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Brown-Cottrell_Flynn_Supp_Reply_Aff

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									                                                 REDACTED – For Public Inspection

                                 Before the
                   FEDERAL COMMUNICATIONS COMMISSION
                            Washington, D.C. 20554


In the Matter of                             )
                                             )
Application by SBC Communications Inc.,      )
Michigan Bell Telephone Company, and         )    WC Docket No. 03-138
Southwestern Bell Communications Services,   )
Inc. for Provision of In-Region, InterLATA   )
Services in Michigan                         )


                    SUPPLEMENTAL REPLY AFFIDAVIT OF
        JUSTIN W. BROWN, MARK J. COTTRELL AND MICHAEL E. FLYNN

                                REGARDING BILLING


                                TABLE OF CONTENTS

SUBJECT                                                           PARAGRAPH
INTRODUCTION                                                            1
PURPOSE OF AFFIDAVIT                                                    4
INDEPENDENT THIRD-PARTY TESTING                                         9
   BearingPoint                                                        10
   Ernst & Young                                                       16
RECONCILIATION                                                         18
SBC MIDWEST’S BILLING DISPUTES IN CONTEXT                              57
SBC MIDWEST’S PROCESSES TO ENSURE BILL ACCURACY                        62
BILLING DISPUTE RESOLUTION                                             71
MISCELLANEOUS CLEC ALLEGATIONS                                         83
   AT&T Corporation                                                    83
   CLECA                                                               84
   MCI                                                                 85
   National ALEC Association                                           87
   Sage                                                                89
   TDS Metrocom                                                        90
CONCLUSION                                                            102
                                 REDACTED – For Public Inspection


              Schedule of Attachments

Attachment A Examples of Results from SBC Midwest’s Preliminary
             Investigation of AT&T’s Allegations

Attachment B June 18, 2003 TDS Email




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We, undersigned, being of lawful age and duly sworn upon our oaths, do hereby depose and state

as follows:

INTRODUCTION

1.       My name is Justin W. Brown. I am General Manager – Regulatory Support for SBC

         Midwest.1 My background and qualifications are provided in my initial affidavit

         regarding SBC Midwest’s Local Service Center (“LSC”) and Local Operation Centers

         (“LOCs”), which was filed in this proceeding.2

2.       My name is Mark J. Cottrell.3 I am Executive Director – Long Distance Compliance –

         OSS for the Michigan Bell. My background and qualifications are provided in my initial

         affidavit regarding SBC Midwest’s Operations Support Systems (“OSS”), which was

         filed in the initial Michigan proceeding (WC Docket No. 03-16) (App. A, Tab 6).

3.       My name is Michael E. Flynn.4 I am Director – Billing Project Management for SBC

         Services, which includes SBC Midwest. My background and qualifications are provided

         in my initial affidavit regarding SBC Midwest’s billing systems, which was filed in the

         initial Michigan proceeding (WC Docket No. 03-16) (App. A, Tab 12).




1
     When used in this affidavit, the term “SBC Midwest” refers to the five state local exchange carrier operations of
     Illinois Bell Telephone Company; Indiana Bell Telephone Company, Incorporated; Michigan Bell Telephone
     Company; The Ohio Bell Telephone Company; and Wisconsin Bell, Inc. All five SBC Midwest states utilize
     the same billing systems, which are managed, monitored and maintained on a region-wide basis.
2
     See Supplemental Affidavit of Justin W. Brown, Mark J. Cottrell and Michael E. Flynn, attached to Application
     by SBC Communications, WC Docket No. 03-138 (FCC filed June 19, 2003) (“Brown/Cottrell/Flynn Joint
     Supp. Aff.”) (Supp. App. A, Tab 2).
3
     See Joint Supplemental Affidavit of Mark J. Cottrell and Beth Lawson, attached to Application by SBC
     Communications, WC Docket No. 03-138 (FCC filed June 19, 2003) (“Cottrell/Lawson Supp. Aff.”) (Supp.
     App. A, Tab 3).
4
     See Brown/Cottrell/Flynn Joint Supp. Aff.
                                                         REDACTED – For Public Inspection

PURPOSE OF AFFIDAVIT

4.   As explained in its Application, SBC Midwest provides CLECs with accurate, timely,

     and auditable billing and usage information in compliance with the requirements of the

     Telecommunications Act of 1996 (“Act”). This joint supplemental reply affidavit

     responds to the comments of AT&T Corp., Competitive Local Exchange Carriers

     Association of Michigan (“CLECA”), MCI, National ALEC Association (“NALEC”),

     Sage Telecom, Inc. (“Sage”) and TDS Metrocom, LLC (“TDS”).

5.   At the outset, it is important to put these comments into context. First, SBC Midwest’s

     billing OSS processes and procedures are exceedingly complex and involve extremely

     large commercial billing volumes. For example, every year, SBC Midwest’s Carrier

     Access Billing System (“CABS”) bills more than $3 billion a year, and generates more

     than 6,000 monthly CLEC bills for a variety of UNE and interconnection products.

     Every month, CABS processes more than 4 billion usage records, including more than 1

     billion UNE-P CLEC usage records. SBC Midwest’s Resale Billing System generates

     more than 500 CLEC bills every month, and processes more than 5 million usage records

     every month. SBC Midwest completed approximately 220,000 rate table updates,

     including price schedule work, updates to support access products, tariff rate changes,

     and rate updates to support the implementation of new products. More than 150,000 of

     these rate table updates were to support CLEC billing in CABS.

6.   Second, these billing systems, processes and procedures were the subject of a

     comprehensive independent third-party review that SBC Midwest passed with flying

     colors. Specifically, BearingPoint conducted extensive reviews and transaction testing in

     six different areas related to daily usage information, monthly bills and overall billing


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     support to CLECs. BearingPoint concluded that SBC Midwest satisfied 95 out of 95 test

     points, or 100%, of the applicable test criteria. See BearingPoint, Michigan OSS

     Evaluation Project Report, Transaction Verification and Validation and Processes and

     Procedures Review, Final Results Update, at 6 (Apr. 30, 2003) (Supp. App. C, Tab 15).

7.   Third, SBC Midwest undertook a database reconciliation to ensure the accuracy of the

     CABS database. An independent auditor, Ernst and Young (“E&Y”) was engaged to

     validate the accuracy of this reconciliation, and reinforce the integrity of billing process

     and verify the current database accuracy. In addition, E&Y performed a comprehensive

     review of SBC Midwest’s rate accuracy by reviewing recurring, non-recurring, and usage

     charges.

8.   Fourth, given the extraordinary complexity of SBC Midwest’s billing systems, processes

     and procedures and the substantial commercial billing volumes handled by SBC

     Midwest, occasionally there will be billing discrepancies that need to be reviewed and, if

     appropriate, corrected. However, as will be discussed in more detail below, none of the

     billing claims raised by the CLECs reflect systemic wholesale billing problems. Many of

     the claims raised by CLECs describe incidents that are outdated or involve small disputed

     amounts, and thus do not indicate any competitive impact on CLECs. Other claims

     raised by CLECs are so general and lacking in detail that it has been difficult for SBC

     Midwest to investigate and respond to their claims. Although CLECs do raise a few

     isolated claims of billing errors, none of the their claims demonstrate any systemic issues

     with SBC Midwest’s billing OSS, and/or succeed in rebutting SBC Midwest’s showing

     that its billing OSS are compliant with Checklist Item 2.




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INDEPENDENT THIRD-PARTY TESTING

9.        It is axiomatic that in a proceeding such as this there will always be issues, some of

          which SBC Midwest and CLECs may not agree upon. However, that is precisely what

          third-party testing is designed for and why it should be given substantial weight in this

          application. SBC Midwest’s billing systems have been tested twice by independent third-

          parties, and both the results of BearingPoint’s testing, as well as E&Y’s testing,

          undermine any claim that SBC Midwest’s billing systems are deficient.

BEARINGPOINT

10.       As described in SBC Midwest’s supplemental filing, BearingPoint’s Bill Production and

          Distribution Process Evaluation (PPR 13), examined SBC Midwest’s processes and

          procedures to prepare CLEC bills on a monthly basis, to distribute those bills to CLECs

          in a timely manner, and to archive historical bills.5 It involved a review of the

          documentation that supports the bill production and distribution process, interviews of

          SBC subject matter experts involved in bill production and distribution, interviews with

          the CLECs to discuss their experiences in receiving accurate and timely bills, and an

          examination of results of its own transaction testing in TVV 9.6

11.       Likewise, in its Functional Carrier Bill Evaluation (TVV 9), BearingPoint conducted a

          transaction-based analysis of the accuracy and timeliness of SBC Midwest’s bills that

          complemented the PPR 13 test. The results from both tests provide substantial evidence

          that SBC Midwest’s bills are accurate.




5
      See Brown/Cottrell/Flynn Joint Supp. Aff. ¶ 17.
6
      Id. (citation omitted).

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12.       Both AT&T and MCI claim that the BearingPoint test of SBC’s billing capabilities did

          not include testing of CABS accuracy since the conversion or the reconciliation.7 This is

          not accurate. BearingPoint successfully tested SBC’s billing systems in the fall of 2002,

          after both the conversion process was complete and SBC’s process improvements were

          implemented.

13.       Because of the problems that SBC Midwest had during and after the CABS conversion,

          SBC Midwest initially did not pass BearingPoint’s test for the timely posting of new

          UNE-P service order activity to CABS in the four Midwest states that was conducted in

          early 2002. SBC Midwest worked diligently throughout the spring and summer of 2002

          to eliminate the mechanical posting problems with RoboTask and manual posting

          problems in the LSC.8 Then, on August 1, 2002, BearingPoint published Exception 127,

          version 2 stating that retesting would occur in Illinois, Indiana, and Wisconsin. In

          performing this retest of TVV 9-32, BearingPoint utilized 35 UNE-P test case scenarios

          in each state. BearingPoint submitted orders during the months of August and September

          2002, and reviewed the bills for August, September, and October 2002 to determine

          whether the service order activity appeared by the second available bill. The results were

          outstanding. BearingPoint determined that the “Billing Test CLEC’s” UNE-P service

          order activity was timely posted to the bills 97.1% of the time in Illinois and 100% of the

          time in both Indiana and Wisconsin.


7
      See Comments of AT&T Corp., WC Docket No. 03-138, at 32-33 (FCC filed July 2, 2003) (“AT&T
      Comments”); Joint Declaration of Sarah DeYoung and Shannie Tavares, ¶ 14, attached to AT&T Comments
      (“DeYoung/Tavares Decl.”); Declaration of Sherry Lichtenberg, ¶ 14, attached to Comments of MCI, WC
      Docket No. 03-138 (FCC filed July 2, 2003) (“Lichtenberg Decl.”).
8
      See infra ¶¶ 21-22; Brown/Cottrell/Flynn Reply Affidavit ¶¶ 19-20, attached to Reply Comments of SBC
      Communications, WC Docket No. 03-16 (FCC filed Mar. 4, 2003) (Reply App., Tab 3) (“Brown/Cottrell/Flynn
      Reply Aff.”); Ex Parte Letter from Geoffrey M. Klineberg, Kellogg, Huber, Hansen, Todd & Evans, P.L.L.C.,
      to Marlene H. Dortch, FCC, WC Docket No. 03-138 (Apr. 3, 2003) (“SBC’s April 3 Ex Parte”).

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14.      BearingPoint’s findings are persuasive for several reasons. First, they demonstrate that, at

         a minimum, by August 2002, new service order activity submitted by CLECs would

         properly post to CABS. Had this not been the case, orders submitted by BearingPoint

         would not have posted correctly. Second, BearingPoint’s findings clearly show that

         enhancements put in place by SBC to address issues stemming from the conversion were

         successful. What is critical is that BearingPoint tested SBC’s billing systems not only

         after the conversion, but also after SBC had implemented its corrective actions through

         the summer of 2002. Thus, the BearingPoint test establishes that prior to the

         reconciliation, CABS was generating UNE-P bills that accurately reflected the

         information posted to the CABS system. Although SBC thoroughly validated the

         reconciliation results, it is not necessary that BearingPoint conduct testing post-

         reconciliation. BearingPoint tested the billing systems (i.e., the programming and

         processes) and found them to be accurate and timely. In contrast, the reconciliation

         addressed the synchronization of the CABS and ACIS data records (i.e., inputs to the

         programs and processes). The combination of BearingPoint’s successful testing with

         SBC’s reconciliation efforts ensures that bills provided to CLECs are timely, accurate,

         and auditable.

15.      Sensing these excellent results however, CLECs criticize these findings, because they

         occurred prior to the reconciliation.9 In response to that criticism, SBC engaged Ernst &

         Young (“E&Y”) to perform testing post-reconciliation. Yet once again, though the

         independent third-party testing shows that SBC Midwest’s billing systems are accurate

         (and not the result that the CLECs desire for 271 purposes), CLECs cry foul.


9
      See AT&T Comments at 32-33.

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ERNST & YOUNG

16.       It is indisputable that E&Y performed comprehensive testing, which further contradicts

          the CLECs’ claims that billing issues are unresolved. First, in a comparison of database

          accuracy, E&Y found in excess of 99% accuracy between CABS and ACIS, after more

          than 1.7 million service orders were processed by SBC Midwest between the time of the

          ACIS/CABS reconciliation (January 2003) and the E&Y comparison conducted using

          April 23, 2003 ACIS data.10 Forty-six (46) percent of those circuits sampled experienced

          service order activity since the reconciliation. E&Y’s findings therefore, confirm that

          post-reconciliation service order activity is posting to the billing system appropriately.11

17.       Second, E&Y performed a comprehensive review of SBC Midwest’s rate accuracy by

          reviewing recurring, non-recurring, and usage charges. In order to ensure that the E&Y

          review reflected the accuracy of actual customer billing experiences, the E&Y sample

          was selected from actual UNE and UNE-P accounts and testing was performed from end-

          to-end.12 The E&Y review traced rates from the CLEC interconnection agreement, to the

          billing system rate tables, through to the actual bills rendered. In addition, E&Y’s sample

          reflects the USOCs that CLECs predominantly order and SBC Midwest bills.13 For the




10
      See Brown/Cottrell/Flynn Joint Supp. Aff. ¶ 65.
11
      Id. ¶ 66.
12
      The samples from live customer records that E&Y selected included those MRCs and NRCs that are most
      frequently ordered by and billed to the CLECs. For example, MRC USOCs included within the sample
      represented more than 82% of the UNE Loop MRC USOCs and about 100% of the UNE-P MRC USOCs most
      frequently ordered by and billed to the CLECs. NRC USOCs included within the sample represented more than
      86% of the UNE Loop and about 100% of the UNE-P NRC USOCs most frequently ordered and billed to the
      CLECs. NRC USOC charges are one time event charges billed through CABS. Examples of UNE-P NRC
      USOC charges are NHCHG – Migration Charge, NR9UV – Subsequent Service Order and NR90E – Loop
      Service Order-Disconnect.
13
      Brown/Cottrell/Flynn Joint Supp. Aff. ¶ 78.

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          monthly recurring charges E&Y found a 1.56% error rate, for non-recurring a 1.31%

          error rate, and for usage a 3.16% error rate.14

RECONCILIATION

18.       If the CLEC allegations are viewed in context, it is clear that they do not substantiate that

          SBC Midwest’s billing functionality is discriminatory. In their comments, the CLECs are

          conducting much of the day-to-day billing claims through the regulatory process rather

          than on a business-to-business basis. AT&T and MCI continue to criticize SBC

          Midwest’s enormous efforts concerning the reconciliation. They generally allege that

          their internal records show that the reconciliation was not successful, that SBC Midwest

          applied credits and debits inappropriately, and that E&Y’s additional testing did not

          address the billing problems.15

19.       Further, AT&T points out that SBC Midwest made no attempt to address discrepancies

          and inaccuracies in SBC Midwest’s usage reports.16 SBC Midwest engaged E&Y to

          thoroughly review and report on the accuracy of the January 2003 reconciliation and

          several other billing-related issues, as outlined above. It was not necessary for E&Y to

          examine the DUF processes related to the reconciliation effort, particularly since E&Y

          validated that the usage process was independent of the posting of individual UNE-P

          circuits.17 Moreover, the DUF process was tested extensively by BearingPoint as a




14
      Id. ¶¶ 81-85; Affidavit of Brian Horst, attached to Application of SBC Communications, WC Docket No. 03-
      138, Attach. C at 31-33 (FCC filed June 19, 2003) (“Horst June 2003 Supp. Aff.”) (Supp. App. A, Tab 7).
15
      See Comments of AT&T at 25-29; DeYoung/Tavares Decl. ¶¶ 19-37; Comments of MCI, WC Docket No. 03-
      138, at 1-9 (FCC filed July 2, 2003) (“MCI Comments”); Lichtenberg Declaration ¶¶ 3-28.
16
      See DeYoung/Tavares Decl. ¶¶ 31-35.
17
      See Horst June 2003 Supp. Aff., Attach. C at 6.

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          component of the extensive OSS test, which was conducted with substantial participation

          from the CLECs and state commissions.

20.       AT&T claims that SBC Midwest has failed to fully rectify its problems or provide proof

          that changes to the billing systems have been successfully made.18 First, as shown above,

          BearingPoint’s OSS test in August through October of 2002 concluded that the ongoing

          UNE-P order processing and associated billing was indeed working timely for those

          circuits established following the conversion and associated clean up effort. That testing

          has now been supplemented by E&Y to validate that the reconciliation was executed as

          designed, which synchronized the databases for those circuits that may have carried

          residual issues from the conversion.

21.       Second, as stated previously, SBC Midwest has made many system changes related to the

          processing of UNE-P orders since the conversion, including improvements to Robotask

          processing and LSC work management tools.19

22.       Some of these improvements include:

             Development of a “follow-up” capability that allows the last person working an item
              to include notes and follow-up instructions for future users who might encounter this
              same item. To the extent that “re-work” scenarios remained, this capability added
              efficiencies for subsequent work, allowing those service representatives to benefit
              from information regarding the previous service representative’s activity;
             Addition of “Notes Tool” functionality, which allows the system to mechanically
              relate the CABS order to the ACIS order as the CABS order is being manually
              worked. This functionality also permits the removal of orders from the LSC work list
              once the order has been processed and updates the CABS database; and




18
      See DeYoung/Tavares Decl. ¶¶ 20-22.
19
      See SBC’s April 3 Ex Parte, Attachment at 4.

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           Development of referral codes for categorizing service orders, allowing for the
            development of specialized skill sets within groups of service representatives. For
            instance, service orders falling into the “Complex” referral code are quickly referred
            to a specialized team for handling, allowing other service representatives to focus on
            working more typical orders.
           Robotask logic was enhanced to mechanically process UNE-P coin requests. Prior to
            this change, service orders for UNE-P coin service were written manually by the
            service center. This change improved flow-through of mechanical processing.
           Robotask logic was enhanced to filter Record (“R”) orders that did not require a
            CABS order. Examples of this type of order would be a correction to the service
            address. Since service address is not maintained in CABS, no order is needed. This
            improved flow through by eliminating ASON orders that did not require CABS
            orders.

23.     SBC Midwest will continue to make system changes in order to improve mechanical and

        manual order processing in the future as needed. Third, E&Y’s testing related to the

        accuracy of the ACIS and CABS databases and its rate accuracy validation, provide

        independent evidence that the UNE-P billing process is indeed very accurate and timely.

24.     Additionally, on June 17, 2002, SBC Midwest offered to provide CLECs with an optional

        Lines in Service (“LIS”) report. The LIS report is a snapshot report that lists all active

        dial-tone based lines in service attributed to a CLEC account on a given date.20 To the

        extent that a CLEC believes that there is a database issue, the CLEC has an opportunity

        to continuously keep their databases trued up by using the Lines in Service reports

        provided by SBC Midwest. This report is generated from ACIS data and is designed to

        assist CLECs in ensuring that their billing system databases are in sync with SBC

        Midwest’s inventory of their circuits. Several CLECs have utilized this report and SBC

        Midwest has worked with those CLECs to investigate potential issues. The Lines in

        Service report can be produced on a monthly basis to maintain billing database


20
     The report is a snapshot of Ameritech Customer Information System (“ACIS”). See Accessible Letter
CLECAM02-256 (June 17, 2002) (App. H, Tab 30).

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          synchronization. AT&T has not ordered this important tool in the last twelve months –

          only recently requesting the LIS report. If AT&T had legitimate doubts concerning the

          accuracy of their circuits, they could have utilized the LIS. Instead, AT&T chose to use

          this 271 proceeding to present this information for the first time.

25.       Specifically, AT&T claims that out of 2,114 telephone numbers for which a detailed

          review was undertaken, AT&T found problems with 1,941 – or 92% – of them.21 First,

          to put this claim in context, AT&T has approximately ***                     *** UNE-P lines that

          are billed each month in Michigan. Even assuming that every one of those identified

          circuits was in error due to some fault of SBC Midwest, then the error rate, based on

          AT&T’s own data, would be merely ***                   ***. In reality though, SBC Midwest’s

          preliminary results indicate that the error rate is far lower. Out of the 1,941 total

          telephone numbers that AT&T produced,22 SBC Midwest has been able to review

          approximately 95% of them (over 1,840). During its preliminary analysis, SBC Midwest

          service representatives compared and analyzed each telephone number with service order

          activity in various SBC Midwest systems.

26.       Out of the circuits that SBC Midwest has reviewed, the preliminary results indicate that

          approximately three-quarters of the discrepancies are due to AT&T’s inaccurate record

          keeping, rather than to errors attributable to SBC Midwest. An example of discrepancies

          due to AT&T’s inaccurate record keeping include instances where the requested

          telephone number provided by AT&T on the order was not available and SBC Midwest

          communicated via a Firm Order Confirmation (“FOC”) the actual telephone number that

          it assigned to the AT&T customer. However, it appears that in these instances AT&T did

21
      DeYoung/Tavares Decl. ¶ 7.
22
      SBC Midwest was not provided an electronic version of AT&T’s confidential attachment until July 7, 2003.

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         not change its records to reflect the provisioned telephone number that SBC Midwest

         actually communicated to AT&T.23 Another example is when AT&T apparently failed to

         update its records to reflect its own subsequent change order requesting that the original

         telephone number be changed to a different telephone number. See Attachment A.

27.      As is to be expected in any complex billing matter, SBC Midwest has identified some

         errors that are attributable to SBC Midwest; generally speaking, however, these errors

         appear to be the result of manual service order errors by SBC Midwest service

         representative failing to follow the appropriate guidelines (e.g., exclusion of an accurate

         telephone number within a FOC/Service Order Completion (“SOC”) or an account being

         established with the incorrect CLEC for the telephone number through a manual error in

         the service order process). SBC Midwest’s preliminary analysis suggests that the small

         number of errors actually attributable to SBC Midwest do not reflect any systemic billing

         problems. By contrast, the number of errors directly attributable to AT&T’s own

         mistakes substantially undermines the credibility of its allegations.

28.      As AT&T itself admits, reviews of this kind are highly labor intensive. During the

         course of its preliminary review, SBC Midwest has spent hundreds of hours investigating

         these circuits. It should be obvious that these types of billing claims are best handled on

         a business-to-business basis, rather than debated in a regulatory setting. SBC Midwest

         can only hope that AT&T will choose to work with SBC Midwest on a business-to-

         business level to investigate any additional alleged inconsistencies that AT&T believes




23
     Although a CLEC may request a specific telephone number in its Local Service Request, SBC Midwest
reserves the right to assign a different number if the requested telephone number was: (a) already placed in service,
(b) previously reserved or (c) if reserved, the reservation period exceeds 30 calendar days before an LSR is
submitted. See CLEC Handbook – Telephone Number Requests. If the requested telephone number is changed, the
new telephone number is communicated to the CLEC in a FOC. See CLEC Handbook – Notifications.

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          exist.24 Indeed, within the next week, when SBC Midwest’s preliminary analysis is

          complete, it intends to share the results with AT&T via the Account Team in order to

          help AT&T identify and correct the errors in its own record-keeping systems.

29.       AT&T alleges that, with respect to the Reconciliation, in many cases SBC Midwest could

          not substantiate the connect or disconnect dates at all for some circuits.25 It is true that

          there were some circumstances where actual connect and disconnect dates could not be

          determined mechanically. For the ACIS/CABS reconciliation, the disconnect date of the

          UNE-P circuit (for credits) and establishment date (for credits) was determined based on

          data maintained in SBC Midwest’s usage processing system, known as the Common

          Ameritech Message Processing System (“CAMPS”). Among other things, CAMPS

          receives a daily update from ACIS for posted provisioning service order activity,

          including the effective dates of service orders for the establishment, change and

          disconnection of service. SBC Midwest used CAMPS for this purpose because the

          circuit establishment and disconnect dates, although updated from ACIS, could be more

          easily extracted from CAMPS.

30.       In each case where the actual start and stop dates could not be determined mechanically,

          SBC Midwest took the conservative approach to either credit back to the start date of the

          circuit, essentially providing over credits to CLECs, or not seeking to back bill, resulting

          in under debits to the CLECs.26 This conservative approach was designed into the

          Reconciliation in order to make the process efficient, timely and accurate. Although the




25
      See DeYoung/Tavares Decl. ¶¶ 23-29.
26
      CAMPS date information is not retained indefinitely, consequently, disconnect dates may not have been
      retrievable for the purposes of reconciliation. The lack of a matching start date is a data currency situation that
      can occur between batch systems.

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          execution of the Reconciliation has been thoroughly audited, SBC Midwest remains

          willing to work with CLECs to resolve any remaining questions that they may have.

31.       AT&T makes reference to receiving a list in June 2003 of 238 telephone numbers that

          were erroneously excluded in the reconciliation.27 The vast majority of telephone

          numbers impacted by the reconciliation were sent to AT&T in March 2003. The billing

          for these 238 telephone numbers was reestablished in March 2003 (without generating

          debits to the impacted CLECs).28 Due to an oversight, this list was not sent to AT&T

          until late June 2003.

32.       Finally, AT&T complains at length regarding SBC Midwest’s application of credits and

          debits for the Reconciliation.29 However, SBC Midwest applied credits and debits

          consistent with the CLEC’s applicable interconnection agreement.30 In addition, SBC

          Midwest’s process to apply credits and debits was completely validated by E&Y.31 To

          the extent that AT&T or other CLECs have concerns with the way in which SBC

          Midwest applied credits and debits for specific circuits, those issues should be addressed

          on a business-to-business basis. If questions do arise, SBC Midwest continues to be

          willing to negotiate an appropriate resolution.

33.       MCI has also questioned SBC Midwest’s calculation of debits and credits related to the

          reconciliation.32 As indicated above, SBC Midwest believes that it has applied credits


27
      See DeYoung/Tavares Decl. ¶ 30.
28
      See Horst June 2003 Supp. Aff., Attach. B, fn 13.
29
      See DeYoung/Tavares Decl. ¶¶ 23-29.
30
      For purposes of the reconciliation review, as well as the other verification efforts of E&Y (e.g. loop rate zone,
      merger discount review) the “applicable interconnection agreement” utilized was the interconnection agreement
      that was in effect as of the date the utility was executed. See Horst Supp. Aff, Attach. B at 6.
31
      Id., Attach. C at 7-10.
32
      See Lichtenberg Decl. ¶¶ 12-16.

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          and debits appropriately, but is open to discussion with MCI regarding these issues. In

          fact, SBC Midwest met with MCI on June 24, 2003, with a subject matter expert

          providing a reconciliation presentation to MCI, as well as addressing additional questions

          from them.

34.       During the June 24th call with MCI, MCI pointed out that the number of credits received

          out of the reconciliation, based on “from” dates, did not diminish over the course of 2002.

          Based on this information, MCI apparently believes that the process improvements put in

          place by SBC Midwest have had no impact. SBC Midwest examined the reconciliation

          OC&Cs for MCI whose “from” date appeared in December 2002. The vast majority of

          OC&Cs generated during this timeframe stemmed from two circumstances. First, the

          ACIS extract problem, where a program problem prevented ACIS from sending all of the

          UNE-P accounts to the reconciliation, resulted in the reconciliation inadvertently

          removing valid UNE-P circuits from CABS.33 The removal of these UNE-P circuits

          generated credit OC&Cs, which was thoroughly audited by E&Y. Secondly, there are

          occasions when duplicate end office entries are established on the CABS database. This

          can cause some circuits for the end office to appear in one place, and other circuits to

          appear in another location for the same end office. The reconciliation moved all circuits

          under one end office assignment. This had no impact on customer billing. However, it

          did generate offsetting OC&Cs to the CLEC. These two situations had nothing to do

          with correcting billable UNE-P billing information from UNE-P order activity applied in

          December 2002.




33
      See Brown/Cottrell/Flynn Joint Supp. Aff. ¶ 44, n.56.

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35.       MCI alleges that SBC Midwest did not properly credit CLECs for circuits that were no

          longer being billed at the time of the reconciliation.34 Generally, a circuit that was no

          longer in service at reconciliation, presuming that it was in service at one point in time,

          would have been disconnected through the normal service order process. When a

          disconnect order is processed, the Effective Billing Date on the order would ensure that

          the appropriate fractional charges are calculated and displayed on the CLEC’s bill.

          Although SBC Midwest is unaware of any such instances, if MCI has specific examples

          that it believes need investigation, SBC Midwest is willing to look into these claims.

36.       MCI alleges that SBC Midwest should also have provided credits for NRCs and usage as

          part of the reconciliation.35 MCI asserts that if SBC Midwest was charging MCI for

          circuits that did not belong to MCI, a nonrecurring charge was erroneously applied. The

          reconciliation, however, was focused on providing NRC credits on circuits for which a

          disconnect order may not have processed due to the out-of-sync condition caused by the

          UNE-P conversion effort. SBC Midwest is unaware of any circumstances related to the

          conversion or subsequent clean up efforts that would have caused erroneous NRCs or

          usage charges to be generated. Conversely, in circumstances where SBC Midwest has

          identified that circuits were not being billed, the reconciliation did not seek to recover

          any NRCs. If MCI has any particular situations in which they believe that they were

          erroneously charged NRCs, SBC Midwest is willing to work with MCI on a business-to-

          business basis to resolve such claims.

37.       Ms. Lichtenberg claims that, “[i]n a June 3 meeting between SBC and MCI, SBC

          explained that the incorrect usage charges stem primarily from network manual errors by
34
      See Lichtenberg Decl. ¶ 11.
35
      Id. ¶ 25.

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          LSC representatives.”36 It is somewhat difficult to determine what Ms. Lichtenberg

          means by “network manual errors” attributed to LSC representatives given the LSC

          Service Representatives do not perform any traditional network functions.37 Service

          Representatives are human and may inadvertently process an order with charges that

          should not apply in a given situation. To the extent that manual errors occur during the

          LSC’s manual order writing process, the LSC Billing team is in place to collaboratively

          work through CLEC billing issues with MCI and all CLECs to resolve billing issues.

          While human error can never be completely eliminated, SBC Midwest has put resources

          (LSC) and processes (billing and dispute processes) in place that provide the CLECs with

          the ability to effectively compete in the marketplace.

38.       MCI also contends that since SBC Midwest doesn’t keep track of installation dates, that it

          would be very difficult to resolve future billing disputes.38 As explained to MCI, if SBC

          Midwest was unable to identify the service start and stop dates mechanically based on the

          usage guide information, SBC Midwest would then use a surrogate date that resulted in

          over credits and under debits to the CLECs. However, for the purpose of resolving

          billing disputes and billing claims, LSC personnel have access to various systems such as

          ACIS and CABS, which can be used to determine service and or bill dates depending on

          the nature of the dispute.

39.       MCI claims that it is developing an “automated auditing process” to compare the lines in

          its databases with billing, usage data and line loss reports (“LLNs”) from SBC to


36
      Id. ¶ 28.
37
      For example, the LSC does not perform the cross-connection of facilities, circuit design, installation,
      maintenance and repair functions.
38
      Id. ¶ 17.

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      determine whether it is being billed “only for appropriate lines.” Lichtenberg Decl. ¶ 18.

      After first admitting that development of this auditing program is not completed, MCI

      nonetheless goes on to raise numerous unsubstantiated allegations concerning the

      accuracy of SBC Midwest’s CABS and ACIS systems based on an “early test run” of

      data that is “incomplete” because MCI’s “software was not finished” when it performed

      its “test runs.” See id. ¶ 18. Not surprisingly, the sweeping conclusions reached by MCI

      using this data are equally unreliable.

40.   First, MCI implies that it only recently became aware of potential billing and line loss

      notification problems with the 487 lines it provided to its Account Team for investigation

      on April 14, 2003. In fact, MCI’s complaint that it is being billed inappropriately for

      these circuits amounts to nothing more than a rehash of LLN issues that are more than a

      year old, and were dealt with and resolved in connection with the MPSC 271 proceeding.

      MCI’s argument that the billing on these circuits somehow indicates a “real ongoing

      problem” with the accuracy of the ACIS database and/or with the effectiveness of the

      ACIS/CABS reconciliation is unfounded.

41.   Specifically, in response to the MPSC’s order dated December 20, 2001, SBC undertook

      to work directly with the CLECs to resolve numerous LLN issues that (among other

      things) could potentially have resulted in the CLECs continuing to bill after service had

      been migrated to a new provider (which could happen if an LLN for the line in question

      was not provided on a timely basis), or failing to appropriately bill an end user (as could

      happen if an LLN was incorrectly provided on an account which the CLEC had not lost).

      As detailed in the numerous and voluminous reports filed by SBC with the MPSC




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          concerning its progress in addressing LLN issues,39 SBC expended significant resources

          and effort throughout 2002 to address CLEC issues and concerns related to LLNs and to

          implement system fixes and enhancements to correct identified problems.

42.       Most importantly, in response to CLEC concerns regarding the accuracy of their

          databases as compared to SBC Midwest’s databases following the various LLN fixes and

          enhancements, SBC developed a “Lines in Service” (“LIS”) report that was made

          available to requesting CLECs pursuant to Accessible Letter CLECAM02-256 (June 17,

          2002) (App. H, Tab 30). The LIS report provides a “snapshot” a CLEC’s active lines in

          the ACIS database as of a given date, including (among other things) a list of Working

          Telephone Numbers (“WTNs”) attributed to the CLEC’s codes as of that moment in time.

          Using this report, CLECs may identify discrepancies between their records and SBC

          Midwest’s records for reconciliation. SBC Midwest recommended the ACIS database as

          the best tool for conducting such reconciliation – a recommendation confirmed by the

          low rate of errors found in the above referenced database scans.

39
      See, e.g., SBC Ameritech Michigan’s Interim Report on the Line Loss Notification Issue, On the Commission’s
      Own Motion, to Consider Ameritech Michigan’s Compliance with the Competitive Checklist in Section 271 of
      the Federal Telecommunications Act of 1996, Case No. U-12320 (Jan. 9, 2002) (App. C, Tab 57); SBC
      Ameritech Michigan’s Supplemental Report on the Line Loss Notification Issue, On the Commission’s Own
      Motion, to Consider Ameritech Michigan’s Compliance with the Competitive Checklist in Section 271 of the
      Federal Telecommunications Act of 1996, Case No. U-12320 (Jan. 29, 2002) (App. C, Tab 61); SBC Ameritech
      Michigan’s Supplemental Report on the Line Loss Notification Issue, On the Commission’s Own Motion, to
      Consider Ameritech Michigan’s Compliance with the Competitive Checklist in Section 271 of the Federal
      Telecommunications Act of 1996, Case No. U-12320 (Feb. 28, 2002) (App. C, Tab 64); SBC Ameritech
      Michigan’s Supplemental Report on the Line Loss Notification Issue, On the Commission’s Own Motion, to
      Consider Ameritech Michigan’s Compliance with the Competitive Checklist in Section 271 of the Federal
      Telecommunications Act of 1996, Case No. U-12320 (Apr. 1, 2002) (App. C, Tab 69); SBC Ameritech
      Michigan’s Supplemental Report on the Line Loss Notification Issue, On the Commission’s Own Motion, to
      Consider Ameritech Michigan’s Compliance with the Competitive Checklist in Section 271 of the Federal
      Telecommunications Act of 1996, Case No. U-12320 (May 1, 2002) (App. C, Tab 76) (“May 1, 2002 Report”);
      SBC Ameritech Michigan’s Supplemental Report on the Line Loss Notification Issue, On the Commission’s
      Own Motion, to Consider Ameritech Michigan’s Compliance with the Competitive Checklist in Section 271 of
      the Federal Telecommunications Act of 1996, Case No. U-12320 (June 3, 2002) (App. C, Tab 84); SBC
      Ameritech Michigan’s Final Report on the Line Loss Notification Issue, On the Commission’s Own Motion, to
      Consider Ameritech Michigan’s Compliance with the Competitive Checklist in Section 271 of the Federal
      Telecommunications Act of 1996, Case No. U-12320 (July 2, 2002) (“Final Report”) (App. C, Tab 87).

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43.       To ensure the best possible accuracy of the LIS report, prior to making the reports

          available SBC ran scans of the ACIS database to correct error conditions that could result

          in billing error. For example, one such scan corrected mismatches between FIDs for the

          business unit indicator (ZBU) for the CLEC and the CLEC code (ZULS for UNE-P,

          followed by a CLEC identifying indicator) on the ACIS record. Such a mismatch could

          drive usage to the wrong CLEC. As described in detail in the reports filed with the

          MPSC, CLECs were actively involved in the preparation for these scans, which were

          completed on May 10, 2002. Out of almost 2,000,000 records scanned, “mismatch”

          errors were found on less than 1,000, for an error rate of less than 0.05%. In order to

          prevent any future occurrences, a system edit to check these FIDs for mismatches prior to

          processing was implemented on April 6, 2002.40

44.       To account for possible situations in which the Business Unit indicator and CLEC code

          FIDs matched on the ACIS record, but the billed name field reflected a different CLEC

          (which can be caused by service rep error and can result in a UNE-P circuit being billed

          to the wrong CLEC), an additional validation scan was performed on June 6, 2002, which

          captured approximately 350 total errors in the SBC Midwest region.41

45.       MCI has received a copy of the LIS on a monthly basis since it was introduced. In

          September 2002, MCI contacted the LSC (per the directions contained in the Accessible

          Letter) and requested that SBC investigate approximately ***                     *** WTNs out of the

          more than ***              *** WTNs that appeared on its August 2002 LIS report (which

          reflected lines in service as of July). As reflected in SBC Ameritech Michigan’s

40
      See May 1, 2002 Report at 3-5; see also Final Report at 4.
41
      See Final Report at 4: “Additionally, SBC performed validations between these codes and the billing name to
      ensure consistency there as well. Errors identified were corrected.”

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          Response to WorldCom’s Update on the Line Loss Notification Issue,42 the total

          discrepancies identified by MCI for investigation amounted to approximately 2% of its

          lines in service. Of those, SBC has determined that more than ***                     *** resulted

          from record keeping errors on MCI’s part, and could not be attributed to any failure on

          the part of SBC to provide accurate line loss notifications. Thus, less than 0.47% of the

          WTNs contained in the August 2002 LIS were associated with any potential error on

          SBC’s part.

46.       On review of MCI’s April 2003 spreadsheet, SBC Midwest has determined that LLNs

          were in fact sent in error on approximately 360 of the 487 listed WTNs, with MCI record

          keeping errors accounting for more than 100 of the WTNs. Only three of the erroneous

          LLNs were sent in 2003 – with the majority being sent prior to July 31, 2002. As noted

          earlier, MCI receives its LIS report on a monthly basis, providing it with the ability to

          request reconciliation of any discrepancies between the report and its own database

          records. Notably, SBC Midwest’s ACIS database correctly reflects the WTNs for which

          MCI received erroneous LLNs as active MCI accounts; the inaccuracies here are in

          MCI’s database – which, using the LIS report, MCI has had more than sufficient

          opportunity to correct.43




42
      See SBC Ameritech Michigan’s Response to WorldCom’s Update on the Line Loss Notification Issue, On the
      Commission’s Own Motion, to Consider Ameritech Michigan’s Compliance with the Competitive Checklist in
      Section 271 of the Federal Telecommunications Act of 1996, Case No. U-12320 (Oct. 24, 2002) (App. C, Tab
      112).
43
      Two of the LLNs sent in error in 2003 related to the situation described in CLEC Accessible Letters
      CLECAMS03-019 (Mar. 6, 2003) (App. J, Tab 3) and CLECAMS03-021 (Mar. 14, 2003) (App. J, Tab 3) when
      the winning CLEC was on LSOG 5 and assumed only the Billing Telephone Number (“BTN”) of a multi-line
      account. As noted in those letters, MCI was contacted and provided with information that should have allowed
      it to reconcile these lines in March of this year. The third 2003 LLN error resulted from a manual processing
      error.

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47.   Contrary to MCI’s contentions, the efforts of SBC and the CLECs to address LLN issues

      during the course of 2002, the ACIS database scans discussed above, and the use of the

      LIS report by CLECs to correct their own databases and to call potential errors to SBC

      Midwest’s attention, only served to enhance the accuracy of ACIS and the efficacy of the

      ACIS/CABS reconciliation.

48.   Nor is there any indication that normal order processing activity has contributed to any

      degree of appreciable error in the ACIS database. Attachment D to the Brown/Cottrell/

      Flynn Joint Supplemental Affidavit is a service order flow diagram for UNE-P LSRs. As

      that diagram illustrates, electronically submitted UNE-P LSRs first go through an editing

      process in LASR. If LASR determines that the request is flow-through eligible, the LSR

      is passed to the MOR/BRS system for the mechanized creation of electronic service

      orders. Those service orders then are sent electronically to ASON, which distributes the

      service orders to the provisioning system.

49.   Using this process flow, mechanically submitted, flow-through eligible UNE-P LSRs are

      capable of being processed and distributed to the provisioning systems based on

      information provided by the CLEC on the LSR, with no manual intervention whatsoever.

      In fact, based on performance measurement data, the vast majority of UNE-P LSRs are

      processed in just this manner. Specifically, in the March – May 2003 timeframe, more

      than 96% of flow-through eligible UNE-P LSRs (PM 13), and 88% of total UNE-P LSRs

      (PM 13.1), processed by Michigan Bell (and reported in PMs 13 and 13.1, respectively)

      flowed through to provisioning without manual intervention.

50.   Once provisioning is competed in ASON, the service orders post to the Customer Service

      Record (“CSR”), which is stored in the ACIS database. If there are error conditions in


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      the provisioning systems that prevent the completion or posting of the service order to

      ACIS, those errors are cleared by LSC service representatives. However, because the

      LSC intervention in this instance is solely to clear an error condition in the electronic

      systems to ensure that the order completes and posts appropriately to ACIS, there is

      minimal chance that this intervention would, instead, be an occasion of error on the ACIS

      record.

51.   Taken together, these facts demonstrate that a very high percentage of UNE-P LSRs

      process through SBC Midwest’s ordering and provisioning systems and post to ACIS on

      an entirely mechanized basis with negligible opportunity for error on the CSR.

52.   As discussed in the Affidavit of Justin W. Brown, electronically submitted LSRs for

      service types that are not designed to flow through fall out for manual handling by the

      LSC. See Affidavit of Justin W. Brown, attached to Application of SBC

      Communications, WC Docket No. 03-16 (FCC filed Jan. 16, 2003) (App. A, Tab 2).

      LSC service representatives manually create the service orders for those LSRs in ASON,

      which then distributes the service orders to provisioning.

53.   While manual processing can be a source of potential error on the ACIS CSR, SBC

      Midwest has undertaken extensive efforts to minimize the opportunity for error, and to

      quickly correct any errors that may be found to exist. For example, as discussed in the

      Brown Reply affidavit, during the course of the BearingPoint OSS test, SBC Midwest

      implemented system modifications and process improvements that raised its Michigan

      test performance on Customer Service Inquiry (“CSI”) accuracy to 92%, just short of the

      95% benchmark. See Reply Affidavit of Justin W. Brown, attached to Reply Comments

      of SBC Communications, WC Docket No. 03-16 (FCC filed Mar. 4, 2003) (Reply. App.,


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      Tab 2). Nonetheless, in response to MPSC order, SBC Midwest has implemented a CSI

      accuracy plan designed to further enhance this already excellent performance.

54.   Pursuant to this plan, SBC Midwest developed a Service Order Quality informational

      package for training LSC service representatives on the importance of accuracy and the

      impact of inaccurate orders on CLECs and end-users. The LSC also designed and

      implemented a Quality Review Process that provides for daily review of a sample of

      manually handled UNE-P and resale production service orders. Quality Assurance

      service representatives compare the internal service orders to the LSR submitted by the

      CLEC on a field-by-field basis. Any errors found are identified and corrected, and the

      root cause identified. This information is tracked and analyzed to determine whether any

      common issues or trends can be identified, as well as to develop and implement

      appropriate corrective action.

55.   In an effort to further improve quality, new reports have been developed which will compare

      some critical fields on the service order to the corresponding fields on the LSR. If the

      values on the service order are not the expected values, the information for this mismatch

      appears on these reports. The reports, referred to as Service Order Quality Assurance

      Reports (“SOQAR”), are available on the SBC intranet and are accessed regularly by the

      LSC to make appropriate corrections to the accounts containing the errors. The three reports

      currently being used are the RUF/RRSO Report, Billing/ZULS Mismatch Report and the

      Missing Billing Information Report. These reports identify the following issues for

      correction:

         a. RUF/RRSO Report – RUF and RRSO are FIDs used to relate telephone numbers on

             migrations to ensure the reuse of facilities. If there is a problem with this


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                  relationship, the report identifies the discrepancy for review.

              b. Billing/ZULS Mismatch Report – The ZULS FID is used to identify the CLEC

                  responsible for a given account. Among other things, this FID is important for

                  processes that send LLNs as well as ensuring that the account is billed to the

                  appropriate carrier. This report identifies scenarios in which the ZULS does not

                  match expected values.

              c. Missing Billing Information Report – This report identifies orders on which some

                  portion of the Billing Information on the order does not match expected values.

56.       Taken together, these facts demonstrate that MCI’s purported concern, based on some

          400 odd lines for which it received an incorrect LLN more than one year ago, that there is

          an “ongoing problem” with either the ACIS database or with the ACIS/CABS

          reconciliation, is completely unfounded. ACIS was and is a sound database that

          accurately reflects UNE-P provisioning activity in the Midwest Region. SBC Midwest

          does not contend that ACIS records are perfect. However, SBC Midwest has taken steps

          to ensure that the database is maintained in as accurate a manner as possible, that any

          opportunities for error are minimized, and that any actual errors are corrected as soon as

          reasonably possible after detection and that CLECs have a tool to review their data and

          request reconciliation. No CLEC has provided credible evidence to the contrary.

SBC MIDWEST’S BILLING DISPUTES IN CONTEXT

57.       Unfortunately, it appears that two categories of evidence presented by SBC Midwest are

          being analyzed outside the context in which such evidence was presented.44 First, SBC

          Midwest presented evidence reflecting that from January 2002 through April 2003,

44
      See Comments of TDS Metrocom, LLC, WC Docket No. 03-138, at 8-9 (FCC filed July 2, 2003) (“TDS
      Comments”); DeYoung/Tavares Decl. ¶ 39.

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          CLECs had disputed approximately 12.1% of their total billings.45 Although SBC

          Midwest recognizes that this metric, standing alone, provides little insight into the

          efficacy of SBC Midwest’s billing systems in Michigan, the evidence was not presented

          in isolation. This evidence was presented in response to generic allegations that CLECs

          have experienced an inordinate number of billing errors in Michigan, requiring them to

          spend an inordinate amount of time and money in auditing their Michigan bills and filing

          rate claims. As SBC Midwest demonstrated, however, SBC Midwest’s claim records

          belie that allegation. Instead, the evidence indicates that over the same period of time

          (selected in order to normalize peaks and valleys in claim activity) other states for which

          SBC has received Section 271 authorization have received a generally comparable level

          of claims.46 Thus, as the heading under which this evidence was presented indicates,

          SBC was merely attempting to place “SBC Midwest’s Wholesale Billing Disputes in

          Context.”

58.       Similarly, questions have arisen with respect to SBC Midwest’s evidence of

          approximately $25 million of disputes outstanding in Michigan as of May 2003.47 AT&T

          asserts that the amounts in dispute cited by SBC Midwest “ignore the disputes of AT&T

          (and perhaps other CLECs) with respect to the credited and debited amounts resulting

          from the data reconciliation itself.”48 Any omission of AT&T claims has nothing to do

          with the type of claim submitted. Instead, AT&T fails to mention that as a company,

45
      See Brown/Cottrell/Flynn Joint Supp. Aff. ¶¶ 111-114. The calculation includes all disputes handled by the
      LSC and would include any claims received during the timeframe quoted which were related to issues/errors
      which were resolved by the reconciliation. It does not include any claims not handled by the LSC, i.e.,
      collocation and Local Service Billing (“LSB”) related claims. See id. nn.127-128.
46
      To be clear, SBC Midwest used the same methodology to derive all of the percentages for all states in its
      comparison.
47
      See Brown/Cottrell/Flynn Joint Supp. Aff. ¶¶ 121-131.
48
      See DeYoung/Tavares Decl. ¶ 39.

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      they refuse to use the SBC Billing Dispute process documented on CLEC online and used

      by most, if not all, other CLECs operating in SBC Midwest. Instead, AT&T insists on

      sending billing inquiries to their account team representative and working directly with

      that organization to reach resolution on their questions. This process completely

      circumvents the normal dispute process, thereby bypassing all tracking and formal

      notification of status and resolution that has been developed. Because of this, while

      AT&T may believe they have billing disputes open with SBC Midwest, in fact the

      number of actual disputes currently open between SBC Midwest and AT&T is only

      ***            *** and none of this amount can be attributed to the CABS reconciliation

      process. SBC Midwest did not omit any claims filed with the LSC and tracked via the

      SBC Billing Dispute process in the calculation of claims in developing the data for its

      initial affidavit, and therefore did not omit any claims that were filed via this process for

      AT&T or any other CLEC, which related to the credited and debited amounts resulting

      from the data reconciliation.

59.   Again, SBC Midwest recognizes that this evidence is meaningless in isolation. It was

      never intended nor should it be analyzed as a proxy for what might be deemed a

      reasonable amount of outstanding disputes at a given point in time. Any such analysis

      would be fruitless because there are far too many factors that affect the amount of

      disputes pending on any given date. As SBC Midwest has previously noted, disputes will

      inevitably arise in a complex commercial relationship such as that in which it and the

      CLECs operate. In some instances those disputes are resolved in favor of SBC Midwest

      and in some instances they are resolved in favor of a CLEC. Moreover, as SBC Midwest

      has candidly admitted, SBC Midwest has in the past – and in all likelihood will in the



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      future – encountered errors as part of the billing process. CLECs likewise make errors.

      But that does not mean that such errors are due to systemic problems with billing systems

      or that such errors deny CLECs a meaningful opportunity to compete.

60.   Thus, the relevance of the $25 million figure presented by SBC Midwest was simply to

      demonstrate the nature of the pending disputes – the vast majority of which related to a

      single carrier. As SBC Midwest demonstrated, almost half of the disputed amounts

      related to contract interpretation issues – having nothing whatsoever to do with any

      potential problems with SBC Midwest’s billing systems. Moreover, almost all of the

      remaining disputes fell into the category of rate administration issues and SBC Midwest

      demonstrated that it has proactively addressed such issues and has now provided

      adjustments as appropriate.

61.   Accordingly, although neither of these pieces of evidence were intended to demonstrate –

      in isolation – the efficacy of SBC’s billing process in Michigan, neither should they be

      ignored. If SBC Midwest’s billing in Michigan is indeed as deficient as the CLECs argue

      – contrary to the third party testing results of BearingPoint and E&Y – one would expect

      to see an inordinately high rate of billing disputes in Michigan, yet no such evidence

      exists. Similarly, although the fact that $25 million in billing disputes were outstanding

      at a snapshot in time proves nothing in isolation, its relevance becomes clear upon

      consideration of the nature of the outstanding disputes. In this case, SBC Midwest

      demonstrated that the vast majority of such disputes are either based upon reasonable

      disagreement over complex contractual/tariff provisions or that they relate to specific

      issues that have been researched and resolved. The evidence was intended to

      demonstrate nothing more.


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SBC MIDWEST’S PROCESSES TO ENSURE BILL ACCURACY

62.       Several commenters have alleged that although SBC Midwest may have corrected past

          billing inaccuracies, SBC Midwest has not done enough to ensure that bills are accurate

          on a prospective basis.49 Contrary to those allegations, SBC Midwest performs several

          activities in order to proactively identify potential billing problems. First, on a monthly

          basis, a sample of CLECs’ most frequently billed products is verified to ensure that the

          rates billed for those products are the same as what should be billed per the

          interconnection agreement price schedules. The bill validation process consists of

          extracting monthly billing recurring and non-recurring activity from month end CABS

          data files for a sample of CLEC products. This is performed for each of the five Midwest

          states. These billed rates are then compared to the control rates, which are maintained

          independently from the CABS Production Rate Tables. The Control Rates are updated

          based on information obtained from the CLEC price schedules. Any rate variances

          between the rates billed and the control rate for the sampled products are investigated and

          corrected. Additionally, each month one account is selected in each state where a

          fractional charge was billed. The fractional charges are manually recalculated to ensure

          the amount billed in CABS was calculated correctly. The rationale behind selecting one

          account in each state is: if the Other Charges and Credits (“OC&C”) programs are

          calculating the OC&C correctly for one transaction it will calculate correctly for all

          transactions since the same code is being used. Any rate variances between the fractional

          charges calculated and the charges on the bill are investigated and corrected.




49
      See, e.g., DeYoung/Tavares Decl. ¶¶ 4, 40; Lichtenberg Decl. ¶ 45; TDS Comments at 8.

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63.   Second, on a bill period basis, the CABS Bill Data Tapes (“BDTs”) are reviewed to

      ensure they conform to Industry Standard Billing Output Specification format and the

      data on the BDT is syntactically correct. These bills are validated for completeness by

      ensuring that the minimum number of records is present on the file. The BDT records

      must also total up correctly. All detail billing charge records are totaled and reconciled

      against the summary charge records. The monthly access charges, usage charges, OC&C

      and amount due totals are verified. For example, the sum of all Other Charges and

      Credits must equal the OC&C charge total on the bill. Any anomalies detected are

      investigated and corrected.

64.   Third, monthly access charges, usage charges, OC&Cs (including non-recurring charges

      and adjustments), and total amount due are tracked and trended on a monthly basis by the

      CABS controls system. On a bill period basis, warnings may be generated if there is a

      significant discrepancy in any of the amounts from one month to the next month’s bill.

      Warnings are investigated on a daily basis by reviewing the monthly bills and comparing

      the differences in the individual charges. When a large increase or decrease in billed

      revenue is detected, the appropriate service center is contacted by CABS Billing

      Operations to further investigate the customer’s bill and correct as necessary.

65.   Even further, SBC Midwest is constantly looking at ways to improve processes and

      performance. Effective July 1, 2003, SBC Midwest implemented an internal database

      that tracks settlements and adjustments over $50,000. This new tool provides a means to

      sort data by root cause to determine trends and potential areas in need of process

      improvements.




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66.       With respect to rate administration, in addition to the dedicated contract management

          organization responsible for the development of price schedules for and management of

          pricing for each interconnection agreement,50 SBC Midwest has reviewed existing

          processes and implemented improvements and controls as well as introduced new

          processes and controls. For example, during August 2002, SBC Midwest implemented

          an organization that provides a single point of interface between the SBC state and

          federal regulatory organizations and its Contract Management Organization to ensure that

          up-to-date regulatory filed and approved billing information and dates are implemented

          in the CMA database. During April 2003, the single point of interface organization was

          supplemented to provide additional support in the area of follow-up and validation.

          During this same timeframe, a control process was implemented between product

          management and contract management to manage rate changes originated by product

          management as opposed to regulatory changes to billing.

67.       Likewise, during March 2003, the key stakeholders representing contract management

          and CABS production support reviewed the processes for the distribution and exchange

          of information from the point of rate changes to the point of billing implementation. The

          team reviewed the distribution process in detail and implemented process improvements

          for the distribution of rate table data from the contract management pricing team to the

          CABS billing team. This effort resulted in formally documented process outlining steps

          and timeframes for each step.

68.       SBC Midwest has continued to review and implement process improvements. One recent

          example is that SBC Midwest is now consistently requiring that CABS production


50
      See Brown/Cottrell/Flynn Joint Supp. Aff. ¶¶ 73-74.

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      support to load any rate changes that involve a prior effective billing date into an off-line

      test environment prior to loading the change into production to determine the financial

      assessment of the rate changes. The output of the test is provided to Contract

      Management for purposes of comparison of the financial impact against an expected

      result when the change is significant.

69.   When SBC Midwest identifies CSI inaccuracies, these inaccuracies are corrected.

      BearingPoint’s testing of the CSI record accuracy for Illinois, Michigan, and Ohio

      resulted in SBC Midwest slightly missing BearingPoint’s benchmark of 95 percent.

      However, SBC Midwest exceeded BearingPoint CSI testing benchmark in Indiana (96.0

      percent) and Wisconsin (96.2 percent). When BearingPoint performed this portion of the

      OSS Test, there were instances in which BearingPoint counted as an error items, which

      simply had not yet updated. As a result of the combined test results, SBC Midwest

      agreed to implement a CSI accuracy improvement plan, which was filed with the MPSC

      on March 13, 2003. See SBC’s Modified Compliance and Improvement Plan Proposals,

      On the Commission’s Own Motion, to Consider Ameritech Michigan’s Compliance with

      the Competitive Checklist in Section 271 of the Federal Telecommunications Act of 1996,

      Case No. U-12320 (Mar. 13, 2003) (Supp. App. C, Tab 8).

70.   Contrary to CLEC allegations, it is clear that SBC Midwest has existing processes and

      procedures in place to ensure that it bills CLECs accurately. In addition, SBC Midwest

      has shown its commitment to refining or updating its processes when appropriate. Thus,

      SBC Midwest not only provides auditable, timely, and accurate bills today, but also has

      processes in place that will help to ensure it continues to do so in the future.




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BILLING DISPUTE RESOLUTION

71.   Notwithstanding the evidence of the accuracy and reliability of SBC Midwest’s billing

      systems and processes – confirmed not only by BearingPoint but by the MPSC and E&Y

      – it is simply inevitable that, from time to time, errors will occur within the billing

      process. But that does not mean that there are systemic billing issues or that SBC

      Midwest does not satisfy the requirements of Checklist Item 2. SBC Midwest has

      specific and workable processes and procedures in place to (a) ensure the overall

      accuracy and auditability of its wholesale bills and (b) resolve the inevitable disputes that

      arise regarding such bills. The disputes that do arise are generally the result of specific

      contract interpretation issues, rate administration issues, or simple misunderstandings

      and/or human errors. And when errors are identified – either unilaterally by SBC

      Midwest or as a result of the established dispute resolution process – those errors are

      corrected.

72.   In addition, as noted in its Supplemental filing, SBC Midwest has been working with the

      CLECs in a Billing Sub-Committee Billing Auditability Improvement Plan. As part of

      this sub-committee, operational questions with respect to the billing claims process are

      being answered and processes are being discussed and improved. Currently, there are

      proposals that have been shared with the CLEC community for the timeliness of

      acknowledging the claims received and the timeliness of resolving the claims. While

      SBC Midwest’s position will be that these PMs should be implemented in lieu of current

      billing PMs, not in addition to current PMs, SBC is confident that the details of such

      measurements, once finalized, agreed-to by the collaborative, and implemented, will

      provide additional insight into the process of resolving billing claims.


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73.       Over 56 CLEC billing issues have been raised since the Billing subcommittee formed in

          the CUF on February 19, 2003. To date, 29 of those issues have been fully resolved. The

          parties are actively discussing the other issues, most recently at the subcommittee

          meeting held on June 12, 2003. For instance, as a result of the subcommittee discussions,

          SBC Midwest proposed a claims trial to allow CLECs to utilize the current standard

          forms and procedures but reduce the amount of information a CLEC must submit for

          multiple occurrences of the same issue. This may allow the LSC to investigate and

          resolve certain types of claims on an “issue” level, instead of an “item” level, potentially

          leading to more timely and efficient processing. Phase I of this trial, using simulated

          claims has completed and the results have been shared with the sub-committee members.

          Phase II using live claims is currently in progress. SBC Midwest believes that it is on

          target for completion of all remaining actions in accordance with the dates established in

          the Commissions’ approved plan.

74.       Notwithstanding SBC Midwest’s efforts, TDS states that it has experienced problems

          with the dispute resolution process.51 However, TDS has recently submitted

          recommended process improvements to the Account Team. In turn, the Account Team

          has submitted TDS’ recommendations to the CLEC Billing Sub-Committee, in which

          TDS is an active participant. These recommendations have been reviewed and are

          scheduled to be addressed at the next Sub-Committee meeting in August. Many of the

          suggestions that TDS has recommended will be adopted based on the input of all CLEC

          participants.




51
      See Affidavit of Rod Cox ¶ 29, attached to TDS Comments (“Cox Aff.”).

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75.         Furthermore, Mr. Cox’ opinion regarding SBC Midwest’s billing dispute process52 is not

            one that seems to be universally shared by fellow TDS employees. In an email to the

            LSC’s Billing group management team, a Mr. Todd McNally of TDS states, “TDS has

            done their fair share of raising concerns with SBCs billing operations, but I wanted to

            take the time to compliment SBC on their efforts relating to a specific enhancement that

            they have implemented regarding the Billing Dispute Claim Resolution form. I am

            starting to see that the forms are coming back with the BAN and Customer Claim #

            which is very useful. Please pass this note on to those who have helped implement this

            specific enhancement.” See Attachment B. While Mr. McNally is referring to a specific

            enhancement, his email is an example of SBC Midwest’s willingness to work

            collaboratively TDS and all CLECs in order to resolve issues. Mr. Cox’ blanket

            statement regarding the billing dispute process is rather disingenuous given the fact that

            his own organization recognizes the efforts being made by SBC Midwest on TDS’ behalf.

76.         In addition, MCI’s Ms. Lichtenberg claims that, “SBC’s tendency to engage in protracted

            discussion of even clear issues before obtaining resolution, forc[es] MCI to expend

            significant resources in negotiation.”53 Ms. Lichtenberg adds that, “a major part of the

            billing problem with SBC is the difficulty of working out disputes that do arise.”54

77.         The LSC Billing team has specific procedures and processes in place in order to make

            “every effort to resolve each claim within 30 days.”55 The LSC Billing team investigates

            CLEC claims and processes the appropriate credits or sustains the charges depending on


52
      Id.
53
      Lichtenberg Decl. ¶ 37.
54
      Id.
55
      Brown/Cottrell/Flynn Joint Supp. Aff. ¶ 116.

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      the results of its investigation. If the CLEC disagrees with the LSC Billing team’s

      findings, it can resubmit the claim along with further supporting documentation that may

      better substantiate the claim. If the LSC again finds that the charges are warranted and

      sustains them, the CLEC has the opportunity to dispute the charges through its SBC

      Midwest Account Manager. The LSC monitors claims on a case by case basis. When

      quality reviews are conducted by the Line Managers, it is noted if the claim was

      completed within 30 days, and if not, whether the appropriate communications were

      made to the CLEC.

78.   The Claims checklist includes items such as:

         Review Interconnection Agreement site for contract information. If disputed rates are
          not included in the Interconnection Agreement, determine which Tariff applies and
          refer to on-line Tariff for rates.
         If unable to resolve claim within 29 days of receipt: Contact CLEC via Email to
          advise of current status of claim. Give estimated completion date of claim and set
          another FLUP for that date. Continue with this process until claim is either closed by
          the LSC or referred to BCATS.
         Update WebTAXI with date, time, name and notes of action taken in the resolution
          text field, change the status in WebTAXI to referred. Notes should be kept in
          resolution text until the claim is resolved. At claim resolution, copy resolution notes
          to the notes screen. All CLEC comments should then go into the Resolution text
          field. Be very specific, this is communication to the CLEC.


79.   If a claim or adjustment is denied, the explanation of the denial is provided to the CLEC

      within the resolution text that is sent back to the CLEC. The expectation is that the text

      will include information that indicates how the LSC came to the resolution of denial. For

      example; “Denied, according to the contract, paragraph 1.10.5 the charge for UNE-P is

      $xx.xx. Based on charges noted on your invoice, the charge is appropriate.” The

      timeframe for providing the explanation is simultaneous with the resolution of the claim.




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80.       Finally, TDS asserts that back bills present considerable problems.56 There were a few

          categories where TDS was back billed during 2002/2003. In those categories, TDS had

          not been billed for anything beyond what their contract allows, and in some cases for a

          lesser duration than what SBC Midwest was legally entitled. In addition, TDS

          understands the applicability of rates and understands how to budget for services ordered.

          When a billing error has been realized as a result of a billing change or audit, Accessible

          Letters or account team notifications have been sent out in advance of the actual billing,

          to allow the CLEC to prepare for the resultant debits or credits. In addition, many

          CLECs such as TDS have requested additional months to pay back billed charges so as to

          have an opportunity to fully reconcile billing prior to payment. This delay in payment

          and/or extended payment arrangements has allowed CLECs cash flow to be minimally

          impacted.

81.       Moreover, Late Payment Charge (“LPC”) adjustments are incorporated into the Claims

          Investigation Process Checklist. The specific direction given to the SBC Midwest LSC

          Service Representative states that, “If adjustment/credit is required: (the Service

          Representative should) Verify if interest or Late Payment charges should be credited.

          (See Adjustment section).

82.       The Adjustment section of the Service Representative Methods and Procedures (“M&P”)

          further explains the process to be followed by the Service Representative as follows:

          When the claim has been investigated and results in an adjustment, issue the adjustment.

          Once all items on the claim spreadsheet are resolved, the status of the claim can be

          changed to Resolved and Closed. A Resolution Letter will be sent identifying the amount


56
      See Cox Aff. ¶¶ 27-28.

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          to be adjusted. If the claimed amount is adjusted (in favor of the customer), Late

          Payment Charges will also be adjusted.

MISCELLANEOUS CLEC ALLEGATIONS

AT&T CORPORATION

83.       AT&T points to an issue that recently was identified related to the DUF process,

          presumably demonstrating that SBC Midwest’s billing systems are not checklist

          compliant.57 Simply stated, the issue involved a transposition of the record category from

          a category “10” record to a category “01” record. Since the records were indeed accurate

          and generally contained the same data, most CLECs did not request that SBC Midwest

          reprocess and resend the records as offered in the Accessible Letter58 on this topic. In

          fact, only 6 carriers have requested the data to be reprocessed as of July 14, 2003, which

          accounted for less than 1% of the total DUF records for the month of June. Moreover,

          this issue demonstrates SBC’s responsiveness when faced with such a problem. This

          issue of mislabeling of records began on June 7, and SBC Midwest first learned of the

          problem on June 12. The problem was investigated, isolated, fixed, tested and a solution

          was implemented by July 16. All files were reprocessed and made available to the

          CLECs and an Accessible Letter was distributed to all CLECs on June 26. This issue

          also demonstrates that when a billing systems issue is identified either internally by SBC

          or by a single CLEC, SBC will correct such impacts across all CLECs.




57
      See DeYoung/Tavares Decl. ¶ 17.
58
      See Accessible Letter CLECAM03-223 (June 26, 2003), available at
      https://clec.sbc.com/clec/accletters/home.cfm.

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CLECA

84.       CLECA continues to submit the same vague, unsupported claims it has in the past. For

          instance, CLECA’s claims of billing inaccuracies stems from an affidavit of one of its

          members, LDMI, that was presented to the MPSC in December 2002.59 Moreover, SBC

          Midwest has already fully addressed these claims from LDMI.60 SBC Midwest remains

          ready to discuss other specific issues with LDMI should the need arise.

MCI

85.       Ms. Lichtenberg claims that, “MCI has made somewhat more progress in resolving

          disputes concerning Universal Service Order Codes (“USOCs”) but that progress has

          been halting at best.”61 She states that, “SBC has been charging MCI for a number of

          USOCs that are incorrect” and that “SBC has now agreed that they are incorrect, but it is

          not yet clear that SBC will take sufficient steps to ensure that the problem is not

          repeated.”62 MCI has also raised issues with charges related to migrations, disconnects

          and truck rolls.63 Based on SBC Midwest’s investigation, SBC Midwest had agreed to

          provide MCI credits related to these items. These issues are largely related to human

          errors and impact a small percentage of MCI’s orders and thus, are not indicative of SBC

          Midwest’s Billing accuracy. SBC Midwest is committed to working with MCI, and all

          CLECs, to resolve human error when it occurs. In addition, SBC Midwest has introduced

          process improvement to ensure the appropriate chargeable USOCs are applied. As

59
      See Comments of the Competitive Local Exchange Carrier Association of Michigan, WC Docket No. 03-138 at
      11 (FCC filed July 2, 2003) (“CLECA Comments”).
60
      See Brown/Cottrell/Flynn Joint Reply Aff. ¶¶ 24, 35, 40, attached to Reply Comments of SBC
      Communications, WC Docket No. 03-16 (FCC filed Mar. 4, 2003).
61
      See Lichtenberg Decl. ¶ 38.
62
      See Lichtenberg Decl. ¶ 38.
63
      Id. ¶¶ 38-43.

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         discussed in the Affidavit of Justin W. Brown, the LSC has enhanced its processes to

         identify and coach service representatives who make repetitive manual errors.

         Specifically, as defined in the CSR and Directory Listing Accuracy compliance plan filed

         with the MPSC, the LSC has implemented a quality tracking database and streamlined

         the process for sampling, tracking and coaching service reps when errors are identified.

         SBC Midwest is committed to further enhancement of service order quality. In addition,

         SBC Midwest and MCI continue to meet weekly to discuss billing issues. SBC Midwest

         will continue to work with MCI to address these and other issues in a business-to-

         business manner and endeavors to provide MCI with timely and accurate information.

86.      In addition MCI asserts that, for years in Michigan, SBC Midwest has been charging

         MCI a loop rate that is higher than the appropriate rate.64 MCI asserts that SBC Midwest

         has now backed away from an agreement, and forced MCI unnecessarily to amend its

         interconnection agreement to resolve the issue on a going forward basis.65 While it is

         true that SBC Midwest and MCI originally attempted to resolve the loop rate issue in the

         context of a larger settlement negotiation, it has always been SBC Midwest’s position

         that MCI’s Interconnection Agreement was clear on the appropriate charges.66


64
      Id. ¶ 36.
65
      Id.
66
      It is Michigan Bell’s position that an interconnection agreement is a binding contract that generally sets forth all
of the provisions under which the parties to the agreement have agreed to operate. Accordingly, as a general rule if
the CLEC’s interconnection agreement contains rates, terms and conditions (“provisions”) for a product or service,
then the item should be ordered under the agreement. If an agreement does not contain provisions for a product or
service, and the item is offered in Michigan Bell’s effective tariff, the CLEC may purchase from the tariff.
However, in such cases, Michigan Bell will request and believes it is appropriate for the CLEC to amend its
agreement to incorporate provisions for the product and/or service or to incorporate by reference, the provisions of
Michigan Bell’s effective tariffs (as those tariffs may change from time to time) for the product and/or service, along
with any associated provisions, into the CLEC’s agreement). This procedure avoids ambiguity about what
provisions apply between the parties at any given time. In some instances, arbitrated agreements in Michigan
contain language as a result of MPSC order(s), which allow a CLEC to purchase products and services from either
its interconnection agreement or Michigan Bell’s tariffs. In such cases, however, the CLEC must purchase the entire
product or service – including associated provisions – from the tariff (or the agreement), as applicable. Michigan
Bell will comply with any MPSC order on this subject, subject to any associated appeals or review.

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            Unfortunately, the parties were unable to reach a mutually acceptable outcome. SBC

            Midwest continues to contend that MCI would need to amend its ICA to take advantage

            of the revised UNE-P tariff loop rates. Therefore, MCI has recently requested a pricing

            amendment to their current ICA to take advantage these rates.

NATIONAL ALEC ASSOCIATION

87.         The National ALEC Association (“NALA”) claims that disputed charges often linger for

            months, and in some cases years without resolution, tying up the working capital of

            CLECs and lessening their ability to expand service offerings.67 For example, NALA

            references the call-blocking dispute between one NALA member and SBC Midwest has

            been unresolved for more than 18 months.68 While SBC Midwest has not been provided

            the specific member NALA references, SBC Midwest is aware of a potential NALA

            member dispute. For a detailed discussion of this issue refer to the Supplemental Reply

            Affidavit of Scott J. Alexander (Supp. Reply App. A, Tab A).

88.         However, generally speaking, the primary reason that some NALA members or CLEC

            claims may not be resolved in a timely manner is that in some instances, parties simply

            do not agree on the resolution of a given claim. For example, SBC Midwest may believe

            that it is owed a specific charge or set of charges from an NALA member or CLEC and

            the NALA member and/or CLEC may disagree with that assessment. Under those

            circumstances, the parties’ interconnection agreement defines the steps that both parties

            must take to resolve the claim. That may or may not include negotiation by the SBC

            Midwest Account team and/or CLEC representative or may include an official arbitration

67
      See Opposition of National ALEC Association/Prepaid Communications Association, WC Docket No. 03-138,
      at 3-4, (FCC filed July 2, 2003) (“NALA Comments”).
68
      Id.

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       hearing in front of a state commission. NALA would apparently have SBC Midwest

       acquiesce to whatever its member or a CLEC representative would propose without

       regard to the due diligence and fiduciary duties required of all providers.

SAGE

89.    Sage alleges that SBC Midwest fails to render complete and accurate call detail records

       (“CDRs”) so Sage can collect all access revenues to which it is entitled. Sage alleges that

       an audit of its May 2003 CDRs for Michigan indicates that the terminating access CDRs

       received from SBC underreport the volume of traffic terminated by Sage by more than

       14% (some states are off by over 70%). See Comments of Sage Telecom, WC Docket

       No. 03-138, at 11 (FCC filed July 2, 2003). SBC had been able to determine that Sage

       recently brought this issue to their SBC account team regarding questions about drops in

       terminating access records for certain IXCs in Texas, another SBC service area, claiming

       that they did not receive all the records they were entitled. These claims were based on

       an internal Sage audit did on the records they were receiving that SBC has not yet been

       able to substantiate as accurate. A subsequent list provided by Sage to their account team

       on June 25, 2003, did include Michigan numbers Sage asserted were missing records, but

       this was the first time that SBC had been made aware of a similar claim in Michigan

       specifically. While the asserted lack of DUF records in itself is not a sufficient

       information to investigate the claim, SBC has been working with Sage to investigate this

       issue and the appropriate contacts in SBC Midwest have now been engaged to further the

       investigative efforts. SBC is currently waiting on additional data from Sage that will

       assist the investigation and analysis of the records in question in Michigan. SBC has and




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           will continue to work with Sage until the investigation is completed and any corrective

           action, if necessary, is implemented.

TDS METROCOM

90.        TDS acknowledges that SBC Midwest has made some progress in solving specific billing

           related errors as they arise, but also indicates that SBC Midwest has yet to prove that it

           has done a comprehensive review of their processes and systems to correct hidden errors

           and ensure future errors are minimized.69 However, other than outdated disputes or

           minor issues either currently in negotiation or corrected by SBC Midwest, TDS provides

           no evidence of systemic billing issues in Michigan.70

91.        For instance, TDS claims that SBC Midwest’s statements regarding backbilling of

           approximately $966,000 associated with an optional service under its interconnection

           agreement, Appendix Hosting “are not entirely correct.”71 TDS claims that “SBC is

           obviously wrong [in its legal position] since it also admits that the service is provided

           pursuant to its interconnection agreement with TDS Metrocom, which was negotiated and

           approved pursuant to Sections 251 and 252.”72

92.        Under the Hosting arrangement, SBC Midwest acts as the “host” for TDS on the

           Centralized Message Distribution System (“CMDS”). This allows TDS (1) to send and

           receive call detail data to and from third-parties on a national basis and (2) to settle with

           third parties and SBC Midwest for the alternately billed local/toll intrastate intraLATA
69
      See TDS Comments at 8.
70
      Most of Mr. Cox’ allegations have been previously addressed in WC Docket No. 03-16 (e.g., incorrect rate
      allegations, see Brown/Flynn/Cottrell Joint Reply Aff. ¶¶ 25-31; special construction charges a/k/a loop
      conditioning charges, see Brown/Flynn/Cottrell Joint Reply Aff. ¶ 33; charges for toll reciprocal compensation
      charges, see Brown/Flynn/Cottrell Joint Reply Aff. ¶ 34).
71
      TDS Comments at 10-11.
72
      Id. at 11.

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          calls (i.e., collect, third number and calling card) that are originated by TDS or billed to

          TDS end users. SBC Midwest offers this optional service to assist CLECs who find it

          useful, not because TDS incorrectly thinks it is part of the requirements of sections 251

          and 252 of the Act.

93.       SBC Midwest utilized the Common Ameritech Message Processing System on an interim

          basis to produce reports for the settlement of alternately billed intraLATA toll and local

          calls until Telcordia Non Intercompany Settlement (“NICS”) reports were available, as

          outlined in the parties interconnection agreement.73 In the conversion process, it was

          determined that certain records were inadvertently omitted from the CAMPS reports.

          More specifically, SBC Midwest determined that the CAMPS report logic only generated

          settlements when the record had a “0” in Indicator 5. Records that were populated with

          something other than a “0” were inadvertently excluded from the CAMPS settlement

          process. Converting to the Telcordia NICS process allowed SBC Midwest to more

          accurately develop settlement reports. These reports were used to back-bill CLECs for

          records that had been omitted from the previous reports.

94.       TDS also disputed the accuracy of SBC Midwest’s prior representations as to the status

          of TDS’s claim regarding the billing of reciprocal compensation and toll charges.74 As

          SBC Midwest has previously explained, however, under certain conditions, a CLEC will

          be billed reciprocal compensation for toll calls, even if it is not a toll provider – such as

          where intraLATA toll calls are passed by TDS to SBC Midwest over the

          local/intraLATA toll interconnection trunks. Depending on the NPA/NXX from which

73
      Initially, Telcordia did not have a product (NICS) to support the settlement of alternately billed calls and
      therefore the CAMPS reports were utilized.
74
      See Affidavit of Rod Cox, ¶ 64, attached to Comments of TDS Metrocom, WC Docket No. 03-16 (FCC filed
      Feb. 6, 2003).

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          the call originated and the mandatory Commission-approved local calling areas, SBC

          Midwest will bill either (a) reciprocal compensation for local calls or (b) terminating

          switched access for toll calls. On April 8, 2003, SBC Midwest provided TDS call detail

          records in support of the toll billings in an attempt to resolve this issue. SBC Midwest

          has received additional questions from TDS regarding the call detail records and

          continues to work with TDS to close the issue.

95.       TDS states that SBC Midwest continues to bill TDS for joint SONET facilities and

          Design and Central Office Construction, Customer Connection, and Administration when

          it agreed not to charge TDS for such services.75 This claim arises from a special

          arrangement whereby TDS and SBC Midwest agreed to jointly develop SONET

          facilities. Under this arrangement, SBC Midwest agreed not to charge TDS for DS3 lines

          running over the joint facilities. TDS was mistakenly charged for some DS3 lines

          because the Trunk Inventory Record Keeping System (“TIRKS”) was not updated to

          reflect which circuits were joint circuits. It is important to note that this was an error in

          updating the TIRKS database, and does not raise issues with SBC Midwest’s billing OSS.

          Although the TIRKS database was updated as of October 2002, SBC Midwest continued

          to work with TDS to provide the appropriate adjustments for prior periods. Although

          SBC thought this issue was resolved with TDS in May 2003, it appears that one

          additional SONET BAN was identified by TDS that was owed an adjustment. SBC is in

          the process of crediting the account. The errors have been corrected resulting in a credit

          of ***           *** to TDS. Further research is being conducted to determine the

          remaining disputed amount of ***         ***. It is SBC Midwest’s understanding that TDS


75
      See Cox Aff. ¶ 20.

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          agrees that all other claims have been adjusted and closed, without requiring any

          additional claims to be filed. The incorrectly billed USOC has been corrected to reflect a

          zero-rate, which will eliminate the need for any further disputes or adjustments.

96.       Additionally, disputes have arisen over the cost of design and construction of central

          office collocation facilities.76 SBC Midwest agrees that under the current TDS

          interconnection agreement central office design and construction of central office

          collocation facilities is $0 rated. SBC Midwest mistakenly only adjusted the late

          payment charges, monthly recurring mileage charges and some non-recurring charges,

          omitting some of the non-recurring charge adjustments due TDS. SBC Midwest is in the

          process of crediting the account. SBC Midwest has confirmed that the accounts are

          billing correctly on a prospective basis.

97.       TDS states that SBC Midwest has been billing the wrong rates for transit traffic in one

          state and that SBC Midwest does not provide adequate information on its bills to

          complete a simple reconciliation.77 SBC Midwest recently identified that rate updates for

          Transit billing were not implemented for TDS in Illinois. SBC Midwest informed TDS

          that rate updates were made effective with the June usage billing on the July invoices and

          that retroactive credits would be applied on the TDS July invoice in accordance with the

          terms and conditions of TDS’s interconnection agreement. This was an isolated incident

          and is not an issue in Michigan.

98.       SBC Midwest recently developed M&P and additional tools to ensure that customers are

          established with the appropriate billing rates. SBC Midwest does provide TDS with a


76
      Id. ¶ 22.
77
      Id. ¶ 25.

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            Transiting Service Detail Usage Report that accompanies the bill. The report currently

            provides billing detail including volume of messages, minutes of usage, and amount

            billed by LATA, terminating OCN, originating NPA/NXX and rate element. In addition,

            a change request is under development to enhance the Transiting Service Detail Usage

            Report to include additional information including the actual rates applied to the billing

            volumes.

99.         Mr. Cox alleges that there is a “significant new problem relate[d] to SBC’s billing for

            redundant collocation power.”78 Mr. Cox claims that, “SBC has dropped another

            unexpected back bill on TDS Metrocom’s doorstep, … is billing TDS Metrocom using a

            rate structure that is completely different from what is contained in the interconnection

            agreement between the parties … [and] is not entitled to the charges it seeks from TDS

            Metrocom.”79 This issue is fully discussed in the Supplemental Reply Affidavit of Scott

            J. Alexander.

100.        Finally, Mr. Cox also alleges that, “TDS Metrocom’s own experience with SBC is that

            since August 2002, TDS Metrocom has opened disputes equal to approximately 20% of

            the total amount billed by SBC during the period.” Cox Aff. ¶ 27. Mr. Cox is correct in

            that TDS has disputed 19.41% of the total amount that SBC Midwest bills TDS in

            Michigan. However, that does not mean that TDS in entitled to the 19.41% in question

            nor should one assume that SBC Midwest billed TDS inappropriately for those dollars.

            For example, SBC Midwest believes that it has been billing TDS properly for

            “redundant” collocation power within its collocation spaces. However, TDS recently

            filed disputes for its power arrangements in the total amount of ***       *** in
78
      Id. ¶ 23.
79
      Id.

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         Michigan. That means that over 22%80 of TDS’s total Michigan dollars in dispute during

         the period of August 2002 through June of 2003 (***                        ***) is related to a

         single disputed issue between the parties. Finally, a review of the claims received by

         SBC Midwest for TDS in Michigan for UNE revenue indicates that there are no claims in

         Michigan that remain open as of July 18, 2003.

101.     As the result of investigating a recent CLEC billing claim, SBC has determined that

         approximately 1400 UNE-P circuits across SBC’s five Midwest states have been billed

         incorrectly due to an ordering system error introduced with the March 2003 OSS release.

         Although this issue impacts a limited number of circuits and was not raised in the CLEC

         comments, nonetheless, SBC is proactively submitting this information. As a result of its

         findings, SBC will implement a correction on August 1, 2003, to resolve this problem

         prospectively. SBC will also initiate efforts to issue appropriate adjustments for the

         impacted circuits back to the date that this issue was introduced on March 15, 2003. SBC

         will also issue an Accessible Letter to communicate appropriate information to the

         impacted CLECs.

CONCLUSION

102.     In sum, SBC Midwest’s billing systems provides CLECs with nondiscriminatory access

         to billing functionality. This is true despite the incredible complexity and scope of billing

         functionality SBC Midwest provides to CLECs, as well as the large commercial volumes

         of billing transactions processed by SBC Midwest’s billing OSS. While CLECs have

         raised issues concerning SBC Midwest’s billing systems, those issues fail to demonstrate



80
     Claims for collocation power filed by TDS Metrocom June 19, 2003 in the amount of ***
         *** total dollars disputed by TDS Metrocom from August 2002 through June 2003 = 22.06%.

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       any systemic issues with SBC Midwest’s billing OSS. In short, SBC Midwest’s billing

       OSS provide CLECs operating in Michigan with a meaningful opportunity to compete.

103.   Pursuant to Part II. E. of the Consent Decree entered into between SBC Communications

       Inc. and the Federal Communications Commission, released on May 28, 2002, see Order,

       In the Matter of SBC Communications, Inc., 17 FCC Rcd 10780 (2002), we hereby affirm

       that we have (1) received the training SBC is obligated to provide to all SBC FCC

       Representatives; (2) reviewed and understand the SBC Compliance Guidelines; (3)

       signed an acknowledgment of our training and review and understanding of the

       Guidelines; and (4) complied with the requirements of the SBC Compliance Guidelines.

104.   This concludes our affidavit.




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