I recommend that the rates shown in Column 5 on Schedule WD-8 be adopted. These are the rates that are consistent with the ACC and FCC ordered inputs, and are consistent with the various applicable requirements, including the requirements of TA96.
BEFORE THE ARIZONA CORPORATIQN COMMISSION
IN THE MATTER OF INVESTIGATION INTO QWEST CORPORATIONS COMPLIANCE WITH CERTAIN WHOLESALE PRICING REQUIREMENTS FOR UNBUNDLED NETWORK ELEMENTS AND RESALE DISCOUNTS
) ) ) DOCKET NO. T-00000A-00-0 194
DIRECT TESTIMONY AND SCHEDULES OF WILLIAM DUNKEL ON BEHALF OF THE STAFF OF THE ARIZONA CORPORATION COMMISSION

JUNE, 2001

PUBLIC COPY
TABLE OF CONTENTS DIRECT TESTIMONY OF WILLIAM DUNKEL DOCKET NO. T-00000A-00-PAGE
Statement of Qualifications and Introduction. Overview. The Qwest claimed actual collocation costs are not actual. The installation costs used in the so-called actual studies are several times the actual installation costs. Qwest also overstated the material costs in its study of service to CLECs Overheadcosts. General recommendation for interconnection and collocation rates.

I1. I11. IV. V. VI. VI1.

VI11. Line splitter non-recurring charges. IX. X. XI. XI1. Rent. For maintenance factors. Qwest used the current to book adjustment selectively. Cost of money factors. Unaffiliated DSL providers are not treated the same as are Qwest or Qwest-affiliated DSL services.
XI11. OSS for line sharing. XIV. Line sharing loop charge. XV. Internet service provider (ISP) traffic.
XVI. Tandem or end office rates. XVII. UNEs for vertical services. XVIII. Line sharing agreement.
XIX. Individual case basis.
TABLE OF CONTENTS (cont.) DIRECT TESTIMONY OF WILLIAM DUNKEL DOCKET NO. T-00000A-00-PAGE XX. Quotation fee. 49
XXI. Cable holes. XXII. UNE-Platform (UNE-P). XXIII. Cable unloading/Bridge tap removal.
XX1V.Avoidedcostdiscount.
XXV. Qwests proposal is effectively to greatly reduce the overall discount-nothing in the remand indicated that the overall discount should be reduced. XXVI. The Qwest avoided cost study violates TA96 requirements. XXVII. Loop Cost Model. XXVIII. Local Switching. Signaling. Transport. and Line Port. XXIX. Miscellaneous Remand Issues. XXX. Conclusion.

In the cost of money factors used in my analyses, I utilized the more recent 9.6 1% overal cost of money from the Staff testimonies and ACC Decision No. 63487, and the associated capital structure.
XII. UNAFFILIATED DSL PROVIDERS ARE NOT TREATED THE SAME AS ARE QWEST OR OWEST-AFFILIATED DSL SERVICES
Q. WHAT DSL SERVICES DO QWEST OR QWEST AFFILIATES PROVIDE?
A. Qwest Corporation provides retail xDSL services to the public in Anzona. In addition,
Qwests affiliate, Broadband Services Inc. (BSI), offers VDSL, video, telephony and
Page 35, Million Direct. Page 36, Denney Direct.
high-speed data services.40 Of course, many of these services compete with xDSL services offered by the CLECs.
Q. IF THERE IS AN ESTABLISHED RATE FOR A CHARGE, IS THE QWEST AFFILIATE ALSO SUPPOSED TO PAY THAT ESTABLISHED CHARGE?
A. Yes. The FCCs affiliate transaction rules provide ways to calculate the charges that such
affiliates should pay to its regulated affiliate. In declining order of preference, these charges are: -Tariff rates for tariffed goods and services (including published UNE rates) -Prevailing company price (PCP) for non-tariffed services purchased at least 50% by non-affiliates -services that are neither tariffed nor offered at prevailing company price, fully distributed cost or fair market value, whichever is higher. The problem is that it is usually Qwest that makes the decision as to which of these requirements apply. For example, Qwest charges non-affiliated DSL providers an $80 per line non-recurring charge for line sharing. The non-affiliated DSL providers pay the
$80, while the Qwest-affiliated DSL provider does not pay the $80, but pays some other

~harge.~

Since Qwest apparently imposes this $80 charge on all other DSL line sharing companies other than themselves or an affiliate, that $80 charge would appear to be a prevailing company price or fair market value. However, Qwest has simply decided that it does not consider this $80 charge a prevailing company price or fair market value, and
Qwest response to ACC Request WD 04-101.

~~~~~~

WD-11.

XIII. OSS FOR LINE SHARING
Q. WHAT IS THE CHARGE FOR LINE SHARING OSS THAT QWEST PROPOSES?
A. Qwest proposes a $2.74 recurring per line per month charge which Qwest alleges will
recover the cost of modifying its operational support systems (OSS) for a long term solution to line sharing.
Q. WHAT ARE OPERATIONAL SUPPORT SYSTEMS (OSS)? A. OSS are programs that the Company uses for service ordering, installation, repair and switch activation. Qwest claims that it has contracted to pay $14 million to a company called Telcordia Technologies, to implement a long term solution for line sharing OSS across its 14 state territory. Telcordia provides many of the OSS programs that were previously provided by Bellcore. The Company alleges that 85% of this contract, or approximately $1 1.9 million is for line sharing. 43 Under Qwests proposal, CLECs would be charged $2.74 per month per line shared for this long term OSS cost.
Q. UNDER THE QWEST PROPOSAL WOULD QWESTS AFFILIATE DSL PROVIDER BE REQUIRED TO PAY THIS OSS CHARGE? A. No. As Qwest admitted in response to ACC Request WD 4-106, Qwests affiliate DSL provider, Broadband Services Inc. (BSI) would not be required to pay this OSS charge.
Q. DOES QWESTS CURRENT LINE SHARING AGREEMENT STATE THAT QWEST WILL CHARGE DSL CLECS THE SAME RATES THAT IT CHARGES ITS OWN AFFILIATE DSL PROVIDER? A. Yes. Section 2.1 1.1 (Separate Subsidiary) of Qwests current line sharing agreement, states: In the event Qwest establishes a separate subsidiary to provide xDSL or other data services, and that separate subsidiary Line Shares with Qwest, Qwest will provision Line Sharing to the separate subsidiary at the same rates Qwest then is
Albersheim Direct Testimony, page 24, footnote 15. In discovery, I asked for the workpapers to support this 85% allocation. The Company responded that there were no workpapers, and that Telcordia provided this information over the telephone. Qwest response to ACC Request WD 04-098.
using to provide Line Sharing to other telecommunications carriers. Those same rates will be made available to all telecommunications carriers on'a nondiscriminatory basis.44 Qwest does have an affiliate, Broadband Services Inc. (BSI), that provides xDSL services using line sharing with Qwest. However, in spite of the above provision, Qwest would not bill this $2.74 per line per month OSS charge to its xDSL affiliate, but would bill it to unaffiliated xDSL

provider^.^'

Q. IS THIS A SIGNIFICANT DISCRIMINATION? A. Requiring the competing CLECs to pay an almost $3 per line monthly charge that Qwest or its affiliates do not pay places those CLECs at a significant, and improper, disadvantage to Qwest.
As is discussed elsewhere in this testimony, there are a number of other rates that apply
to the non-affiliated xDSL providers but do not apply to the Qwest affiliate xDSL

provider.

Q. WHAT DO YOU RECOMMEND PERTAINING TO UNAFFILIATED XDSL

PROVIDERS?

A. I recommend that the tariff charges for a particular service that applied to the unaffiliated
xDSL providers also apply to the Qwest affiliated xDSL provider. Such a requirement eliminates discrimination, is consistent with the provision of the Qwest agreement quoted
Attachment 1 to the Amendment to the Interconnection Agreement between (CLEC) and Qwest Corporation. Qwest responses to ACC Requests WD 06-161 and WD 04-097.
above, and is consistent with the FCCs affiliate transaction rules, as discussed elsewhere in this testimony.
Q. HAS QWEST IMPLEMENTED AN INTERIM SOLUTION FOR LINE SHARING OSS? A. Yes. As Qwest indicated in response to discovery, Qwest has implemented changes in methods and procedures to allow CLECs to order line sharing. With the interim solution, Qwest is now able to receive and process orders for line har ring.^'
Q. WILL QWESTS LONG TERM OSS SOLUTION ENABLE QWEST TO PROVIDE ANY LINE SHARING SERVICES THAT QWEST CANNOT NOW PROVIDE UNDER ITS SHORT TERM SOLUTION? A. No. As Qwest stated in response to discovery, There is no difference in what line sharing service could or could not be provided. The difference between the interim and long-term solutions is a difference in the automation of line sharing processes via Qwest OSS.
Q. DOES THIS COST FOR A LONG TERM SOLUTION APPEAR TO BE REASONABLE? A. No. It must be remembered that OSS would be utilized only at the time an order was being placed, or for repair calls. However, the Company proposed $2.74 charge is per month per line. If DSL service stayed in service an average of three years, that would

Qwests

Qwests response to Staff Data Request WD 4-94(a) and (d). response to Staff Data Request WD 4-94(e).
mean the CLEC would be paying a total of approximately $100 per order just to pay for the cost of the OSS m o d i f i c a t i ~ n.Of course, the CLEC also pays charges that pay for ~~ any other costs incurred at the time the order is placed. Paying what amounts to $100 per order just for the modifications to the computer program to accept those orders in a different way than they are now accepted, does not appear to be reasonably cost justified.

Qwest response to ACC Request WD 01-014. Also see the response to ACC Request WD 04-* response to ACC Request WD 04-134; Qwest response to ACC Request WD 01-014. Qwest
It should be noted that the differences in the states cannot reasonably justifj such a huge
difference in avoided costs. For example, the postage cost that is avoided in Arizona is the same postage cost avoided in any other state.
Q. DID YOU CHECK THE ACCURACY OF THE COMPANYS CLAIM THAT THESE OTHER COMMISSIONS HAD BASED THEIR AVOIDED COST DISCOUNT ON THE CAAS/CARS?
A. Yes. Washington is one state that Ms. Gude claims relied on CAASICARS for its
avoided cost discount. The Washington Order that Ms. Gude refers to does not indicate that the Companys judgements were used, but instead indicates that the avoided cost discount was based primarily on Staff proposals. Specifically, The Commissions review of direct, avoidable cost indicates that Commission Staffs estimates of the ratio of avoidable costs for product management, sales, and product advertising are appropriate. With respect to customer services, the Commission also finds Commission Staffs ratio to be reasonable, except that the customer service costs related to non-recurring charges in excess of revenue are 100% avoidable. Otherwise, we adopt Commission Staffs presentation on call completion and number The Washington Order also states that the avoided cost calculation is based upon the capital costs in Commission Staffs study. Quite simply, Ms. Gudes claim that the Washington Order was based upon Qwests determination of avoided costs is simply not correct.
Eighth Supplemental Order Interim Order Establishing Costs for Determining Prices on Phase 11; and Notice of Prehearing Conference, Washington Utilities and Transportation Commission, Docket No, UT960369 et al., May 11, 1998, Paragraph 408. 90 Id. at 410.
Q. HOW DO THE WHOLESALE DISCOUNTS ADOPTED IN THE OTHER QWEST STATES THAT MS. GUDE REFERRED TO COMPARE TO THAT PROPOSED B QWEST IN THIS PROCEEDING? A. Shown below is a comparison of the wholesale discounts Qwest proposes for Residential Basic Exchange Service in this proceeding, to the discounts approved for this service in the states in which Qwest claims the Commissions adoptedrelied on CAAS/CARS data in setting Qwests resale

IO 13 14

discount^''^^:
Residential Basic Wholesale Discounte2
Qwest proposed This proceeding Colorado Iowa Nebraska New Mexico South Dakota Utah Washington
4.19% Discounts in effect: 13.00% 10.27% 22.50% 15.05% 15.49% 12.20% 16.00%
As demonstrated above, Qwests proposed discount for Residential Basic Exchange
Service is much smaller than the wholesale discount that has been approved in the states where Qwest claims that the Commissions in those states adoptedrelied on
CAAS/CARS data in setting Qwests resale discounts

12 A. 15

In addition, Ms. Gude does not even claim that external auditors have audited the second
step in the Qwest process, which is the step in which Qwest determines what portion of each expense Qwest contends will be avoided for each product group. Since the
P. 29, Gude Direct. Qwest response to ACC Request WD 02-045, Attachment A, page 3.
avoided cost figures that Qwest has filed in this case are clearly opinion or judgementdriven figures, it is not clear how such figures could realistically be audited.
Q. WOULD THE QWEST PROPOSAL INTRODUCE NUMEROUS, IMPROPER ADMINISTRATIVE PROBLEMS? A. Yes. Under the Qwest proposal, different CLECs could be getting vastly different discounts for the exact same services. For example, under Qwests proposal, if a CLEC purchased residential basic exchange service and Call Waiting for the same customer at the same time, that would not constitute a package/special service purchase. The reason it would not be considered a package/special service purchase is because it would be ordered under two separate USOCs. USOCs are codes that Qwest uses internally to identify different services. However, if a different CLEC ordered that same combination of services for a customer at the same time, but used the single Qwest USOC that indicated Custom Choice, that CLEC would receive the package/special services discount on that package.
In discovery, I asked Qwest if a CLEC wished to offer a package that consisted of basic exchange service and non-published services, would that CLEC receive the package/special service discount. Qwest said they would not.
No. , Basic Exchange Residence service and Non-Published service would have to be purchased a la carte on separate USOCs since Qwest does not offer these services as a bundle that can be purchased on a single unique USOC.
In other words, it is not any combination of basic and vertical services that qualify as a package. It is only certain combinations that Qwest chooses to offer that qualify.
Q. DOES THE QWEST PROPOSAL HAVE LESS DISAGGREGATION THAN FIRST APPEARS?
A. Yes. The Qwest proposal would result in the same discount rate being applied to

approximately

** of the business lines, and almost **

** of the

residential lines.
** of residential lines are provided under what is
** of business lines are provided under what
considered a package service, and **
is considered a package service under Qwests proposal. Therefore, the 10.46% proposed discount would apply to ** residential lines.

Q. MS.GUDESTATES:

Unique category discounts are in keeping with the spirit and the express language of the Act. The langua e of the Act refers to wholesale and retail rates, using the plural, not the singular.702 DOES THE ACT REQUIRE THAT MORE THAN ONE DISCOUNT BE IMPLEMENTED?

Q. WHAT DID QWEST ASSUME FOR THE INSTALLATION AND DISTRIBUTION CABLES IN A NEW RESIDENTIAL SUBDIVISION? A. Qwest assumed that
** ** of the length of the distribution cables would have to be
placed by the very expensive placement methods, including boring, cutting and restoring concrete, and cutting and restoring asphalt. This is an unrealistic percent.
Q. IN RESIDENTIAL SUBDIVISIONS, HOW ARE THE DISTRIBUTION CABLES ACTUALLY PLACED? A. The subdivision developer frequently provides the trench to Qwest at no cost to Qwest. However, it is common for developers to provide utilities access to a common trench in new subdivisions.IIO The developer often provides the trench.
Q. IN PLACING DISTRIBUTION CABLE IN A RESIDENTIAL SUBDIVISION, IS IT NORMALLY NECESSARY TO CUT AND RESTORE CONCRETE, CUT AND RESTORE ASPHALT, OR BORE UNDER EXISTING CONCRETE OR ASPHALT? A. No. When a new residential subdivision is being developed, the normal practice is for the LEC to install the buried distribution cables prior to the time that the surface
Schedule RJB-3, page 5, Buckley Direct. In their study, Qwest does assume a ** ** sharing factor ** for buried (Qwest response to ACC Request WD 09-187), which has the effect of assuming that ** of the cable placement costs would be recovered in some manner other than from Qwest. However, that does not compensate for the improper mix of placement types that Qwest has utilized. l o Qwest response to ACC Request WD 09- 187A. I Id at B.
obstructions (Le. roads, sidewalks, driveways, lawns, etc.) are in place, as.Qwest admitted in discovery.

Reauest:

Is it a correct statement that in your service territory when a new residential subdivision is being developed, the normal practice is for the LEC to install the buried distribution cables generally prior to the time that the roads, driveways, sidewalks, lawns, bushes, etc. are in place? If this is not a correct statement, please provide the correct statement. Owest remonse: Yes. In new sub-divisions where the developer coordinates with the utilities, outside plant facilities are generally placed prior to the placement of streets and landscaping. l 2
The practice of installing cables in new subdivisions before the surface obstructions are in place is the reasonable practice, and there is no reason to believe that this will not be the practice that will be followed in the future. It is simply much more efficient and less costly to put the buried cables or underground facilities in the ground before placing the surface obstructions than after. Qwest's assumption that

cases, the inputs that were specified by this Commission in Decision No. 60635.Il4 In addition, there are some inputs that the ACC did not address in its prior order, but for which the FCC has found appropriate inputs.I5 Therefore, I utilized the ACC and FCC inputs. The CD provided along with Mr. Denneys testimony contained a second run in which Mr. Denney had adjusted the inputs for what he considered to be the ACC inputs, although this was not the run that Mr. Denney sponsored in his testimony. I did not use that run. Instead, I used the working model that Mr. Denney had used, and input the FCC and ACC inputs. For those inputs that were addressed by the ACC in Decision No. 60635, I used the ACC ordered inputs. For those inputs that were addressed by the FCC in FCC 99-304, but not addressed by the ACC in Decision No. 60635, I used the FCC
AT&T Exhibit DKD- 1, Denney Direct. FCC 99-304.
selected inputs. The loop cost results of this revised run are summarized on Schedule WD- 14.
Q. SCHEDULE WD-14 SHOWS TWO CATEGORIES, ONE THAT INCLUDES ALL
EXCHANGES INCLUDING THOSE THAT ARE FOR SALE, AND A SECOND ONE THAT EXCLUDES THOSE EXCHANGES THAT ARE FOR SALE. WHICH OF THESE TWO DO YOU RECOMMEND BE UTILIZED? A. I recommend that the loop cost that excludes those exchanges that are for sale be utilized, since that will reflect the actual wire centers that will be Qwest wire centers in the future. The sale of the Qwest rural exchanges to Citizens has been approved.17 The unbundled loop rates that I recommend are as follows: Total Loop Cost Zone 1 Zone 2 Zone 3 Weighted statewide average
$9.35 $14.20 $36.34 $11.89
It should be noted that the above figures are not purely costs, since they already include
a 15% contribution to the directly assigned, directly attributed, and common costs. It should be noted that the sale of exchanges had a significant impact on the average loop cost. As shown on Schedule WD-14, the statewide average loop cost was $1 3.21 including the exchanges subject to sale, but dropped to $1 1.89 after removing the sold exchanges.

ACC Decision No. 63268.

AT&T Exhibit DKD-7, Denney Direct.
Schedule WD- 15 shows the loop costs by wire center.
Q. THE FCC HAS REQUIRED THAT THERE BE AT LEAST THREE UNE ZONES. HOW MANY ZONES HAVE THE VARIOUS PARTIES TN THIS PROCEEDING PROPOSED? A. Qwest proposed three zones, and AT&T/XO/Worldcom proposed three zones. In Schedules WD-14 and WD-15, I have also utilized three zones.

Q. HOW DID YOU SORT THE WIRE CENTERS BY ZONES? A. In Mr. Denneys Direct testimony, AT&T/XO/Worldcom presented the concept of running a program that would minimize the deviation between the average cost for a zone and the individual wire center costs in those zones. In effect, this program groups the wire centers so as to make as small a total difference as possible between the cost of each wire center and the average cost for the zone which includes that wire center. This procedure makes sense and I believe is less arbitrary than many other methods of dividing the wire centers between zones. I used this AT&T/XO/Worldcom program to group the wire centers by minimizing the deviation between the individual wire center
costs and the average zone costs.*
XXVIII. LOCAL SWITCHING, SIGNALING. TRANSPORT. AND LINE PORT
Q. YOU HAVE PRESENTED THE LOOP COST RESULTS OF RUNNTNG THE HATFIELD MODEL USING THE INPUTS ORDERED BY THE ACC IN DECISION
NO. 60635 AND THE FCC INPUTS. DOES THAT RUN ALSO PRODUCE RESULTS FOR LOCAL SWITCHING, SIGNALING, TRANSPORT, AND LINE PORTS?
3 A Yes. The results of that run are shown on Schedule WD-16. In this run, I used the
Hatfield model as provided by Mr. Denney in this proceeding, except modified to utilize the inputs as specified by the ACC in Decision No. 60635. For those inputs that were not specified by the ACC in that Order, I utilize the FCC selected inputs.'I9
DO YOU BELIEVE THE RATES WHICH YOU HAVE RECOMMENDED IN THIS
PROCEEDING ARE CONSISTENT WITH THE REINSTATED COST RULES OF THE FCC, WHICH ARE CURRENTLY IN EFFECT?

A. Yes.

3 REMANDISS ES
Q. WHAT IS ONE ISSUE THE COURT REMANDED?
A. One issue the Court remanded is the pricing for a four wire loop. I recommend the price for a four wire loop should be double the cost of a two wire loop, minus the cost of one network interface device (NID). The effect of this is that a four wire loop costs twice as much as a two wire loop, except there will not be the cost of two NIDs included.
Q. WHAT IS ANOTHER ISSUE THAT THE COURT REMANDED?
As provided in Schedule DKD-12, Denney Direct. The CD that was provided along with Mr. Denney's Testimony, in addition to the model that Mr. Denney proposed, contained a second file with the Hatfield model adjusted for the ACC inputs from Decision No. 60635. However, I did not use that run. I started with the Hatfield model and revised the inputs to conform to the ACC and FCC orders.
A. Another issue that the Court remanded is that the ACC had placed a $5 maximum charge on the Customer Transfer charge. The Court stated that the ACC had not indicated that this was reflective of cost. I am not recommending a $5 maximum on the Customer Transfer charge.
A. The ACC had set the non-recurring charge that applied to certain UNE elements based upon a discount of the non-recurring charges that apply to certain retail services. The Court held that if the non-recurring charge was for a UNE, it should be based upon its own costs, and not upon a discount of the retail non-recurring rate. In this proceeding, I am not proposing to base the non-recurring UNE rates on a discount of any retail rate.

However, it should be remembered that many of the functions are the same. Therefore, it is reasonable to expect that there may be some similarity of costs. In those instances where the Companys non-recurring costs for handling a UNE are much different than the cost for handling a similar retail service that properly brings into question the accuracy of the Companys cost figures. I am proposing that the non-recurring UNE rate be based upon reasonably calculated costs, not on a percent discount from retail rates.
Q. WHAT IS ANOTHER REMAND ISSUE?
A. In the Jennings order, the Court stated: If US West is proposing to separate already-combined network elements, that is seemingly foreclosed by the Supreme Courts decision affirming 47 C.F.R. 1.315(b). If US West is proposing to withhold certain network elements, that
would appear to violate the terms of the interconnection agreements. (citations omitted) This issue generally relates to the provision of UNE-P service. As is discussed elsewhere, it appears that Qwest is now prepared to offer UNE-P service in Arizona. As far as the statement about Qwest to withhold certain network elements, elsewhere in this testimony I have addressed the concept that Qwest should be required to provide services such as connection to operator and directory assistance services, as well as toll. I believe other portions of my testimony addresses any remaining key relevant issues.
Q. WHAT IS ANOTHER REMAND ISSUE? A. Another remand issue is the single point of interconnection. In this issue, AT&T and MCI wish to have available to them a single point of interconnection from which traffic from a significant area would be connected. Qwest appeared to object to this, complaining that such a single point of interconnection could overload Qwest tandem switches. Qwest apparently suggests that such an area wide or LATA wide interconnection point should not be required. The Court rejected Qwests contention that a CLEC is always required to establish a point of interconnection in each local exchange in which it intends to provide service.
Q. WHAT DO YOU RECOMMEND WITH REGARD TO THE SINGLE POINT OF
INTERCONNECTION ISSUE? A. My understanding is that this issue is being addressed in the workshops. In general, I believe that the multiple points of interconnection should be available to the CLEC.
Allowing a single point of interconnection does not place Qwest at any disadvantage since the CLEC would pay Qwest the appropriate rates for the use of those facilities.
Q. THE COURT REMANDED ISSUES PERTAINING TO SUB-LOOP UNBUNDLING. PLEASE COMMENT.
A. The ACC decided to permit unbundling of subloops, but only through a Bonafide request

THIS SCHEDULE HAS BEEN OMITTED IT CONTAINS INFORMATION CLAIMED TO BE PROPRIETARY BY QWEST

Page 4 of 4

xiieauie w U - L Page 1 of 3
THE FOLLOWING PAGES ARE FROM QWESTS ARIZONA COLLOCATION COSTS.XLS SPREADSHEET, TAB E.3.1 POWER-CAGED. THIS SPREADSHEET WAS PROVIDED ON A CD ROM THAT WAS FILED WITH MS. MILLIONS APRIL 16,2001 SUPPLEMENTAL DIRECT TESTIMONY
Schedule WD-2 Page 2 of 3

Page 3 of 3

hrizond
Docket N o. T-00000A-00-019,l WD 06-150

INTERVENOR: REQUEST NO:

With reference to Attachment A of Qwest's response to Data Request WDA 4-108, the "MegabitCostl'and the "Megasubscriber Cost" are shown.
A. Please provide a complete copy of the cost studies that support the cost figures shown.
B. What is the basis for the differences in cost calculated for "Megabit" service and the "Megasubscriber" services ti.e. what cost-causative differences are there between these two services?)?
C. Are these referenced cost figures the "direct" ( i. e. TSLKIC) costs of '' Megabit" service and "Megasubscriber" service? If n o t , please provide the direct" (i.e. TSLRIC) costs of these services.

"

RESPONSE :
A. Please see Confidential Attachments A and B. (Confidential Attachments A and B are included in CD provided herein.)
B. Megabit Subscriber Service is a dedicated 'Ialways on" seri/ice. It has a 1 to 1 configuration meaning that the number of subscriber lines is equal to the number of modems in the central office equipment. Megasubscriber service is a modem pooling arrangement. In this configuration the number of subscriber lines is greater than the number of modems in the central office equipment. If no modem is available a signal is sent to the subscriber's modem indicating no connection can be made.
Cost differences can be attributed to differences LII the service offerings, dedicated vs. pooled (or concentrated). Megabit Service, because ~t is dedicated, requires more modems,different equipment cards and different bay configuration. C. Yes. Respondent : Jeiinifer Peppers, Cost Interface Xanacjer
x n e a u i e w u-3 Page 2 of 6

- -. " V ~. _

Page 3 of 6

Page 5 of 6

Page 1 ot 5
COLLOCATION: LINE SHARING
Arizona February 2001 Study ID #4702
QWEST CORPORATION Policy and Law

Page 2 of 3

Schedule WD-4 Page 3 of 3

-.'-uu.L

"V

Page 1 of 3

Qwest:
Schedule WD-5 Page 2 of 3

Sc 11 edu I e WD -5

Page 1 of 2

JURISDICTION

D. What hourly rate did Qwest assume for Installation Labor in its cost study for virtual collocation? E. What is the source of the Maintenance Labor charges used in the Qwest cost study for virtual collocation?
F. What hourly rate did Qwest assume for Maintenance Labor study for virtual collocation?

its cost

G. What is the source of the Training Labor charges u s e d in the Qwest cost study f o r virtual collocation?
What hourly rate did Qwest assume for Training Labor for virtual collocation?

i l s cost study

Hourly Rate Table
1999 STRAIGHTTIME PER HALF HR.

1999 TIME& 112 RATE

PER HALF HR.
P42-DSOC MTCE./TRAINING P70-QUALITY INSPEC./INSTALL,

$20.27 $23.1 1

$27.12 $29.76

E20-DETAIL ENGINEERING

$21.87

$28.23

Schedule WD- 13 Page 2 of 2
A. The source of the labor charges used in the Qwest cost study f o r virtual collocation is from the incurred charges and product~vchoui-s charged to accounts 6534:Plant Operations Administration Expense and G535.Engincering Expense. For a detailed description of these accounts, see the Collocation Model, on the E. 4. 2 LABOR RATES worksheet.
B. See Hourly Rate Table above and Collocation Model, on the E. 4. 2 LABOR RATES worksheet.
See Response " a " , above.
D. See Hourly Rate Table above and Collocation Model, on t h e E. 4. 2 LRBOK RATES worksheet.
E. See Response "a", above.
F. See Hourly Rate Table above and Collocation Model, on the E. 1. 2 LABOR RATES worksheet.
H. See Hourly Rate Table above and Collocation Model, on the E. 4. 2 LABOR RATES worksheet. Terri Million Director - Cost Witness 1801 California St. Denver, CO

Schedule WD- 14

Lo a ,

5 N.E.-. c

0"

z C 0.l n

bcneauie w LJ- i 3 Page 2 of 4

2 f? c3

O O O O O Q O O O O O r O O O O O O O O O O O O O O ~ - O O O - ~ O ~ O

Page 3 of 4

Schedule WD- 16
Appendix A Page 1 of 11 William Dunkel. Consultant 8625 Farmington Cemetery Road Pleasant Plains, Illinois 62677
qualifications The Consultant is a consulting engineer specializing in telecommunication regulatory proceedings. He has participated in over 140 state regulatory proceedings as listed on Appendix A attached hereto. The Consultant has provided cost analysis, rate design, jurisdictional separations, depreciation, expert testimony and other related services to state agencies throughout the country in numerous telecommunication state proceedings. The Consultant has also provided depreciation testimony to state agencies throughout the country in several electric utility proceedings. The Consultant made a presentation pertaining to Video Dial Tone at the NASUCA 1993 MidYear Meeting held in St. Louis. In addition, the Consultant also made a presentation to the NARUC Subcommittee on Economics and Finance at the NARUC Summer Meetings held in July, 1992. That presentation was entitled "The Reason the Industry Wants to Eliminate Cost Based Regulation--Telecommunications is a Declining Cost Industry." The Consultant provides services almost exclusively to public agencies, including the Public Utilities Commission, the Public Counsel, or the State Department of Administration in various states. William Dunkel currently provides, or in the past has provided, services in telecommunications proceedings to the following clients: The Public Utility Commission or the Staffs in the States of: Arkansas Arizona Delaware Georgia Guam Illinois Maryland Mississippi Missouri New Mexico Utah Virginia Washington U.S. Virgin Islands

TR-79-213 TR-80-256 TR-82- 199 TR-86-84 TC-89-14, et al. TC-93-224/TO-93-192 TR-93-181 TO-86-8 TO-87- 131
Docket No. 802-135 BPU NO.815-458 OAL NO.3073-81 BPU NO. 8211-1030 OAL NO.PUC10506-82 BPU NO. 848-856 OAL NO. PUCO6250-84
Appendix A Page 9 of 11 NEW JERSEY (CONT.) Division of regulated from competitive services Customer Request Interrupt NEW MEXICO U.S. West Communications, Inc. E-1 proceeding General rate proceeding General rate/depreciation proceeding Subsidy Case VALOR Communications Subsidy Case
BPU No. TO87050398 OAL NO. PUC 08557-87 Docket No. TT 90060604
Docket No. 92-79-TC Docket No. 92-227-TC Case No. 3008 Case No. 3325 Case No. 3300
Ohio Bell Telephone Company General rate proceeding General rate increase General rate increase Access charges General Telephone of Ohio General rate proceeding United Telephone Company General rate proceeding Docket No. 79- 1184-TP-AIR Docket No. 8 1- 1433-TP-AIR Docket No. 83-300-TP-AIR Docket No. 83-464-TP-AIR Docket No. 8 1-383-TP-AIR Docket No. 8 1-627-TP-AIR
OKLAHOMA Public Service of Oklahoma Depreciation case PENNSYLVANIA GTE North, Inc. Interconnection proceeding Bell Telephone Company of Pennsylvania Alternative Regulation proceeding Automatic Savings Rate Rebalance Enterprise Telephone Company General rate proceeding All companies InterLATA Toll Service Invest.

Cause No. 96-00002 14

Docket No. A-3 10125F002 Docket No. P-00930715 Docket No. R-953409 Docket No. R-00963550 Docket No. R-Docket No. 1-910010
Appendix A Page 10 of 11 PENNSYLVANIA (CONT.) GTE North and United Telephone Company Local Calling Area Case Northwestern Bell Telephone Company General rate proceeding

Docket No. C-9028 15

SOUTH DAKOTA

Docket No. F-3375

TENNESSEE (on behalf of Time Warner Communications) Be11South Telephone Company Avoidable costs case UTAH

Docket No. 96-00067

U.S. West Communications (Mountain Bell Telephone Company) General rate case Docket No. 84-049-General rate case Docket No. 88-049-Services case Docket No. 90-049-05 General rate case/ Docket No. 90-049-06/90incentive regulation 049-03 General rate case Docket No. 92-049-07 General rate case Docket No. 95-049-05 General rate case Docket No. 97-049-08