INCUMBENT LOCAL EXCHANGE CARRIERS ( ILECS )? A. The TRO outlines an active role for the state commissions. Paragraph 489 lists several tasks the state commissions must complete. Specifically: [S]tates should decide the appropriate volume of loops that should be included in the batch. In conjunction with incumbent LECs and competitive LECs, states should also approve specific processes to be employed when performing a batch cut. Generally, however, we expect these processes to result in efficiencies associated with performing tasks once for multiple lines that would otherwise have been performed on a line-by-line basis. In addition to developing a cost-effective hot cut process, state commissions should evaluate whether the incumbent LEC is capable of migrating batch cutovers of unbundled loops combined with unbundled local circuit switching to unbundled stand-alone loops for any requesting carrier in a timely manner. Specifically, state commissions may require that incumbent LECs comply with an average completion interval metric, including any further disaggregation of existing loop performance metrics (i.e., quality or maintenance and repair metrics), for provisioning high volumes of loops. Finally, if they have not done so already, state commissions should adopt TELRIC rates for the batch cut activities they approve. These rates should reflect the efficiencies associated with batched migration of loops to a competitive LEC s switch, either through a reduced per-line rate or through volume discounts v1

8 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 7 of Q. ARE THESE THE ONLY CRITERIA WHICH APPLY TO STATE COMMISSIONS? A. No. Additionally, Paragraph 512 of the TRO tasks states with more general or overriding considerations relative to the development of the batch cut process: [W]e have directed the state commissions to implement batch cut processes to reduce the economic and operational barriers posed by the present hot cut process. Specifically, we ask the states to determine whether incumbent LECs are providing nondiscriminatory access to unbundled loops. State commissions should also consider whether the incumbent s facilities, human resources, and processes are sufficient to handle adequately the demand for loops, collocation, cross connects, and other services required by competitors for facilities-based entry into the voice market. We therefore ask the state commission to consider more granular evidence concerning the incumbent LECs ability to transfer loops in a timely and accurate manner Q. WHAT ARE THE KEY FINDINGS OF YOUR TESTIMONY? A. SBC s proposed batch cut process 1. Does not meet the criteria of the TRO. 2. Does not adequately protect or accommodate the consumer. 3. Discriminates in its provisioning of unbundled loops. 4. Promotes an anti-competitive telecommunications environment v1

9 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 8 of II. SBC S PROPOSED BATCH CUT PROCESS DOES NOT COMPLY WITH THE DIRECTIVES OF THE TRO Q. DOES SBC S BATCH CUT PROCESS MEET THE CRITERIA SET FORTH IN THE TRO? A. No, SBC s batch cut process fails to provide non-discriminatory access to unbundled loops. SBC has not proven that it can accomplish the foreseeable volumes of batch cuts with existing facilities, human resources and processes, let alone an increased demand on those facilities, resources and processes. SBC s proposed batch cut process does not allow competitive local exchange carriers ( CLECs ) to take advantage of any efficiencies of scale or scope. For example, SBC proposes to limit CLECs to 200 orders per day, per central office. SBC s proposal greatly limits the ability of an individual CLEC to process its orders, since the individual CLEC could be constrained by the demand of CLECs in the aggregate. Further, SBC s proposed intervals are wholly unacceptable for a competitive telecommunications environment. SBC s proposed batch cut process is nothing more than the existing process with some window dressing. The number of loops that can be provisioned for a cut has increased, there are some additional proposed tools and OSS enhancements, but the end result is the status quo, or potentially even something less than the status quo v1

10 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 9 of Finally, as I discuss in more detail below, SBC deliberately excludes certain loop types, which should be part of the minimum criteria Q. DOES SBC INCLUDE ALL LOOP TYPES THAT SBC HAS PROVIDED AS PART OF THE UNBUNDLED NETWORK ELEMENT PLATFORM ( UNE- P ), INCLUDING LOOPS PROVIDED OVER INTEGRATED DIGITAL LOOP CARRIER ( IDLC ) AND NEXT GENERATION DIGITAL LOOP CARRIER ( NGDLC ), AS WELL AS OVER UNIVERSAL DIGITAL LOOP CARRIER ( UDLC ) EQUIPMENT, HYBRID LOOPS, LOOPS WITH ENHANCED EXTENDED LINKS ( EELS ), AND LOOPS SERVED BY REMOTE SWITCHING MODULES? (MATRIX ISSUE 6.) A. No Q. WHAT IS THE COMPETITIVE AND OPERATIONAL IMPACT OF THESE EXCLUSIONS? A. If CLECs are forced to migrate to unbundled loops ( UNE-L ), they need to be able to convert all customers that they previously served with unbundled switch ports. This includes customers served through line split loops, line shared loops, Broadband loops, loops with EELs, loops provided over IDLC, NGDLC, and UDLC equipment, hybrid loops, and loops served by remote switching modules. Unfortunately, SBC has explicitly omitted line split loops, line shared loops, Broadband loops, and loops v1

11 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 10 of with EELs from its batch cut process. Without a batch cut process that operates at parity with the UNE-P and retail provisioning processes, CLECs will be unable to reasonably convert customers served by SBC s switch within those categories to the CLECs switches. I discuss specific problems for several of these categories in other issues Q. MATRIX ISSUES 28 AND 28.1 ASK WHETHER SBC HAS DEVELOPED CLEAR AND ACCURATE LOOP AND OTHER OSS DATA THAT CAN BE UPDATED ON A REAL-TIME BASIS, INCLUDING CIRCUIT ID INFORMATION RELIED UPON BY SBC AND THE CLEC THAT IS ACCURATE IN THE LOOP QUALIFICATION DATABASE. WHY IS IT IMPORTANT FOR SBC TO DEVELOP CLEAR AND ACCURATE LOOP AND OTHER OSS DATA? A. If SBC s inventory and subsequent databases (particularly the loop databases) are inaccurate, SBC will reject a CLEC s order as being unclean, due to no fault of the CLEC. While SBC and the CLEC sort out fault, the customer is harmed by a delay in their order. The burden will then fall upon the CLEC to facilitate correction of an SBC database and inventory error, because the CLEC will be required by SBC to issue a supplemental order, or change, to the original service order. SBC s rejection will also negatively impact the customer s perception of the ease by which the v1

12 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 11 of customer can migrate his or her services, given all the resulting delays in completion of the end-to-end process Q. WHAT TYPE OF INFORMATION DO CLECS NEED FROM SBC S LOOP DATABASES? A. CLECs need clear and accurate data about the circuit ID and loop makeup, including type of loop, loop length, loop gauge, presence of repeaters, bridge taps, and load coils. This is particularly important in instances, such as IDLC, where SBC is requiring the CLEC to select a new loop. CLECs need this information to determine what type of voice and data services the loop can support Q. WHAT IS THE IMPORTANCE OF CIRCUIT ID INFORMATION? A. Circuit ID information is information that identifies a specific loop. If a CLEC is going to lease an unbundled loop from SBC, it needs to know the circuit ID. If the information about the circuit ID is incomplete or inaccurate, the CLEC will be unable to obtain additional information about the loop from SBC s databases. This is particularly important when CLECs are forced to select a new loop (e.g., to replace IDLC loops), because CLECs need to determine the voice and data capabilities of the new loop. CLECs also need accurate circuit ID information to track the loop during CLEC to CLEC migrations. The circuit ID information is a critical success item for v1

13 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 12 of any CLEC for the entire process; pre-order, order, provisioning, maintenance and repair, and accurate and timely billing Q. ARE YOU COMFORTABLE THAT SBC S EXISTING DATABASES, INCLUDING LOOP DATABASES, ARE SUFFICIENTLY ACCURATE AND COMPLETE TO ALLOW CLECS TO PROVIDE UNE-L BASED SERVICE TO MASS MARKET CUSTOMERS AT PARITY WITH THE ILEC? (MATRIX ISSUE 27.) A. No. I recommend that the Commission and parties validate the accuracy of these databases as part of any overall validation of SBC s batch cut process. This will require an analysis of each step of SBC s proposed batch cut process to ensure that OSS is available, at parity with UNE-P and retail, for CLECs to participate in and validate the process. Examples include ongoing monitoring of customer-initiated trouble-reports related to hot-cut activities, such as database tests (confirmation of calling scopes), OSS tests (for accuracy and timeliness of order submission and completion), network reliability (including redundancy), quality tests (for quality of the provisioned line), and general maintenance issues. SBC will also need to prove, through performance data at mass-market volumes, that its UNE-L OSS can accommodate the initial bulk demand and subsequent churn within acceptable performance standards. Finally, I recommend that the Commission establish a v1

14 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 13 of benchmark of minimum accuracy failures allowed, so that a CLEC can clearly gauge the opportunity for false reject and jeopardy occurrences Q. DOES SBC S PROPOSED BATCH CUT PROCESS INCLUDE PROVISIONING INTERVALS AND STANDARDS AT PARITY WITH EXISTING UNE-P AND RETAIL PROCESSES? (MATRIX ISSUE 10.1.) A. No. In its December 15 th proposal, SBC took the position that UNE-P intervals do not apply to hot cuts. SBC s position implies that CLECs should be subject to considerably longer provisioning intervals if CLECs are forced to migrate to UNE-L for mass market customers, and that any measure of performance deliverables would not apply. SBC s position is a clear indication that CLECs are impaired by such a migration Q. IS SBC S PROPOSED 13 TO 20 BUSINESS-DAY PROVISIONING INTERVAL FOR ITS DEFINED BATCH CUT PROCESS REASONABLE? (MATRIX ISSUE 11.) A. No. The timeframe should be at parity with UNE-P and retail provisioning intervals, which are generally two to three days. CLECs are impaired if, among other issues, they cannot provision UNE-L at parity with the provisioning intervals in the existing UNE-P and retail processes. Therefore, if CLECs are required to migrate to UNE-L, they must be able to migrate their customers to UNE-L at intervals that are at least at v1

15 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 14 of parity with UNE-P and retail intervals. These intervals, and other associated standards, need to be monitored and enforced through the appropriate performance measurement and remedy plan. SBC is taking the position that CLECs and their customers must live with a 13 to 20 day provisioning interval if they want to achieve the alleged efficiencies of the defined batch cut process. This interval far exceeds the two to three day intervals that generally exist in SBC s territory for UNE-P. SBC attempts to justify this elongated interval by pointing to its labor contracts. Regardless of the reasons, the fact remains that CLECs are impaired by a migration to UNE-L if they are forced to rely on a provisioning process that takes four to ten times longer than the UNE-P and retail provisioning process. I view this no differently than establishing parity processes for the 271 process. I also cannot think of a scenario where it would be acceptable to any company that a wholesale supplier would provide less service and quality than that which it provides to its own retail customers Q. CAN CLECS USE THE DAILY BATCH CUT PROCESS TO OBTAIN SHORTER INTERVALS? A. It is unclear whether CLECs can use the daily batch cut process to reasonably convert customers. If SBC proposes the existing enterprise cutover rates for the daily batch cut process, which greatly exceed the UNE-P and retail service order charges, then CLECs are impaired by having to rely on those inflated rates. Furthermore, CLECs v1

16 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 15 of cannot use the daily batch cut process outside of normal business hours. If a customer wants to avoid an outage during the day time and requests an evening or early morning cutover, then CLECs cannot use the daily batch cut process for this customer. Instead, that customer is subjected to the 13 to 20 day provisioning interval for the defined batch process. The batch hot cut process would also greatly limit the total number of conversions any given CLEC could convert in a day, if in fact another CLEC had been given that day as its respective due date and the maximum daily allowable volume was to be exceeded. Thus, the burden to determine which of SBC s proposed hot cut methods best serves the end user becomes the entire responsibility of the CLEC community; ultimately, neither of the proposed options may benefit, nor ease, the consumer s experience Q. CAN SBC SCALE ITS PROCESS SO THAT IT IS ABLE TO HANDLE THE PROJECTED VOLUMES OF HOT CUT REQUESTS? (MATRIX ISSUES 13.1 AND 13.2.) A. I am not confident that it can. The parties need validation of that ability v1

17 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 16 of Q. WHY IS IT IMPORTANT FOR THE COMMISSION AND THE PARTIES TO VALIDATE THAT SBC S BATCH CUT PROCESS CAN ACTUALLY HANDLE THE PROJECTED VOLUMES OF HOT CUT REQUESTS? A. If SBC s process fails, and CLECs customers fail to receive local service in a timely and seamless manner, then CLECs are clearly impaired by a transition to UNE-L. The CLECs public images are inappropriately and unacceptably damaged Q. WHAT IS THE IMPACT OF THE SCALABILITY OF SBC S PROCESSES ON THE ABILITY OF CLECS TO ECONOMICALLY USE THEIR OWN SWITCHES? A. SBC s batch cut processes must be scalable in order to allow carriers owning and operating their own switch to take advantage of the economies of scale using that switch. For example, if a carrier has 100,000 customers, SBC must be able to migrate those customers to the switch in sufficient bulk and in sufficient time so that the CLEC does not have unused capacity in the switch v1

18 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 17 of Q. HAS SBC ESTABLISHED AT LEAST ONE PROCESS THAT PROVIDES BATCH CUTS AT INTERVALS, STANDARDS, AND RATES THAT ARE AT PARITY WITH SBC S UNE-P AND RETAIL MIGRATION PROCESSES? (MATRIX ISSUE 15.) A. No. The defined batch cut process subjects CLECs and their customers to 13 to 20 day provisioning intervals, which far exceed the two to three day intervals for UNE-P and retail orders. The daily batch cut process does not allow CLECs to process orders outside of business hours (in order to avoid customer outages during business hours) and apparently will be priced by SBC at the current inflated rates for enterprise cutovers. Finally, the bulk project process lacks any intervals or rates at all, since they are subject to negotiation on an individual case basis III. SBC S PROPOSED BATCH CUT PROCESS DOES NOT ADEQUATELY PROTECT OR SERVE CONSUMERS Q. HAS SBC PLACED A PRIORITY ON AVOIDING, PREVENTING, AND A. No. REMEDYING CUSTOMER OUTAGES? (MATRIX ISSUES 24.5 AND 63.) v1

19 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 18 of Q. WHY IS IT IMPORTANT TO AVOID LOSS OF SERVICE FOR CUSTOMERS? A. When customers receive service from SBC or from a UNE-P carrier, they expect to receive the service without an outage. If customers start experiencing significant service outages as CLECs transition to UNE-L, the customers will blame the CLEC. Therefore, CLECs will be impaired in their ability to keep and obtain customers Q. DID THE FCC ADDRESS THIS ISSUE IN THE TRO? A. Yes. Paragraphs of the TRO require orderly, seamless, and trouble free migrations for mass-market customers. As the FCC stated on paragraph 467, [c]ompetition is meant to benefit consumers, and not create obstacles for them Q. DO YOU HAVE ANY RESPONSE TO SBC S STATEMENT IN ITS DECEMBER 15 TH PROPOSAL THAT CERTAIN ASPECTS OF THE BATCH CUT PROCESS WILL REMAIN MANUAL? A. Yes. The issue of automating the provisioning of hot cuts is up to SBC. However, if SBC chooses to maintain manual provisioning processes, it must still meet provisioning intervals that are at parity with retail and UNE-P intervals, not impose outages beyond a de-minimus (e.g., five minute) level, and charge rates that are at parity with retail and UNE-P migration rates. Additionally, I am concerned whether by opting to use a manual process, which I perceive to be planned failure, that SBC v1

20 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 19 of will be able to meet its own stated intervals. I would also note that flow-through is not defined as a CLEC being able to fully and mechanically interface with SBC. That would only demonstrate the existence of mechanical interface mechanisms for order issuance. Instead, flow-through is the ability of SBC to handle an order without human intervention on an end-to-end basis. Without a fully mechanized flowthrough end-to-end process, CLECs are impaired Q. DO YOU HAVE ANY RESPONSE TO SBC S STATEMENT IN ITS DECEMBER 15 TH PROPOSAL THAT THE TRO DOES NOT INDICATE IN ANY WAY THAT THAT POTENTIAL [FOR DISRUPTION OF SERVICE] (OR A REDUCTION IN THAT POTENTIAL) IS ONE OF THE CRITERIA THE COMMISSION SHOULD CONSIDER WHEN IT DECIDES WHETHER TO APPROVE A BATCH CUT PROCESS? A. Yes. First of all, SBC misinterprets the TRO. As I outline above, paragraphs of the TRO require orderly, seamless, and trouble free migrations for massmarket customers. More importantly, SBC s position shows a clear disregard for the welfare of customers. SBC is willing to subject customers to service outages in order to advance its regulatory and strategic goals of eliminating UNE-P v1

21 1 2 3 IV. Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 20 of 46 SBC S PROPOSED BATCH CUT PROCESS PROMOTES AN ANTI- COMPETITIVE TELECOMMUNICATIONS ENVIRONMENT Q. WHAT IS THE OPERATIONAL AND COMPETITIVE IMPACT OF SBC S DECISION TO OMIT CLEC TO CLEC MIGRATIONS FROM THE BATCH CUT PROCESS? (MATRIX ISSUE 2.2.) A. In the context of this proceeding, CLEC to CLEC migrations occur when a customer switches from one facilities-based CLEC to another facilities-based CLEC. That requires the parties, including SBC, to coordinate the transfer of SBC s loop from the switch of the first CLEC to the switch of the second CLEC. SBC s omission of CLEC to CLEC migrations operationally and competitively impairs CLECs. Currently, CLECs use UNE-P to serve the vast majority of their mass market residential customers. Sage, for example, relies exclusively on UNE-P. With UNE-P, a customer can transition from one UNE-P CLEC to another UNE-P CLEC using a simple service order. There is no disruption in service for the customer and the process flows are well understood. If CLECs are forced to convert to UNE-L, as requested by SBC, then conversions from one CLEC to another will have to occur through the cutover process. If that process is not smoothly implemented, customers will lose confidence in their ability to exercise competitive choices between CLECs. 1 1 By excluding CLEC to CLEC migrations from the batch cut process, SBC is subjecting those migrations to the many problems posed by the existing hot cut process, which was only designed for low volume business customers v1

22 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 21 of In the end, those customers may conclude that it is easier to remain customers of the ILECs Q. DID THE FCC REQUIRE SBC TO INCLUDE CLEC TO CLEC MIGRATIONS IN THE BATCH CUT PROCESS? A. Yes. In paragraph 478 of the TRO, the FCC stated [c]ompetition in the absence of unbundled local circuit switching requires seamless and timely migration not only to and from the incumbent s facilities, but also to and from the facilities of other 9 competitive carriers. 2 Furthermore, 47 C.F.R (d)(2)(ii) defines an ILEC batch hot cut process to include a process by which the incumbent LEC simultaneously migrates two or more loops from one carrier s local circuit switch to another carrier s local circuit switch and paragraph 514 of the TRO raises the lack of CLEC to CLEC cross connects as a source of impairment. Many states already recognize that it is important for the consumers overall experience to have rules and process guidelines for CLEC to CLEC migrations. To that end, it is a logical conclusion that this process should include specific processes for CLEC to CLEC migrations Emphasis added v1

23 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 22 of Q. ARE CLEC TO CLEC MIGRATIONS SUBJECT TO STATE REQUIREMENTS? A. In many instances, yes. The batch cut process should include all state requirements for CLEC to CLEC migrations Q. DOES SBC S PROPOSED BATCH CUT PROCESS ALLOW CLECS TO PROVISION UNBUNDLED LOOPS AT A QUALITY IN PARITY WITH THE LEVEL OF QUALITY AT WHICH SBC PROVIDES TO ITSELF OR ITS AFFILIATES? (MATRIX ISSUES 4.2, 44, AND 45.) A. No. The loop migration process proposed by SBC materially degrades the signal quality of the loop, epitomized by an unacceptable reduction in the customer s modem duration speeds for dial-up Internet access Q. HOW? A. If SBC serves a customer through an IDLC-provisioned loop and the customer chooses a CLEC as his or her local provider, SBC will migrate the customer off of the IDLC and replace the loop with a copper or a UDLC-provisioned loop Q. DID THE FCC ADDRESS IDLC ISSUES IN THE TRO? A. Yes. In paragraphs of the TRO, the FCC removed its national finding that ILECs had to provide access to IDLC v1

24 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 23 of Q. DOES THIS PRECLUDE STATES FROM SEPARATELY UNBUNDLING IDLC? A. I am not an attorney, however, based upon my expert opinion state commissions have the authority to unbundle elements such as IDLC under separate state authority. Section 252(e)(3) of federal Telecommunications Act ( the Act ), entitled Preservation of authority states: [N]othing in this section shall prohibit a State commission from establishing or enforcing other requirements of State law in its review of an agreement, including requiring compliance with intrastate telecommunications service quality standards or requirements. Likewise, Section 251(d)(3) of the Act, entitled Preservation of State access regulations states: In prescribing and enforcing regulations to implement the requirements of this section, the Commission shall not preclude the enforcement of any regulation, order, or policy of a State commission that - (A) establishes access and interconnection obligations of local exchange carriers; (B) is consistent with the requirements of this section; and (C) does not substantially prevent implementation of the requirements of this section and the purposes of this part. Finally, Section 601(c)(1) of the Act states: No implied effect- This Act and the amendments made by this Act shall not be construed to modify, impair, or supersede Federal, State or local law unless expressly so provided in such Act or amendments v1

25 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 24 of Q. DID THE FCC ADDRESS THE INDEPENDENT UNBUNDLING AUTHORITY OF STATE COMMISSIONS IN THE TRO? A. Yes. The FCC stated as follows in paragraphs 192 and 194 of the TRO: Based on the plain language of the statute, we conclude that the state authority preserved by section 251(d)(3) is limited to state unbundling actions that are consistent with the requirements of section 251 and do not substantially prevent the implementation of the federal regulatory regime * * * * [W]e find that the most reasonable interpretation of Congress intent in enacting sections 251 and 252 to be that state action, whether taken in the course of a rulemaking or during the review of an interconnection agreement, must be consistent with section 251 and must not substantially prevent its implementation Q. BASED ON YOUR EXPERIENCE AND UNDERSTANDING, DOES UNBUNDLING IDLC SUBSTANTIALLY PREVENT THE IMPLEMENTATION OF THE ACT? A. No. SBC is still required under the Act to provide reasonable and non-discriminatory access to loops. As I discuss below, SBC will inherently provide CLECs with inferior loops if CLECs have to migrate from IDLC to long copper loops or UDLC. The loops will be inferior because, among other things, a CLEC s customer will suffer a degradation in dial-up Internet speeds. Accordingly, unbundling IDLC for v1

26 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 25 of narrowband services substantially enhances, rather than prevents, the implementation of the Act Q. IF ILECS ARE PERMITTED TO DENY IDLC LOOPS TO CLECS, HOW WOULD A CLEC CONVERT A CUSTOMER FROM SBC USING ITS OWN OR A THIRD-PARTY SWITCH? A. Under that framework, in order for a CLEC to use its own switch to serve a customer that is currently on an IDLC system, the ILEC must first physically move the customer s loop to a pre-existing spare copper facility and then the hot cut procedure can be used to transfer the loop to the CLEC s switch. This procedure hinges on access to the copper facility that would typically have been replaced by the fiber-fed IDLC. Alternatively, if spare copper is not available, the ILEC can attempt to move the end-user s service off of the IDLC system and to reconnect it to a UDLC system that connects to the main distribution frame at the central office presumably then becoming eligible for the hot-cut process Q. DO THESE ALTERNATIVES OF MIGRATING TO SPARE COPPER LOOPS OR UDLC PROVIDE FOR LEVELS OF SERVICE ACCEPTABLE TO CUSTOMERS ACCUSTOMED TO RECEIVING ILEC SERVICE? A. No. Both processes of moving the customer s loop off of IDLC to connect it with a CLEC or third-party switch materially degrade the signal quality of the loop, v1

27 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 26 of epitomized by an unacceptable reduction in modem operation speed for the popular 56 kilobyte per second modems preferred by most dial-up users of the Internet Q. DO YOU HAVE SUPPORT FOR YOUR POSITION? A. Attached as Exhibit LWN-3 (I-_) is an excerpt from Issue 4, October 2002 of Telecordia s Notes on the Networks outlining methods of unbundling IDLC configured loops and the inherent operational problems associated with such unbundling. Customers face significant degradation in dial-up Internet connection speeds due to the longer copper loop lengths and the additional digital to analog conversions caused by UDLC Q. WHEN WOULD THE END-USE CUSTOMER NOTICE THESE CHANGES? A. If the end-use customer was a customer of the ILEC whose service was routed through an IDLC, and was switching via the UDLC approach to a competitive carrier, the customer would start to experience these problems as soon as he or she switched to the competitive carrier v1

28 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 27 of Q. HOW DOES THIS IDLC TO UDLC OR IDLC TO COPPER LOOP SCENARIO DIFFER FROM THE MANNER IN WHICH SBC PROVISIONS AN IDLC CONFIGURED LOOP USING UNE-P? A. SBC provisions UNE-P over IDLC if the retail customer was previously served by IDLC. In fact, both the FCC and the Supreme Court of the United States (through the Verizon decision) have directed that the elements which are combined in the ILEC network must remain combined, if so requested, in the conversion to a CLEC UNE-P serving method. Thus, customers served via UNE-P avoid the conversion problems as well as the problems with operational parity that I discuss above. It should also be noted that the UNE-P regime already represents a fully automated and efficient batch hot cut process for the unbundled local loops, using software controlled digital telephony principles only, and no analog re-wiring. It should be considered the yardstick by which other hot cut alternatives are measured Q. WHAT IS THE COMPETITIVE IMPACT OF THE DEGRADATION IN THE CUSTOMER S DIAL-UP INTERNET SPEEDS? A. Half of Sage s customer base access the Internet through dial-up, particularly customers in the rural and suburban areas that Sage serves. If those customers experience a significant degradation in their dial-up Internet speeds after switching to a CLEC, they will naturally want to switch back to SBC in order to regain the higher dial-up speeds, taking away any opportunity to compete within a given market v1

29 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 28 of Q. ARE THERE OTHER IMPACTS TO THE CUSTOMER THAT RESULT FROM SBC S DECISION TO PROVISION IDLC CONFIGURED LOOPS VIA HOME RUN COPPER OR UDLC? A. Yes. There is a specific impact associated with the UDLC configuration. To enable a UDLC configuration to support all of the key functions associated with the switch, either the ILEC s GR303 protocol must be unbundled and included in provisioning of the loop, and a partition of digital channels from the IDLC handed off to the CLEC in the central office or at the remote terminal; or, the CLEC must be able to access the loop digitally at the central office end of a UDLC so that the GR303 protocol of the CLEC switch will govern the provisioned loops. In either case, a digital cross connect must be mandated as the standard hand-off, together with a fully functional GR303 signaling arrangement, in order to ensure parity quality of service for the loop. Therefore, Sage recommends the establishment of a pre-engineering process for loops served by digital loop carrier ( DLC ) that accommodates the configuration outlined above while allowing the migration to take place at intervals that are at parity with UNE-P (and retail) and that would ensure that the UNE-L performs at parity with the IDLC loop previously used by SBC to provide retail service to the customer. This parity performance should include the same dial-up Internet speeds that are achievable through the ILEC s IDLC arrangement for UNE-P customers of a CLEC, v1

30 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 29 of or for the ILEC s own customers. Any lack of parity, such as that which will result from the use of UDLC equipment as deployed by SBC for CLECs, is grounds for the Commission s rejection of SBC s process Q. DOES SBC S DECEMBER 15 TH PROPOSAL ADDRESS THE PRE- ENGINEERING CHECK? A. SBC appears to agree in concept to deploy a pre-order tool that allows CLECs to proactively identify customers with IDLC. This is a positive and welcome step, although CLECs need additional information about the tool. Furthermore, CLECs need additional information about how SBC will provision the IDLC orders within the standard provisioning intervals and rates Q. WHAT ARE YOUR SPECIFIC RECOMMENDATIONS ON THE PROCESS FOR PERFORMING THE PRE-ENGINEERING CHECK? A. I recommend the following: identification of the loop being provisioned if the loop is served by IDLC, determination of the alternate configuration (e.g., home run copper, UDLC, or maintaining the IDLC) if home run copper will be supplied, the CLEC should be given the specifications of the copper loop (length, etc) so that the CLEC can accommodate the signal (e.g., the CLEC might have to install a range extender in its collocation cage) v1

31 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 30 of if UDLC will be supplied, the CLEC needs to know that in advance so that it can be prepared to test the circuit after the hot cut to ensure the quality of the voice and data service offered to the customer in the case of EELs, CLECs need to be able to oversee the continuity of the circuit to ensure the quality of the voice and data service offered to the customer Q. IN SUMMARY, WHAT ARE YOUR RECOMMENDATIONS FOR THIS ISSUE? A. SBC should provide additional detail on a pre-engineering check for IDLC loops and SBC should provide access to existing GR303 functionality for UDLC loops so that the customer does not suffer a degradation in dial-up Internet speeds and retains traditional functions of their phone service when SBC converts the loop from IDLC to UDLC Q. SHOULD CLECS HAVE TO PAY FOR THIS ADDITIONAL WORK? A. No. CLECs would prefer to have access to the IDLC. SBC is creating the additional work, so SBC should incur the cost v1

32 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 31 of Q. ARE THERE OTHER OMISSIONS IN SBC S PROPOSED BATCH CUT PROCESS THAT CREATE AN ANTI-COMPETITIVE TELECOMMUNICATIONS ENVIRONMENT? A. Yes. SBC has refused to include line split and line shared loops in the batch cut process (Matrix Issues 5.0 and 5.4). In addition, in its December 15 th proposal, SBC states: Although SBC is willing to consider the development of a batch cut process for EELs as an enhancement to the batch cut process after the process initial roll-out, it did not include such a process in its final proposal. (Matrix Issue 7.) Q. WHAT ARE LINE SPLIT AND LINE SHARED LOOPS? A. Line split loops are loops that have voice provided by the CLEC and digital subscriber line ( DSL ) based data provided by a CLEC, an ILEC s DSL affiliate, or the ILEC. Line shared loops are loops that have voice provided by the ILEC and DSL-based data provided by a CLEC, an ILEC s DSL affiliate, or the ILEC Q. WHAT IS THE COMPETITIVE IMPACT ON CUSTOMERS AND CLECS OF EXCLUDING LINE SPLIT AND LINE SHARED LOOPS FROM THE BATCH CUT PROCESS? A. Many customers increasingly desire a combined voice and data product. If CLECs are required to self-provision switches and use UNE-L, they will also have to be able v1

33 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 32 of to provide a DSL product with UNE-L in order to stay competitive. A batch cut process for line splitting and line sharing is a necessary (although not necessarily sufficient) step for CLECs to be able to provide a combined voice and data product to customers through UNE-L Q. IS IT APPROPRIATE, AS A MATTER OF POLICY, TO INCLUDE LINE SPLIT AND LINE SHARED LOOPS IN THE BATCH CUT PROCESS? A. Yes. Section 251(c)(3) of the Act requires SBC to provide nondiscriminatory access to network elements on an unbundled basis. SBC undoubtedly provisions DSL to its retail customers on an expeditious basis, particularly since there is no need to establish a new loop and switch connection for its retail DSL customers. SBC s CEO Ed Whitacre, addressing the Citigroup Conference on, indicated that SBC has about 50 percent of the market share if you look across SBC. 3 Additionally, Mr. Whitacre indicated that SBC intends to continue to be very aggressive in DSL. Therefore, the Commission should ensure a competitive playing field in the DSL market by requiring SBC to provide line splitting and line sharing to CLECs on a non-discriminatory basis. Although batch hot cuts inherently fail to ensure entirely nondiscriminatory access, they very likely could provide better access 3 The presentation is available online at v1

34 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 33 of than the existing line-by-line cutover process. Accordingly, SBC should include line splitting and line sharing in the batch cut process Q. WHAT IS THE COMPETITIVE AND OPERATIONAL IMPACT OF SBC S EXCLUSION OF EELS FROM THE BATCH CUT PROCESS? (MATRIX ISSUE 7.0.) A. SBC s refusal to include EELs in the batch cut process makes it very difficult for CLECs to rely on EELs to expand the scope of their switches for mass market customers. From an operational perspective, an EEL is a combination of loop and transport facilities that allows a CLEC to transport a customer s traffic from one wire center to a switch in a remote location, without requiring the CLEC to collocate in the customer s wire center. The EEL accomplishes this by combining the loop with multiplexing and transport Q. WHAT STEPS ARE REQUIRED TO PROVISION AN EEL AS PART OF A CUTOVER? A. First, the parties have to set up the EEL itself, which requires the parties to connect the loop to the multiplexer and establish the appropriate circuit over the transport facility to the CLEC s switch. Then, once the EEL is established and tested, the parties can perform the standard steps for a hot cut v1

35 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 34 of Q. WHAT IS YOUR RECOMMENDATION? A. SBC should include loops with EELs in its batch cut process and establish, if technically feasible, procedures that allow the parties to provision the EELs at intervals and rates that are at parity with UNE-P and retail orders. In the event that it is not technically feasible to provision EELs at intervals and rates that are at parity with UNE-P and retail orders, then EELs are not a reasonable substitute for unbundled local switching for the mass market V. APPROPRIATE PERFORMANCE MEASUREMENTS AND ENFORCEMENT PLANS Q. HAS SBC PROPOSED LOOP PERFORMANCE METRICS (I.E., QUALITY MAINTENANCE AND REPAIR METRICS) FOR PROVISIONING HIGH VOLUMES OF LOOPS? (MATRIX ISSUES 55.2.) A. No. In its December 15 th proposal, SBC stated that it would establish new performance measurements for the defined batch processes. However, SBC does not address the daily batch or the bulk project processes. It is my understanding that SBC wants to keep the existing performance measurements for the daily batch process. Presumably, SBC would not measure its performance for the bulk project process at all v1

36 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 35 of Q. IS SBC S PROPOSAL REASONABLE? A. No. The existing performance measurements for enterprise hot cuts are insufficient to adequately measure daily batch cuts for mass market customers. For example, the existing measurements generally allow SBC to subject the customer to a service outage of one or two hours. This may (or may not) be acceptable for the enterprise market, but is certainly not acceptable for residential customers. Furthermore, the existing measurements often exempt batches of more than 24 lines. That unreasonably limits the number of lines that CLECs can convert if CLECs are forced to migrate to UNE-L. Finally, exempting the bulk project process from performance measurements altogether is unacceptable because it means SBC has no accountability for errors or delays in converting customers under this process Q. WHAT ARE THROWBACKS? A. Throwbacks occur when a customer is reconnected to SBC s switch because of operational problems that arise during the cutover. I expect the volume of throwbacks to rise as customers are converted from IDLC to copper loops or UDLC, due to problems with the new loop, or if other generic operational problems occur during cutover v1

37 Direct Testimony of Lyndall Wayne Nipps on behalf of Sage Telecom, Inc. MPSC Case No. U Pre-Filed: January 23, 2004 Page 36 of Q. DOES SBC CURRENTLY MEASURE THE INTERVALS FOR PERFORMING THROWBACKS IN ITS PERFORMANCE MEASUREMENTS? A. No Q. SHOULD SBC MEASURE THROWBACK INTERVALS? A. Yes, given the likelihood that throwbacks will increase due to SBC s position that it will migrate customers off of IDLC onto new loops Q. WHAT IS YOUR SPECIFIC RECOMMENDATION ON SBC S PROPOSAL? A. The Commission and parties should develop performance measurements for all three batch cut processes that recognize the special characteristics of mass market customers. There should be no exemptions and the outage times should be no more than a de-minimus amount, such as five minutes. Finally, SBC should measure the volume of throwbacks and the period of time that SBC takes to complete the throwbacks. The measure should not only reflect the aggregate information, but CLEC-specific information as well since the central offices could be limited by volume per day, per CLEC v1