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JOHN M DLMPSEY

December 8,2003

Via Hand Delivery

Mary Jo Kunkle, Executive Secretary Michigan Public Service Commission 6545 Mercantile Way Lansing, MI 4891 1

Re: Ameritech Michigan's submission on performance measurements, benchmarks, and reporting on compliance with the October 2, 1998 Order in MPSC Case No. U-11654 Case No. U-11830

Dear Ms. Kunkle:

Enclosed for filing regarding the above-captioned matter please find the original and 15 copies of Joint Motion for Expedited Approval of Billing Performance Measurements and Joint Petition for Commission Resolution. Also enclosed is the Proof of Service.

If you should have any questions, please contact me.

Very truly yours,

Dlgltally stgned

%John M. by Dempsey DN John cn=John M M

Dempsey, ==US

sbnarb, Unkwn D e m pse y y::8?r:&?

John M. Dempsey

JMDlmb Enclosures

LANSING 34060-47 259053~06

C o u n s e l l o r s A t L a w

D E T R O I T B L O O M F I E L D H I L L S L A N S I N G G R A N D R A P I D S A N N A R B O R W A S H I N G T O N , D . C .

STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

Arneritech Michigan's submission on performance ) measurements, benchmarks, and reporting in

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compliance with the October 2, 1998 Order in ) Case No. U- 1 1830 I - ~ ~ G ~ I $ ~ ~ $3iji:!2;-!,:;; :;:r;:r4q,jicE; ~ ~ : : ' > J ~ R A : : . ; : ; ! ( : ) !\J

MPSC Case No. U- 1 1654.

PROOF OF SERVICE

STATE OF MICHIGAN

> ss COUNTY OF WASHTENAW

L. Michele Brainerd, being first duly sworn, deposes and says that she is employed at Dickinson Wright PLLC; and that on December 8, 2003 she served a copy of Joint Motion for Expedited Approval of Billing Performance Measurements and Joint Petition for Conzmission Resolution upon the attached service list via email and fist class mail by placing the same in envelopes addressed as attached, with proper first-class postage affixed thereto, and by causing the same to be deposited in a mail receptacle maintained by the U.S. Government in Ann Arbor, Michigan.

Dtgitally signed by L

33 L. Michele Brainerd %h::K:ce:iie Brslnerd, c=US

Slgnerldsnlv Dale 2003 12 08

""inawn 14 39 06 -0500'

L. Michele Brainerd

Subscribed and sworn to before me, a Notary Public in and for said County, this 8th day of December, 2003.

~ a r v l - - Angela M. Marin ;+::;::,:,-,. .05100.

Angela M. Marin, Notary Public Washtenaw County, Michigan My Commission Expires: 09/29/05

LANSING 34060-47 229179~03

SERVICE LIST - U-11830

Michael A. Nickerson John J. Reidy, 111 MPSC Staff Doug Trabaris 6545 Mercantile Way, Suite 15 AT&T Communications Lansing, MI 48909 222 W. Adarns Street, Suite 1 500

Chicago, IL 60606

Michael Moody Attorney General 525 W. Ottawa, 6th Floor Lansing, MI 48913

McLeodUSA, Inc. Rhythms Links, Inc. CoreComm Michigan, Inc. William R Ralls Leland R. Rosier 2455 Woodlake Circle Okemos, MI 48864-5941

Bradley R. Kruse Associate General Counsel McLeodUSA, Inc. G400 C Street, S.W. P.O. Box 3 177 Cedar Rapids, IA 52406-3 177

ZTel Communications XO Michigan, Inc KMC Telecom 11, Inc./KMC Telecom 111, Inc. Michael S. Ashton 1000 Michigan National Tower Lansing, MI 48933

Lee T. Lauridsen Sprint Communications Company LP 8 140 Ward Parkway, 5E Kansas City, Missouri 64 1 14

Julie Kaminski CompTel Davis Wright & Trernaine LLP 1500 K Street, N.W., Suite 450 Washington, DC 20005

Art LeVasseur AT&T Communications 3500 Guardian Building Detroit, MI 48226

Albert Emst WorldCom Dykema Gossett PLLC 800 Michigan National Tower Lansing, Michigan 48933

James R. Denniston WorldCom 205 North Michigan Avenue, Suite 3700 Chicago, Illinois 6060 1

Howard Siege1 1P Communications Corporation 9430 Research Blvd. Echelon 11, Suite 120 Austin, Texas 78759

William H. Keating GTE NortNVerizon 100 Executive Drive Marion, OH 43302

1

STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COM

Ameritech Michigan's submission on performance ) measurements, benchmarks, and reporting in 1 Case No. U- 1 1830 compliance with the October 2, 1998 Order in 1 MPSC Case No. U- 1 1654. 1

JOINT MOTION FOR EXPEDITED APPROVAL OF BILLING PERFORMANCE MEASUREMENTS AND

JOINT PETITION FOR COIWMISSION RESOLUTION

Michigan Bell Telephone Company d/b/a SBC Michigan ("sBc")', the CLEC

participants,2 and the Commission Staff (collectively, the "Parties") jointly request the

Commission (1) to approve the performance measurements and benchmarks agreed to Le., not I disputed) by the Parties to this Joint Motion as additions to those previously approved in the

Commission's Prior orders3 issued in this proceeding and (2) to resolve certain disputes I regarding issues that have not been agreed to by the Parties. The Parties seek expedited

consideration so that implementation of the changes can commence. I In support of this Joint Motion and Joint Petition, the Parties state as follows:

1 SBC participates in this filing without prejudice to, and expressly reserves its arguments regarding, its positions in Michigan Court of Appeals Case No. 25 1 I 17.

2 The "CLEC participants" include the following: AT&T Communications, Inc., TCG Detroit, MCImetro Access Transmission Services LLC, MCI WorldCom Communications, Inc. and Brooks Fiber Communications of Michigan, Inc., McLeod USA, Inc., and TDS Metrocom.

3 On May 27, 1999, the MPSC issued its initial Order in this proceeding requiring SBC to implement performance measures and standards. Since that time the MPSC has issued several orders regarding the May 27, 1999 Order, including orders entered on September 3, 1999, February 9, 2000, July 17, 2000, February 22, 2001, April 17, 2001, July 11, 2001, July 25, 2001, December 20, 2001, February 25, 2002, February 20, 2003, March 26, 2003, two orders on May 28, 2003, and August 26, 2003. (the "Prior Orders"). The latest order issued by the MPSC in this docket on October 23, 2003 relates to a collaborative

Footnote continued on next page . . .

I. Collaborative Discussions

As part of the Parties' ongoing commitment to review and propose modifications to the

performance measures based upon actual experience, additional collaborative meetings have

been held to discuss changes to the billing performance measurements. A billing collaborative

meeting was held on January 30, 2003. Conference calls were held: March 3 1, April 29, May

22, June 26, July 15, August 7, August 19, and August 28, 2003. Subsequent to August 28, I 2003, the Parties have had further communications regarding this filing. As a result, the Parties

reached consensus that certain performance measurements should be added to those approved in

the Prior Orders.

The Parties expressly reserve their rights to pursue their positions, and no Party waives I any position, regarding the development of additional performance measures beyond those

approved or adopted in the Commission's Prior Orders or described in this Joint Motion. The

Parties expressly reserve their rights to advocate, and no Party waives any position, regarding the

substance or appropriateness of any product, service or process, notwithstanding that such I product, service or process is the subject of performance measures agreed to in this Joint Motion.

11. Agreed Upon Proposed Additions

During the collaborative discussions, the Parties agreed to three new Performance

Measurements - CLEC BLG-2, CLEC BLG-3 and 125. Performance Measurement CLEC BLG-

2 (Percent of Billing Claims Acknowledged Within 5 Business Days) and CLEC BLG-3 (Percent I of Billing Claim Resolution Notifications SentIMade Available Within 30 Business Days)

Footnote continued from previous page . . . process devoted to consideration of performance measures and remedies for CLECs operating in SBC

Footnote continued on next page . . .

measure the efficiency of the billing claims process, while Performance Measurement 125

(Percent Matching UNSP Provisioning & Billing DB Records) is designed to assess SBC's

accuracy in maintaining consistency between the ACIS customer service record and the CABS

billing record for provisioned UNEP lines.

Included as Schedule 1 to this Joint Motion is the text of Perfomnce Measurements

CLEC BLG-2, CLEC BLG-3 and 125, for which approval is sought herein subject to

Commission resolution of the disputed issues.

111. Disputed Issues

Because consensus on all issues was not able to be reached, the Parties seek Commission

resolution of their dispute regarding those unresolved issues. Accordingly, the Parties hereby

submit this Joint Petition and request that the Commission resolve the following issues:

A. Disputes on Performance Measurements Otherwise AgreecPTo and Proposed for Implementation

Application of remedies and performance standard on PM CLEC BLG-2.

Period in which no remedies apply for PM CLEC BLG-3.

Exclusion of CLECs with 30% or more claim line items denied from Tier 1 remedies for CLEC BLG-3 metric.

B. Disputes on Performance Measurements Not Otherwise Agree&To Which CLECs Propose Implementation Of

CLEC proposal for addition of a measure to assess the timeliness of Post-to-Bill notification, with a 95% in 5 days benchmark, and remedies, and no deletion of current PM 17.

Footnote continued from previous page . . . territory.

CLEC proposal for addition of a diagnostic report (measure) on the percent of claims denied for CLEC aggregatelindividual.

Accordingly, incorporated herein and attached as Appendices A and B (as comments and

replies, respectively) are t b positions of the Parties who have submitted positions on the

disputed issues, specifically including the Parties' respective positions on areas of agreement

related to the issues, as well as the specific areas of disagreement. Additionally, any disputed

proposed business rules are included in Schedule 1 hereto.

IV. Implementation

The Parties propose that the implementation of the agreed-upon proposed Performance

Measurements should follow the implementation schedule, included as Schedule 2 to this Joint

Motion, on an SBC Midwest regionwide basis (implementation in all five states

simultaneously), absent any objection from the Commission. If the Commission rejects any

portion of this Joint Motion that includes a change already implemented, SBC agrees to restate

the affected performance results so as to come into compliance with the Cornmissiods Order.

The Parties propose that the agreed-upon performance measures, as detailed in Section 11 I

above, not be subject to the ongoing Bearing Point Third Party OSS test ("Bearing Point test"), I

subject to Commission determination otherwise. The Parties agree that the approval of a

performance measure change should not lead, in and of itself, to an extension of any component i of the Bearing Point test.

V. Conclusion

WHEREFORE, the Parties respectfully request that the Commission act on this Joint

Motion, on an expedited basis, to approve the additional performance measurements and

benchmarks agreed to (i.e., not disputed) by the Parties and on this Joint Petition to resolve the

disputed issues as set forth herein.

Dated: December 8,2003

Respectfblly Submitted, Craig Anderson (P28968) SBC Michigan 444 Michigan Avenue, Room 1 700 Detroit, MI 48226-25 17 (3 13) 223-8033

and

DICKINSON WRIGHT PLLC 1

By:

Dlgltaly signed by 3 John M. JohnM Dempsey sey DN cn=John M Dempsey c=US

8Q"Br lbs"llP, Dele 2003 12 08

UMLN~~ 14 58 59 -05 (K1'

John M. Dempsey (P30987)

Concurred in by:

MICHIGAN PUBLIC SERVICE COMMISSION STAFF

AT&T COMMUNICATIONS, INC. TCG DETROIT

MCIMETRO ACCESS TRANSMISSION SERVICES LLC, MCI WORLDCOM COMMUNICATIONS, INC. (F/K/A MFS INTELENET OF MICHIGAN, INC.) AND BROOKS FIBER COMMUNICATIONS OF MICHIGAN, INC.

MCLEOD USA, INC.

TDS METROCOM

SCHEDULE 1

claims received on non-standard forms Holidays and Weekends Excludes Access and LSB Billing claims

I( Exclusion definitions are detailed on CLEC OnLine and can be found in the Billing Adjustments and Claims 1)

days: Acknowledged claims are entered &to the billing claims tracking system. The s&t time for this measure is the dak of receipt by SBCIArneritech. Day of receipt shall be considered Day zero (0) for computing acknowledgement performance. The end time is the date the acknowledgement (confirmation letter) is sent to the CLEC,

11 Claims are included in the result in the month the acknowledgement is sent. 11 Any valid Local claims sent to the e-mail address of

AICS-TC.Billing@ameritech.com will be included. Any claims that are incorrectly sent to this e-mail address will be rejected. Any valid Collocation claims sent to the email address of

AJTCBLCL@txmail,sbc.com will be included. Any claims that are incorrectly sent to this e-mail address will be reiected.

Collocation (agreed to be reported only on a diagnostic basis)

All Other Claims

business days + total # of billing claims Affiliate. I acknowledred) * 100

Tier 1 None None 11 Tier 2 None None None None None None None None

Collocation - Diagnostic All Other Claims - Diagnostic

1) 30 business days of receipt by SBCIArneritech. 11

11 Claims on invoices greater than 4 months old 11 Rejected Claims Duplicate Claims Claims received on non-standard forms Holidays and weekends JEP Time Excludes Access and LSB Billing claims

Exclusion definitions are detailed on CLEC OnLine and can be found in the Billing Adjustments and Claims section of the CLEC OnLine Handbook at h~s://clec.sbc.comlcleckbl

(1 The purpose of this measure is to track the percentage of billing claims resolution notifications sent within 30 (1

A business days. Day of receipt (not date of acknowledgement) shall be considered Day zero (0) for computing resolution performance. The end time is the date the resolution is sent to the CLEC. A Any valid Local claims sent to the e-mail address of

AICS-TC.Billing@ameritech.com will be included. Any claims that are incorrectly sent to this e-mail address will be rejected. Any valid Collocation claims sent to the email address of

AITCBLCL@txmail.sbc.com will be included. Any claims that are incorrectly sent to this e-mail address will be rejected.

Billing Claims (excluding negotiated projects) Collocation Billing Claim (excluding negotiated projects)

Negotiated projects (5 disaggregations): o % in less than or equal to 30 days o % in less than or equal to 60 days

2

First 6 Months Tier 1 None None None None None Tier 2 None None None None None

After 6 Months Tier 1 Remedied Remedied Medium Low Remedied Tier 2 None None None None None

Billing Claims (excluding negotiated projects) 95% within 30 business days. First 6 months diagnostic then remedy at per occurrence with a CAP for Tier 1 only.

Collocation Billing Claim (excluding negotiated projects) - Diagnostic Negotiated Projects - Diagnostic only. This disagg is for project performance display only and will not have a benchmark or remedy.

CLECs with a denied claim item rate of 30% or greater for three consecutive months for will not be eligible for Tier 1 Payments. If a CLEC excluded fiom payments under this condition requests a reconciliation of results and data for this performance measurement, and that reconciliation finds that SBC Midwest incorrectly denied claims to the extent that the properly denied claim items resulting are less than 30% of total claim items for which a resolution notice was provided in any of the three months, the Tier 1 payment restriction will be removed and remedy payment will be made with appropriate interest as defined in the remedy plan for late payment of remedies.

(1 generate a monthly recurring charge, that match the corresponding UNE-P circuit level CABS 11 billing records.

of the reporting month (posted to ACIS but not yet posted to CABS) where the activity is unposted to CABS for less than 30 calendar days from the completion date will be excluded from the test sample. UNE-P orders/circuits that post to ACIS but are not designed to post to CABS (e.g. Directory Listings updates). UNE-P orders/circuits that post to billing in CABS but are not designed to post to the ACIS

If any of the bill-affecting services andlor features do not match when the corresponding ACIS and CABS WE-P circuit records are compared, the update will be deemed a "miss" for reporting vwoses.

ACIS in the report month will be compared to the &-responding recurring billing record updated in, or added to, CABS. The comparison will assess all updates to CABS for UNE-P services andlor features that generate monthly recurring charges. The statistically valid sample will be established from the total number of UNE-P service orders that process from ACIS to CABS in the reporting month. The number of records compared will be sufficient to assure 95% confidence in the test result.

II None II

11 -her of recirds sampled) * 100 I aggregate. 11

Tier 1 None None None None None 11 ~ i e r 2 None None None None None

Feature Group A Feature Group B Feature Group D Wireless

A service order is considered completed for Billing when the service order is posted in the Billing systems. Service orders are measured from service order completion in the Ordering system to bill posting in the Billing system. All other orders will be considered

11 on time if posted within the first bill cycle following; order completion. 11

Lineshare LWBP Resale

(# of on time posted billing orders in report month i total billing orders in renort month) * I00

~BCl~meritech, and SBCIAmeritech Affiliate.

Tier 1 Low Low Med Low Low Tier 2 Med Med Med Med Med

1) Percent of Post to Bill notices that are sent within 10 days of completion of the last order I\ 11 associated with an LSR. 11

Orders for which billing completion notices are not sent. Access Service Orders billed through CABS

For OSS versions that generate Post to Bill notifications ("PTBs"), the process to generate the PTB is initiated after the service order is posted in the Billing system. PTB timeliness is measured, for each PTB sent, from service order completion in the Ordering system to the time that the billing completion notification is sent/made available to the CLEC.

Where CLEC accesses SBCIAmeritech - LEC's systems using a Service Bureau Provider, the measurement of SBC/Ameritech - LEC's performance shall not include Service Bureau Provider processing, availability or response time.

11 None 11

11 (Number of Post to Bill notifications I Reported f& CLEC, ~ ~ ~ C L E C S , a n d sent within 10 days of service order completion i total Post to Bill notifications sent) * 100

SBCIAmeritech Affiliate.

Tier 1 Remedied Remedied Med Low Remedied 11 Tier 2 Med Med Med Med Med 1 1 - . - -. I Benchmark: ' 95% within 10 days

SCHEDULE 2

I C L ~ B L ~ ~ Percent of Billing Claims Acknowledged within 5 Business Days CLEC BLG3 Percent of Billing Claims Resolution Notifications Sent within 30

1 1 125 Percent Matching UNE-P Provisioning & Billing DB Records 2/20/04

STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

Ameritech Michigan's submission on performance ) measurements, benchmarks, and reporting in Case No. U- 1 1830 compliance with the October 2, 1998 Order in MPSC Case No. U- 1 1654. 1

COMMENTS OF MCI AND AT&T REGARDING

DISPUTED ISSUES

AT&T Communications of Michigan and TCG Michigan (collectively "AT&T");

and MCImetro Access Transmission Services LLC, MCI WorldCom Communications,

Inc., and Brooks Fiber Communications of Michigan, Inc. (collectively "MCI"), hereby

submit their initial comments.

1) Application of Remedies and Performance Standard for PM BLG-2.

With PM BLG-2, the parties have agreed that SBC Michigan must track the time

within which a CLEC billing claim dispute is acknowledged by SBC Michigan with 5

business days of receipt. However, this PM does not have a benchmark performance

measurement, nor are any remedies associated with this PM. MCI and AT&T believe it

is important for the acknowledgement of the claim to be received within the specified

period 95% of the time. Without such acknowledgement, a CLEC does not know if its

claim is being worked or whether there is more information needed for the claim to be

worked. As with the other performance measurements, SBC Michigan should be given

incentives to improve its performance, which is the point of remedy payments. CLEC

billing issues are of critical importance, and SBC Michigan should be held to a standard

for acknowledging the receipt of billing claims so that the process will move along

expeditiously.

2. Period in which no remedies apply for PM BLG-3.

PM BLG-3 establishes a benchmark of 95% for resolution of billing claims within

30 business days of receipt. However, the application of remedy payments for SBC

Michigan's failure to meet this standard has been deferred for 6 months. MCI and AT&T

disagree that there should be a 6 month deferral of the application of remedies to this

diagnostic.

As the FCC and state 271 proceedings have shown, CLECs have run into

numerous billing errors in the SBC Midwest region, and this is not a new problem. At

the very least, there should be some immediate incentive for SBC to promptly resolve

billing claims for errors the CLECs find themselves. Responding to billing claims is not

a new service or process, but it is one where old policies and procedures have been

lacking. There is no reason to wait to apply remedies that require SBC Michigan to

resolve a claim in 30 days. Even if the claim is a denial, having that denial in hand

promptly (and hopefully with enough information to understand the denial) will help the I

CLEC move on to escalate the problems to executives, arbitrators or state regulators if it

believes its claim still is just. Remedies should be applied at the highest level and no cap I

available in the plan because, while this metric does not provide an incentive for SBC to

send out accurate bills in the first place, it does encourage it to respond to CLEC claims

in a timely manner with either (1) an agreement to credit bills and when or (2) a clearly

explained

--

denial for the CLEC to escalate disagrees.

3. Exclusion of CLECs with 30% or more claim line items denied from Tier 1 remedies for the BLG-3 metric.

MCI and AT&T oppose SBC Michigan's proposal to exclude from Tier I

remedies any CLEC that has had more than 30% of the line items on its claim denied for

three months in a row. MCI and AT&T1s experience in all ILEC regions is that most

initial claims are denied and theh have to be escalated, some times even for years, until a

settlement is reached. This provision leaves entirely in SBC Michigan's control whether

it pays any Tier 1 payments at all. For example, by simply delaying the final resolution of

a billing dispute for a period of months, SBC Michigan could necessarily ensure that a

CLEC would fail the 30% standard since SBC Michigan's front line billing dispute

I personnel would continue to deny a CLEC's disputes on that open issue for a period of

I

I months.

Even with a reconciliation function, SBC Michigan and the CLEC likely will

remain at a standoff as to whether the claim was valid or not. Section 7.2 of SBC

Michigan's remedy plans cover waivers for CLEC-caused misses of metrics.

Notwithstanding this protection mechanism, SBC Michigan has insisted upon proposing

an exclusion that will result in the CLECs fighting each month over whether the claim

was legitimate or not. Verizon and BellSouth have similar processes for dealing with

CLEC-caused misses where the facts are aired. However, these ILECS have no such

exclusion for denied claims written directly into similar metrics. The whole point of the

FCC's desire to see self-effecting remedies support 271 applications was to ensure that

CLECs were not burdened litigating with the ILEC for every remedy, In fact, among the

criteria the FCC has used in judging whether remedy plans are adequate in 271

proceedings are that the plan include a "self-executing mechanism that does not leave the

door open unreasonably to litigation and appeal." [Paragraph 433, In re Application of

Bell Atlantic New York for Authorization Under Section 271 of the Communications Act

to Provide In-Region, InterLATA Service in New York, CC Docket No. 99-295,

Memorandum Opinion and Order, 7 12 (rel. Dec. 22, 1999)l. I

I The accuracy of SBC Michigan's rejection of claims that are used in determining

whether Tier I remedies are applicable would not be picked up in the third party audits

that are part of the SBC Michigan performance plan. If SBC Michigan believes that a

CLEC is abusing the claims adjustment process then it can bring its case to this

Commission and seek a waiver or adjustment of the remedies it believes were paid

because of this abuse. The CLECs have absolutely no incentive to file false billing

claims, and therefore the burden should not be placed on the CLECs to prove that their

claims were valid in the first place. SBC Michigan has never provided any plausible

reason why CLECs would go to the considerable trouble of filing a claim on the off

chance that it might not be able to resolve them fast enough to meet the metric deadline.

In fact, MCI and AT&T are more concerned that SBC Michigan will be apt to

reject billing claims to meet the 30 day deadline if it has not finished analyzing the claim

in time. That is why MCI and AT&T have proposed that, just as BellSouth does, SBC

Michigan should report the number of claims denied for CLEC aggregate and individual

CLECs each month so that regulators and CLECs can monitor whether claims seem

inordinately high.

SBC Michigan's proposal creates an even greater incentive for SBC to deny

billing disputes so that CLECs become disqualified for remedy payments that would

otherwise be owed. Even third-party audits would not be a protection. It would be easy

for a third party audit to count the number of rejections, but such an audit would never

provide an opinion on whether the rejections were legitimate.

4) CLEC proposal for addition of a measure to assess the timeliness of Post-to-Bill notification, with a 95% in 5 days benchmark, and remedies, and no deletion of current PM 1 7.

Billing completion notices ("BCNs") are an electronic notice sent by SBC to the

CLEC notifying the CLEC when billing account information is updated. Timely receipt

of this notice is crucial for the ability of CLECs to properly bill their customers. When

billing does not commence until the month after a CLEC places an order, it may have to

accrue these amounts at year-end - a financial disadvantage that can have considerable

competitive impact.

The MCI and AT&T propose that SBC Michigan implement the same

Performance Measurement No. 17.1 standard that SBC Southwest implemented in Texas

- 95% performance within 5 days. (SBC Southwest's Texas measurement is Attachment

No. 1). Thus, it is proposed that BCNs should be sent within five days of being updated.

(See the MCI and AT&T proposal, which is Attachment No. 2). SBC Michigan has not

agreed to this proposal and instead insists that, based on its own internal data, the best it

can do in Michigan is 95% within 10 days.' SBC's inability to agree to the Texas PM

17.1 standard in Michigan suggests that the fundamental problems in SBC Midwest's

In performance measure workshops, SBC has explained that the antiquated billing process it uses in the former Arneritech states -- ACIS - has a process of closing an order and sending the order completion to CABS that takes several days. Each step required to move a completed order in ACIS to a billing completion notice from CABS is done via a batch process, which is completed only once per day. Moreover, an error free order will take at least five days to generate a billing completion notice, and there are several steps in the process that can generate errors, which must be manually corrected. Those corrected orders are then sent back through the batch process.

billing systems may somehow be linked to the legacy Ameritech billing system -- ACIS -

- and that these problems were not resolved by the ACIS-CABS reconciliation.

SBC Michigan's proposal, however, calls for use of a benchmark that no other

Bell Operating Company ("RBOC") uses. In fact, the longest interval used by other

RBOCs is 5 days. Other ILECs, notably Verizon and Qwest, provide BCNs in two days.

(Verizon's and QWEST's performance measurements are provided together in

Attachment No. 3).

The five-day BCN benchmark sought here is very conservative, given SBC's own

voluntary agreement to use an identical time frame in Texas. SBC Michigan certainly

should not be held to such an extraordinary low standard as it proposes here. The CLECs

need to know their orders have closed in billing so SBC Michigan can stop billing, and

they can start billing and resolving their customers' problems. As noted above, the 10

day interval proposed by SBC Michigan is totally unacceptable to the CLEC, but even at

10 days it appears that SBC Michigan would fail this metric. This impacts the customer

with double billing, and MCI and AT&T by adding to the inaccuracy of its carrier bills.

In fact the interval is so long, it appears to be causing SBC Michigan to fail a billing

completeness metric (PM 17) where it has a whole month to get the change on the next

bill. CLECs should not be penalized because SBC Michigan designed a process that adds

an extremely long period from when the service is added to, changed or deleted, to when

such changes are reflected in its final bill and in the CLEC's new bill to the customer.

Furthermore, without the timely BCN, CLECs do not know when the customer is theirs

in order to handle that customer's maintenance and service questions.

MCI and AT&T would not oppose eliminating PM 17 if three conditions are met:

(I) A backbilling metric is implemented to get at the billing completeness issues as the

CLECs had intended when proposing it years ago; (2) the above BCN timeliness metric is

implemented; and (3) in order to apply remedies for the BCN timeliness metric, duration

periods under the old PM 17 failures prior to implementation would be counted. In other

words, if PM 17 was missed in April, May, June and July and then is replaced by the

BCN timeliness metric, the remedy would be set at the duration level if the old PM 17

months of failure are included. SBC Michigan should not receive a windfall of starting

at the base remedy again when the highest remedy level did not provide it with an

incentive to shorten the intern1 between completion of the order activity to updating the

billing systems. Its only incentive has been to try to soften the metric rather than fix the

systems. MCI and AT&T therefore respectfully request that their proposed five-day

benchmark be adopted.

5 ) CLEC-proposal for addition of a diagnostic report (measure) on the percent of claims denied for CLEC aanregate/individual.

In conjunction with BLG-3, SBC needs to report on the number of claims it

denies each month so that CLECs and regulators can more easily monitor whether this

metric is providing an incentive for it to reject claims rather than research them as the

former is faster. BST currently has this provision in its similar billing claims adjustment

metric. Attached is a copy of the diagnostic measure that MCI and AT&T believe is

better to trigger closer review of raw data if the levels of rejection are extremely high for

either the aggregate or the individual CLEC results or both (see Attachment 4).

This proposed diagnostic is necessary to make sure the new metrics do not

become an incentive for SBC Michigan to deny billing claims to avoid the metric's

deadline and reduce credited amounts in proposed BLG-3. Full and partially denied

billing claims need to be monitored by the whole industry, not just by a specific CLEC,

because SBC Michigan could argue that high levels of rejects for a particular CLEC is a

quality issue. The MCI and AT&T proposal is a diagnostic measure so it would not

encourage CLECs to file more claims, but to continue to file claims where they believe

are legitimate. CLECs judge audit center performance by adjustments gained not

numbers of claims filed. BST reports this as a diagnostic, and Verizon likely will report

this as a diagnostic measure after NY PSC vote in August or September on consensus and

nonconsensus issues.

Respectfully submitted,

AT&T COMMUNICATIONS OF MICHIGAN, INC. AND TCG DETROIT

By: - John J. Reidy, 111 (P60620) Douglas W. Trabaris AT&T Corp. 222 West Adams, Suite 1500 Chicago, IL 60606 (3 12) 230-2647

AT&T Communications of Michigan, Inc. 2 15 South Washington Square, Suite 230 Lansing, Michigan 48933 (5 17) 374-6521

MCI

By: James Denniston (P57736) MCI 205 North Michigan Avenue, 1 1 th Floor Chicago, IL 60601 (312) 260-3190

STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

Ameritech Michigan's submission on performance ) measurements, benchmarks, and reporting in 1 Case No. U- 1 1830 compliance with the October 2, 1998 Order in 1 MPSC Case No. U- 1 1654. 1

INITIAL COMMENTS OF SBC MICHIGAN ON DISPUTED ISSUES RELATED TO PERFORMANCE MEASURES

In conjunction with these Initial Comments, SBC Michigan, several CLECs, and the

Staff, are simultaneously filing a "Joint Motion For Expedited Approval of Billing Performance

Measurements and Joint Petition For Commission Resolution" ("Joint MotiodPetition") with

this Commission. The Joint MotiodPetitionrequests that (a) the Commission approve additional

performance measurements agreed to by the parties, and (b) the Commission resolve certain

disputes regarding issues that had not been agreed to by the parties.

Pursuant to the agreed-upon procedure, SBC Michigan is including its initial and reply

comments and supporting affidavits as Attachments A and B to the Joint Motion/Petition SBC

Michigan addresses herein two general types of disputes. The first type applies to the agreed-to

performance measures included in Schedule 1 of the Joint MotiodPetition The second type

applies to performance measures proposed by the CLEC participants. Attached to these

comments is the Affidavit of James D. Ehr, which provides detailed discussion on and factual

support for SBC Michigan's position on the disputed issues. Each dispute is listed below as set

forth in Section I11 of the Joint MotiodPetition

I. DISPUTES ON PERFORMANCE MEASUREMENTS OTHERWISE AGREED TO AND PROPOSED FOR IMPLEMENTATION

A. Application of Remedies and Performance Standard on PM CLEC BLG2

The CLEC participants propose to create a remedy for CLEC BLG-2 that would

duplicate a remedy provided under CLEC BLG-3. As more fully explained in Mr. Ehr's

affidavit, adding a remedy to CLEC BLG-2 would cause SBC Michigan to potentially pay

remedies twice for the same action. Therefore, SBC Michigan does not support the proposal.

B. Period in Which No Remedies Apply for PM CLEC BLG3

SBC Michigan believes a diagnostic period for remedies is necessary because SBC

Michigan will be rolling out an entirely new process for handling and tracking billing claims that

was developed through collaborative discussions with the CLEC participants. The CLEC

participants' proposal for a zero-month diagnostic period for remedies on CLEC BLG-3 is

unreasonable and should be rejected. SBC Michigan believes that a six-month diagnostic period

is appropriate to allow for completion of all implementation activities for the entire process

desired by the CLECs.

C. Exclusion of CLECs With 30% or More Claim Line Items Denied Prom Tier 1 Remedies

The agreed-to CLEC BLG-3 included in Schedule 1 to the Joint MotionlPetition currently

denies eligibility for Tier I remedy payments to CLECs with a denied claim item rate of 30% or

greater for three consecutive months. SBC Michigan believes that a sustained 30% denied claim

item rate for three consecutive months should warrant Tier 1 remedy relief for SBC Michigan

This is because one CLEC sending large numbers of claims without merit (and as a result are

denied) could, and does, affect SBC Michigan's ability to respond to all CLEC claims.

SBC Michigan believes that just as CLECs have a desire to drive SBC Michigan behavior

- resolving claims timely by implementing the performance measurement standards - SBC

Michigan desires to drive CLEC behavior to execute sufficient investigation before they submit

billing claims. Limiting billing claims to a generous 70% valid items imposes reasonable

safeguards within the remedy structure to prevent the submission of claims without merit by

CLECs.

11. DISPUTES ON PERFORMANCE MEASUREMENTS OTHERWISE AGREED TO AND PROPOSED FOR IMPLEMENTATION

A, CLEC Proposal for Addition of a Measure to Assess The Timeliness of Post- to-Bill Notification and No Deletion of Current PM 17

In the billing PM collaborative, SBC proposed to implement a new measure, PM 17.1, at

the request of the CLECs. SBC Michigan believes that a Post-to-Bill notification PM overlaps

the current PM 17 and, therefore, it conditioned the implementation of PM 17.1 on the deletion

of PM 17. (Copies of PM 17 and 17.1 are attached to Mr. Ehr's affidavit.) Because the CLECs

did not agree to the condition, SBC could not agree to the implementation of the new measure.

This billing PM raises concerns related to SBCs OSS architecture. The CLECs appear to

be inappropriately seeking to drive OSS change through placing overly burdensome PM

standards on SBC instead of in a more appropriate forum.

B. CLEC Proposal for Addition of a Diagnostic Report Performance Measure on the Percent of Claims Denied for CLEC AggregateIIndividual

Since the billing PM collaborative discussions, SBC has determined that it could agree to

produce a report, upon CLEC request, providing the percent of denied claims to that individual

CLEC. Additionally, because the benchmark for PM BLG-3 provides for any CLEC not eligible

for Tier 1 payments because of a 30% denied claim rate to request a reconciliation of results and

data for this performance measurement, SBC is clearly willing to share this data with CLECs that

request it. However, consistent with its position taken at t k collaborative, SBC Michigan

opposes the development of an additional PM, or any burdensome reporting requirement.

Respectfully Submitted,

Craig Anderson (P28968) SBC Michigan 444 Michigan Avenue, Room 1700 Detroit, MI 48226-25 17 (3 13) 223-8033

and

DICKINSON WRIGHT PLLC

By: John M. Dempsey (P30987) Attorneys for SBC Michigan 2 15 S. Washington Square, Suite 200 Lansing, MI 48933- 18 16 (517) 371-1730

STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

Ameritech Michigan's submission on performance ) measurements, benchmarks, and reporting in 1 Case No. U- 1 1830 compliance with the October 2, 1998 Order in MPSC Case No. U- 1 1654. 1

)

AFFIDAVIT OF JAMES D. EHR ON BEHALF OF SBC MICHIGAN

STATE OF ILLINOIS 1

COUNTY OF COOK

I, James D. Ehr, being of lawfbl age and duly sworn upon my oath, do hereby depose and

state as follows:

1. My name is James D. Ehr. My business address is 2000 W. Arneritech Center Drive,

Location 4G60, Hoffman Estates, IL 601 96. I am Director of Performance Measures for

SBC Midwest. ' Since June 200 1, I have been responsible for the processes and systems

used by SBC Midwest, including Michigan Bell Telephone Company ('SBC Michigan"),

to measure and report the performance of its operations support systems ("OSS") and the

functions of pre-ordering, ordering, provisioning, maintenancelrepair and billing. I have

14 years of experience in information services within the telecommunications industry,

and 18 years of experience in the analysis, design, development, implementation and

management of information systems projects and applications. I obtained a Bachelor of

1 When used in this affidavit, the term "SBC Midwest" refers to the five state local exchange carrier operations of Illinois Bell Telephone Company; lndiana Bell Telephone Company, Incorporated; Michigan Bell Telephone Company; The Ohio Bell Telephone Company; and Wisconsin Bell, Inc.

Science - Management Information Systems degree fiom Oakland University, Rochester,

Michigan, in 1984 and a Masters of Business Administration degree fiom the University

of Central Florida, Orlando, Florida, in 1994.

2. I have participated as SBC Midwest's representative in several collaborative workshops

on performance measures with state commissions and competing carriers throughout the I

1 SBC Midwest region, held under the auspices of the Michigan Public Service

Commission ("MPSC") and the regulatory commissions of Illinois, Indiana, Ohio and

I Wisconsin.. In particular, I participated in the billing performance measurement

collaborative meetings that resulted in the filing of the "Joint Motion For Expedited

I Approval of Billing Performance Measurements and Joint Petition for Commission

I Resolution" ("Joint MotionlPetition") to which this Affidavit is attached..

3. Parties to the Joint MotiodPetition requested that (a) the Commission approve the

I additional agreed-to performance measurements and benchmarks set forth in Schedule 1

to the Joint Motion; a d (b) the Commission resolve certain disputes regarding issues that

had not been agreed to by the Parties. The purpose of this Affidavit is to present SBC

Michigan's position regarding the disputed issues pursuant to the procedure detailed in

Section I11 of the Joint MotionIPetition

4. There are two general types of disputes. The first type applies to the agreed-to

performance measures included in Schedule 1 of the Joint Motion. The second type

applies to performance measures proposed by the CLEC participants.

DISPUTES ON PERFORMANCE MEASUREMENTS OTHERWISE AGREED-TO AND PROPOSED FOR IMPLEMENTATION

I 5 . SBC Michigan's positions on the first type of disputes are discussed below. The separate

headings mirror the definition of the issues in Section I11 of the Joint MotionlPetition

For each of these disputes, SBC Michigan first places the issue in the context in which it

was discussed in the billing PM collaborative, then presents the position of SBC

Michigan on the dispute along with supporting rationale.

! Application Of Remedies And Performance Standard on PM CLEC BLG-2

6. Performance measure CLEC BLG-2 was initially submitted to the SBC Midwest PM

Collaborative by TDS Metrocom and McLeodUSA in the 2002 six- month review

collaborative. The collaborative agreed to defer discussion of this, and several other,

proposed PMs to a special billing PM collaborative. The purpose of this new

performance measure CLEC BLG-2 (Percent of Billing Claims Acknowledged within 5

Business Days) is to track SBC Michigan's timeliness in providing CLECs with

acknowledgment that SBC Michigan received and is processing billing claims submitted

by CLECs. The notification interval against which performance is assessed in the

performance measure is whether the acknowledgement was sent within 5 business days.

This PM has been agreed-to for implementation by SBC Michigaq and the remaining

issue, as SBC Michigan understands it from the billing PM collaborative discussions, is

the CLECs' desire for a 95% benchmark to apply, and for CLEC BLG-2 to be subject to

remedies.

7. SBC Michigan has agreed to implementation of this PM with no corresponding deletion

or changes to any other of the current PMs. SBC Michigan recognizes CLECs' concerns

with SBC Michigan's performance on billing claim processing, based upon the issues

identified by the CLECs within the past year. That is why SBC Michigan has agreed to

implement this measure and measure CLEC BLG-3 without any reduction in the number I of, or changes to, other current measures. However, while SBC Michigan agrees that this I is an appropriate measure, SBC Michigan believes it inappropriate to apply a I

performance standard at this time, and believes it inappropriate to apply remedies to this

measure. The reasons for these positions are as follows:

a.) The sys tem changes and corresponding processes being put in place to implement the new business process this measure will assess were agreed to by SBC Michigan through negotiations with CLECs in a separate billing sub-team of the CLEC User Forum, and are not expected to be implemented until the first quarter 2004;

. b.) SBC Michigan believes that whether or not it notifies a CLEC that its billing dispute claim has been received and is being processed within 5 days, or any number of days, for that matter, has no significant competitive impact;

c.) SBC Michigan believes that the timeframe in which it takes SBC Michigan to provide this acknowledgement notification to the CLEC has no end-user impact; and,

d.) The acknowledgement notification interval time period to be measured in this PM is also accounted for in the more important CLEC BLG-3 - Percent of Billing Claim Resolution Sent within 30 Business Days (filed as an agreed-upon new PM in Schedule 1 to the Joint MotionIJoint Petition), which tracks the percentage of billing claims resolution notifications sent within 30 days (both PMs use the same start date). CLEC BLG-3 has a set performance standard, and all parties have agreed CLEC BLG-3 will be subject to remedies.

8. The most obvious reason CLEC BLG-2 should not be subject to remedies is that the

"start time" for bothof the measures (CLEC BLG-2 and CLEC BLG-3) begins with the

same day. That day is specified in the "Business Rules" section of both performance

measures as the day of receipt of a valid claim that is correctly sent to SBC Michigan

The timeframe it takes to send an acknowledgement of a claim is included under CLEC

BLG-3, and the CLEC BLG-2 acknowledgement is sent to the CLEC only, in the same

2 A copy of both of the business rule for both of these performance measures was included in Schedule 1 to the Joint Motion.

manner as the CLEC BLG-3 resolution of the same claim is sent to the CLEC only. The

CLEC BLG-2 acknowledgment of the claim is sent to the CLEC as a second step of the

entire process required to timely resolve any claim. The first step is the actual receipt and

"loading" of the claim so that processing can begin.

9. SBC Michigan would not have any motivation to delay the process under CLEC BLG-2,

since any delay in the loading and processing of a claim would have an adverse impact on

its performance in providing timely resolution notification of the same claim to the

CLEC, which is measured under CLEC BLG-3. This delay in sending an

acknowledgement to the CLEC will be subject to remedies in CLEC BLG-3 should that

delay result in untimely notification to the CLEC of the resolution of the claim. For

example, if SBC Michigan does not process the claim for fifteen business days, and then

sends notice of acknowledgement to the CLEC, that delay will be reflected in

performance on CLEC BLG-2. More importantly, though, that delay consumed fifteen of

the thirty business days against which the typical claim will be assessed (and subject to

remedies) in CLEC BLG-3, and increases the likelihood that the CLEC BLG-3 standard

will be missed for this claim. Therefore, SBC Michigan believes a remedy status of

diagnostic is appropriate for CLEC BLG-2 because CLEC BLG-2 measures a subprocess

of the entire process measured by (and remedied under) agreed-to CLEC BLG-3.4.

10. A general agreement that has been reflected a number of times in the performance

measurement collaboratives is that a measure that assesses performance on aportion of a

3 Notification of the receipt of a billing claim from a CLEC and resolution of the same billing claim occurs after the service has already been provided to the end user. Accordingly, any delay in the entire process of billing claim resolution does not affect the end user's service.

4 The Benchmark section of the business rule for CLEC BLG-3 included with Schedule 1 of the Joint MotionIPetition discusses the benchmarks and remedies that SBC Michigan has already agreed to implement.

process that is subject to remedies in the whole under another measure should not be

subject to remedy. A measure that only measures a portion of the process is then

typically defined as a diagnostic measure (meaning no standard of performance applies),

as is advocated here by SBC Michigan for CLEC BLG-2. Adding a remedy to CLEC

BLG-2 would cause SBC Michigan to potentially pay remedies twice for the same action

should a delay in acknowledgement measured in CLEC BLG-2 lead to a delay in

providing the resolution notification measured in CLEC BLG-3.

Period In Which No Remedies Apply For PM BLG3

1 1. Performance measure CLEC BLG-3 was initially submitted to the SBC Midwest PM

Collaborative by TDS Metrocom and McLeodUSA in the 2002 six-month review

collaborative. The collaborative agreed to defer discussion of this PM, as it did with

CLEC BLG-2 discussed above, to a special billing PM collaborative. That collaborative

resulted in the filing of the Joint MotionJPetition being filed here in Michigan The

purpose of this new performance measure, CLEC BLG-3, is to assess the timeliness in

which SBC Michigan provides CLECs a resolution notification for billing claims

submitted by the CLECs. SBC Michigan has agreed to implement this PM with no

corresponding elimination or change to pre-existing PMs, and has agreed to a

performance standard, and to having this PM be subject to remedies.

12. SBC Michigan understands the dispute from the CLECs to center on two issues: the

inclusion of a six-month diagnostic period in CLEC BLG-3 before remedies will be paid

should performance not meet or exceed the standard, and the inclusion of an SBC

Michigan exemption from Tier 1 remedy liability for any CLEC who has submitted

claims such that more than 30% were denied in the three consecutive most recent months

ending with a month in which performance for that CLEC on CLEC BLG-3 failed to

meet or exceed the benchmark. The second of these is discussed in the following section

of this affidavit.

13. With regard to the diagnostic period, results during this time would be reported as

specified in the performance measurement business rules, and would be compared to the

defined standard, but would not be subject to remedy payment. SBC Michigan believes a

diagnostic period for remedies on CLEC BLG-3 is appropriate and, in fact, necessary

because SBC Michigan will be rolling out an entirely new process for handling and

tracking billing claims developed through collaborative discussions with CLECs. SBC

Michigan believes that a six-month diagnostic period for CLEC BLG-3 is appropriate to

allow for completion of all implementation activities for the entire process desired by the

CLECs.

14. These implementation activities include training of users that cannot begin until the

system enhancements are completed. These enhancements, being implemented to meet

requests from the CLECs in the CLEC User Forum billing sub-team, will not be complete

until the first quarter of 2004. Accordingly, SBC Michigan believes the application of

remedies before the entire implementation activity (the completion of system

enhancements and the training of personnel) has been completed successfblly could result

in remedy payments solely because of system or process issues that typically arise in the

first few months any new process and system is first put into place.

I 15. Precedence exists for this approach of applying performance standards and/or remedies to l

a PM on a deferred basis. Such agreement was reached in the last six-month review, as

an example. In that collaborative, agreement was reached to implement a new PM, PM

22.1 (Mechanized Customer Production Support Center (MCPSC) Grade of Service

(GOS)). This PM was implemented as a diagnostic PM, to be reviewed at the next six-

month review to establish a benchmark and to determine whether or not remedies would

apply. So what SBC has proposed and agreed-to is not something new or novel -this

approach has been agreed to by CLECs in the past. However, an important difference

between t k PM 22.1 situation and this situation regarding PM CLEC BLG-3, is that SBC

Michigan has gone beyond the PM 22.1 situation by agreeing in advance to a date-certain

to make CLEC BLG-3 subject to remedies, and has already established the appropriate

benchmark. No future negotiation is required between SBC Michigan and the CLECs to

make that happen. For CLEC BLG-3, even if the Commission believes that the six

month diagnostic period advocated by SBC Michigan is too long, SBC Michigan believes

the Commission should decide that the CLEC participants' proposal of zero diagnostic

months is not only too short, but also contrary to precedent.

Exclusion of CLECs With 30% Or More Claim Line Items Denied From Tier I Remedies

16. The agreed-to CLEC BLG-3 proposed in t k Joint MotiodPetition exempts SBC

Michigan from payment of Tier 1 remedies to CLECS with a denied claim item rate of

30% or greater for the most recent three consecutive months. CLECs argued in the

collaborative that such a function in the PM would incent SBC Michigan to fraudulently

deny claims in order to meet the performance standard of CLEC BLG-3. Of course, no

such evidence of any such past practice was offered by the CLECs, because none exists.

The damages SBC would likely incur to its corporate reputation, along with the affect of

Commission actions (sanctions, fines) taken based on the expected complaints filed by

5 As stated previously, the Benchmark section of the Business Rule for CLEC BLG-3 submitted as Schedule 1 to the Joint Motion/Petition for approval by this Commission includes the benchmarks and remedies already agreed-to by SBC Michigan.

CLECs should such activity actually occur, would outweigh any benefits in avoided

remedy payments. SBC Michigan believes that a sustained 30% denied claim item rate

for 3 consecutive months should warrant Tier 1 remedy relief for SBC Michigan This is

because one CLEC sending large numbers of claims without merit (which would lead to

high (greater than 30%) denied claim percentages for that CLEC) could, and does, affect

SBC Michigan's ability to respond to all CLEC claims in a timely fashion.

17. Furthermore, it is not appropriate that a CLEC would be able to affect SBC Michigan's

workload so easily and then collect remedies when SBC Michigan is unable to meet the

new standards in CLEC BLG-3 through actions of CLECs that SBC Michigan cannot

control. CLEC participants may claim that they have no incentive to exhibit this

behavior. However, across the five SBC Midwest states during the modhs of July,

August and September 2003, between 82% and 93% of claim items resolved within the

local service center have been wholly denied. Even if one makes the questionable

assumption that even half of these items are subsequently resubmitted by the C E C and

found to be valid by SBC Michigan, there are still more than 40% of the items submitted

that would have been without merit.

SBC Michigan believes that just as CLECs have a desire to dnve SBC Michigan behavior

- timely resolution of claims by implementing the performance measurement standards -

so does SBC Michigan seek to drive CLEC behavior to execute sufficient investigation

before they submit billing claims. Limiting billing claims to a generous 70% valid items

imposes reasonable safeguards within the remedy structure to prevent the submission of

claims without merit by CLECs. Additionally, the requirement of sustained evidence of

this behavior (over three consecutive months) protects CLECs from an occasional month

- - - - - -

where denied claim percentages are high. This same approach was adopted in a

performance measurement for SBC Michigan's affiliate SBC Texas, and was approved

by the Texas Commission.

DISPUTES ON PERFORMANCE MEASUREMENTS NOT OTHERWISE AGREED-TO WHICH CLECS PROPOSE IMPLEMENTATION OF

19. SBC Michigan's positions on the second type of disputes are discussed below. The

separate headings mirror the definition of the issues in Section 111 of the Joint

MotiodPetition For each of these disputes, SBC Michigan first places the issue in the

context in which it was discussed in the billing PM collaborative, then presents the

position of SBC Michigan on the dispute along with supporting rationale.

CLEC Proposal for Addition of A Measure to Assess The Timeliness of Post-to-Bill Notification and No Deletion of Current PM 17

20. CLEC participants are proposing the addition of a measure to assess the timeliness of

Post-to-Bill notifications sent, with a benchmark of 95% of notifications being sent

within 5 days, and have remedies apply, with no deletion of the duplicative measure

current PM 17 (Percent of ontime service orders that post to Billing within a designated

interval). A true, accurate and correct copy of current PM 17, showing amendments

approved by the Commission by Order dated February 20,2003~ are attached to this

affidavit.

2 1. In the billing PM collaborative, SBC Midwest proposed such a PM at the request of

CLECs. Attached is the PM 17.1 proposal SBC Midwest discussed at the billing

6 PM 10.1 (Percent Manual Rejects Received Electronically and Returned Within X Hours) first approved by the Texas Public Utilities Commission in Version 2.0 of the SBC Texas performance measurements in Project No. 20400. Section 271 Compliance Monitoring of Southwestern Bell Telephone Company o f Texas, Order No. 33 , Project No. 20400, Public Utility Commission of Texas (June 1, 2001).

collaborative for implementation. It was SBC Michigan's understanding that the

attachment represents the performance measure agreed to by the CLECs during the

discussions with the exception of: (a) the benchmark and remedy components; and (b)

SBC Michigan's required companion proposal to delete the duplicative current PM 17.

22. SBC Michigan believes that a Post-to Bill notification PM is a complete overlap with the

current PM 17 with one exception: the time to actually send the notification, which is

initiated by the posting of the service order to the billing database. As such, SBC

Midwest's proposal required the deletion of current PM 17 for agreement. As CLECs

would not agree to delete this duplicative PM, SBC Midwest could not agree to

I implement the new Post-To-Billing Notification PM proposed. I I I 23. Additionally, the UNBP and Lineshare product service orders measured in both the I

I

current PM 17 and the proposed Post- To-Bill Notification PM use a serial billing process

I

where the ACIS customer service record ("CSR") is first updated, then the CABS billing

database is updated. This situation was described in detail to CLECs in the collaborative.

SBC Michigan has been very forthcoming with the reasons why a standard such as the

CLECs demand is not reasonable and is not required to demonstrate adequate levels of

service to support competition. The Post-To-Bill notification is generated once the

posting of the service order to CABS completes. This additional time component for

these two product types generates a typical interval of four to five days for posting to

CABS. As such, a 95% within five days proposed standard is not achievable given

current SBC Midwest OSS architecture. Hence, SBC Midwest had discussed with

I

7 In the Matter of SBC's , f/ka Ameritech michigan, submission on performance measures, reporting, and I

benchmarks, pursuant to the October 2, 1998 order in Case No. U-11654, Order Amending Prior Orders, I I

Case No. U-I 1830, issued February 20,2003. ~

CLECs in the billing PM collaborative a benchmark for its proposed Post-To-Bill

Notification measure (attached to this affidavit) of 95% in 7- 10 days, with remedies

applying. CLECs rejected that proposal.

24. Key in this discussion is that the proper forum to address OSS concerns is the Change

Management Process. SBC Midwest is concerned that CLECs are proposing standards

for PMs that they know to be unattainable without re-architecture of the Billing OSSs. In

their rejection of a reasonable benchmark subject to remedies, and their anticipated

proposal of a PM with a benchmark standard not attainable given t k current OSS I

I architecture, CLECs appear to be inappropriately seeking to drive OSS change through

I

placing overly burdensome PM standards on SBC Michigan The appropriate forum in I I

which to negotiate such OSS changes with SBC Midwest is the Change Management

Process, with which the CLECs are familiar and regularly participate. Such action with

regard to PMs is not appropriate, and SBC Michigan hopes this Commission will not

condone such action by approving the CLEC proposal.

25. SBC Midwest contends that PM 17 meets the requirements of a timely billing metric.

SBC Midwest negotiated in good faith to address the CLECs desire for a Post-to-Bill

measurement, and proposed such a measurement with a reasonable benchmark that if

found to be preferable should be considered a replacement for PM 17. Should this

Commission believe it appropriate to require SBC Michigan to implement such a

measure, we urge the Commission to adopt the measure as proposed in the collaborative

by SBC Midwest (and attached to this affidavit), with the deletion of the duplicative

current PM 17, that would then establish a meaningful standard of 95% Post-to-Bill I notifications sent within 7- 10 business days.

CLEC Proposal for Addition of A Diagnostic Report Performance Measure On the Percent of Claims Denied for CLEC Aggregate/Individual

26. In the billing PM collaborative discussion of billing claims performance measurement,

MCI introduced a proposal for an additional measure (above and beyond the two

measures agreed-to) that would report on the percentage of claims denied by SBC

Michigan SBC Midwest's response at that time was that there is no need for such a

measure, as every CLEC has the data available (its own submitted claims and the status

provided back from SBC Michigan to the CLEC on each claim) to calculate the percent

of denied claims itself. In addition, if a CLEC wanted to understand how its performance

compared to other CLECs, it could simply ask those other CLECs what level of denied

claims they were experiencing with SBC Michigan SBC Michigan's position is that

since this data is in the CLEC's possession already, there is no need for SBC Michigan to

take on the additional burden of required reporting of a third measurement on billing

claims processing.

27. SBC Michigan's position remains the same as stated in the billing PM collaborative.

However, SBC Midwest has determined that it could agree to produce a report, upon

CLEC request, providing the percent of denied claims to that CLEC. Additionally,

because the benchmark for CLEC BLG-3 provides for any CLEC not eligible for Tier 1

payments because of a 30% denied claim rate to request a reconciliation of results and

data for this performance measurement8, SBC Midwest is clearly willing to share this

SBC Midwest realizes that it already has the obligation to participate in datareconciliation for any performance measurement. This wording in CLEC BLG-3 clarifies that the data used to assess percentage of denied claims is also included in that obligation.

I I I 1 APPENDIX B - REPLY COMMENTS

MCI&AT&T

SBC Michigan

STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

Arneritech Michigan's submission on performance ) measurements, benchmarks, and reporting in ) Case No. U- 1 1 compliance with the October 2, 1998 Order in ) MPSC Case No. U- 1 1654. 1

)

REPLY COMMENTS OF MCI AND AT&T REGARDING

DISPUTED ISSUES

AT&T Communications of Michigan and TCG Michigan (collectively "AT&T"); and

MCImetro Access Transmission Services LLC, MCI WorldCom Communications, Inc., and

Brooks Fiber Communications of Michigan, Inc. (collectively "MCI"), hereby submit their

initial comments. This filing is premised on the understanding of the parties at the

collaborative that the parties would file substantially identical comments and reply comments

in Michigan as part of the joint motion that the parties filed in the corresponding proceeding

in Ohio.

1) Application of Remedies and Performance Standard for PM BLG-2.

As explained in the initial comments, the CLECs request that a 95% benchmark, and

remedy payments, be added to agreed-upon PM BLG-2. This request is being made because

it is critical that SBC Michigan be provided an incentive to acknowledge billing claims

within 5 days. Otherwise, the entire billing claims procedure will be delayed by 30 days if

SBC Michigan notifies the CLEC, under the PM BLG-3 standard, that the claim has been

rejected due to lack of information or other problem that could have been corrected bythe

CLEC.

SBC Michigan opposes the implementation of the 95% benchmark and remedies for

this PM, but its arguments in support of this position have little merit. In his affidavit Mr.

Ehr first states that the system changes being put in place to implement the new business

practices will not take place until the first quarter of 2004 (Ehr affidavit, 2, par. 7a.).

However, this is not an adequate explanation of why this metric would be so difficult to

implement by the time SBC Michigan will start reporting it. The process agreed to by the

parties has been known for several months, and it will be several more months afrer the state

commissions in the SBC region accept the joint filing for this metric to be implemented. The

acknowledgment process is not widely different than past practices. Mr. Ehr has failed to

supply a sufficient justification as to why SBC would need an additional six months to apply

a benchmark and remedies after it starts reporting the metric. The claims that added time is

needed to test this process should not be accepted as a valid reason for not adopting the

CLECs' recommendation.

As to the lack of competitive impact of SBC Michigan's failure to acknowledge

claims within 5 days, AT&T and MCI would submit that the competitive impact can be

substantial. Without a timely acknowledgement that the claim has been received, CLECs

will not know whether the claim has been received or simply lost in the system. As noted

above, if the claim is "lost" and the CLECs are not timely apprised, the entire billing claim

process will be delayed by 30 days. There would be no start date in SBC's system until the

CLECs resubmitted the "lost" claims request. Thus, remedies for BLG-3 do not also provide

an incentive for compliant behavior in supplying timely acknowledgements. Similar to the

problems encountered in the past with faxed ASRs and LSRs, as well as e-mails, losing the

request could become a way of extending the time for responding to the claim. When

CLECs originally developed the billing me trics they did not expect such problems to occur

so they did not propose metrics at this time, but increasingly competitors are seeing cases

where, if the metric only pays remedies at the finish line of the entire process, ways are found

to thwart the starting or intermediate notice points to ensure that the CLEC is blocked or

burdened.

Mr. Ehr next states that compliance (or lack thereof) with the 5 day notification

timeframe has no customer impact (par. 7c.). MCI and AT&T disagree with this conclusion

as well. While it is correct that the end user customer may not know SBC Michigan is

stalling the adjustment of billing errors at the starting or ending gate, there is an impact down

the road on the customers' competitive choices if the CLECs' costs are driven up and they

are ultimately driven out of the market. Having to research where unacknowledged claims

may be and resubmit them can be very burdensome to the CLEC audit centers. Again, the

interval of 5 business days is very generous, and this would likely not be a remedy triggered

until performance had become extremely poor. Even if SBC has a record the claim was

received and a remedy applied to responding to the entire claim, the initial late response may

be a rejection for inadequate information for the CLEC to correct quickly and resubmit the

claim.

Finally, Mr. Ehr discusses what he considers to be the duplicative nature of the

CLECs' proposed benchmark and remedy payments for PM BLG-2 with those of PM BLG-3

(pars. 7d., 8- 10). Specifically, Mr. Ehr has argued that the claims receipt notification process

is merely a subprocess of the entire billing claims procedures, and thus a diagnostic is more

appropriate for a portion of a process than benchmarks and remedies. This is simply a rehash

of arguments that have been made in the past, and routinely rejected by the CLECs and state

commissions alike. Indeed, at the beginning of the collaborative processes being held in

many states, the ILECs routinely argued that there should be no remedies for timely FOCs

and order Rejects because these were all a subprocess of the provisioning process. This line

of reasoning allows the ILECs to divert the focus of the remedy on problem areas that must

be corrected for the CLECs to be able to do business. The billing claims process is no

different. If SBC Michigan has no incentive to fix the claims acknowledgement process to

achieve the proposed benchmark, the CLECs will be burdened with inaccurate bills and will I ultimately lose customers as a result of this poor perfirmance. ' 2. Period in which no remedies apply for PM BLG-3. I

At paragraphs 13- 15 of his affidavit, Mr. Ehr argues that a 6 month diagnostic period I is appropriate for PM BLG-3 because implementation activities and system enhancements

will not be complete until first quarter 2004, and the application of remedy payments

immediately upon implementation may result in payments being made simply because the

systems are not yet working properly.

These arguments are not sufficient justification for a 6 month delay in the application

of benchmarks and remedies for this metric. Billing problems in the SBC Midwest region I are well documented, and responding to the CLEC-found billing errors at all, let alone in a I timely manner, has been a major issue in SBC territory. To allow another six months after

Mr. Ehr has argued repeatedly that the untimely acknowledgement of the loading and processing of a claim would lead to delays in meeting the 30 day standard of PM BLG-3, and thus SBC M ichigan has no incentive to miss the 5 day standard of PM BLG-2. However, as MCI and AT&T have repeatedly noted, SBC Michlgan is more likely to meet the 30 day standard by rejecting the claim for reasons that could have been rectified in a much shorter period. The CLECs then must resubmit the claim after waiting the full 30 days to find out what happened to it, and the whole purpose of both PM BLG-2 and BLG-3 has been frustrated.

implementation of the metric itself (which will take several months after regulatory approval)

before applying remedies to enforce this interval is unreasonable considering past problems

raised in the SBC 271 proceedings. It may be new to SBC Michigan to respond to billing

claims in a timely manner, but this metric has been in the works for quite a while and SBC

Michigan should have been working toward improving its systems.

Furthermore, from what MCI and AT&T have witnessed through the collaborative

process, most of the improvements from the billing forum should not involve massive

programming and training adjustments. In the past, CLECs have agreed sometimes to

diagnostic intervals, just to avoid the resources involved in a dispute resolution fight that

possibly could, in and of itself, give SBC Michigan a similar delay in fixing its billing claims

processes. In other situations, products and processes are entirely new and need to be

monitored to work out a benchmak2 However, in this case billing claims are not a new

process in general, and recent modifications are not equivalent to developing changes to

provisioning and ordering databases, methods and procedures. Mr. Ehr has simply not

provided a valid reason for a six month delay in the implementation of remedies for PM

BLG-3, and as long as this metric remains a diagnostic, there is no real incentive for SBC

Michigan to fix its billing claims process.

3. Exclusion of CLECs with 30% or more claim line items denied from Tier 1 remedies for the BLG-3 metric.

In support of its position that CLECs with a 30% or more claim reject rate for the past

three months should be excluded from the payment of remedies, Mr. Ehr has noted that the

claims rejected rate for July, August and September for SBC Midwest has been 82-93% of

Mr. Ehr uses the implementation of PM 22.1 as a situation where the CLECs agreed to a diagnostic period, and AT&T and MCI do not dispute that there has been agreement in the past to a deferral of remedies for other metrics. However, PM BLG-3 is not simiIarIy situated, and therefore the CLECs cannot agree to such a period for this metric.

5

the claims submitted. It appears to MCI and AT&T that this bit of information supports the

CLEC position rather than SBC Michigan's position--clearly SBC Michigan will be paying

very few remedies for untimely resolved claims regardless of its performance in sending

timely approvals or denials.. It bears repeating that the CLECs have absolutely no incentive

to submit invalid billing claims, especially during those months when there were no metrics

or remedies in place. The CLECs' bill auditing centers have more than enough to do in just

reviewing the bills, especially because back billing is high, rate table errors occur, and line

losses and usage are usually mismatched. At times it can take up to three years after initial

denial to resolve a billing claim with SBC.

In addition, the CLECs have no way of knowing how SBC will deal with resubmitted

claims, which may perhaps be rejected or excluded as duplicate claims. It Resubmitted

claims are to be included in the metric, but the CLECs cannot determine whether they are

being included. Even if they are, there is no proviso that SBC will go back and pay remedies

to CLECs with 30% or higher rejections in the last three months if these resubmits would

bring down the CLEC's overall reject rate. Even if this proviso is added to the business

rules, SBC could just reject the resubmitted claims again to avoid paying remedies to the

CLECs if that current month's resolutions are untimely. SBC Michigan already has a

major incentive to deny claims to avoid paying them, to try to get interest from CLECs the

longer they dispute them. For SBC Michigan to also be exempt from remedies due to

thwarting the CLECs' ability to get to the level of third-party resolution of billing claims (i.e.

by untimely denials as BLG-3 would capture) by simply denying a large number of claims is

unacceptable.

4) CLEC proposal for addition of a measure to assess the timeliness of Post-to-Bill notification, with a 95% in 5 days benchmark, and remedies, and no deletion of current PM 17.

SBC Michigan makes two points, one of which is a red herring, and the second of

which is generally consistent with AT&T and MCI's position. AT&T and MCI responded to

most of these arguments in their initial comment, but wish to briefly discuss them here.

SBC Michigan first argues that requiring it to adopt the AT&T and MCI proposed

performance benchmark somehow requires the company to make OSS changes. (Ehr

affidavit, pars. 23-24). AT&T and MCI proposed no such thing. Indeed, AT&T and MCI

are indifferent to what process is used by SBC Michigan for billing notifications, so long as

the level of performance is similar to that offered by SBC in other regions and the level of

service provided by other companies (such as Verizon, BellSouth and Qwest). There frankly

is no valid reason why SBC Michigan seems indifferent to improving its timeliness for

providing billing completion notifications when other incumbent providers do such a better ,

job. Since SBC Michigan is seemingly not interested in voluntarily improving its

performance to the same level as other providers, it is obvious that an incentive must be

provided. The best incentive is adoption of a performance metric such as the one proposed

by the CLECs.

SBC Michigan's second argument is that the CLEC proposal is duplicative with

SBC's existing measure. (Ehr affidavit., par. 22). AT&T and MCI believe this is not the

case. However, as was stated in more detail in their initial comments, MCI and AT&T

would not oppose eliminating PM 17 if three conditions are met:

(I) A back billing metric is implemented to get at the billing completeness issues as

the CLECs had intended when proposing it years ago;

(2) the above BCN timeliness metric is implemented; and

(3) in order to apply remedies for the BCN timeliness metric, duration periods under the old PM 17 failures prior to implementation would be counted,

In other words, if PM 17 was missed in April, May, June and July and then is

replaced by the BCN timeliness metric, the remedy would be set at the duration level if the

old PM 17 months of failure are included. This proposal accommodates SBC Michigan's

concerns about double counting, but retains an incentive for the company to provide billing

completion notices no more slowly than other ILECs.

5 ) CLEC-proposal for addition of a diagnostic report (measure) on the percent of claims denied for CLEC aggregatelindividual.

The CLECs have proposed a diagnostic measure for the number of claims rejected

each month so that the new metric contained in PM BLG-3 will not incent SBC Michigan to

deny claims to avoid remedy payments. As explained by MCI and AT&T in the initial

comments, this percent of claims must be monitored by the industry and not only by

individual CLECs. Mr. Ehr, on behalf of SBC Michigan, has offered to prepare an individual

CLEC report upon request by the CLEC, but has suggested that individual CLECs simply ask

other industry participants for information to determine industrywide results.

This offer by SBC Michigan is insufficient to replace the proposed diagnostic.

Again, SBC Michigan's report of the high level of claims denial the last three months shows

that an aggregate report would provide useful information to the Commission. The

conclusion to be reached from such a report would be that just because claims are being

resolved in 30 days, there still may be many billing problems being escalated and disputed

behind the metric. BellSouth in Florida and Georgia provides such a diagnostic report of

percent of claims denied and while its rejections are high overall, they are not even as high as

the SBC Michigan claims denied levels reported by Mr. Ehr's affidavit. This addition is

clearly needed, as CLECs cannot poll every CLEC in SBC's market to see how many claims

were rejected each month. Further, AT&T and MCI cannot understand how an individual

report to the CLEC sent separately would be easier than putting this information in the metric

report for CLEC-specific activity. Once agiin, Mr. Ehr has not presented a convincing case

for the denial of.the diagnostic measure proposed by the CLECs, and his own statistics show

I that such an addition to PM BLG-3 is necessary.

1 For all of the reasons discussed above, the CLEC proposals for the metrics at issue

herein should be adopted.

Respectfblly submitted,

AT&T COMMUNICATIONS OF MICHIGAN, INC. AND TCG DETROIT

By: - - John J. Reidy, I11 (P60620) Douglas W. Trabaris AT&T Corp. 222 West Adams, Suite 1500 Chicago, IL 60606 (3 12) 230-2647

AT&T Communications of Michigan, Inc. 21 5 South Washington Square, Suite 230 Lansing, Michigan 48933 (517) 374-6521

MCI

By: James Denniston (P57736) MCI 205 North Michigan Avenue, 1 lth Floor Chicago, IL 60601 (3 12) 260-3 190

STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

Ameritech Michigan's submission on performance ) measurements, benchmarks, and reporting in ) Case No. U- 1 1830 compliance with the October 2, 1998 Order in ) MPSC Case No. U- 1 1654. )

REPLY COMMENTS OF SBC MICHIGAN ON DISPUTED ISSUES RELATED TO PERFORMANCE MEASURES

In conjunction with these Reply Comments, SBC Michigaq several CLECs, and the Staff

are simultaneously filing a "Joint Motion For Expedited Approval of Billing Performance

Measurements and Joint Petition For Commission Resolution" ("Joint MotionIPetition") and

Initial Comments and supporting affidavits that are based upon the same documents filed in the

Ohio proceeding addressing these same issues. ' Pursuant to the agreed upon procedure, SBC

Michigan is including its initial and reply comments and supporting affidavits as Attachments A

and B to the Joint MotionlPetition.

Attached to these Reply Comments is the Reply Affidavit of James D. Ehr, which

provides detailed discussion on and factual support for SBC Michigan's reply position on the

disputed issues.

I In the Matter of the Further Investigation Into SBC Ohio S Entry Into In-Region InterLATA Services Under Section 271 of the Telecommunications Act of 1996, Case No. 00-942-TP-COI

The remaining disputed issue is MCI and AT&T's desire for PM CLEC BLG-2 to be

changed from a "diagnostic" PM, where no predefined standard is established and remedies do

not apply, to a PM subject to remedies with a 95% benchmark applied.

As more fully explained in Mr. Ehr's affidavit, MCI/AT&T's assertion that they need the

acknowledgement of the receipt of their claim within five days to know if their claim is being

worked or whether there is more information needed for the claim to be worked is without merit

because the detailed analysis of the claim required to determine if all information needed has

been provided is not part of the acknowledgement process. The additional time required to

review the details of the claim and determine if any additional information is needed to process

the claim is subsequent to the acknowledgement process, and is included in the period of time

assessed under CLEC BLG-3. The CLEC participants' proposal to create a remedy for CLEC

BLG-2 would duplicate a remedy provided under CLEC BLG-3 because the PMs measure the

billing claim process beginning with the same start point.

MCI /AT&T's assertion that the point of remedy payments is to provide incentive to SBC

Michigan to improve its performance is also without merit. The purpose of performance

measures is to assess performance against a pre-determined, reasonable standard, and the

purpose of remedy payments is to compensate CLECs for any potential harm when performance

does not meet that standard. There has been no showing of how a CLEC would be damaged by

a delay in receiving acknowledgement that SBC Michigan has received its claim, neither in the

collaborative discussions nor in the MCI/AT&T Comments. As such, there is no evidence

supporting the need for a benchmark to be established for CLEC BLG-2, and no evidence that

remedies should apply. Therefore, SBC Michigan does not support the proposal.

2

Disputed Issue No. 2: Period In Which No Remedies Applv For PM CLEC BLG-3 -

SBC Michigan continues to believe a diagnostic period for remedies is necessary because

SBC Michigan will be rolling out an entirely new process for handling and tracking billing

claims that was recently developed through collaborative discussions with the CLEC

participants. MCI and AT&T9s assertion that there is "no reason to wait to apply remedies" to

CLEC BLG-3 ignores the fact that SBC Michigan must have time to implement its new systems

and processes and to produce actual performance results which the parties could use to assess the

reasonableness of the negotiated standard. Moreover, allowing SBC Michigan sufficient time to

implement the new systems and processes prevents SBC Michigan from paying remedies for

system or process issues that typically arise during the first few months any new process and

system is first put into place.

Disputed Issue No. 3: Exclusion of CLECs With 30% Or More Claim Line Items Denied From Tier I Remedies

The agreed to CLEC BLG-3 currently denies eligibility for Tier I remedy payments to

CLECs with a denied claim item rate of 30% or greater for three consecutive months. MCI and

AT&T argue that, based on their experience, most initial claims are denied and have to be

escalated to reach settlement. They then assert that SBC Michigan would delay the final I I I

resolution of a single billing dispute for a period of months in order to reach the 30% standard of I I

denied claims to be able to pay less remedies. No evidence of any such past practice was offered

by the CLECs in the collaborative. Moreover, neither MCI nor AT&T submitted an Affidavit ~ I ~

2 1

MCI/AT&T Comments, p. 2.

with their comments providing supporting data to substantiate this assertion. Accordingly, this

unsupported assertion should be rejected by the Commission.

MCI and AT&T are also wrong when they claim that the accuracy of SBC Michigan's

rejection of claims under CLEC BLG-3 would not be picked up in third party audit^.^ Section

6.6 of SBC Michigan's performance remedy plan provides for mini-audits regarding the

collection, computing and reporting process for any performance measurement data, and a

I dispute process. The dispute process (data reconciliation followed by a CLEC-initiated audit)

requires the CLEC and SBC Michigan to consult with one another and attempt in good faith to

resolve any issues regarding the accuracy or integrity of data collected, generated, and reported.

An independent audit can be conducted if resolution cannot be reached within 45 days. SBC

Michigan believes the Commission to have latitude within the categories of reporting accuracy

and data integrity to define the scope of the audit to address specific concerns. Additionally, the

Commission has ordered SBC Michigan to undergo an annual audit. This ensures annual

oversight of SBC Michigan's data collection and reporting processes, for the Commission has

directed that "[tlhat the results of the audit should be available b the [Commission] and all

CLECs purchasing service from [SBC Michigan]."

Accordingly, any actions of SBC Michigan to manipulate the data and results under

CLEC BLG-3 would be disclosed in a public forum. Any systemic behavior to fraudulently

deny claims for the purpose of meeting a performance measurement threshold should be

discovered during this type of audit.

3 MCI/AT&T Comments, p. 4. 4 In the Matter ofAmeritech Michigan's Submission on Performance Measures, Reporting, and Benchmarks,

Pursuant to the October 2, 1998 Order in Case No. U-11654, Opinion and Order, Case No. U-11830 (May 27, 1999), p. 11.

4

MCI and AT&T overstate the importance of Post-To-Bill notifications (also referred to as

Billing Completion Notices, or BCNs) in arguing for the imposition of a new PM with an

unrealistic benchmark they know to be unattainable by SBC Michigan given current OSS

ar~hitecture.~ CLECs are advised exactly when their billing of the end customer should begin.

The Service Order Completion (SOC) notification provides the CLEC with notice that service

has been transitioned to the CLEC, or changes have been made to existing service for that CLEC,

specifying the completion of all ordering and provisioning activities. In addition, the vast

majority of the time SBC Michigan posts CLEC service orders to billing in significantly less

than the 30-day timeframe portrayed by MCI and AT&T.

MCI and AT&T also continue to confuse the PM 17.1 proposed by SBC Michigan, and

proposed with their comments (with several changes to the version SBC Michigan is willing to

implement), with a different PM, with a different standard, implemented in Texas by SBC

Michigan's affiliate. PM 17.1 in Texas assesses how quickly after completion of the order is the

order posted to the billing database. The PM being discussed here measures how frequently the

post-to-bill notification is sent to the CLEC.

MCI and AT&T state that they would not oppose eliminating PM 17 if three conditions

are met.6 Mr. Ehr addresses the three conditions in his affidavit. Of particular concern, however,

is their first proposed condition, a back-billing mtric. Such a proposal has not been made as

part of the billing collaborative but has been introduced into the six-month review collaborative.

As this issue has yet to be discussed in the six-month review collaborative, and no discussion has

5 MCI/AT&T Comments, p. 5. 6 MCI/AT&T Comments, p. 7.

been provided by MCI and AT&T to explain how a back-billing PM relates to their request for

imposition of a PM measuring the timeliness of post-to-bill notifications, the offer should be

rejected.

Disputed Issue No, 5; CLEC Proposal for Addition of A Diagnostic Report Performance Measure On the Percent of Claims Denied for CLEC Ag~regateIIndividual

As stated in SBC Michigan's initial comments, SBC Michigan has determined that it

could agree to produce a report, upon CLEC request, providing the percent of denied claims to

that CLEC. The proposed PM in Attachment 4 of the MCI/AT&T Comments is not necessary.

As stated above, any claims submitted by CLECs or claims denied by SBC Michigan without

adequate justification for such denial could be disclosed to the industry and the Commission

through operation of the mini-audits.

Respectfully Submitted,

Craig Anderson (P28968) SBC Michigan 444 Michigan Avenue, Room 1700 Detroit, MI 48226-2517 (313) 223-8033

and

DICKINSON WRIGHT PLLC

By: John M. Dempsey (P30987) Attorneys for SBC Michigan 2 15 S. Washington Square, Suite 200 Lansing, MI 48933- 18 16 (517) 371-1730

1 STATE OF MICHIGAN

BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION ~ I

Ameritech Michigan's submission on performance ) measurements, benchmarks, and reporting in ) Case No. U- 1 1830 compliance with the October 2, 1998 Order in ) MPSC Case No. U- 1 1654. )

REPLY AFFIDAVIT OF JAMES D. EHR ON BEHALF OF SBC MICHIGAN

STATE OF ILLINOIS ) 1

COUNTY OF COOK 1

I, James D. Ehr, being of lawful age and duly sworn upon my oath, do hereby depose and

state as follows:

1. My name is James D. Ehr. My business address is 2000 W. Ameritech Center Drive,

Location 4G60, Hoffman Estates, IL 60196. I am the same James D. Ehr who submitted

an Affidavit in this proceeding included in Attachment A to the Joint MotionIPetition

being filed simultaneously with this Reply Affidavit.

2. The purpose of this Reply Affidavit is to make my response to the comments of MCI and

AT&T filed on September 29,2003 ("MCI/AT&T Comments") in the Ohio proceeding'

regarding these same issues, Michigamspecific. Pursuant to the agreed-upon procedure,

SBC Michigan is including its initial and reply comments and supporting affidavits as

I In the Matter of the Further Investigation Into SBC Ohio's Entry Into In-Region InterLATA Services Under Section 271 of the Telecommunications Act of 1996, Case No. 00-942-TP-C01.

Attachments A and B to the Joint MotionlPetition There are three disputed issues related

to the agreed-to PMs and two other disputed issues.

Disputed Issue No. 1: Application Of Remedies And Performance Standard on PM BLG-2

3. The purpose of the new PM BLG-2 approved by the Commission is to track SBC

Michigan's timeliness in providing CLECs with acknowledgment that SBC Michigan

received and is processing billing claims submitted by CLECs. The remaining disputed

issue is the CLECs' desire for CLEC BLG-2 to be changed from a "diagnostic" PM,

where no predefined standard is established and remedies do not apply, to a PM subject

to remedies with a 95% benchmark applied.

4. The MCI/AT&T assertion that they need the acknowledgement of the receipt of their

claim within five days to know if their claim is being worked or whether there is more

information needed for the claim to be worked fails because the "acknowledgment" of

the claim required by CLEC BLG-2 only signifies that SBC Michigan has received the

claim. It does not include a requirement that SBC Michigan also let the CLEC know, at

that time, if any further information is required for SBC Michigan to complete processing

of the claim. The detailed analysis of the claim required to determine if all information

needed has been provided is not part of the Acknowledgement process. The

Acknowledgement process assessed in CLEC BLG-2 includes (a) receipt of the claim

from the CLEC, (b) validation that the claim has been properly submitted and should be

accepted by SBC Michigan for review, and (c) execution of processing required to update

the claim tracking and management system with the claim data such that the

I acknowledgement can be sent. The additional time required to (a) review the details of

1 the claim and determine if any additional information is needed to process the claim, and l

(b) actually process the claim to final disposition, is subsequent to the Acknowledgement

process, and is included in the period of time assessed under CLEC BLG-3.

5. To the extent that SBC Michigan needs to be incented to provide acknowledgement of

receipt of a billing claim in a timely fashion (a service for which SBC Michigan believes

it already has adequate incentive to provide in a timely fashion), CLEC BLG-3 provides

the appropriate financial incentive in terms of remedy payments. This is because, should

a delay in SBC Michigan's acknowledgment to the CLEC that SBC Michigan has

received the claim result in SBC Michigan not providing a resolution notification within

the timeframe called for under CLEC BLG-3, SBC Michigan's performance will be

subject to appropriate remedy payments for billing claim processing performance.

As described in my initial affidavit in this proceeding, both CLEC BLG-2 and CLEC

BLG-3 measure the billing claim process beginning with the same start point. CLEC

BLG-2 assesses SBC Michigan performance on a subset of that time. Because CLEC

BLG-3 is already skject to both a benchmark and remedies, subjecting CLEC BLG-2 to

its own benchmark and remedies in addition to those under CLEC BLG-3 would create

situations where a delay in acknowledgement measured in CLEC BLG-2 that leads to a

delay in providing the resolution notification measured in CLEC BLG-3, results in

remedies being paid twice on that single claim. This "double-dipping" is counter to

previous agreements reached between the parties through the collaborative process where

transactions that would be subject to remedies for the same "failure" in multiple PMs

were agreed to be excluded from certain of those PMs to avoid the "double-dip" of

remedy payments.

MCI and AT&T's assertion that the point of remedy payments is to provide incentive to

SBC Michigan to improve its performance is also erroneous. The purpose of

performance measures is to assess performance against a predetermined reasonable

standard, and the purpose of remedy payments is to compensate CLECs for any potential

harm when performance does not meet that standard. To the extent that remedy

payments provide an additional financial incentive above and beyond the expectation that

SBC Michigan will meet its contractual and regulatory obligations, that is fine and

appropriate. However, remedy payments are far from the sole incentive for SBC to

provide adequate performance to CLECs to support competition. There has been no

showing of how a CLEC would be damaged by a delay in receiving acknowledgement

that SBC Michigan has received its claim, neither in the collaborative discussions nor in

the MCI/AT&T Comments. As such, there is no evidence supporting the need for a

benchmark to be established for CLEC BLG-2, and no evidence that remedies should

apply to compensate CLECs for any damages they may incur uniquely from a delay in

receiving an acknowledgment for a billing claim submitted.

Disputed Issue No. 2: Period In Which No Remedies Apply For PM CLEC BLG-3

8. The MCI/AT&T assertion that there is "no reason to wait to apply remediesv2 to CLEC

BLG-3 ignores the fact that SBC Michigan must have time to implement its new systems

and processes. That is why SBC Michigan believes a diagnostic period for remedies on

CLEC BLG-3 is appropriate and, in fact, necessary. SBC Michigan will be rolling out a

new process for handling and tracking billing claims developed through collaborative

discussions with CLECs. SBC Michigan believes that a six-month diagnostic period for

2 MCI/AT&T Comments, p. 2.

4

CLEC BLG-3 is appropriate to allow for completion of all implementation activities for

the entire process desired by the CLECs. It would also provide actual performance

results that the collaborating parties could use to assess the reasonableness of the

negotiated standard.

9. Additionally, SBC Michigan does not need to be "encourag[ed]" to respond to CLEC

I claims in a timely manner by requiring remedies on CLEC BLG-3 sooner than the

I diagnostic period proposed by SBC Michigan. SBC Michigan does not need such

encouragement to do its job, and remedies are used to compensate CLECs for any

possble harm only if SBC Michigan does not perform against the standard in any

I remedied performance measurement. Allowing SBC Michigan sufficient time to

implement the new systems and processes prevents SBC Michigan from paying remedies

for system or process issues that typically arise during the first few months any new

process and system is first put into place.

Disputed Issue No. 3: Exclusion of CLECs With 30% Or More Claim Line Items Denied From Tier I Remedies

10. MCI /AT&T state their experience is that most initial claims are denied and have to be

escalated to reach settlement. They then assert that SBC Michigan would delay the final

resolution of a single billing dispute for a period of months in order to reach the 30%

standard of denied claims to be able to pay less remedies. No such evidence of any such

past practice was offered by the CLECs in the collaborative, and neither MCI nor AT&T

provide any evidence to support their similar assertions in their Comments. Accordingly,

the Commission should reject this unsupported assertion.

1 1. The damages SBC would likely incur to its corporate reputation, along with the affect of

Commission actions resulting from the expected complaints filed by CLECs should SBC

~ fraudulently deny claims in order to exceed the 30% threshold of CLEC BLG-3 in three I

consecutive months for a single CLEC (the actual standard applied for this exclusion),

would outweigh any benefits in avoided remedy payments. SBC Michigan believes that

MCI and AT&T are trying to force SBC Michigan into unreasonable litigation to obtain

refunds of remedies paid to CLECs resulting from the self- executing nature of the

Michigan performance remedy plan when a CLEC does not properly assess and filter

claims on its own to prevent submitting inaccurate or unsupported claims to SBC

Michigan

12. SBC Michigan continues to believe that just as CLECs have a desire to drive SBC

Michigan behavior - timely resolution of claims - through the application of performance

remedies, so does SBC Michigan seek to drive CLEC behavior to execute sufficient

investigation before they submit billing claims. Limiting billing claims to a generous

70% valid items imposes reasonable safeguards within the remedy structure to recognize

the submission of claims without merit by CLECs. These claims negatively impact SBC

Michigan's ability to process claims for all CLECs in a timely fashion, and the self-

executing payment of unjustified remedies by SBC Michigan without this clause in the

PM, if deleted by the Commission, would require SBC Michigan to engage the

Commission in a regulatory process to properly be absolved of liability for a sub-standard

PM performance resulting from the lack of due diligence by the CLEC. Additionally, the

requirement of sustained evidence of this behavior (over three consecutive months)

protects CLECs from an occasional month where denied claim percentages are high.

13. MCI and AT&T are also wrong when they state that the accuracy of SBC Michigan's

rejection of claims under CLEC BLG-3 would not be picked up in third party audits.

Section 6.6 of SBC Michigan's performance remedy plan provides for mini-audits

regarding the collection, computing and reporting process for any performance

measurement data, and a dispute process. The dispute process (data reconciliation

followed by a CLEC- initiated audit) requires the CLEC and SBC Michigan to consult

I with one another and attempt in good faith to resolve any issues regarding the accuracy or

integrity of data collected, generated, and reported. An independent audit can be

conducted if resolution cannot be reached within 45 days. SBC Michigan believes the

Commission to have latitude within the categories of reporting accuracy and data

integrity to define the scope of the audit to address specific concerns. Additionally, the

Commission has ordered SBC Michigan to undergo an annual audit. This ensures annual

oversight of SBC Michigan's data collection and reporting processes, for the Commission

has directed that "[tlhat the results of the audit should be available to the [Commission]

and all CLECs purchasing service from [SBC Michigan]."

14. Accordingly, any actions of SBC Michigan to manipulate the data and results under

CLEC BLG-3 could be the subject of these audits. Any systemic behavior to

fraudulently deny claims for the purpose of meeting a performance measurement

threshold could be discovered during these audits.

3 In the Matter of Ameritech Michigan's Submission on Performance Measures, Reporting, and Benchmarks, Pursuant to the October 2, 1998 Order in Case No. UII654, Opinion and Order, Case No. U118320 (May 27, 1999), p. 11.

Disputed Issue No. 4: CLEC Proposal for Addition of A Measure to Assess The Timeliness of Post-to-Bill Notification and No Deletion of Current PM 17

15. MCI and AT&T overstate the criticality of Post-To-Bill notifications (also referred to as

Billing Completion Notices, or BCNs) in arguing for the imposition of a new PM with an

unrealistic benchmark they know to be unattainable by SBC Michigan given current OSS

architectures. CLECs are advised exactly when their billing of the end customer should

begin. The Service Order Completion (SOC) notification provides the CLEC with notice

that service has been transitioned to the CLEC, or changes have been made to existing

service for that CLEC, specifying the completion of all ordering and provisioning

activities. With that notice, the CLEC knows when the end-customer became their

customer, or when the changes to service became effective. CLECs have competed

successfully against SBC in the past without Post-To-Bill notifications, as these notices

were first provided with the LSOG 5 release in Spring 2002.

In addition, the vast majority of the time SBC Michigan posts CLEC service orders to

billing is significantly less than the 30-day timeframe portrayed by MCI and AT&T. The

current PM 17 assesses the frequency in which SBC Michigan posts CLEC service orders

to billing prior to the first bill date on which the order could possible bill. This is the first

bill date for the account the service order will bill on subsequent to the completion date of

the service order. As can be seen from the published PM 17 results for CLECS in

Michigan in Figure 1 below, SBC has consistently posted service orders to billing prior to

the first bill date after service order completion well over 95% of the time in each of the

past six months.

Figure 1- PM 17 Results In Michigan (Source: Published performance results available on CLEC OnLine)

17. The current data (published results for March through September 2003) for the existing

PM 17 (Percent of On-Time Service Orders that Post to Billing) depicted in the chart

above show that over 95% of orders are included on the first possible bill following

completion of the order. In all cases, based on a maximum 30-day billing cycle, these

timely orders were posted in less than thirty days. Contrary to the Comments of MCI and

AT&T, SBC Michigan is not failing PM 17 "where it has a whole month to get the

change on the next bill.'" MCI and AT&T would have the Commission believe,

incorrectly, that SBC Michigan is allowed 30 days to post orders to billing under PM 17.

A simple read of the business rules is enough to clearly see that PM 17 determines as

successful orders that post to billing "within the first bill cycle following order

completion".

18. For example, if the first bill cycle end date for the order is three days after completion of

the order in the ordering systems (provisioning is done), that order must be posted to

billing within three days to be a "make". SBC Michigan is meeting this aggressive PM

17 standard, as shown by the CLEC-aggregate data above. For the vast majority of those

orders, that posting occurred in much less than 30 days. Hence SBC Michigan's proposal

for a 10-day benchmark in the collaborative. SBC Michigan stands by its willingness to

implement the new PM 17.1 with this 10-day benchmark, even though MCI and AT&T

believe SBC Michigan will fail that standard5 (and pay remedies as a result, under SBC

Michigan's proposal), and have rejected that proposed benchmark. i 19. Contrary to the assertions of MCI and AT&T, CLECs will be able to answer their ~

customer's maintenance and service questions after the service order is complete, which i is signified by the service order completion, or "SOC", notice. That notice indicates

when a CLEC can submit trouble tickets and orders to change or add services on a just-

provisioned line or circuit. CLECs do not need to rely on the notification that the order

has posted to billing prior to submitting trouble tickets or additional orders. The SOC

provides them the pertinent notice.

20. MCI and AT&T also continue to confuse the PM 17.1 proposed by SBC Michigan, and

proposed with their Comments (with several changes to the version SBC Michigan is

willing to implement), with a different PM, with a different standard, implemented in

Texas by SBC Michigan's affiliate. PM 17.1 in Texas assesses how quickly after

completion of the order that the order is posted to the billing database. The PM being

discussed here measures how frequently the post-to-bill notification is sent to the CLEC.

The delivery of the post-to-bill notification is not a process or event included within the

scope of the Texas PM 17.1. As a result, any comparison of a PM standard in Texas to

4 MCI/AT&T Comments, p. 6 5 MCl/AT&T state "but even at 10 days it appears that SBC [MichiganIOhio] would fail this metric" at page

6 of their comments.

the proposed PM standard in Michigan compares two different PMs measuring two

different events.

2 1. Contrary to MCI and AT&T's portrayal of SBC Michigan's billing system as being

"antiquated - it is simply a system put together for the purpose of billing. Whether it is

I antiquated or not is not an issue to be resolved by a performance measurement. This is an

issue to be resolved through changes to SBC Michigan's Operational Support Systems

I ("OSS"). As I stated in my initial affidavit, the proper forum to address OSS concerns is

the Change Management Process, with which the CLECs are familiar and regularly

participate. Imposition of PM standards that are not possible given OSS architecture is

not t k proper way to negotiate changes to OSS.

22. MCI and AT&T state they would not oppose eliminating PM 17 if three conditions are

I met.6 The first condition, a back-billing metric being proposed here in the MCI/AT&T

Comments, was not proposed as part of the billing PM collaborative but is a subject that

has been introduced into the six-month review collaborative that commenced recently.

As this issue has yet to be discussed in the six-month review collaborative, and no

discussion has been provided by MCI and AT&T to explain how a back-billing PM

relates to their request for a PM measuring the timeliness of post-to-bill notifications, the

Commission should reject such an "offer" outright. Should the CLECs desire this

additional measure unrelated to the issue under dispute, the collaborative process

currently underway is the appropriate forum for those discussions.

23. The second condition is the implementation of the CLEC proposed PM 1 7.1. As the

Commission now understands, it would not be appropriate to require SBC Michigan to

6 MCI/AT&T Comments, p. 7.

implement a PM standard, and make performance against that standard be subject to

remedy, where the CLECs have failed to show what competitive harm would result from

a 10-day benchmark rather than a 5-day benchmark, and where it has been clearly

communicated to CLECs that the current OSS architecture does not support a 5-day

benchmark. As for CLECs not demonstrating the harm experienced by a 10-day

benchmark rather than a 5-day benchmark, that is because there likely is none, because

CLECs are already notified when the service order completes, and receiving the past-to-

bill notification is simply a final confirmation that billing processing has been completed.

CLECs are not prevented from either billing their customer or submitting trouble tickets

or subsequent orders due to the lack of receipt of a post-to-bill notification.

24. The third condition addresses remedies that may be owed on PM 17. Should the

Commission agree with SBC Michigan's proposal for a specific PM 17.1 standard (10-

day bemhmark) and remedy level (low, per occurrence with a cap), coupled with the

deletion of the current PM 17, SBC Michigan could agree to the single additional

condition of continuing the count of consecutive month's missed from current PM 17 to

the new PM 17.1.

Disputed Issue No. 5: CLEC Proposal for Addition of A Diagnostic Report Performance Measure On the Percent of Claims Denied for CLEC AggregateIIndividual

25. As stated in my initial affidavit, SBC Michigan has determined that it could agree to

produce a report, upon CLEC request, providing the percent of denied claims to that

CLEC. Additionally, because the benchmark for PM BLG-3 provides for any CLEC not

eligible for Tier 1 payments because of a 30% denied claim rate to request a

reconciliation of results and data for this performance measurement7, SBC Midwest is

clearly willing to share this data with CLECs that request it. However, there is no need

for a PM, nor a requirement to produce reports, for every CLEC nor for the CLECs as a

whole

26. The proposed PM in Attachment 4 of the MCI/AT&T Comments is not necessary. As

stated above, the impact of any unjustifiable claims submitted by CLECs, or claims

denied by SBC Michigan without adequate justification for such denial, could be

disclosed to the industry and the Commission through operation of the mini-audits. The

damages SBC would likely incur to its corporate reputation, along with the affect of

Commission actions resulting from the expected complaints filed by CLECs should SBC

fraudulently deny claims in order to meet the 30% performance standard of PM BLG-3,

would outweigh any benefits in avoided remedy payments.

7 SBC Midwest realizes that it already has the obligation to participate in data reconciliation for any performance measurement. This wording in CLEC BLG-3 clarifies that the data used to assess percentage of denied claims is also included in that obligation.

13

FURTHER AFFIANT SAYETH NOT

JAMES D. EHR

Subscribed and sworn to before me this day of ,2003.

NOTARY PUBLIC