PINNSTLVANIA

PUC CCWMONWEALTH OF PENNSYLVAITT^V

PENNSYLVANIA PUBLIC UTILITY COMMISSION Office of Administrative Law Judge

P.O. BOX 3265, HARRISBURG, PA 17105-3265 January 10, 2007

IN REPLY PLEASE REFER TO OUR FILE

In Re: A-310922F7002

(SEE ATTACHED LIST)

Petition of Core Communication, Inc. for Arbitration of Interconnection Rates, Terms and Conditions with The United

Telephone Company of Pennsylvania, Inc.

Arbitration Notice

This is to inform you that a hearing on the above-captioned case w i l l be held as follows:

Type

Date

Ti me

Location:

DOCUMENT

Presi di ng

Pre-Arbitration Conference

Wednesday, January 31, 2007

10:00 a.m.

Hearing Room 4 Plaza Level Commonwealth Keystone Building 400 North Street Harrisburg, PA 17120

Administrative Law Judge David A. Salapa PO Box 3265 Harrisburg, PA 17105-3265 Phone: 717-783-5452 Fax: 717-787-0481

ES/ JAN 2 5 2007 L i

RECEIVED JAN 1 9 2007

PA PUBUC UTILITY COMMISSION SECRETARY'S BUREAU

#387273 rev 04/05

Attention: You may lose the case if you do not come to this hearing and present facts on the issues raised.

I f you intend to f i l e exhibits, 2 copies of a l l hearing exhibits to be presented into evidence must be submitted to the reporter. An additional copy must be furnished to the Presiding Officer. A copy must also be provided to each party of record.

Individuals representing themselves do not need to be represented by an attorney. All others (corporation, partnership, association, trust or governmental agency or subdivision) must be represented by an attorney. An attorney representing you should fi l e a Notice of Appearance before the scheduled hearing date.

I f you are a person with a di s a b i l i t y , and you wish to attend the hearing, we may be able to make arrangements for your special needs. Please call the scheduling office at the Public U t i l i t y Commission at least (2) two business days prior to your heari ng:

• Scheduling Office: 717-787-1399 • AT&T Relay Service number for persons who are deaf or

hearing-impaired: 1-800-654-5988

pc: Judge Salapa Stacy Nolan, Scheduling Officer Beth Plantz Docket Section Calendar File

#387273 rev 04/05

A-31Q922F7QQ2 Pet^tton of Core Communication, for Arbitration of InterconnectioiWrates, Terms and ConditionsWWth The United Telephone Company of Pennsylvania, Inc.

UPDATED 10/02/06

NORMAN J KENNARD ESQUIRE HAWKE MCKEON SNISCAK & KENNARD LLP 100 NORTH 10 T H STREET PO BOX 1778 HARRISBURG PA 17105 717.236.1300

ZSUZSANNA E BENEDEK ESQUIRE THE UNITED TELEPHONE COMPANY OF PA D/B/A EMARQ 240 NORTH THIRD STREET SUITE 201 HARRISBURG PA 17101-1521

MICHAEL A GRUIN ESQUIRE STEVEN & LEE 17 NORTH 2ND STREET 16TH FLOOR HARRISBURG PA 17101

to STEVENS & LEE LAWYERS & CONSULTANTS

17 North Second Street 16th Floor

Harrisburg, PA '17101 (717) 234-1090 Fax (717) 234-1099

www.stevenslee.com

January 17,2007

Direct Dial: Email: maj Direct Fax:

(717) 255-7365 Ostevenslee.com

(610) 988-0852

4 James J, McNulty, Secretary Pennsylvania Public Utility Commission Commonwealth Keystone Building 400 North Street, 2nd. Floor Harrisburg, PA 17120

Re: Petition of Core Communications. Inc. for Arbitration of Interconnection Rates. Terms and Conditions with the United Telephone Company of Pennsylvania, d/b/a Embarq Docket No. A-310922F70002

Dear Secretary McNulty:

Enclosed please fmd an original and three (3) copies of executed Appendix A's on behalf of Core Communications, Inc. in the above referenced matter. Please contact me if you have any questions.

Best regards,

STEVENS & LEE

Michael A. Gruin

Enclosures

cc: Honorable David A. Salapa Sue Benedek, Esquire Norman Kennard, Esquire

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Jan 16 07r-02:59p. Tim Gates, Sr. V.P. 303-424-4433 p.2

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APPENDIX A

BEFORE THE PENNSYLVANIA PUBLIC UTILITY COMMISSION

Petition.pf Core Communications, Inc. for Arbitration ) Of Interconnection Rates, Terms and Condition with ) The United Telephone Company of Pennsylvania , ) . Docket No. Pursuant to 47 U.S.C, §252(b) ) A-310922F7002

)

)

TO WHOM IT MAY CONCERN:

The undersigned, '^ftot-Mic r (QaJzj^^S* , is an employee of {() ^ T ' ^ ^ ^ , _ i ^ L r ^ t o , or has been retained as a consultant or expert witness, executing this Appendix

on behalf of fi/nr^^ . The undersigned has read and understands the Protective Order entered in the above-referenced proceeding; addressing the treatment of Proprietary and Highly Confidential Information. The undersigned agrees to be bound by, and comply with, the terms and conditions of said Protective; Orde-T*

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LLi ^ ^CC PRINT NAIiJE

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EMPLOYER

DATED: l/l to IS?

APPENDIX A

BE FORK THE PENNSYLVANIA PUBLIC UTILITY COMMISSION

Petition of Core Communications, Inc. for Arbitration ) Of Interconnection Rates, Terms and Condition with ) The United Telephone Company of Pennsylvania ) Docket No. (.; Pursuant to 47 U.S.C. §252(b) • 1 ) A-310922K7002 •.- - r K O .:^}

) )

TO WHOM IT MAY CONCERN:

is an employee of _ (pert witness, executing this Appendix

on behalf of MU$@H L - The undersigned has read and understands the Protective Order entered in the above-referenced proceeding, addressing the treatment of Proprietary and Highly Confidential Information. The undersigned agrees to be bound by, and comply with, the terms and conditions of said Protective Order.

, . The undersigned, UI/LlUlWy6{ ll/iC-. or has been retained as a consultant or_e/pei

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PtNNST LVANIA

PUC i COW^ONWEALTH OF PENNSYLVAi

PENNSYLVANIA PUBLIC UTILITY COMMISSION Office of Administrative Law Judge

P.O. BOX 3265, HARRISBURG, PA 17105-3265 January 29, 2007

IN REPLY PLEASE REFER TO OUR FILE

In Re: A-310922F7002

(SEE LETTER DATED 1/10/07)

Petition of Core Communications, Inc. for Arbitration of Interconnection Rates, Terms and Conditions with The United

Telephone Company of Pennsylvania, Inc.

Arbitration Notice

Hearing Cancellation/Reschedule Notice

This is to inform you that the Pre-Arbitration Conference on the above-captioned case previously scheduled for January 31, 2007, has been canceled.

The hearing has been rescheduled as follows:

Type:

Date:

Time:

Locati on:

Presidi ng

DOCUMENT

Pre-Arbitration Conference

Friday, February 16, 2007

10:00 a.m.

Hearing Room 4 Plaza Level Commonwealth Keystone Building 400 North Street Harrisburg, PA 17120

Administrative Law Judge David A. Salapa PO Box 3265 Harrisburg, PA 17105-3265 Telephone: 717-783-5452 Fax: 717-787-0481

FEB 1

•Tl 2007

#447549 04/05

*

Please mark your records accordingly.

I f you are a person with a d i s a b i l i t y , and you wish to attend the hearing, we may be able to make arrangements for your special needs. Please call the scheduling office at the Public U t i l i t y Commission at least (2) two business days prior to your heari ng:

• Scheduling Office; 717-787-1399 • AT&T Relay Service number for persons who are deaf or

hearing-impai red: 1-800-654-5988

pc: Judge Salapa Stacy Nolan, Scheduling Officer Beth Plantz Docket Section Calendar File

#447549 04/05

STEVENS & L E E LAWYERS & CONSULTANTS

17 North Second Street 16th Floor

Harrisburg, PA 17101 (717) 234-1090 Fax (717) 234-1099

www.stevenslee.com

Direct Dial: (717) 255-7365 Email: mag@stevenslee.com Direct Fax: (610) 988-0852

February 15,2007

VIA HAND DELIVERY

Secretary James McNulty Pennsylvania Public Utility Commission Commonwealth Keystone Building Harrisburg, PA 17105-3265 m Re: Petition of Core Communications, Inc. for Arbitration of Interconnection Rates. Terms and

Conditions Pursuant to 47 U.S.C. § 252(b) with The United Telephone Company of Pennsylvania, Inc., d/b/a Sprint Docket No. A-310922 F7002

Dear Secretary McNulty:

Enclosed for filing please find an original plus three (3) copies of Core Communications, Inc.'s Motion for Partial Summary Judgment in the above-captioned matter. Copies have been served in accordance with the attached certificate of service.

DOCUMENT FOLDER

Best regards,

STEVENS & LEE

ivftfh! chael A. Gruin

cc: Certificate of Service

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Philadelphia • Reading • Valley Forge • Lehigh Valley • Harrisburg • Lancaster • Scranton VVilliamsport • Wilkes-Barre • Princeton • Cherry Hill • New York • Wilmington

A PROFESSIONAL CORPORATION

02/15/07/SL1 701979vl/100826.00003

PENNSYLVANIA PUBLIC UTILITY COMMISSION ^ ^ BEFORE THE

In re: Petition of CORE COMMUNICATIONS, INC.

Petition of Core Communications Inc. for Arbitration of Interconnection Rates, Terms and Conditions with the United Telephone Company of Pennsylvania d/b/a Embarq

Docket No.: A-310922F7002

MOTION FOR PARTIAL SUMMARY JUDGMENT

Now Comes Core Communications, Inc. ("Core"), pursuant to 52 Pa. Code

Section 5.102; and files this Motion for Partial Summary Judgment in the above-

captioned case. This motion seeks judgment on specific issues that are raised in the

parties' filings, and that have been previously resolved by federal law, FCC rules, or

Commission orders, including the Commission's recent order granting Core authority to

operate as a CLEC in rural telephone company ("RTC") territories (the "Core RTC

Certification Order")x. In further support of its Motion, Core avers as follows:

FEB 1 6 2007

L BACKGROUND

1. On April 21, 2006, Core filed a Petition for Arbitration of Interconnection

Rates, Terms and Conditions with the United Telephone Company of

Pennsylvania d/b/a Embarq ("Embarq") pursuant to 47 U.S.C. § 252(b)(the

"Petition").

DOCUMEN 1 Opinion and Order, Application of Core Communications, Inc. for Authority to Amend its Existing Certificate of Public Convenience and Necessity. A-310922F0002, AmA (Order entered Dec. 4. 2006)("Co/-e RTC Certification Order).

2. On May 16, 2006, Embarq filed its Response to Core's Petition for

Arbitration, and also filed a Motion to Strike or Dismiss Core's Petition for

Arbitration (the "Motion to Dismiss").

3. By Order dated May 30, 2006, Administrative Law Judge David Salapa

denied Embarq's Motion to Stay and Dismiss. ALJ Salapa's May 30, 2006 Order

also established an Arbitration schedule for this matter.

4. On May 24, 2006, Core served Interrogatories and Requests for

Production of Documents upon Embarq.

5. On May 30, Core provided its Responses to Embarq's Interrogatories and

Requests for Production of Documents, Set I .

6. On May 31, 2006, Embarq served Interrogatories and Requests for

Production of Documents, Set I I , upon Core.

7. On June 2, 2006 Embarq served Interrogatories and Requests for

Production of Documents, Set HI, upon Core.

8. On June 13, 2006, Embarq provided Responses to Core's Interrogatories

and Requests for Production of Documents.

9. On June 8, 2006, Administrative Law Judge Wayne Weismandel issued an

Initial Decision in the Core RTC Certification Proceeding at Docket No. A-

310922F0002, Am.A.. The matter at Docket No. A-310922F0002 involved Core's

Application to Amend its Certificate of Authority to include the service territories

of all of the rural local exchange carriers in Pennsylvania (hereinafter referred to

as the "Core RTC Certification Proceeding"). Judge Weismandel's Initial

Decision in that matter will be hereinafter referred to as the "Initial Decision".

10. On June 20, 2006, Core filed a Motion to Stay Arbitration and Revise

Arbitration Schedule in the present matter.

11. By Order dated June 28, 2006, Administrative Law Judge David Salapa

stayed the present Interconnection Arbitration pending the entry of a final

Commission Order in the Core RTC Certification proceeding at Docket No. A-

310922F00002, AmA.

12. On December 4, 2006, the Commission issued an Order in the Core RTC

Certification Proceeding which denied all protests to Core's CLEC Application

and granted Core's Exceptions to the Initial Decision in that proceeding. As a

result of the Commission's Order, Core has obtained certification as a facilities-

based CLEC in all of Pennsylvania's rural service territories. A copy of the

Commission's Order in the Core RTC Certification Proceeding is attached hereto

as Appendix A.

13. Many ofthe interconnection issues in dispute between Embarq and Core

in the present matter do not involve factual disputes; rather, they involve disputes

over obligations ofthe respective parties under the controlling law. The

Commission's December 4, 2006 Order in the Core RTC Certification proceeding

clarified many of these issues.

14. On January 2, 2007, Core submitted a request by electronic mail

requesting the scheduling of a new pre-arbitration conference in the present

matter, in accordance with the June 28, 2006 Order in this matter.

15. Because most of the remaining disputes between the parties are legal,

rather than factual, in nature, Core files the within Motion for Partial Summary

Judgment in order to dispose of issues that are purely legal in nature.

II . STANDARD OF R E V I E W

16. Commission regulations permit any party to file a motion for summary

judgment at any time "[a]fter the pleadings are closed, but within a time so that

the hearing is not delayed..." 52 Pa. Code § 5.102(a)(2006). The present motion

is filed following a lengthy stay of the proceeding, and prior to the parties' initial

round of testimony. Accordingly, consideration of Core's motion now poses no

obstacle to a timely hearing in this case.

17. Motions for summary judgment may be filed based on the pleadings,

depositions, answers to interrogatories, admissions and supporting affidavits.

Judgment will be rendered i f the documents show that "there is no genuine issue

of material fact and that the moving party is entitled to judgment as a matter of

law." 52 Pa. Code §5.102(d)/ As with any extraordinary remedy, such motions

are granted only in the clearest of cases, where there is not the slightest doubt as

This is the same standard applied by the courts of this Commonwealth. See Donnelly Directory v. Bell Telephone. Co. of Pa., Docket No. C-00871245, Commission Opinion and Order entered February 19, 1988, citing Schacter v. Albert, 239 A.2d 841 (Pa.Super. 1986).

4

to the absence of triable issues. Matz v. Lakatos, 318 A.2d 497 (Pa. Cmwlth.

1978); Demmler v. Smithkline Beecham Corp., 671 A.2d 1151, 1153 (Pa.Super.

1996).

18. The Commission's regulations further provide that partial summary

judgment on one or more but not all of the outstanding issues may be made in the

form of an order, or initial or recommended decision. 52 Pa. Code §5.102(c)(2).

19. As stated by the Pennsylvania Supreme Court, in P.J.S. v. PA. State Ethics

Commission, 723 A.2d 174, 176 (Pa., 1999):

Summary Judgment may be granted only in those cases where the record clearly shows that there are no genuine issues of material fact and that the moving party is entitled to judgment as a matter of law. Marks v. Tasman, 527 Pa. 132, 589 A.2d 205 (1991). On a Motion for Summary Judgment, the record must be viewed in the light most favorable to the opposing party, and all doubts as to the existence of a genuine issue of material fact must be resolved in favor of the nonmoving party. Kapres v. Heller, 536 Pa. 551, 640 A.2d 888 (1994).

20. With respect to the specific issues addressed herein, and considering only

those factual allegations to which Embarq has specifically admitted, the parties'

respective pleadings and other papers (including extensive discovery requests and

responses) indicate that there is no genuine issue of disputed fact. Core

acknowledges that other issues of disputed fact do exist in this proceeding, but

Core does not seek summary judgment with respect to those issues.

21. A preliminary ruling on the specific issues outlined in this motion will

greatly aid the speedy resolution of this proceeding, since it will eliminate the

5

opportunity for the parties to submit and file unnecessary and unduly burdensome

discovery requests, testimony, and briefs with respect to these previously settled

legal issues.

22. A ruling on this motion would also eliminate the possibility that parties in

this proceeding could receive regulatory treatment that is different from the

established legal rights and obligations that are generally applicable to similarly

situated carriers.

III. STATEMENT OF ISSUES

23. The following issues are the subject of this Motion. All of these issues

have been raised by Embarq in its Response to Core's Petition, and all have

previously resolved by the Commission or the FCC:

Issue 1:

Issue 2:

Issue 3:

Issue 4:

Does the Commission have jurisdiction over the services Core offers and Core's Arbitration Petition?

Answer: Yes.

Does Core qualify as a facilities-based local exchange carrier throughout Pennsylvania?

Answer: Yes

Does Core provide telecommunications services, rather than information services?

Answer: Yes

Is Core's use of VNNX consistent with its status as a Local Exchange Carrier?

Answer: Yes

Issue 5:

Issue 6:

Does Core qualify as a "public utility"?

Answer: Yes

Is Core's proposed definition of the scope of traffic that is subject to the reciprocal compensation provision of Section 251(b)(5) ofthe Act and its implementing rules correct under applicable law?

Issue 7:

Answer: Yes

Does an originating carrier have a duty to transport its interconnection traffic to the network ofthe terminating carrier?

Answer: Yes

Issue 8: Is VNXX-enabled, ISP-bound traffic local in nature, rather than access, and therefore governed by the FCC's ISP Remand Order ?

Answer: Yes

24. A preliminary decision on these issues would have at least two major

benefits. The first is the elimination of unnecessary litigation. The second is

increased certainty for the parties, which should foster further negotiation and

settlement of remaining issues.

IV. ARGUMENT

Relevant Law and Precedent

25. Nearly 11 years following passage of the 1996 Telecommunications Act

(the "Act"), there exists a substantial body of law and precedent concerning rates,

7

terms, and conditions for interconnection agreements ("ICAs") between

competing carriers. The initial and most comprehensive source of precedent is the

FCC's 1996 Local Competition Order,3 in which the commission set the

framework for important issues such as reciprocal compensation, interconnection

transport, and numerous other issues.

26. Subsequently, the FCC issued a new framework for reciprocal

compensation in the 2001 ISP Remand Order.4

27. The ISP Remand Order redefined the scope of traffic that is subject to

reciprocal compensation, and created a whole new set of rules governing

compensation for the termination of ISP-bound traffic (as opposed to "voice"

traffic).

28. In 2002, the D.C. Circuit Court of Appeals remanded, but did not vacate,

the ISP Remand Order 5 October, 2004, the FCC released the Core Forbearance

Order,6 which modified the compensation rules for ISP-bound traffic, eliminating

some ofthe restrictions applicable to such compensation.

First Report & Order, In the Matter of Implementation of the Local Competition Provisions in the Telecommunications Act of 1996, Interconnection between Local Exchange Carriers and Commercial Mobile Radio Service Providers, CC Dockets Nos. 96-98 and 96-185 (rel. August 8, l996)("Local Competition Order").

4 Order on Remand & Report & Order, In the Matter of Implementation of the Local Competition Provisions in the Telecommunications Act of 1996. Intercarrier Compensation for ISP-Bound Traffic, CC Docket Nos. 96-98 and 99-68 (Rel. April 27, 2001)(l75P Remand Order"). 5 WorldCom v. FCC, 288 F.3d429, 434 (D.C. Cir. 2002)(', WorldCom").

Order, Petition of Core Communications. Inc. for Forbearance Under 47 U.S.C. § 160(c) from Application ofthe ISP Remand Order, WC Docket No. 03-171 (Rel. Oct. 18, 2004)("Core Forbearance Order).

29. The Commission has spent considerable time and effort to the FCC's

interconnection framework for ICAs, pursuant to the Commission's authority to

arbitrate TCA disputes under section 252 of the Act. 7

30. In the VZW/AUtel Arbitration Order? the Commission specifically

examined the FCC's rules as they apply to an interconnection involving a rural

telephone company and a competing wireless or CMRS carrier. The

Commission's order in that case is particularly relevant to the present case, since

the Commission ruled that the same rules should apply to all competing carriers,

whether CMRS or landline/CLEC.

31. In the VZW/AUtel Arbitration Order, the Commission established a

framework for direct and indirect interconnection between an incumbent RTC

(like Embarq) and a competing telecommunications carrier seeking

jnterconnection (like Core).

32. Finally, in the recent Core RTC Certification Order,9 the Commission

considered and ruled upon the issues relating to Core's services. Core's status as a

facilities-based CLEC, the Commission's jurisdiction over Core and its services,

as well as how to treat ISP-bound traffic that is routed using virtual NXX or

"VNXX" arrangements. The Commission specifically examined Core's business

7 47 U.S.C. §252. 8 Opinion and Order, Petition of Cellco Partnership d/b/a Verizon Wireless For Arbitration... With ALLTEL Pennsylvania, Inc., Docket No. A-310489F7004 (Order entered January 18, 2QQ5)("VZW/ALLTEL Arbitration Order"). 9 Opinion and Order, Application of Core Communications, Inc. for Authority to Amend its Existing Certificate of Public Convenience and Necessity, A-310922F0002, AmA (Order entered Dec. 4, 2006)("a>re RTC Certification Order).

model and traffic and concluded that ISP-bound VNXX traffic should be

classified as local traffic, and not long distance or "access" traffic as the RTC

Protestants (of which Alltel was one) had argued. In so doing, the Commission

ruled on several important issues that are pertinent to this arbitration, as discussed

below.

ISSUE 1: Does the Commission have jurisdiction over the services Core offers and Core's Arbitration Petition?

YES. THE COMMISSION UNQUESTIONABLY HAS JURISDICTION OVER CORE'S PETITION FOR ARBITRATION, AS CLARIFIED MOST RECENTLY BY THE COMMISSION'S CORE RTC CERTIFICATION ORDER

33. In this proceeding Embarq has argued that Core is not entitled to pursue an

ICA arbitration because Core does not qualify as a "CLEC" under federal and

Pennsylvania state law. In a related vein, Embarq argued that the Commission has

no jurisdiction over Core's petition because Core is not a CLEC. Embarq states

these arguments in different ways in different filings, but the gist of Embarq's

point is plain and consistent.

34. Beginning with its May 16, 2006 Response to Core's Petition,

("Response") Embarq raises a series of related allegations which it refers to as the

"Jurisdictional Issue."

35. Further, Embarq consistently claims that the outcome of the Jurisdictional

Issue would be subject to the Commission's ruling in Core RTC certification case.

10

According to Embarq, "Core's alleged status as a local service provider is one

issue directly subject to litigation in a certification proceeding involving several

rural carriers, as pending at Docket No. A-310922F0002, AMA... Similarly, in

that proceeding, the jurisdictional nature of the VNXX ISP-bound service actually

provisioned by Core in Pennsylvania remains at issue and, based upon

information and belief, is slated f o r resolution in that proceeding."10

36. Embarq's parses out the Jurisdictional Issue as follows:

• Core acts as ISP or an aggregator for ISPs, and not as a telecommunications carrier.11

• Core routes its ISP-bound traffic using VNXX, so that Core is not a local exchange carrier. 12

Core does not provision local exchange service to telecommunications end users.13

37. Based on these incorrect statements, Embarq asserted that it has no duty to

interconnect with Core under sections 251 and 252 of the Act. 1 4

38. Further, Embarq alleges that Core should pay Embarq originating access

charges for all traffic that is originated by Embarq end users and terminated by

1 0 Response of the United Telephone Company of Pennsylvania to Petition for Arbitration filed by Core Communications, Inc. (May 16, 2006)("Response"), at 1. " /rf.at3.

Id. Id. Id.

Core's ISP customers.15 Embarq leveled the same allegations in its Motion to

Dismiss.16

39. In its Pre Hearing Conference Memorandum, Embarq summarized the

Jurisdictional Issue as follows:

Does Core have legal authority under Section 251 and 252 ofthe Act to negotiate and arbitrate an agreement for local interconnection services for ISP-bound traffic that does not originate and terminate in United PA's local calling area?

Given Core's provisioning of VNXX-enabled ISP-bound service, is Core a local exchange carrier provisioning local exchange services to telecommunications end users, with the traffic at issue originating and terminating in United PA's local calling area?17

40. In addition to the Jurisdictional Issue, Embarq ties resolution of Core's

substantive interconnection Issues 2, 9, 10, 13, 14, and 15 in whole or in part to its

allegation that Core does not operate as a local exchange carrier because it uses

VNXX to provide service to ISPs.18

41. Embarq's counsel further clarified the company's position on the

Jurisdictional Issue at the prehearing conference. There, Counsel stated the

following:

• Your Honor, we would request that this jurisdictional issue be addressed in a bifurcated manner for the remainder of the case, because it does run through the entire rest of the case... In our view, Your Honor, it is a seminal issue. It is a threshold issue to determine whether 251/252 are indeed obligations that we have and are indeed rights that Core has.19

Id. at 4. The United Telephone Company Motion to Stay and Dismiss (May 16, 2006), at pp. 6-8. Prehearing Memorandum of the United Telephone Company (May 22, 2006), at p. 6. Id. at pp. 6-8. Tr. at 12. (Emphasis added).

12

We question whether they're a local service provider. We question whether they're a provider of local exchange services; in addition, whether that certificate should stay. 2 0

So I 'm envisioning that this threshold issue is the tail that wags the dog. And my client, there's a proceeding already out there where a Judge, or there will be a Commission order at some point addressing this issue of whether they're an interexchange carrier, whether they're providing local service or whether they're indeed a telecom carrier at al l . 2 1

And that is part of many other issues, that's a part of those issue[s] being raised by this, and that will be precedent."22

42. Although Embarq's Motion to Dismiss has been denied, the Jurisdictional

Issue remains in this proceeding.23 The ALJ previously ruled that "[sjince I've

denied [Embarq's] motion to dismiss, there's certainly nothing that would prevent

[Embarq] from doing discovery and either going to a hearing and raising a

jurisdictional issue at that point when you have more facts on the record or, I

suppose, filing a motion for summary judgment.. . " 2 4

43. Indeed, in order to address Embarq's Jurisdictional Issue, the ALJ required

Core to demonstrate that it would be offering local exchange services pursuant to

its certificate for Embarq territory: "[Core is] going to have to demonstrate, this is

2 0 Tr. at 12-13. (Emphasis added). 2 1 Tr. at 15. (Emphasis added). 2 2 Tr. at 15-16. (Emphasis added). 2 3 Core has attempted on multiple occasions to clarify Embarq's position on the Jurisdictional Issue in the wake of the Core RTC Certification Order, but to no avail. Embarq has agreed to remove the "Jurisdictional Issue" as a discrete issue in this proceeding. However, Embarq has not agreed that it will not raise the same or similar matters that were in play in the Core certification case. Nor has Embarq explained what certification-related matters it may or may not want to raise in this proceeding. This leaves Core with no recourse but to seek partial summary judgment with respect to the entire Jurisdictional Issue. 2 4 Tr. at 10 (Statement of ALJ Salapa).

13

how we intend to provide service pursuant to our certificate of public

convenience.. . " 2 5

44. Finally, Embarq's discovery requests26 so far in this proceeding further

underline its determination to litigate its Jurisdictional Issue to the hilt. Based on

Core's review of Embarq's 80 discovery requests so far, fully 34 relate primarily

or solely to the Jurisdictional Issue and Core's status as a local exchange carrier.

The breakdown is as follows:

• Questions relating to the jurisdictional nature of Core's services: "information" or "telecommunications": 1-1,1-13,1-14,1-28, 1-33,1-34,1-35,1-38, and 1-39.

• The capabilities of Core's switches (which bears on the "information" versus "telecommunications" issue): 1-3, 1-4, and 1-5.

• Core's intention to offer services to residential customers: 1-24,1-25, and 1-48.

• Core's use of VNXX arrangements to deliver traffic to ISPs: 1-29,1-30,1-31, I -32,1-36,1-37,1-49,1-50,1-51, and 1-52.

• Core's Financial, Management & Technical Fitness to Operate: I I I - l , 1II-2, III-3, 111-4, III-5, III-6, III-7, III-8, and III-9.

45. Even i f every single factual allegation raised by Embarq in its Response,

Motion to Dismiss, and other filings is accepted as true, Embarq's position on the

Jurisdictional Issue fails as a matter of law. This is because the Commission, in

2 5 Tr.atlO. 2 6 Embarq's discovery requests in this proceeding consist of its May 9, 2006 Set I Interrogatories and Request for Production of Documents (53 questions); its May 31, 2006 Set II Interrogatories and Request for Production of Documents (17 questions); and its June 2, 2006 Set III Interrogatories and Request for Production of Documents (10 questions).

14

the Core RTC certification case, conducted an extensive inquiry into the exact

same questions Embarq now raises in this proceeding.

46. In the certification case, the ALJ found (1) that Core does not qualify as a

CLEC in rural territories because it is not a facilities-based carrier; (2) that Core is

not a local exchange carrier because it does not offer telecommunications services

to end users; (3) that Core is not a local exchange carrier because it uses VNXX

arrangements to permit calls that do not originate and terminate in the same LEC-

defined local calling area; and (4) that Core is not a local exchange carrier

because it serves ISPs primarily or exclusively. These are precisely the same

allegations Embarq would like to shoe-horn in to the present proceeding.

47. The Commission rejected the ALJ's analysis and conclusions, and granted

Core's exceptions, on each of these issues.

48. Notably, the Commission's order was based on a factual record of Core's

current operations in Verizon, Verizon North, and Embarq territories.

Accordingly, there is no legal basis to support Embarq's ongoing efforts to

relitigate these same issues in the context of this case.

49. Therefore, based on the Commission's extensive analysis and conclusions

ofthe exact same jurisdictional issues raised by Embarq in this proceeding, Core

should be granted summary judgment with respect to Embarq's jurisdictional

2 7 Core RTC Cenification Order, at 7-9 (discussing factual context of Core's operations), 12 (quoting ALJ's Initial Decision), and 27 ("the ALJ found fault with Core's current operations in Verizon, Verizon North and Embarq service territories").

15

issue, and Embarq should be precluded from offering pleadings, testimony, or

argument, or propounding discovery in furtherance of this issue.

ISSUE 2: Does Core qualify as a facilities-based local exchange carrier throughout Pennsylvania?

YES. THE COMMISSION HAS ALREADY DETERMINED FOUND THAT CORE OPERATES AS FACILITIES-BASED C L E C

50. The Commission characterized the ALJ's ruling on the facilities-based

CLEC issue as follows:

In concluding that "facilities-based" CLECs are those CLECs owning their own switches and transmission lines to render service, as opposed to those CLECs relying on "resale" of ILEC services, the ALJ cited several Commission determinations involving entry into rural ILEC service territories.,. He also found his understanding in this regard was in accord with the definition of "Facilities-based Carrier" found in Newton's

28

Telecom Dictionary.

51. The Commission thoroughly reviewed Core's exceptions and the RTCs:

reply exceptions, and found as follows:

For the reasons outlined below, we shall grant Core's Exceptions, consistent with the discussion in this Opinion and Order. We conclude that Core has met its burden to establish that its operations are sufficiently facilities-based services. We are, therefore, able to further conclude that Core will provide service over a distinctly independent network.29

We would agree with the observation of Core, that the use of a combination of facilities, including self-provisioning, leased, or resold, is acceptable in the current telecommunications environment. (Citation

Id. at 15. Id. at 21-22.

16

omitted). We, therefore, concluded that the deployment of a combination of facilities, in a variety of configurations, does not exclude the CLEC from being facilities-based. We would further agree with the argument of Core, that to the extent the CLEC is not wholly reliant on the resale of another carrier's (the incumbent's) services and has invested in facilities necessary for its subscribers to originate and terminate a call, we are able to find that the carrier qualifies as facilities-based.

Core, admittedly, provides service to a "niche" market. Its business model is geared towards aggregating dial-up access to ISPs. In this regard, its service is assailed by the PTA as not investing in any facilities that will actually provide service within a local calling area. However, we conclude that Core's business provides more than this. The service Core provides is comparable to and in direct competition to the service offerings provided by certain of the rural ILECs through affiliates. We expressly acknowledge and reject the contention of the PTA that rural ILEC affiliates provide services to ISPs, but provide these services in ways that are different from Core.30

52. Accordingly, the Commission has already considered and rejected

Embarq's allegation that Core does not operate as a facilities-based CLEC. Even

if all of Embarq's factual allegations concerning Core's operations are viewed as

true, there is no longer any legal theory to support those allegations. Therefore,

Core is entitled to summary judgment on this issue, and Embarq should be

precluded from offering pleadings, testimony, or argument, or propounding

discovery in furtherance of this issue.

17

ISSUE 3: Does Core provide telecommunications services, rather than information services?

THE COMMISSION FOUND THAT CORE PROVIDES TELECOMMUNICATIONS SERVICES, NOT INFORMATION SERVICES

53. The Commission characterized the ALJ's ruling on the

telecommunications versus infonnation service issue as follows:

[T]he ALJ found that Core's operations do not meet the definition of a "local exchange carrier." Consequently, he concluded that Core is not, and would not be in the future, a facilities-based CLEC nor satisfy the definition of local exchange carrier under federal law.31

54. The Commission thoroughly reviewed Core's exceptions and the RTCs'

reply exceptions, and found as follows:

The FCC, in its Intercarrier Compensation for ISP-bound Traffic Order, concluded that ISP-bound traffic was not subject to reciprocal compensation provisions of TA-96 Section 251(b)(5)... In this same order, the FCC also made several observations which run counter to the position of Core in this Application. However, the FCC did make a jurisdictional determination regarding this traffic and established a compensation mechanism applicable to this traffic. JVe f ind the FCC's treatment of dial-up access to ISPs to be more consistent with the Core position. That is, ISPs themselves, are treated as end users of telecommunications services, while the underlying service they provide to ISP subscribers, Internet access, is information. (Emphasis added).

Based on the foregoing, we shall grant the Exceptions of Core. 32

55. Accordingly, the Commission has already considered and rejected

Embarq's allegation that Core offers infonnation services not telecommunications

Id. at 22. Id. at 23.

18

services. Even if all of Embarq's factual allegations concerning Core's operations

are viewed as true, there is no longer any legal theory to support those allegations.

Therefore, Core is entitled to summary judgment on this issue, and Embarq

should be precluded from offering pleadings, testimony, or argument, or

propounding discovery in furtherance of this issue.

ISSUE 4: Is Core's use of VNNX consistent with its status as a Local Exchange Carrier?

YES. THE COMMISSION HAS ALREADY DETERMINED THAT CORE'S USE OF VNXX IS WHOLLY CONSISTENT WITH ITS EXISTING AND PROPOSED CERTIFICATION AS A C L E C

56. As to the VNXX issue, the Commission characterized the ALJ's ruling as

follows:

[T]he ALJ found fault with Core's current operations in Verizon, Verizon North and Embarq service territories. Core's local service territory mirrors that of the local exchanges of these ILECs, but through the use of VNNX, Core allows its ISP customers to arrange for their end user customers to make a local call from Allentown to Philadelphia - a call which would, otherwise, be classified as a toll call. ALJ Weismandel found that Core provides no connections from end users to Core's ISP customers, but relies on the use of VNXX to permit its ISP customers to make a "local" telephone number available which uses the ILEC facilities to connect the end user with the ISP. The ALJ concludes that this demonstrates that Core is not offering the transmission of messages or communications that originate and tenninate within a prescribed local calling area.33

Id. at 26-27. Id. at 27.

19

57. The Commission thoroughly reviewed Core's exceptions and the RTCs'

reply exceptions, and found as follows:

The record supports a conclusion that several ILECs, CLECs, and/or their affiliates, offer VNXX, or a VNXX-like service. The record indicates that VNXX is not exclusively used by Core. Based on our conclusion that Core has sufficiently invested in facilities and by a preponderance of the evidence has demonstrated a commitment for more investment so as not to fall in the category of reseller, we find the emphasis on its VNXX use misplaced in this regard.

The Commission concluded that "[t]he Exceptions of Core are granted" on

the VNXX issue.34

58. Accordingly, the Commission has already considered and rejected

Embarq's allegation that Core's use of VNXX arrangements renders it an

interexchange carrier outside of the Commission's jurisdiction, and therefore Core

is entitled to summary judgment with respect to this issue.

ISSUE 5: Does Core qualify as a "public utility"?

YES. THE COMMISSION HAS ALREADY DETERMINED THAT CORE OPERATES AS A PUBLIC UTILITY, OFFERING SERVICE TO ALL PROSPECTIVE END USERS INDISCRIMINATELY

59. On this issue, the Commission characterized the ALJ's ruling as follows:

ALJ Weismandel concluded that Core's customer base, consisting of 26 ISPs in Pennsylvania, does not comport with its obligation to offer services 'to the public" under the Chapter 30 of the Pennsylvania Public

34 Id. at 30-31. 20

Utility Code.35

60. The Commission thoroughly reviewed Core's exceptions and the RTCs'

reply exceptions, and found as follows:

On consideration of the ALJ recommendation, we shall reject said recommendation. The Exceptions of Core are granted, consistent with our discussion. We find the ALJ's conclusion of what constitutes service to the public to be unduly narrow in that it fails to recognize a discreet subset of the public to whom Core provides services, indiscriminately. fVe have, in this Order, recognized the competitive nature of the niche market for telecommunications service to ISPs. We agree with Core that ISPs are a class of the public to whom Core holds itself out to provide service to any member of that class.36

61. Accordingly, the Commission has already considered and rejected

Embarq's allegation that Core's is not a public utility because it provides service

primarily or exclusively to ISPs. Even if all of Embarq's factual allegations

concerning Core's operations are viewed as true, there is no longer any legal

theory to support those allegations. Therefore, Core is entitled to summary

judgment this issue, and Embarq should be precluded from offering pleadings,

testimony, or argument, or propounding discovery in furtherance of this issue.

62. In summary, the Commission's lengthy and detailed Core RTC

Certification Order leaves no room for Embarq to continue its objections to

Core's business model or regulatory status. This is true both generally, and

specifically in relation to Core's current operations in Embarq territory.

Id. at 32. 21

Eliminating Embarq's Jurisdictional Issue from this proceeding will eliminate

much needless expenditure of the Commission's and the parties' resources.

ISSUE 6: Is Core's proposed definition of the scope of traffic that is subject to the reciprocal compensation provision of Section 251(b)(5) ofthe Act and its implementing rules correct under applicable law?

YES. CORE'S DEFINITION OF "SECTION 251(b)(5) TRAFFIC" IS BASED ON CURRENT FCC RULES, WHEREAS EMBARQ'S DEFINITION OF "LOCAL TRAFFIC" HAS NO BASIS IN APPLICABLE LAW

63. One of the non-jurisdictional issues in dispute between the parties involves

defining the scope of interconnection traffic that is subject to the reciprocal

compensation provision of the Act, 47 U.S.C.§ 251(b)(5) and its implementing

rules. Such traffic is colloquially referred to as "reciprocal compensation traffic"

and sometimes, "local traffic." The issue is significant because it defines the

scope of traffic for which reciprocal compensation is due.

64. Core proposes the following definition for this traffic ("Section 251(b)(5)

Traffic"):

Section 251(b)(5) Traffic means (1) telecommunications traffic exchanged between a LEC and a telecommunications carrier other than a CMRS provider, except for telecommunications traffic that is interstate or intrastate exchange access, or exchange services for such access (see FCC Order on Remand, 34, 36, 39, 42-43); and/or (2) telecommunications traffic exchanged by a LEC and a CMRS provider that originates and terminates within the same Major Trading Area, as defined in 47 CFR §

36

37 Id. at 33. (Emphasis added). Prehearing Memorandum ofthe United Telephone Company (May 22, 2006), at 6.

22

24.202(a). 38

65. Embarq rejects Core's definition of Section 251(b)(5) Traffic, and instead

prefers its definition of "Local Traffic" as defined in its original Definitions,

section 1.73.

66. According to Embarq, "United PA's definition of Local Traffic correctly

includes only traffic with origination and termination points within United PA's

Commission-approved local calling areas."39

67. Embarq quotes what it alleges to be the relevant FCC rule as follows:

"Local Telecommunications traffic—telecommunications traffic between a LEC

and a telecommunications carrier other than a CMRS carrier that originates and

terminates within a local service area established by the state commission."

Embarq offers a citation to this rule as being "51 C.F.R. § 701(b)(1)."40

68. Embarq relies on an outdated and superseded FCC rule.41 In the ISP

Remand Order, the FCC replaced its definition of "Local Telecommunications

Traffic" with a new definition of "Telecommunications Traffic." The FCC

reasoned as follows:

We conclude that a reasonable reading of the statute is that Congress intended to exclude the traffic listed in [section 251] subsection (g) from the reciprocal compensation requirements of subsection (b)(5). Thus, the statute does not mandate reciprocal compensation for "exchange access.

3 8 See, 47 C.F.R. §51.70^("Telecommunications Traffic"). 3 9 Response, Appendix 2, at 3. 40 Id, 4 1 In response to a Core discovery request, Embarq purports (without explaining why) to amend its Response in order to delete its definition of "Local Telecommunications Traffic." The discovery response is attached hereto at Appendix B.

23

information access, and exchange services for such access" provided to IXCs and information service providers. Because we interpret subsection (g) as a carve-out provision, the focus of our inquiry is on the universe of traffic that falls within subsection (g) and not the universe of traffic that falls within subsection (b)(5). This analysis differs from our analysis in the Local Competition Order, in which we attempted to describe the universe of traffic that falls within subsection (b)(5) as all "local" traffic. JVe also refrain from generically describing traffic as "local" traffic because the term " local," not being a statutorily defined category, is particularly susceptible to varying meanings and, significantly, is not a term used in section 251(b)(5) or section 251(g).42

Consistent with this reasoning, the FCC struck the term "local" before every instance of

the term "telecommuni cati ons traffic" in its rules.43

69. Accordingly, the FCC codified the following definition of

"Telecommunications Traffic":

(a) The provisions of this subpart apply to reciprocal compensation for transport and termination of telecommunications traffic between LECs and other telecommunications carriers.

(b) Telecommunications traffic. For purposes of this subpart, telecommunications traffic means:

(1) Telecommunications traffic exchanged between a LEC and a telecommunications carrier other than a CMRS provider, except for telecommunications traffic that is interstate or intrastate exchange access, information access, or exchange services for such access (see FCC 01-131, paragraphs 34, 36, 39, 42-43); or

(2) Telecommunications traffic exchanged between a LEC and a CMRS provider that, at the beginning of the call, originates and terminates within the same Major Trading Area, as defined in § 24.202(a) of this chapter.44

42

44

ISP Remand Order, at 1[34. (Emphasis added). Id. at App. B ("Final Rules"), p. 60. 47 C.F.R. §701.

24

70. This is the definition from which Core's proposal is derived. Core

excluded the rule's reference to "information access" because the court in

WorldCom rejected the FCC's conclusion that ISP-bound traffic is "information

access" traffic under section 251(g).4:) This leaves uncertainty as to what i f

anything the term "information access" encompasses.

71. Since Core's definition of Section 251 (b)(5) Traffic is consistent with

existing applicable law, and because Embarq's definition of Local Traffic is

expressly premised on outdated FCC rules, Core is clearly entitled to summary

judgment on this issue, and the Commission should therefore require the parties to

adopt Core's proposed definition in the interconnection agreement executed

between the parties.

ISSUE 7: Does an originating carrier have a duty to transport its interconnection traffic to the network of the terminating carrier?

Y E S . T H E DUTY O F AN ORIGINATING C A R R I E R TO TRANSPORT ITS ORIGINATING T R A F F I C TO T H E NETWORK O F T H E TERMINATING C A R R I E R FOR TERMINATION IS W E L L S E T T L E D LAW

72. Another disputed issue involves the parties' respective duties to pay for or

otherwise provide transport for interconnection traffic exchanged between the

parties' switches 4 6

WorldCom, at 433-434. Prehearing Memorandum of the United Telephone Company (May 22, 2006), at 7.

25

73. For example, if Core's switch is located in Harrisburg, and Embarq's

switch is in Carlisle, the transport at issue would be the facilities needed to

transmit interconnection traffic between Harrisburg and Carlisle. There are a

variety of arrangements to accomplish this, including self-provisioning facilities,

leasing facilities from one another, or leasing facilities from a third-party.

Whatever facilities are used, the issue is who should be financially responsible for

this transport.

74. Core proposes an interconnection architecture based on dual

interconnection points ("IPs"). Under Core's proposal, each party designates an IP

on its network at which the other party is responsible to deliver its originating

traffic.47

75. Core's proposal recognizes that applicable FCC rules—and Commission

precedent—require each party to bear the cost to deliver its originating

interconnection traffic to the switch location of the other party. The designation of

a single point of interconnection ("POI"), without further clarification of dual IPs,

may serve to mask this duty, by implying that Core must bear the cost of bringing

Embarq's originating traffic from Embarq's switch (which Embarq defines as the

sole POI) to Core's switch. Core's proposal clarifies that each party must deliver

its originating traffic to the IP designated by the other, terminating party.

47 Petition of Core Communications, Inc. for Arbitration of Interconnection Rates, Terms and

Conditions , Appendix 12 (Core's redline of Embarq's initial ICA proposal), at § 54, p. 97. 26

76. Embarq believes that there must be one POI, located "at any technically

feasible point within [Embarq's] network," citing to section 251(c)(2) of the

Act 4 8

77. Embarq further believes that Core should be required to bear all of the

costs both (1) to deliver Core's originating traffic to Embarq at a POI at one or

more Embarq switches; and (2) to pick up traffic originating on Embarq's

network at the same POI(s) and bring that traffic back to Core's own switch.49

78. Embarq also argues that it can not be required to transport its originating

traffic outside of its service territory.50

79. Finally, Embarq denies that it has any real duty to interconnect with Core

at all, since Core is allegedly not a CLEC.51

80. However, even i f all of Embarq's factual allegations on the transport issue

are accepted as true, Embarq's position fails as a matter of law. FCC rules require

originating carriers to deliver their originating traffic to terminating carriers

without charge. The relevant FCC rule states as follows:

A LEC may not assess charges on any other telecommunications carrier for telecommunications traffic that originates on the LECs network.52

81. In the VZW/AUtel Arbitration Order, the Commission relied upon this rule

in approving a "dual IP" interconnection arrangement that exactly mirrors Core's

4 8 Response, Appendix 2, at 13. 4 9 Id.; and see, Petition, Appendix 6 (Embarq's original ICA proposal) at § 54, pp. 81-82. 50 Id. 5 1 Id. at 14-15. As discussed herein above, the Commission has found that Core's current operations in Embarq territory meet the definition of facilities-based local exchange service.

27

proposal in this arbitration. With respect to interconnection traffic handled by a

third party transit provider (generally speaking, Verizon), the Commission found:

[Tjhe general rule is that traffic which originates on the network of a LEC must be delivered by that LEC for termination at the originating LECs cost...

Based on FCC rule § 51.703(b) that prohibits an originating carrier from charging a tenninating carrier for the costs of traffic originating on its network, we decide that the weight of authority would place the cost responsibility for third-party transit on the originating carrier.53

FCC rules derived from the Local Competition Order, require that each party, to the extent it is an originating carrier, bear financial responsibility for the delivery of traffic originating on its network. 47 C.F.R. § 51.703(b). Therefore, the originating carrier is prohibited from imposing charges on the terminating carrier for either the telecommunications traffic originating on its network or the facilities used for the delivery of that traffic.5 4

[W]hen ALLTEL's customers originate traffic that eventually terminates on the network of Verizon Wireless, they invoke the prohibition against ALLTEL's shifting of costs for the delivery of this traffic to Verizon Wireless.

There is a strong pronouncement on the part of the FCC to unwaveringly adhere to the principle that the originating carrier bears the costs of delivering traffic which originates on its network.55

82. The Commission considered and rejected Alltel's argument (identical to

Embarq's argument in this case) that it can not be required to transport traffic

across its service territory boundary:

47 C.F.R. § 51.703. VZW/AUtel Arbitration Order, at 27. Id. at 30.

28

ALLTEL objects that the application of the FCC rule could require it to extend delivery of traffic outside of its network and into areas which extend beyond its Pennsylvania-franchised service territory. Because the FCC rule expressly prohibits a charge for either the telecommunications traffic or facilities used in the delivery of this traffic by the originating LEC, we find that ALLTEL's Exceptions shall be denied consistent with the discussion in this Opinion and Order.56

83. Although the VZW/AUtel Arbitration Order clearly involved an 1LEC-

CMRS interconnection, as distinct from an ILEC-CLEC interconnection, the

Commission expressly concluded that the duty of an originating carrier to

transport its own originating traffic to the switch ofthe terminating party is

independent of carrier type:

ALLTEL essentially takes the position that TSR Wireless, and cases which have followed, turn on the fact that they involve different types of telecommunications carriers (RBOC vs. ILEC) and CMRS providers (paging carriers vs. wireless company) than those involved in the present case. However, the distinction ALLTEL attempts to draw based on the type of carrier involved does not invalidate the ALJ's reliance on TSR Wireless et al. On the contrary, to engage in such a distinction would subject such a conclusion to allegations of discrimination which run counter to the goals of TA96.57

84. Ultimately, the Commission approved Verizon Wireless's proposed

language, which provided for a dual IP arrangement identical to Core's proposal

in this case. Verizon Wireless proposed that it would be responsible to deliver its

own originating traffic to Alltel at an IP "within ALLTEL's interconnected

network", and that Alltel would be responsible to deliver its own originating

traffic to Verizon Wireless at an IP designated by Verizon Wireless.

Id. at 33. Id. at 47. Id. at 48.

29

85. With respect to Alltel-originated traffic, the Commission rejected the

inclusion of the phrase "within ALLTEL's interconnected network,"58 and

permitted Verizon Wireless to designate one IP in each LATA in which it sought

interconnection with Alltel. 5 9

86. With respect to Verizon Wireless' IP, the Commission found as follows:

Southwestern Bell stands for the proposition that, although ILEC networks were not designed to accommodate third-party interconnection, the ECC rules require ILECs "to adapt their facilities to interconnection or use by other carriers" in order to accommodate the interconnector, after it has been determined that the point selected by the interconnector is a "technically feasible point" consistent with § 251(c)(2). We also note that Southwestern Bell involved an interconnection between an ILEC and a CLEC. In that regard, FCC rules allow a competitor LEC to select at least one technically feasible interconnection point per LATA. We believe it would be prudent to apply the same interconnection requirements that exist for interconnection between wireline carriers in the instant case involving interconnection between a wireless and an ILEC. Therefore, we shall direct that ALLTEL permit Verizon Wireless the opportunity to select one technically feasible interconnection point per LATA located within the boundaries of the Commonwealth of Pennsylvania.60

87. The Commission's extensive analysis ofthe originating party's transport

duty in the VZW/AUtel Arbitration Order leaves no room for Embarq's position

on this issue, even if all of Embarq's factual allegations are assumed to be true.

Meanwhile, the Commission's analysis and approved language are entirely

consistent with Core's position. Accordingly, Core is entitled to summary

judgment on this issue, and the Commission should require the parties to adopt

5 8 Id. at 78-79. 5 9 Id. at 95. 60 Id.

30

Core's proposed language in the interconnection agreement executed between the

parties.

ISSUE 8: Is VNXX-enabled, ISP-bound traffic local in nature, rather than access, and therefore governed by the FCC's ISP Remand Order ?

Y E S . T H E COMMISSION HAS DETERMINED THAT T H E VNXX-ENABLED, ISP-BOUND T R A F F I C T E R M I N A T E D BY C O R E IS L O C A L IN NATURE, NOT A C C E S S , AND T H E R E F O R E GOVERNED BY T H E FCC'S ISP REMAND O R D E R

88. Another issue in dispute involves the proper classification of virtual NXX

or "VNXX" traffic for intercarrier compensation purposes.61

89. Consistent with the Act, FCC rules and orders, and the Core RTC

Certification Order, Core's position is that intraLATA traffic should be rated as

Section 251(b)(5) Traffic or intraLATA toll traffic based on a comparison of the

NPA-NXX ofthe calling and called parties.62

90. Similarly, Core's position with respect to ISP-bound traffic is that it

should be rated as compensable traffic pursuant to the ISP Remand Order i f the

NPA-NXX of the calling and called parties fall within the same local calling

area.63

91. Embarq believes VNXX-type traffic should not be subject to tenninating

reciprocal compensation charges. Embarq believes that the designation of traffic

Prehearing Memorandum of the United Telephone Company (May 22, 2006), at Petition, Appendix 12, at § 55.6, p. 104. Id. at §55.3, p. 104.

31

as intraLATA toll based on the actual geographic locations ofthe calling and

called parties.

92. Embarq argues that there do exist methods to determine, or estimate, the

actual physical locations of the calling and called parties. Embarq also proposes

that calls using VOIP technology also be classified based on geographic locations

for compensation purposes.64

93. Embarq's arguments have been rendered unavailing by the Commission's

Core RTC Certification Order. The order clearly establishes VNXX traffic as

local in nature, and therefore subject to reciprocal compensation and intercarrier

compensation for ISP-bound traffic. The order rejects Embarq's theory that

VNXX traffic is interexchange ("long distance") traffic subject to the access

charge regime.

94. Although Core never took the position that an evaluation of VNXX traffic

was necessary for the resolution of the certification case, the RTC Protestants

insisted that Core was not a local exchange carrier because it relied primarily or

exclusively on the use of VNXX arrangements to offer local calling to its ISP

customers in RTC territories.

95. The Commission framed Core's position in the certification case as

follows:

Core emphasizes that the calls it terminates on a VNXX basis are local as a matter of federal law. It refers to the decision of the FCC staff in the Virginia Arbitration Order to argue that the standard industry practice is

64 Response, Appendix 2, at 19-2i. 32

for carriers to rate calls by comparing the origination and termination of NPA-NXX codes... Core also states that the use of VNXX codes was found to be legal and acceptable by this Commission in its recent investigation of the issue and points out that there is no state or federal law or regulation that requires them to take any steps to prohibit the use of VNXX service in Pennsylvania. Core finally points out that the Investigation Report conducted by this Commission found that VNXX practices were positively beneficial to consumers and competition. (Citations omitted).

Core further notes that, as stated by the FCC on numerous occasions, the calls that are handled on a VNXX basis do not just appear to be local. Rather, the calls are local and subject to Section 251(b)(5) of TA-96.

Core also claims that the record shows that ILECs and CLECs serve ISPs in Pennsylvania using various sorts of expanded calling area arrangements. According to Core, Verizon provides VNXX in conjunction with its tariffed Internet Protocol Routing Service which provides for the collection, concentration and management of the customers traffic within the LATA... Core also points out that Commonwealth Telephone Company is currently interconnected with a CLEC certified in its territory that principally serves ISP's by using VNXX codes... Core also points out another instance of a rural carrier. North Pittsburgh Telephone Company, offering Foreign Exchange service to ISPs including its affiliate ISP, Pinnatech...65

96. The Commission further outlined the position of the RTC Protestants in

their Reply Exceptions:

In Replies to Exceptions, the PTA supports the ALJ's conclusion that Core's business plan consists of utilizing virtual numbering methods to generate a call that appears to be local, so that Core can obtain reciprocal compensation. PTA opines that the ALJ's observation in this regard is completely accurate. It also agrees that Core does this to expand local calling area to make what would otherwise be toll calls as toll-free dial-up internet calls. The PTA defers to Core's argument that most, if not all, of the traffic physically originates and terminates within the ILECs' and Core's local calling area, and it finds Core's reliance in a few instances insignificant.

65 Core RTC Certification Order, at 27-28. 33

66

The PTA states that it has consistently acknowledged the Commission's Statement of Policy on VNXX that it declines to take any steps to prohibit the use of VNXX service in Pennsylvania and will not make any conclusions on the issue of inter-carrier compensation for traffic that moves over VNXX arrangements. The PTA concedes that not all applications of VNXX violate local calling rules. However, in the case of Core, it is using VNXX as a device to claim local status for an Interexchange call.

The RTCC points out that the Commission, in its Statement of Policy on the use of VNXX, did not make any jurisdictional findings that the intraLATA boundaries were eliminated or that VNXX calls were all local. The RTCC adds that the Commission, in fact, recognized that the VNXX dispute is the applicable inter carrier compensation scheme and specifically deferred to the FCC's pending Intercarrier Compensation Proceeding...

The RTCC also notes two recent decisions - the First Circuit and the Second Circuit Courts of Appeals decisions - to refute Core's argument that VNXX traffic is local traffic. The RTCC submits that the two decisions determined that VNXX traffic is Interexchange traffic, and thus, is subject to access charges.66

97. The Protestants' arguments in the Core certification case mirror Embarq's

arguments in this case.

98. Ultimately, the Commission granted Core's exceptions on the issue of

VNXX traffic, and explicitly agreed with Core's conclusion that such traffic

should be classified as "local" as opposed to access or toll traffic:

The record supports a conclusion that several ILECs, CLECs, and/or their affiliates, offer VNXX, or a VNXX-like service. The record indicates that VNXX is not exclusively used by Core. Based on our conclusion that Core has sufficiently invested in facilities and by a preponderance ofthe evidence has demonstrated a commitment for more investment so as not to fall in the category of reseller, we find the emphasis on its VNXX use

Id. at 29-30. 34

misplaced in this regard.

With regard to the locai nature of Core's exchange service as a result of its use of VNXX, we would further agree with Core.*'1

99. As further clarification of its endorsement of Core's position, the

Commission cited with approval the following passage from Core's Exceptions:

Core's services are telephone exchange services because each and every call is terminated on a local basis (whether geographically local, or VNXX), within the same LATA in which it originated, courtesy of Core's direct interconnections with Verizon tandems in each LATA.. . .It is also important to differentiate between Core's services, whereby each call is originated and terminated on a local basis, within the same LATA, and the service at issue in the Level 3 Application in Marianna & Scenery Hill territory. In the case of Level 3, it was determined that all Pennsylvania calls terminated by Level 3 were terminated at Level 3's modem banks in Baltimore, Maryland. By contrast, as set forth above, all calls handled by Core originate and terminate on a local basis in the same LATA. 6 8

The Commission broadly concluded "[tjhe Exceptions of Core are granted."69

100. In light ofthe importance ofthe VNXX issue in the Core RTC

Certification Proceeding, and the Commission's careful and conclusive analysis

of the issue, there remains no further basis in the law to support Embarq's

position that such traffic should be considered long distance or access traffic.

Rather, the Commission's analysis wholly supports Core's position that VNXX

traffic should be considered "local" compensable traffic both under Section

251(b)(5) and the ISP Remand Order.70 Therefore, Core is entitled to summary

6 7 Id. at 31. (Emphasis added). 6 8 fd. (Emphasis added). 69 id. 7 0 Core notes that Embarq considers Issue 15 to encompass the issue of how to classify VOIP traffic for intercarrier compensation purposes. Core does not seek judgment on the pleadings with reference to

35

judgment on this issue, and Embarq should be precluded from offering pleadings,

testimony, or argument, or propounding discovery in furtherance of this issue.

Conclusion

For all of the foregoing reasons, Core respectfully requests entry of partial

summary judgment in this matter, with respect to the following conclusions of law:

1. The Commission has jurisdiction over Core's Petition for Arbitration

2. Core operates as a facilities based CLEC in Pennsylvania

3. Core provides telecommunications services in Pennsylvania

4. Core's use of VNXX is consistent with its status as a facilities based local exchange carrier

5. Core is a public utility offering service to all prospective end users indiscriminately

6. Core's definition of "Section 251(b)(5)" traffic is correct under applicable law and will be included in the final interconnection agreement executed by the parties

7. Under applicable law, an originating carrier has a duty to transport its originating traffic to the network of the tenninating carrier

8. VNXX-enabled ISP-bound traffic terminated by Core is Local Traffic, not Access Traffic, and therefore governed by the FCC's ISP Remand Order

VOIP issues at this time. 36

Respectfiilly Submitted:

STEVENS & LEE

Michael A. Grun Stevens & Lee Attorney ID No.: 78625 17 N. 2nd St. 16th Floor Harrisburg, PA 17101 Tel. (717) 255-7365 mag@ste venslee. com

Counsel for Core Communications, Inc.

37

CERTIFICATE OF SERVICE

I hereby certify that on this 15th day of February, 2007 copies of the foregoing Motion

have been served, via hand delivery, upon the persons listed below in accordance with the

requirements of 52 Pa Code Sections 1.54 and 1.55 ofthe Commission's rules.

Sue Benedek United Telephone Company of PA 240 N. 3rd. St. Suite 201 Harrisburg, PA 17101

Administrative Law Judge David Salapa Pennsylvania Public Utility Commission Commonwealth Keystone Building 400 North Street Harrisburg, PA 17120

Michael A. Gruii^'Esq. Stevens & Lee Attorney ID No.: 78625 17N. 2nd St. 16th Floor Harrisburg, PA 17101 Tel. (717) 234-1090

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38

PENNSYLVANIA PUBLIC UTILITY COMMISSION P.O. BOX 3265, HARRISBURG, PA 17105-3265

W REPLY PI EASE REFER TO OUR FILE

December 4, 2006 A-310922F0002AMA A-3I0922F0002AMB

TO A L L PARTIES

Application of Core Communications, Inc. for Authority to amend its existing Certificate of Public convenience and necessity and to expand Core's Pennsylvania operations to include the Provision of

competitive residential and business Local exchange telecommunications services throughout the Commonwealth of Pennsylvania

(A-310922F0002AMA)

Alltel Pennsylvania, Inc's Motion for Stay and Record Incorporation (A-310922F0002AMB)

To Whom It May Concern:

This is to advise you that the Commission in Public Meeting on November 30, 2006 has adopted an Opinion and Order in the above-entitled proceeding.

An Opinion and Order has been enclosed for your records.

Very truly yours.

Enclosure Certified Mail JF

CO rr, o

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PENNSYLVANIA PUBLIC UTILITY COMMISSION

Harrisburg, PA 17105

Public Meeting held November 30,2006

Commissioners Present:

Wendell F. Holland, Chairman James H. Cawley, Vice Chairman Kim Pizzingrilli Terrance J. Fitzpatrick

Application of Core Communications, Inc. for Authority to amend its existing Certificate of Public Convenience and necessity and to expand Core*s Pennsylvania operations to include the Provision of competitive residential and business Local exchange telecommunications services throughout ihe Commonwealth of Pennsylvania

A-310922F0002,AmA

Alltel Pennsylvania, Inc.'s Motion for Stay and Record Incorporation

A-310922F0002,AinB

OPINION AND ORDER

I . Matter Before the Commission

Before the Commission for consideration are the Exceptions filed to the

June 8,2006, Initial Decision (I.D.) of Administrative Law Judge (ALJ) Wayne L.

Weismandel at Docket No. A-310922F0002, AmA. Exceptions were filed by Core

Communications Inc. (Core) on June 28, 2006. Replies to Exceptions were filed by the

Rural Telephone Company Coalition (RTCC) and the Pennsylvania Telephone

Association (PTA) on July 10,2006.

We also consider in this Order, Alltel Pennsylvania, Inc.'s Motion for Stay

and Record Incorporation (Alltel Motion) filed April 24, 2006, at Docket No.

A-310922F0002,AmB.

I I . AUtel Motion

Before addressing the merits on the Exceptions to ALJ Weismandel's

Initial Decision, we shall dispose of the Alltel Motion.

The Alltel Motion references several related, but separately docketed,

proceedings involving Core's applications for certificate authority to provide service as

competitive local exchange Telecommunications Company in the service territories of

certain rural incumbent local exchange companies and related Intercoxmection Requests.1 In

particular, Alltel advises that by Order Staying Proceeding dated March 6,2006 (March 6,

2006 Order), presiding Administrative Law Judges Weismandel and David Salapa granted a

Joint Stipulation for Stay of Proceedings whereby Core and various rural incumbent local

exchange carriers (RLECs) that are involved in consolidated aibitration proceedings

adjudicating, inter alia. Core's rights arising pursuant to the federal Telecommunications

Act of 1996 (TA-96) and this Commission's Implementation Orders, infra, have agreed to

stay those proceedings.

The dockets are: Nos. A-310922F0002, A-310922F7004, AmB, A-310922F7003; A-310922F7005; A-310922F7007; A-310922F7009 through A-310922F70016; A-310922F70018; and A-310922F70020 through A-310922F70038. (Alltel Motion at 4).

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Specifically, the parties to those consolidated proceedings have stipulated to

stay the proceedings until, at least, thiity-five days after a final Commission decision is

entered in the instant docket (Alltel Motion at 4). Alltel advises that the resolution ofthe

« issues in this matter will have the same "impact" on the consolidated proceedings as with its

pending proceeding with Core (redocketed at No. A-310922F7004, AmB). As such, Alltel

requests the same relief for its proceeding at Docket No. A-310922F7004, AmB, as was

granted to the various RLECs by the March 6,2006 Order. (Alltel Motion at 3,6).

In addition, Alltel requests that the record in the instant proceeding be

incorporated by reference into the record at Docket No. A-310922F7004, AmB. Alltel

submits that such incorporation will pennit the Commission's Bureau of Fixed Utility

Services (FUS) to consider fully the Commission's final Order in the instant proceeding and

its impact on the Core CLEC Application applicable to the Alltel service territory.

On May 4,2006, Core filed its Objection and Answer to Alltel's Motion for

Stay and Record Incoiporation. Core initially objects to the Alltel Motion on the ground

that it is an out-of-time attempt to revive its previously withdrawn Protest. Core vigorously

opposes AlUel's Motion, stating that it is filed in bad faith and is unfair in that it attempts to

stay FUS' review of Core's Application. In particular, Core points out that A U

Weismandel provided Alltel with an opportunity to reconsider its withdrawal from the

- instant proceeding, until Febmary 24,2006, and Alltel declined to do so. Core also points

out that the deadline established by the presiding A U gave Alltel ample time to digest all of

the evidence and testimony submitted in the protested proceedings.

- A .

Core additionally urges the rejection ofthe Alltel Motion, stating that it would

be inherently prejudicial to allow a company to join a Protest to the Application after the

close of the discovery and after the evidentiary hearing has been concluded. Core

characterizes Alltel's Motion to "open the door" to strategic maneuvering by the rural

ILECs in future application proceedings and to jump in and out of protests or wait until the

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record closes in a protested proceeding and then seek a stay of FUS* review of applications

without ever participating in the evidentiary hearing and briefing process. This, states Core,

would lead to unnecessary uncertainty for future applicants as well as Commission Staff.

(Core's Answer at 8).

Core responds to AUtel's argument of "misunderstanding" of Core's business

intentions as a reason for its cunent change of mind from its prior withdrawal from its

earlier Protest. Core denies there is merit to this contention. It points out that that Alltel's

counsel in this matter was present during the entire evidentiary hearing and that no new

information has emerged for a grant of this Petition. (Core Answer at 10,11).

Disposition

On consideration of the Alltel Motion and Core's Objection and Answer, we

find Alltel's request extraneous and untimely. Accordingly, we shall deny said Motion.

Concerning the merits of Alltel's position, we also conclude that granting Alltel's request

would not be in the public interest as it would severely operate to the prejudice of Core, the

party seeking affirmative Commission action in the instant Application. The record

indicates that the presiding A U in this case, ALJ Weismandel, has given Alltel ample time

(until February 24,2006) to reconsider its position.2

Unless I receive a written objection from you on or before Friday, February 24,2006,1 intend to issue an order requesting the Commission Secretary's Bureau to assign a separate and distinct docket number for the Core application as to each of your companies and then assign those eight cases to the Commission Bureau of Fixed Utility Services for appropriate action.

2 See, A U Weismandel's February 6, 2006, letter at Docket No. A-310922F0002, AmA, and ID at 5.

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We also find that Alltel will not be harmed by the denial of this Motion since

it has other opportunities in the Interconnection Arbitration proceeding to address all

relevant issues. Core, on the other hand, would not have such opportunity i f we were to

grant the Alltel Motion. Accordingly, the Alltel Motion for Stay and Record Incorporation

is denied!

I I I . History ofthe Proceeding

This matter is the application of Core, filed May 27, 2005 (Application),

pursuant to the provisions ofthe Public Utility Code, 66 Pa. C.S. §§ 1101, el seq.y and

Commission regulations, to Amend its Certificate of Public convenience to begin to offer,

render, fumish or supply Competitive Local Exchange Telecommunications Services to the

public in the Commonwealth of Pennsylvania and Petition to Establish Competitively

Viable Resale Rates (Application). On August 22,2005, Core filed an amended

Application3 to include the provisioning of competitive residential and business local

exchange telecommunications services throughout the Commonwealth of Pennsylvania.

On July 2, 2005, notice ofthe filing of the Application was published in the

Pennsylvania Bulletin at 35 Pa. Bull. 3747. On July 18,2005, Core filed proofs of

publication of notice of the filing of the Application. (LO. at 2).

On July 18,2005, timely Protests were filed by the PTA and RTCC. The

PTA Protest did not identify by name the individual telephone companies on whose

behalf the Protest was filed. Subsequently, in its Prehearing Conference Memorandum,

the PTA specifically identified in footaote 1, the following seven telephone Companies

that it represents: The Bentleyville Telephone Company, Citizens Telephone Company of

3 The significant difference between the original Application and the amended Application is that Core's Application no longer requests the establishment of competitive resale rates from the ILECs.

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Kecksburg, Commonwealth Telephone Company, Ironton Telephone Company,

Marianna & Scenery Hill Telephone Company, Mahanoy & Mahantango Telephone

Company and Sugar Valley Telephone Company.

The RTCC Protest specified in footnote 1, by name, twenty-one telephone

companies comprising its members for the purposes of this litigation. The companies

were: Alltel Pennsylvania, Inc.4 (now known as Windstream Communications Inc.

(hereinafter, Windstream)); Armstrong Telephone Company - North; Armstrong

Telephone Company- Pennsylvania; Bentleyville Communications Corporation;5

Buffalo Valley Telephone Company; Conestoga Telephone and Telegraph Company;

D & E Communications, Inc.; Hancock Telephone Company; Hickory Telephone

Company; Lackawaxen Telecommunications Services; Laurel Highland Telephone

Company; The North-Eastem Pennsylvania Telephone Company; North Penn Telephone

Company; North Pittsburgh Telephone Company; Palmerton Telephone Company;

Pennsylvania Telephone Company; Pymatuning Independent Telephone Company; South

Canaan Telephone Company; Venus Telephone Corporation; West Side

Telecommunications; and Yukon-Waltz Telephone Company.

Core's Application pertaining to Windstream, the Frontier Communications

of Breezewood Inc., Frontier Conununications of Canton Inc., Frontier Communications

of Pennsylvania Inc:, Frontier Communications of Lakewood Inc., Frontier

Communications of Oswayo River Inc., Citizens Telecommunications Company of New

York, and TDS Telecom/Deposit Telephone Company service territories were either not

Subsequently, on January 26,2006, Alltel Pennsylvania Inc. withdrew its protest to Core's Amended Application.

3 Although Bentleyville Telephone Company was initially represented by the RTCC, as indicated by the PTA in its Prehearing Memorandum filed on September 28, 2005, Bentleyville Telephone Company is being represented by the PTA. (PTA Pre Memo at 2). This was confirmed by PTA during the hearing of February 21, 2006 (See, Tr. at 69)

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protested or were filed untimely and have been separately docketed and assigned to the

Commission's Bureau of Fixed Utility Services for fiirther processing as unprotested

applications. (I.D. at 6).

An Initial hearing was held on October 5,2005. Evidentiary hearings were

held on February 21 and 22, 2006, resulting in a transcript of 614 pages. Core, the PTA

and the RTCC filed Main Briefs and Reply Briefs on March 24,2006, and April 14,

T< 2006, respectively. The record was closed upon receipt ofthe final brief on April 14,

- 2006. (I.D. at 6).

The Initial Decision was issued June 8,2006. Exceptions and Replies were

filed as noted.

IV. Discussion

A. Introduction and Background

This Application presents several issues relative to CLEC entry into the

service territories of rural ILECs and the nature of local exchange service provided by a

% CLEC. Core is seeking certificate authority as a facilities-based, competitive local

. exchange carrier (CLEC), to provide telecommunications services'to the public in the

- service territories of rural ILECs.6 The PTA and RTCC oppose Core's Application and

raise various issues in opposition to the Application, including allegations that Core's

proposed services are not "local," are not facilities-based, and are not "telephone

exchange" service within the jurisdiction of this Commission. The protesting rural

6 As noted, Core's Applications pertaining to Windstream, the five Frontier companies and Deposit Telephone Company are bifurdated from the original application and are dealt with separately. (I.D. at 6).

64075lvl

ILECs also challenge Core's fitness to provide competitive service. The rural ILECs also

raise issues pertaining to interconnection arrangements with Core.

Core is currently certified by this Commission to provide facilities-based

local exchange service in the service territories of Verizon Pennsylvania, Inc. (Verizon),

Verizon North Inc. (Verizon North) and The United Telephone Company of

Pennsylvania d/b/a Sprint (Sprint).7 It has held this authority since 2000. (Core Stmt. 2.0

atl) .

Core primarily markets services that provide connectivity between

infonnation service providers and the Public Switched Telephone Network (PSTN).

Target customers of Core are integrated telephony service providers (ITSPS), Internet

Service Providers (ISPs), inbound voice recognition providers, interconnection vendors,

PBX installers and fax bureaus. (Core Stmt. 1.0). Core's basic service is its Managed

Modem Services tariffed as a local exchange service in Pennsylvania since 2000, and is a

replacement for Primary Rate Interface (PRI) service that ISPs purchase from incumbent

telephone companies. (Core Stmt. 2.1, Tr. 133).

Core utilizes 'Virtual" NXX (VNXX) arrangements to provision local

calling numbers for its customers. Core intends to provision "loops" in the rural ILEC

territories by leasing high capacity lines such as T-1 and T-3 lines that would connect one

of Core's network locations to various locations in the Rural ILEC territories. (Tr. 348).

A key consideration in this Application and a consideration, oawhich Core

places great emphasis, is regulatory and competitive parity. See generally.

7 We note Sprint's recent name change from The United Telephone Company of Pennsylvania d/b/a Sprint to The United Telephone Company of Pennsylvania d/b/a Embarq Pennsylvania (Embarq).

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47 U.S.C. § 253. Core explains that it is seeking CLEC authority to expand and compete

with (he rural ILECs within their service territories. Core provides the competitive

backdrop of the Application by explaining that there is a robust, competitive market for

^ telecommunications service geared toward ISPs in the non-rural parts of Pennsylvania. It

explains that there is nothing unique about the service it provides in the non-rural parts of

"the Commonwealth. Its competitors in these markets include Verizon, Qwest, Sprint, and

other CLECs such as Telcove, Level 3, MCI, and US LEC. See Core Stmt. 1.1.

In the ISP markets, Core maintains that the rural ILECs and their affiliates

" are among its "fiercest" competitors. See Core Exceptions at 4, infra. Core states that

certain ofthe niral ILECs are engaged in a "rural edge-out strategy" by which it is

alleged that the rural ILECs leverage their financial resources and regulatory protections

(exemption and suspension provisions of TA-96,47 U.S.C. § 251(f)(1) and (2)), to

expand into neighboring service territories. (Core Exc. at 4, citing Stmt. 2.0, infra). Core

seeks certification as a CLEC because only with certification may it obtain

. interconnection pursuant to Section 251 of TA-96,47 U.S.C. § 251, et seq. See

Exceptions.

8. ALJ Recommendation

- For reasons discussed below, we shall reverse the ALJ and grant the

"Application, as amended, consistent with our discussion. We conclude that granting the

Application, consistent with the discussion contained in this Opinion and Order, will

-promote the public interest, convenience and necessity. See 66 Pa. C.S. § 1L03:

. . . A certificate of public convenience shall be granted by order ofthe commission, only i f the commission shall find or determine that the granting of such certificate is necessary or proper for the service, accommodation, convenience, or safety ofthe public. The commission, in granting such

64075!vl

certificate, may impose such conditions as it may deem to be just and reasonable...

See also 66 Pa. C.S. § 3019(a):

The commission may certify more than one telecommunications carrier to provide local exchange telecommunications service in a specific geographic location. The certification shall be granted upon a showing that it is in the public interest and that the applicant possesses sufficient technical, financial and managerial resources.

On review of the record, we conclude that the public benefits in granting

the Application substantially outweigh those considerations interposed by Protestants.

We, therefore, deny the PTA and RTCC protests, consistent with the discussion in this

Order.

ALJ Weismandel reached 54 Findings of Fact and drew 22 Conclusions of

Law. Said Findings of Fact and Conclusions of Law shall be rejected, modified or

adopted and incorporated in our discussion and resolution solely to the extent consistent

with the discussion contained in this Opinion and Order, We expressly reject the

following Conclusions of Law:

8. In Pennsylvania, a "facilities-based" CLEC is understood to be one owning its own switches and transmission lines.

9. In Pennsylvania, under Chapter 30 to the Pennsylvania Public Utility code, a "local exchange telecommunications company", a term functionally synonymous with the term "local exchange carrier", must offer "local exchange telecommunications service", i.e., the transmission of messages

64075Ivl 10

or coirununications that originate and terminate within a prescribed local calling area for a fee to the public.

10. Core's business plan, which relies on the use of VNXX to provide Core's retail ISP customers with the ability to offer "local" calls to their Internet dial-up customers despite the ISP's POP not being in the dial-up customer's local calling area, does not offer the transmission of messages or communications within a prescribed local calling area.

11. Core's customer base, consisting of 26 retail ISPs in Pennsylvania, does not comport with its obligation to offer services "to the public" under Chapter 30 ofthe Pennsylvania Public Utility Code.

12. Core's Amended Application for authority to be a "facilities-based local exchange carrier" in the service territories ofthe RTCC and PTA RLECs is a sham. Core is not, and does not intend to be, either "facilities-based" nor a "local exchange carrier".

13. Even i f Federal law applied. Core does not meet the definition of a "local exchange carrier" found at 47 U.S.C. §153.

16. The applicant in this case, because though certificated to provide facilities-based local exchange service actually does not provide such service, is not entitled to the usual rebuttable presumptions regarding fitness.

17. Core failed to prove by a preponderance of the evidence that it is technically fit to render the service applied for in its Amended Application.

18. Core failed to prove by a preponderance of the evidence that it is managerially fit to render the service applied for in its Amended Application.

19. Core failed to prove by a preponderance of the evidence that it is financially fit to render the service applied for in its Amended Application.

640751vl l i

20. Core failed to prove by a preponderance of the evidence that it has a commitment to compliance with Pennsylvania law.

21. Core's Amended Application must be denied because Core does not intend to actually render the service for which authority is sought.

22. Core's Amended Application must be denied because Core failed to bear its burden of proof by a preponderance of the evidence.

(I.D. at 27-29).

ALJ Weismandel concluded that the nature of Core's service offerings did

not amount to a "facilities-based" carrier. The ALJ cited several Commission decisions

regarding CLEC entry into the rural ILEC service territories for the proposition this

Commission has required, for purposes of facilities-based classification that the proposed

service be provided over distinctly independent networks:

Based upon Core's method of operation in the Pennsylvania territories of Verizon Pennsylvania Inc., Verizon North Inc., and Sprint/United Telephone Company of Pennsylvania, it is, at best, dubious that Core will own its switches and transmission lines in the service temtories of each ofthe 26 RLECs comprising RTCC and PTA in this case. Core currently owns and operates five switch equivalents, all located in the territory of Verizon Pennsylvania Inc. Core leases capacity on other carrier's transmission lines to connect its ISP customers to Core's switch equivalents. Core provides no connections from end users to Core's ISP customers, but relies on the use of VNXX to permit its ISP customers to make a "local" telephone ~* number available which uses the ILEC's facilities to connect the end user with the ISP. Despite the representations made in its Amended Application, evidence adduced at the Hearing in this case establishes that Core is not now, and would not be in the future, a facilities-based CLEC as that term has been

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understood in Pennsylvania since enactment of the Telecommunications Act of 1996.

(I.D. at 17-18).

The ALJ fnrther referenced the requirements of 66 Pa. C.S. § 3012

(Definitions) and concluded that a "local exchange carrier" must offer the transmission of

messages or communications that originate and terminate within a prescribed local calling

area fora fee to the public. He concluded that Core does not originate or terminate

communications in this manner, nor does Core contemplate doing so in the territories ofthe

rurallLECs. (I.D. at 18).

ALJ Weismandel also found that Core was not engaged in the provision of

either "telephone exchange service" or "exchange access," because it did not meet the

definition of a "local exchange carrier" under federal law in at least four respects.

First, ALJ Weismandel concluded that Core does not provide

"telecommunications." This conclusion was based on the observation that the end user of

dial-up Internet service does not specify the end point of a transmission over the Internet

and the form of the infonnation sent by the end user, TDM (Time Division Multiplexing)

format, is changed by Core to IP (Internet Protocol) format before the information continues

its transmission. (I.D. at 20).

Second, A U Weismandel concluded that Core does not offer

"telecommunications" directly to the public, or to such classes of users as to be^effectively

available to the public, for a fee. The A U reasoned that the "public" contemplated by

TA-96, would be the dial-up ISP end users. Rather, the A U found that Core does not offer

anything to the end users for a fee. Rather, Core's business deals with twenty-six (26) retail

ISP providers, and it is only those entities to which Core provides service for a fee.

(I.D. at 21).

64075[v[ 13

Third, the ALJ reasoned that Core does not provide "telephone exchange

service" because it does not fumish subscribers, i.e., the end users, either service within a

telephone exchange or intercommunicating service covered by the exchange service charge.

Nor does Core provide comparable service by which a subscriber (again, the end user) can

originate and terminate a "fejecommunications service." (Id.).

Fourth, the A U found that Core does not offer "exchange access" because it

does not offer access to telephone exchange services or facilities for the purpose ofthe

origination or tennination of telephone toll service. Core's entire business plan, in the

determination of the AU, revolves around having no connection, ofany kind, to toll

telephone service, but the use of VNXX. See I.D. at 21.

Additionally, the ALJ concluded that Core did not meet its burden of proving

its fitness to render the proposed service. A U Weismandel declined to adopt a rebuttable

presumption that Core was fit to provide service based on the existence of certificated

authority from the Commission. He found that Core did not provide facilities-based local

exchange service and, therefore, held that Core should not be the beneficiary ofthe usual

Commission presumptions in evaluating its Amended Application in this case. (I.D. at 24-

25).

On review of the criteria for technical, managerial, and financial fitness, the

ALJ additionally concluded that Core was not fit to provide the proposed service. He,

therefore, recommended that the Application be denied.

C. Issues for Resolution

In order to better manage the numerous issues raised by the Application, we

shall address the following issues which are identified as key issues in this matter and are

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grouped together for disposition. Any issues or contentions not expressly discussed are

either considered in this fashion or shall be deemed considered and rejected.

1. Facilities-based Nature of Core's Services

This issue considers the extent to which Core seeks to provide service on a

"distinctly independent network" so as to be certificated as a facilities-based carrier.

In concluding that "facilities-based" CLECs are those CLECs owning their

own switches and transmission lines to render service, as opposed to those CLECs

relying on "resale" of ILEC services, the ALJ cited several Commission determinations

involving entry into rural ILEC service territories. (LD. at 23). He also found his

understanding in this regard was in accord with tbe definition of "Facilities-based

Carrier" found in Newton's Telecom Dictionary. See also I.D. at 17:

In requiring "distinctly independent networks" the Commission allowed entry into RLEC tenitories only for those CLECs willing to invest the capital to install and own its switches and transmission lines in the RLEC territories. "Facilities-based" CLECs were, therefore, understood to be those CLECs owning their own switches and transmission lines, as opposed to those CLECs relying on "resale" of ILEC's installed and owned facilities to be able to render service. (Note omitted).

Exceptions

In Exceptions, Core argues that the ALJ applied the wrong test Jpr

determining whether a LEC is "facilities-based" and that he improperly concluded that a

facilities-based CLEC must own, outright, 100% ofthe facilities it uses to provide services.

See Exception No. 3, pp. 13-16.

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Here, Core attempts to distinguish the rural ILEC entry cases cited by ALJ

Weismandel on the basis that none of the cases involved the issue of what facilities are

required to be put in place for certification and that these cases predate the Commission's

subsequent termination ofthe TA-96 Section 251 (0(2) suspension for rural ILECs. (Exc.

at 13).8 Core goes on to argue.that the AU did not support his detennination that Core

lacked facilities-based status with legal authority. {Id.).

Core takes the position that a reference to and review of definitions in

Newton '5 Telecom Dictionary, in fact; supports its position that it is a facilities-based

carrier. (Exc. at 13-14). Core emphasizes that this Commission has concluded that it is

acceptable for a CLEC to provide services using a combination of its own facilities and,

where necessary, leased or resold facilities of other carriers. (Exc. at 14). Core states that

only a carrier that operates wholly as a reseller of other carriers' services that would not

qualify as having its own facilities. (Exc. at 15, citing 47 C.F.R. § 54.20l(d)-(f)).

Core continues with its comparison of the Federal Communications

Commission's (FCC's) use of the term, "facilities-based," and references those

requirements addressing universal service and "eligible telecommunications carrier" (ETC)

status in rural areas. Core observes that the FCC, in the context of setting criteria applicable

to carriers seeking ETC status in rural, high cost areas, has determined that the TA-96

Section 254 facilities" requirement mandates only that a carrier own some but not all of the

facilities needed to provide service. (Federal-State Joint Board on Universal Service, 12

FCC Red. 8776 (1997), Report and Order, at Par. 24).

_*

Core relies on the evidence in this proceeding and takes the position that this

evidence establishes that Core and its affiliates own and operate no less than fourteen Cisco

switches: five in Pennsylvania, five in Maryland, three in Virginia and one in New York

8 See Petition of Rural Incumbent Local Exchange Carriers .. . , Docket No. P-00971177 (Order entered January 15, 2003)(Suspension Termination Order).

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(Core Stmt. 1.0 and PTA Exhibit GMZ-6). Based on these facts, Core argues that it is a

facilities-based provider. That Core connects its wire centers and its customers by leasing

dedicated circuits from fiber based carriers and, alternately, relies on leased transport and

loops is infinitely preferable for Core, its customers, and the general public, than building

out yet another fiber network in Pennsylvania. See Tr. at 348.

Additionally, Core emphasizes its clearly stated intent to extend its existing

network in order to place whatever facilities are necessary in the rural territories in order to

establish interconnection with the rural ILECs and provide service. (Exc. at 15). The type

of facilities that will be put in place will ultimately depend on a number of factors, including

market demand, interconnection terms, and the availability of leased transport and loops.

Core also notes that key interconnection issues, such as transport, point of interconnection,

and VNXX, will also dictate the parameters of Core's network investment. (Exc. at 15-16).

Core, in its Exception No. I , specifically addresses A U Weismandel's

Finding of Fact No. 15. Core asserts that Finding No. 1 is inconsistent with his finding at

No. 27. At Finding No. 27, the A U concluded that Core neither owns nor leases any

physical connections from a subscriber's premise to Core's Point of Presence (POP) in the

Local Access And Transport Area (LATA), i.e.. Core has no local loops in Pennsylvania

certified service area.

Core states that it permits its customers to collocate within its wire centers,

thereby eliminating the need for traditional loop, and that that it does prpvide the functional

equivalent of a loop to deliver traffic, analogous to a collocated PRI. Core claims that the

record indicates that it intends to provision loops in the rural ILEC areas by leasing lines

from third party fiber carriers to Core's wire centers to customer premises. (Exc. at 6-7,

citing Tr. at 348).

640751vl 17

In its Exception No. 7, Core also argues that the AU's conclusions regarding

Core's status as a facilities-based CLEC are erroneous, contrary to controlling law and the

evidence in the record, or outside the scope of this case. Core claims that under

Pennsylvania and federal law, it is unquestionably a facilities-based CLEC.

Core complains that the A U ignored extensive evidence demonstrating

Core's longstanding and unchallenged status as a CLEC. Core points out that Core and its

affiliates have interconnected its facilities-based network directly with Verizon in five

different wire centers in Pennsylvania. (Core Stmt. 1.0, Mingo Direct at 2). It also states

that Core has established and maintained inbound and outbound interconnection tmnks for

the exchange of telecommunications traffic and maintains both local and IXC tninks for the

exchange of telecommunication traffic with Verizon in Pennsylvania. (Core St. 1.0, Mingo

Direct at 7).

Core also responds that it originates and terminates telecommunications

traffic over interconnection trunks. (Core St. 1.0, Mingo Direct at 5). Core references a

Maryland Commission's finding in which that commission is to have unequivocally found

that Core's services are indeed 'local exchange service^);" See Proposed Order, In the

matter of Core Communications, Inc. v. Verizon Maryland Inc., MDPSC Case 8881, at 8-9

(Sept 9,2003) Order findings confirmed in Order No. 78989 (Feb. 27,2004).

In Replies, the PTA claims that in its business operation, Core has invested

capita] and ownership for its gateway site and Core's entire original cost asset before being

transferred to an affiliate in 2003 was only slightly more than $600,000. This consisted of

sets of Cisco systems AS5800 and AS5850 "Universal Gateways" located at Core's LATA

POIs. (Tr. at 226).

PTA claims that even with the five Cisco "gateways," Core cannot claim to

own a switch. These gateways, states the PTA, are used to aggregate dial-up Internet-bound

640751vl lg

traffic and convert the TDM protocol to IP protocol. That Core does not intend to provide a

loop by stating it "intends to provision 'loops* in the rural ILEC temtories" asks the .

Comnussion to find that it currently provides "the functional equivalent of a loop."

In its Replies, the RTCC concedes that the Commission has not established a

rigid standard that defines "what facilities are sufficient to constitute the provision of

facilities-based service." However, it believes that the Commission has consistently

declared that the provision of facilities-based service by CLEC is provided over a "distinctly

independent network" in the applied-for service territory. And, the Commission has

encouraged CLECs who want to invest their own capital and build their own networks in

areas served by rural companies.

The RTCC complains that Core has no network facilities connecting to any

carrier's network in Pennsylvania other than Verizon. Also, Core has no local exchange

facilities in any RTCC service territory. RTCC claims that Core will not deploy any

network facilities within the service territory of a CLEC for the provision of local exchange

service to residential and business customers located in those service areas. (RTCC Stmt. 1

at 6-7; Tr. 429-31; Finding of Fact-Nos. 15,16,32,33).

The RTCC states that the information provided by Core in its plan for

facilities was vague, incomplete and lacking candor. Accordingly, RTCC takes the view

that Core has no plans to expand its network into rural service areas.

In its Replies to Exceptions, PTA complains that Core obtained certification

in the territories of Verizon and Sprint based on its verified statement to the Commission in

2000 that it plans to offer facilities-based interexchange, exchange access, and local

exchange services in the Commonwealth of Pennsylvania. It states that Core provides

services to 26 retail ISPs offering dial-up Internet service. Based on this observation, PTA

640751vl 19

points out that it is misleading for Core to now assure the Commission that it markets

services to a wide variety of enhanced service providers.

PTA also points out that Core maintains a local tariff in Pennsylvania in

which is offered all of those services in order to appear as a CLEC, bnt it actually offers

only two services. PTA complains that Core relies upon local exchange carries to originate,

transmit, switch and deliver the dial-up calls to its single LATA location. Core uses CLEC

status to obtain virtual numbers (VNXX) and does not invest in any facilities that will

actually provide service within a local calling area.

PTA continues in its Replies, that Core demands to be paid reciprocal

compensation because it deems all ISP-bound VNXX traffic to be local, notwithstanding the

geographic remoteness of origination or the ultimate delivery point, the Internet. PTA states

that even though Core intends to mirror the RLEC local calling areas in its tarifF, VNXX is a

critical aspect of Core's operation.

PTA does not dispute the fact that CLECs have no obligation to replicate all

the service offerings of the rural ILECs. PTA also does not care for the type of network

Core would build as long as it will actually provide facilities-based local service in the

applied-for service area. PTA's analogizes its position to that ofthe Commission's position

in the Vanguard decision where the CLEC application for local services was to be based on

the type of service that is being proposed rather than on the underlying technology to

provide that service.

Disposition

For the reasons outlined below, we shall grant Core's Exceptions,

consistent with the discussion in this Opinion and Order. We conclude that Core has met

its burden to establish that its operations are sufficiently facilities-based services. We are,

640751vI 20

therefore, able to further conclude that Core will provide service over a distinctly

independent network. We reach this conclusion, notwithstanding that Core's business

model strains this concept in that Core does not, as a general proposition, provide the last

mile facility to the customer premises. However, we reject the notion that Core's

operations are that of a reseller.

In Petition For Streamlined Form of Regulation and Network

Modernization Plan of Citizens Telephone Company ofKecksburg... Docket Nos.

P-00971229, et al, (Order entered March 4, 1999), 1999 Pa. PUC LEXIS 61), we

concluded that our review of facilities-based applications should be narrow as the intent

of TA-96 is to promote competition. In the present case, Core's Application is attacked

as lacking in facilities-based infrastructure. On review ofthe record, we would disagree

with the presiding ALJ on this issue.

This Commission has not established a rigid standard that defines what

facilities are sufficient to constitute the provision of "facilities-based service." At the one

end of the spectrum, we have CLECs who are engaged solely in resale. These entities

clearly do not qualify as facilities-based. At the other end of tlie spectmm, there is the

CLEC which is able to provide service over a folly independent, i.e, distinctly independent

network. In the present case, we have the CLEC that provides service over a combination

of facilities.9 However, the provision of services over a combination of facilities, while

blurring the "distinctly independent network" conclusion, is an achievement that we

presently envision can only be obtained, for example, by cable companies or broadband

over power lines (BPL) entities. _

We note that Core has made it clear that it will lease necessary elements from alterative service providers and not from the rural ILECs on a UNE or resale basis. (Exc. at 16, n. 57).

640751YI 21

We would agree with the observation of Core, that the use of a combination

of facilities, including self-provisioning, leased, or resold, is acceptable in the current

telecommunications environment. See Exc. at 14, referencing Application of Level 3

Communications, LLC, Docket No. A-310633F0002, AmA (Initial Decision dated June 10,

2003). We, therefore, concluded that the deployment of a combination of facilities, in a

variety of configurations, does not exclude the CLEC from being facilities-based. We

would fiirther agree with the argument of Core, that to the extent the CLEC is not wholly

reliant on the resale of another carrier's (the incumbent's) services and has invested in

facilities necessary for its subscribers to originate and terminate a call, we are able to find

that the carrier qualifies as facilities-based.

Core, admittedly, provides service to a "niche" market. Its business model

is geared towards aggregating dial-up access to ISPs. In this regard, its service is assailed

by the PTA as not investing in any facilities that will actually provide service within a local

calling area. However, we conclude that Core's business provides more than this. The

service Core provides is comparable to and in direct competition to the service offerings

provided by certain of the rural ILECs through affiliates. We expressly acknowledge and

reject the contention of the PTA that rural ILEC affiliates provide services to ISPs, but

provide these services in ways that are different from Core. See PTA R.Exc: at 5. Here,

PTA asserts that we should draw a distinction between Core's ISP-oriented business and

those ofthe rural ILEC affiliates because:

These RLEC affiliates operating in Verizon's territory . provide service to ISPs, but in ways that are completely different from Core. In CTSPs example, only 17% of its revenues are from ISPs, compared to Core's 100% ISP-related revenue stream. CTSI provides regular dial tone service to its ISP customers, unlike Core, which refuses to provide originating service to anyone. By way of contrast. Core's ISP customers must seek out a real local telephone

640751 vl 22

service provider to be able to make (originate) a call.

(PTA R. Exc. at 5).

We are cognizant ofthe fact that the "dial up" ISP market has developed

significant competition and we have required investment in facilities for purposes of

CLEC entry into rural service territories. We conclude that Core's facilities, which, at

minimum, provide switch functionality, meet these criteria.

Finally, we agree with Core's position on the facts of its proposed service.

Core leases interconnection facilities from fiber based carriers and uses a self-provision

switch, or switch equivalent, for service. Based on the foregoing, we shall reverse the ALJ

on this issue.

2. Do Core's Services Satisfy Definition of a "Local Exchange Carrier"?

In Conclusion of Law Nos. 9,12,13, the ALJ found that Core's operations

do not meet the definition of a "local exchange carrier."- Gonsequently,-he concluded.that

Core is not, and would not be in the future, a facilities-based CLEC nor satisfy the definition

of local exchange carrier under federal law. However, the ALJ acknowledged that Chapter

30 ofthe Pennsylvania Public Utility Code (Code), 66 Pa. C.S. §§ 3011 - 3019, does not

define the term "local exchange carrier."

Exceptions ~*

In its Exception No. 4, Core argues that the A U failed to apply the correct

definition of "local exchange carrier" in evaluating Cores' application. See also discussion

at Exception No. 6. Core finds that the A U erroneously concluded that that term "local

exchange telecommunications company" is fiirictionally synonymous with the term "local

640751vl 23

exchange carrier" as defined in Chapter 30. Core observes that the definition in Chapter 30

clearly states that it refers only to incumbent carriers and not competitors (66 Pa. C.S.

§ 3012). Core claims that a definition that is more applicable to its service is "Alternate

service provider," which is defined as an entity that provides telecommunications services in

competition with a local exchange telecommunications company. (Exc. at 17).

Core also observes that the Chapter 30 law was riot drafted nor designed to

regulate CLECs or CLEC market entry and, therefore, is not an appropriate reference for a

definition of "local exchange carrier." Core states that the overriding purpose of Act No.

183 is to craft a revised alternative regulation regime for incumbent telephone companies,

including network modernization plans and broadband deployment 66 Pa. C.S. § 3011.

(Exc. at 17).

Core states that TA-96 defines "local exchange carrier" as "any person that is

engaged in the provision of telephone exchange service or exchange access." (47 U.S.C. §

153(26)). Thus, a CLEC, like any other local exchange carrier, is a company that provides

either telephone exchange service or exchange access service. Telephone exchange service

is defined either as service within a telephone exchange, or within a connected system of

telephone exchanges within the same exchange area operated to fumish to subscribers

intercommunicating service ofthe character ordinarily furnished by a single exchange, and

which is covered by the exchange service charge, or comparable service provided through a

system of switches, transmission equipment, or other facilities (or combination thereof) by

which a subscriber can originate and terminate a telecommunications service. (47 U.S.C. §

153(47)).

.-

Core claims that its two existing services in Pennsylvania- Managed Port

service (MPS) and Superport service, constitute telephone exchange services that are

tariffed as "an interface to connect Customer with its dial-up clients." Core explains:

640731vl 24

MPS is purchased in increments of DSO level modem ports. Core's MPS is a direct substitute for PRI service commonly offered by ILECs and CLECs. MPS is analogous to local exchange services that Verizon markets to ISPs, including its Internet Protocol Routing Service ("IPRC"), Enhanced IntellilinQ PRI Hub Service and Cyberpop. In fact. Core's MPS has been specifically approved by the Commission as a competitive local exchange service, based on an explicit comparison to Verizon's Enhanced IntellilinQ PRI HUB Service, another Commission-approved local exchange service. Similarly, Core's Superport service is tariffed as "a single interface to send and receiver large volumes of telecommunications traffic on a LATA-wide basis. Both services are purchased in increments of DSO level ports... -the basic unit of telecommunications traffic. In essence Core sells its end users DSO telecommunications capacity on Core's switches.

(Exc. at 26-27; notes omitted).

To support its position on tbe status of CLEC telecommunications service

offerings to ISPs, Core quotes the FCC's ISP Remand Order. This order mandates that

ILECs provide TA-96 Section 251 interconnection to CLECs for the exchange of ISP-

bound traffic. Core takes the position that this presumes that LEC services to ISPs are

indeed telephone exchange services under TA-96. See In the Matter of the Implementation

of the Local Competition provisions in the Telecommunications Act of1996, Intercarrier .

. Compensation for ISP-bound Traffic, 16 FCC Red. 9151 (2001) atf 78, note 149.

In Replies to Exceptions, the RTCC and the PTA agree with the ALJ's

finding that Core is not a facilities-based CLEC. They also agree with the ALJ's

application ofthe federal definition of "local exchange carrier" which "means any person

that is engaged in the provision of telephone exchange service or exchange access." The

RTCC states that Core provides only managed modem interface to ISP clients. PTA

asserts that since Core does not serve any subscribers it fails that portion ofthe definition.

640751 vl 25

The PTA states that even when Core's tariff defines local and toll calling

areas by reference to customer's physical presence within geographically-defined

exchange local calling area. Core's ISP customers are "not required to have any physical

facilities . . . within that originating exchange." (NT at 127). The PTA argues against

Core's claim that its calls are local based on the conceptual notion that its Intemet-bound

traffic is composed of two parts - a "telephone exchange service" piece and a non-

regulated "information service" piece that flow through the Internet. The PTA maintains

that the FCC continues to defend the "one call" approach and observed that the traffic is

classified as interstate. (R. Ex. at 15).

Disposition

On consideration of the Exceptions of Core, they shall be granted,

consistent with the discussion in this Order. We need not engage in an extended

consideration of the nature of "dial up" access to ISP providers and address the myriad of

questions as to the nature ofthe service, particularly whether it is local, non-local, or

infonnation versus telecommunications. The FCC, in its Intercarrier Compensation for

ISP-bound Traffic Order, concluded that ISP-bound traffic was not subject to reciprocal

compensation provisions of TA-96 Section 251(b)(5), (See Order at 66). In this same

order, the FCC also made several observations which ran counter to the position of Core in

this Application. However, the FCC did make a jurisdictional determination regarding this

traffic and established a compensation mechanism applicable to this traffic. We find the

FCC's treatment of dial-up access to ISPs to be more consistent with the Core position.

That is, ISPs themselves, are treated as end users of telecommunications services, while

the underlying service they provide to ISP subscribers, Internet access, is information.10

1 0 This observation is not to suggest a particular position on the "one-call' versus "two calls" debate associated with ISP-bound compensation litigation.

640751 vl 26

Based on the foregoing, we shall grant the Exceptions of Core.

3. VNXX and its use by CLECs

In Conclusion of Law No. 10, the A U found fault with Core's current

operations in Verizon, Verizon North and Sprint service territories. Core's local service

territory mirrors that ofthe local exchanges of these ILECs, but through the use of VNNX,

Core allows its ISP customers to arrange for their end user customers to make a local call

from Allentown to Philadelphia - a call which would, otherwise, be classified as a toll call.

A U Weismandel found that Core provides no connections from end users to Core's ISP

customers, but relies on the use of VNXX to permit its ISP customers to make a "local"

telephone number available which uses the ILEC facilities to connect the end user with the

ISP. The A U concludes that this demonstrates that Core is not offering the transmission of

messages or communications that originate and tenninate within a prescribed local calling

area. See Finding of Fact No. 17.

Exceptions

In its Exception No. 5, Core states„that the A U selectively used the record in

this case to erroneously conclude or imply that it relies exclusively on VNXX to provide

local service to its customers and that communications delivered via VNXX are not

properly rated as 'local." Core objects to the AU's pejorative characterization of how it

uses VNXX. Core further takes exception to the use of the record to conclude that all the

traffic Core terminates on a VNXX basis. This conclusion, states Core, is based on one

"vignette" of a VNXX call from Allentown to Philadelphia. Core does not distount its use

of VNXX, but denies it uses VNXX assignments exclusively in rural ELECs' territory.

Core emphasizes that the calls it terminates on a VNXX basis are local as a

matter of federal law. It refers to the decision of the FCC staff in the Virginia Arbitration

640751vl 27

Order 1 to argue that the standard industry practice is for carriers to rate calls by comparing

the origination and termination of NPA-NXX codes. (Exc. at 18). Core also states that the

use of VNXX codes was found to be legal and acceptable by this Commission in its recent

investigation of the issue and points out that there is no state or federal law or regulation that

requires them to take any steps to prohibit the use of VNXX service in Pennsylvania. Core

finally points out that the Investigation Report conducted by this Commission found that

VNXX practices were positively beneficial to consumers and competition. See

Investigation Report, Generic Investigation Regarding Virtual NXX CodesL Pa. P.U.C.

Docket No. 1-00020093, at 10 (Order entered Oct. 14,2005).

Core further notes that, as stated by the FCC on numerous occasions, the calls

that are handled on a VNXX basis do not just appear to be local. Rather, the calls are local

and subject to Section 251 (bX5) of TA-96. Virginia Arbitration Order.

Core also claims that the record shows that ILECs and CLECs serve ISPs in

Pennsylvania using various sorts of expanded calling area arrangements. According to

Core, Verizon provides VNXX in conjunction with its tariffed Internet Protocol Routing

Service which provides for the collection, concentration and management of the.customers

traffic within the LATA. (Core Exc. 15). Core also points out that Commonwealth

Telephone Company is currently interconnected with a CLEC certified in its territory that

principally serves ISP's by using VNXX codes. (Core Cross Exh. 36); Core also points out

another instance of a rural carrier, North Pittsburgh Telephone Company, offering Foreign

Exchange service to ISPs including its affiliate ISP, Pinnatech. (Core Cross Exh. 39-21).

11 Petition of WorldCom, Inc. Pursuant to Section 252(e)(5) of the Communications Act for Preemption of the Jurisdiction of the Virginia State Corporation Commission regarding Interconnection Disputes with Verizon Virginia Inc. and for Expedited Arbitration, 17 FCC Red. 27039,1 301 (2002) {Virginia Arbitration Order).

640751vl 28

In Replies to Exceptions, the PTA supports the ALJ's conclusion that Core's

business plan consists of utilizing virtual numbering methods to generate a call that appears

to be local, so that Core can obtain reciprocal compensation. PTA opines that the AU's

observation in this regard is completely accurate. It also agrees that Core does this to

expand local calling area to make what would otherwise be toll calls as toll-free dial-up

internet calls. The PTA defers to Core's argument that most, if not all, ofthe traffic

physically originates and terminates within the ILECs' and Core's local calling area, and it

finds Core's reliance in a few instances insignificant.

The PTA states that it has consistently acknowledged the Commission's

Statement of Policy on VNXX that it declines to take any steps to prohibit the use of VNXX

service in Pennsylvania and will not make any conclusions on the issue of inter-carrier

compensation for traffic that moves over VNXX arrangements. The PTA concedes that not

all applications of VNXX violate local calling rules. However, in the case of Core, it is

using VNXX as a device to claim local status for an Interexchange call.

The RTCC points out that the Commission, in its Statement of Policy on the

use of VNXX, did not make any jurisdictional findings that the intraLATA boundaries were

eliminated or that VNXX calls were all local. The RTCC adds that the Commission, in fact,

- recognized that the A^NXX dispute is the applicable inter carrier compensation scheme and

specifically deferred to the FCC's pending Intercarrier Compensation Proceeding. (RTCC

R. Exc. at 13,14, quoting Commission's VNXX Statement ojPolicy at 9, Order entered on

October 14,2005).

640751vl 29

The RTCC also notes two recent decisions - the First Circuit12 and the

Second Circuit13 Courts of Appeals decisions - to refute Core's argument that VNXX traffic

is local traffic. The RTCC submits that the two decisions determined that VNXX traffic is

Interexchange traffic, and thus, is subject to access charges. (RTCC R. Exc. at 16).

Disposition

On consideration of the positions ofthe parties, we shall grant Core's

Exceptions consistent with our discussion. In our recent VNXX Statement ofPolicy, we

concluded:

Based upon the discussion above, we decline to take any steps at this time to prohibit the use of virtual NXX service in Pennsylvania. Additionally, since the FCC is currently considering to establish a unified intercarrier compensation regime for all telecommunications traffic that utilizes the public switched network, we will not make any conclusions at this time on the issue of intercarrier compensation for traffic that moves over VNXX arrangements

(VNXX Statement of Policy at 11).

Substantial focus has been directed to Core's use of VNXX as part of its

business plan. Particularly, ALJ Weismandel found disfavor with the practice in

connection with his discussion ofthe local exchange carrier nature of Core's services:

. . . through its use of VNXX, Core allows its ISP customers to arrange for their end user customers to make a "local" call from^, Allentown to Philadelphia - a call that is not a local call under Verizon Pennsylvania Inc's (and, hence. Core's) Commission

12

2006) 13

(2 n d Cir. Order Released July 5,2006)

Global NAPs, Inc. v. Verizon New England, Inc.t et al. A^A F.3d 59 ( l s l Cir.

Global NAPs, Inc. v. Verizon New England, Inc. Docket No. 04-4685-cv

640751vl 30

approved tariff. This demonstrates that Core is not offering "the transmission of messages or communications that originate and tenninate within a prescribed local calling area" (emphasis added).

(LD.at 19).

The record supports a conclusion that several ILECs, CLECs, and/or their

affiliates, offer VNXX, or a VNXX-like service. The record indicates that VNXX is not

exclusively used by Core. Based on our conclusion that Core has sufficiently invested in

facilities and by a preponderance of the evidence has demonstrated a commitment for

more investment so as not to fall in the category of reseller, we find the emphasis on its

VNXX use misplaced in this regard.

With regard to the local nature of Core's exchange service as a result of its

use of VNXX, we would further agree with Core. Core's reliance on VNXX has been

emphasized to the extent it has been the subject of disputed questions of fact. Core

explains:

Core's services are telephone exchange services because each and every call is tenninated on a local basis (whether geographically local; or VNXX); within the same LATA in which it originated, courtesy of Core's direct interconnections with Verizon tandems in each LATA It is also important to differentiate between Core's services, whereby each.call is originated and terminated on a local basis, within the same LATA, and the service at issue in the Level 3 Application in Marianna & Scenery Hill territory. In the case of Level 3, it was determined that all Pennsylvania calls tenninated by Level 3 were terminated at Level 3's modem banks in _ Baltimore, Maryland. By contrast, as set forth above, all calls handled by Core originate and terminate on a local basis in the same LATA.

(Core Exc. at 27; notes omitted).

The Exceptions of Core are granted.

640751vl 31

4. Public Nature of Service

In Conclusion of Law No. 11, A U Weismandel concluded that Core's

customer base, consisting of 26 ISPs in Pennsylvania, does not comport with its

obligation to offer services 'to the public" under the Chapter 30 ofthe Pennsylvania

Public Utility Code. See LD.at 19.

Exceptions

Core, in its Exception No. 6, states that the A U applied the wrong test to

determine what constitutes service to the public. Core argues that the ALJ erroneously

concluded that Core does not offer services to the public and, therefore, does not qualify as

a public utility. Core adds that the A U failed to cite to any Commission or federal

precedent but, instead, speculated as to the legal definition of the term "to the public." Core

points out that under applicable law, ISPs are undoubtedly end users of telecommunications

services. Core relies on language from the D.C. Circuit Court of Appeals that strongly

suggested that an ISP is a communications-intensive business end user, to make the

argument that the ISPs, themselves, are a class ofthe public which uses telecommunications

services, whereas the ISP subscribers are not purchasers of telecommunications services.

(Exc. at 21).

Core claims that it clearly serves the public under Section 102 ofthe Public

Utility Code, 66 Pa. C.S. § 102. A "public utility" is defined as: "(a)ny person or

corporation now or hereafter owning or operating in this Commonwealth equipment or

facilities for... (c)onveying or transmitting messages or communications... by telephone or

telegraph... .the public for compensation....". Core clarifies that the Pennsylvania courts

have consistently stated the test for "public utility" and the phrase "for the public" is based

on whether or not such person holds himself out, expressly or impliedly, as engaged in the

640751 v l 32

business of supplying his product or service to the public, as a class or to any limited portion

of it, as contradistinguished from the holding himself out as serving or ready to serve only

particular individuals. See Exc. at 22, citing Waltman v. Pa. PUC, 596 A.2d 1221 (Pa.

Cmwlth. 1991),14 (Waltman). Core asserts that the Commission has used the holding of

Waltman to find public utility service to a utility that served as few as two customers. Id.

citing UGI Utilities, Inc. v. Pa. PUC, 684 A.2d 225 (Pa. Cmwlth Ct. 1996) (UGI).

In UGI, the court affirmed the Commission's modification of a gas pipeline

company's certificate of public convenience to provide "transportation of gas products for

the purpose of electric generation" to a class of customers that included two electric

companies. UGI, 684 A.2d at 230. Core argues that the lack of residential customers also

does not preclude a utility from being considered "public." It cites Dunmire Gas Co. v. Pa.

P.U.C, 413 A.2d 473 (Pa. Cmwlth Ct. 1980), where the court found that a public utility

which did not solicit residential customers was properly a public utility so long as the

company provided gas service, to the extent of its capacity, to an indefinitely open class of

customers.

Disposition

On consideration of the A U recommendation, we shall reject said

recommendation. The Exceptions of Core are granted, consistent with our discussion.

We find the ALJ's conclusion of what constitutes service to the public to be unduly

narrow in that it fails to recognize a discreet subset ofthe public to whom Core provides

services, indiscriminately. We have, in this Order, recognized the competitixe nature of

the niche market for telecommunications service to ISPs. We agree with Core that ISPs

are a class of the public to whom Core holds itself out to provide service to any member

of that class.

Appeal granted 529 Pa. 642, 600 A.2d 1260, affirmed 533 Pa. 304, 621 A.2d 994 (1993).

64075!vl 33

In the present case, we conclude that the pertinent factors discussed in

Waltman and in Dunmire Gas Co., have been satisfied by Core.

5. Technical, Managerial, and Financial Fitness.

The Initial Decision calls into questions Core's technical, managerial and

financial fitness. See Conclusions of Law Nos. 16-20. An applicant that has previously

been issued a certificate of public convenience to render the kind of service for which

additional territorial authority is sought enjoys a rebuttable presumption of fitness. The

A U , however, concluded that the normal presumptions that apply to an applicant who has

been issued a certificate of public convenience to render the kind ofservice should not be

applied in the case of Core's application because Core does not provide the kind ofservice

that it was authorized. Consequently, the ALJ found that Core has the burden to prove its

technical, financial and managerial fitness. (I.D. at 23-25).

ALJ Weismandel concluded that Core did not bear its burden of proof as to its

technical fitness to render the kind of service for which it applied for authority. Core

presented evidence regarding the number of employees it utilizes over six states (including

Pennsylvania) and five switch equivalents in Pennsylvania, all located in Verizon's service

territory. The A U did not find this evidence to be credible as bearing on Core's technical

fitness.

The A U also questioned Core's financial fitness. He found it significant to

observe that when one takes into consideration reciprocal compensation that Vferizon

refused to pay to Core for a period of years, Core's operating margin is reduced from more

than 81 % to less than 5%. (I.D. at 25). The ALJ was additionally skeptical ofthe future .

financial prospects for Core. He noted that Core's business plan put heavy reliance on one­

way reciprocal compensation and further relied on its definition of when a dial-up call to the

640751*1 34

Internet "terminates." The ALJ viewed this business plan as dubious in light of the FCC

initiatives to eliminate or reduce "regulatory arbitrage" (I.D. at 26).

The A U also found that Core was lacking in commitment to comply with the

Public Utility Code. He cited instances of Core being penalized in a number of cases

regarding number reclamation and proceedings wherein it failed to timely file Commission

required reports. The A U also noted that the service offerings listed in Core's Commission

approved tariff are not really offered in the Pennsylvania territories where it has authority.

Finally, the A U found that Core does not offer Lifeline, Emergency 911, operator services,

or TRS.

Exceptions

In its Exception Nos. 1, 8, and 9, Core objects that it was not afforded a

rebuttable presumption of fitness. Core also asserts that many of the ALJ's Findings of

Facts regarding Core's current operations are either incorrect, are not supported by the

record, or relate to matters outside the scope of this proceeding. Core complains that the

presiding ALJ exceeded the scope of authority in this proceeding by concluding that Core

does not have the requisite fitness to render service in its currently certificated territory. See

Exc. at 33 citing Re: VIP. Travel Service, Inc., 56 PA PUC 625 (1982).

In its Replies, the PTA emphasizes that, to the extent Core was entitled to a

presumption of fitness, that presumption has been rebutted. (PTA R.Exc. at 22-23).

In its Replies, RTCC references its proposed Findings of Fact and cites, as

examples. Core's 5% operating margin and $10,000 cash total current assets i f Core loses

the ability to claim reciprocal compensation for the termination of intraLATA toll ISP-

bound calls, and its lack of legal fitness as shown by Core's representations in its

business plan. (RTCC R. Exc. at 24).

640751vl 35

Disposition

On consideration of the positions of the parties, we find that Core was

entitled to a rebuttable presumption of fitness. To the extent the presiding A U was

convinced that the burden had been sufficiently rebutted by the presentation of the

protesting parties, we would emphasize our narrow review of facilities-based CLEC

applications. While the prospects of Core's future success may seem daunting in light of

regulatory policies under consideration involving intercarrier compensation, we have

noted that the burden is on the facilities-based CLEC to make a go of its business. See

Petition For Streamlined Form of Regulation and Network Modernization Plan of

Citizens Telephone Company of Kecksburg... Docket Nos. P-00971229, et al., (Order

entered March 4, 1999), 1999 Pa. PUC LEXIS 61.

Additionally, while the Commission-initiated proceedings against Core are

a cause for mild concern, we do not conclude that the record shows a lack of propensity

to operate in conformance with Commission Orders.

Based on the foregoing, we shall grant the Exceptions of Core, consistent

with this discussion.

5. Public Interest

This Commission has, consistent with the clear statutory objectives of state

and federal law, concluded that the benefits of local telephone competition areih the public

interest. See Amended Application of Vanguard Telecom Corp...., Docket No.

A-310621F0002 (Order entered August 23,2000). At page 24 of the Initial Decision, it is

noted that Core's technical capability to provide the service to its current 26 retail ISP

customers is not in question. However, the protesting parties challenged, and the presiding

M075]vl 36

A U agreed, that Core's technical fitness to provide facilities-based local exchange carrier

service in the areas which are the subject ofthe present Application, was deficient.

The public interest challenge to Core's Application is based on several

complaints of the protesting parties. Most notably. Core's Application is objectionable to

the rural ILECs because Core's business plan targets dial-up service to ISPs and,

apparently, does so in a manner which maximizes existing intercarrier compensation

rules and minimizes the capital outlay necessary to enter the market. Core's current

customer base is predominantly twenty-six ISPs who, themselves, provide Internet

service. See PTA MB at 8, citing NT 82-83.

The protesting parties do not discount the value of dial-up Internet access,

or the competitive nature of this market. Rather, our review of the record indicates that

the protesting parties object to the manner in which Core is able to provide its service.

As noted, Core is able to provide its service using a business strategy that is made viable

by the current state of regulation, particularly regarding the intercarrier compensation

regime for dial-up Internet calls. We are mindful ofthe assertions of the PTA that Core's

proposed service will result in a loss of revenue for the rural ILECs; see PTA MB at 51;

The effects on the RLECs are several-fold, loss of revenue, imposition of new costs (i.e. reciprocal compensation) and continuation ofthe same costs of proyiding-service, as Mr. Watkins explained:

When the incumbent LEC serves the ISP, the incumbent LEC receives service payment for

: the dial-up service capability that the ISP ~%

obtains; when the incumbent LEC serves Core under Core's scheme, the incumbent LEC receives nothing, the incumbent LEC still provides the same dial-up capability, but now faces the threatened burden of payment to Core for termination and the incurrence of additional costs associated with provisioning an

640751v I 37

extraordinary network arrangement to accommodate Core's scheme.

(PTA MB at 51).

Additionally, the niral ILECs take the position that the public interest will

be detrimentally impacted due to the efTect of Core's operations on ISPs and IXCs. The

Application is further questioned for the potential that it will result in a "waste" of

numbering resources. (PTA MB at 52-53). On the question of Core's financial fitness,

such fitness was attacked by the protesting parties who, on the one hand, observed that

Core's operating revenues and net income indicated a profit margin of 81%. (PTA MB

at 7). On the other hand, the protesting parties undermined this perception of profitability

with the conclusion that Core's revenue stream is virtually and exclusively dependent

upon reciprocal compensation. (PTA MB at 8).

On consideration of the positions of the protesting parties, we are

constrained to deny their protests. We conclude that the public interest benefits ofthe

Application clearly outweigh the asserted detriments. This Commission has been

continually faced with the concerns of tlie incumbents when faced with

telecommunications competition in the local exchange market, i.e., the so-called "trilogy"

argument.15 We find the protests of the protesting parties to be a variation of the trilogy

argument whereby the trilogy is now to expressly include intercarrier compensation

reform. Substantially similar to the concerns that this Commission addressed when we

initially authorized competitive entry into the local exchange market, see

public interest is not promoted by foreclosing competition until such time as difficult

regulatory problems are resolved. See, generally, Chester Water Authority, v. Pa. PUC,

1 5 See Suspension Termination Order, Docket No. P-00971177 (Order entered January 15,2003), slip op. at 10 discussing the issues of access charge reform, interconnection, and universal service.

1 6 Application of MFS Intelenet, Inc., Docket Nos. A-310203F0002, et al. (Order entered October 4, 1995).

640751vl . 3g

868 A.2d 384 (Pa. Cmwlth. Ct. 2005) - the propriety of permitting competition in a

particular field is an administrative question for the PUC in the exercise of its discretion.

This Commission would not, however, condone an express shifting of costs by a new

entrant where the record supports such a conclusion. We conclude that the record does

not support such a conclusion.

Based on the foregoing, we conclude that the public interest will be

advanced by our grant of the Application.

V. Conclusion

In light ofthe foregoing discussion, we shall grant Core's Exceptions,

reverse the ALJ's Initial Decision and grant Core's Application to provide service as a

facilities-based Competitive Local Exchange Carrier.

640751 vl 39

VI. Order

THEREFORE,

IT IS ORDERED:

1. That the Exceptions filed by Core Communications, Inc. to the

Initial Decision of Administrative Law Judge Wayne L. Weismandel are granted

consistent with this Opinion and Order.

2. That the Initial Decision of Administrative Law Judge Wayne L.

Weismandel is reversed consistent with this Opinion and Order.

3. That the Application of Core Communications, Inc. for Approval of

the Right to Offer, Render, Fumish or Supply Telecommunications Services as a

facilities-based Competitive Local Exchange Carrier to the Public in the Service

Territories of Armstrong Telephone Company - North, Armstrong Telephone Company

- Pennsylvaniaj Bentleyville Telephone Company, Buffalo Valley Telephone Company,

Citizens Telephone Company of Kecksburg, Commonwealth Telephone Company,

Conestoga Telephone and Telegraph Company, Denver and Ephrata Telephone and

Telegraph Company, Hancock Telephone Company, Hickory Telephone Company,

Ironton Telephone Company, Lackawaxen Telecommunication Services, Laurel

Highland Telephone Company, Mahanoy & Mahantango Telephone Company, Marianna

& Scenery Hill Telephone Company, The North-Eastem Pennsylvania Telephone

Company, North Penn Telephone Company, North Pittsburgh Telephone Company,

Palmerton Telephone Company, Pennsylvania Telephone Company, Pymatuning

Independent Telephone Company, South Canaan Telephone Company, Sugar Valley

Telephone Company, Venus Telephone Corporation, West Side Telephone Company,

64075tvl 40

and Yukon-Waltz Telephone Company, at Docket Number A-310922F0002 AmA, is

approved, consistent with this Opinion and Order.

4. That the Protest filed July 18,2005, by the Pennsylvania Telephone

Association at Docket Number A-310922F0002, AmA, is denied.

5. That the Protest filed July 18, 2005, by the Rural Telephone Company

Coalition at Docket Number A-310922F0002, AmA, is denied.

6. That Alltel Pennsylvania, Inc.'s Motion for Stay and Record

Incorporation (Alltel Motion) filed April 24, 2006, referenced to Docket Number

A-310922F0002, AmB, is denied, consistent with the discussion in this Opinion and Order.

7. That the Secretary mark this docket closed.

BY THE COMMISSION

James J. McNulty / • Secretary

(SEAL)

ORDER ADOPTED: November 30,2006

ORDER ENTERED: m U m

64075]vl 41

Petition of Core Communications, Inc. for Arbitration of Interconnection Rates, Terms, and Conditions Pursuant to 47 U.S.C. 252(b) with the United Telephone

Company of Pennsylvania, d/b/a Sprint Docket No. A-310922F7002

Response of The United Telephone Company of Pennsylvania d/b/a United PA To Core Communications, Inc. Set I

Response Sponsor: Counsel

Core Set 1-1

Reference page 3 of the "United PA's Counter Statement of Disputed Issues" ("Counter Statement"). What is the precise, verbatim language that United PA contends is currently set forth in 51 C.F.R. §701(b)(1).

Objection:

United PA objects to the question and the accompanying instructions/definitions impose duties beyond those required by the Pennsylvania Public Utility Code and the Commission's regulations. See, e.g., 52 Pa. Code §5.323(a).

Response:

Notwithstanding the objection, and without waiver thereof, United PA deletes the citation to 51 C.F.R. §701(bXl)» inclusive ofthe parenthetical accompanying that citation, as appearing at page 3 of United PA's counter-statement of disputed Issues (Appendix 2).

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