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					                               STATE OF MICHIGAN

            BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION


                                       *****

In the matter, on the Commission’s own motion, )
to review the costs of telecommunications      )   Case No. U-13531
services provided by SBC Michigan              )




                            INITIAL TESTIMONY OF

                               STEVEN E. TURNER

                                  ON BEHALF OF

              AT&T COMMUNICATIONS OF MICHIGAN, INC.

                                         AND

                                  TCG DETROIT



                                 (COLLOCATION)




                                  JANUARY 20, 2004



                              *** PUBLIC VERSION ***




                                           i
                                                 TABLE OF CONTENTS
CONTENTS                                                                                                                          PAGE


I.      BACKGROUND AND EDUCATION .........................................................................1

II.     PURPOSE OF TESTIMONY........................................................................................2

III.    SUMMARY OF TESTIMONY.....................................................................................3

IV.     OVERVIEW OF COLLOCATION RATES AND MODEL ADOPTION...................6
        A.  STATUS OF AT&T/MCI COLLOCATION COST MODEL ..........................6
        B.  STATUS OF COLLOCATION RATES ACROSS THE SBC
            TERRITORY .....................................................................................................9

V.      OVERVIEW OF THE SIX METHODS OF COLLOCATION AND COST
        MODEL .......................................................................................................................15

VI.     PHYSICAL COLLOCATION COST MODEL ..........................................................20
        A.   IMPORTANCE OF PHYSICAL COLLOCATION........................................20
        B.   DEVELOPMENT OF THE PHYSICAL COLLOCATION MODULE OF
             THE COLLOCATION COST MODEL ..........................................................22
             1.   COSTS FOR PHYSICAL COLLOCATION WERE DEVELOPED
                  USING THE COLLOCATION COST MODEL, MODEL
                  LAYOUTS AND BEST PRACTICES ASSUMPTIONS ...................22
             2.   USE OF MODEL LAYOUTS TO CALCULATE
                  INVESTMENTS FOR PHYSICAL COLLOCATION .......................33
             3.   APPLICATION AND OPERATION OF THE COLLOCATION
                  COST MODEL IN ESTIMATING THE COSTS OF PHYSICAL
                  COLLOCATION .................................................................................41

VII.    VIRTUAL MODULE IN THE COLLOCATION COST MODEL ............................47
        A.   IMPORTANCE OF VIRTUAL COLLOCATION..........................................47
        B.   DEVELOPMENT OF THE VIRTUAL COLLOCATION MODULE OF
             THE COLLOCATION COST MODEL ..........................................................48
             1.   DEVELOPMENT OF THE COLLOCATION COST MODEL
                  AND MODEL LAYOUTS FOR VIRTUAL COLLOCATION .........49
             2.   USE OF THE MODEL LAYOUT TO CALCULATE
                  INVESTMENTS FOR VIRTUAL COLLOCATION .........................50
             3.   APPLICATION AND OPERATION OF THE COLLOCATION
                  COST MODEL IN ESTIMATING THE COST OF VIRTUAL
                  COLLOCATION .................................................................................57

VIII.   COMMON COLLOCATION......................................................................................59

IX.     CAGELESS COLLOCATION ....................................................................................63

X.      ADJACENT PHYSICAL COLLOCATION – ON-SITE ...........................................65

XI.     ADJACENT PHYSICAL COLLOCATION – OFF-SITE..........................................74


                                                                    i
                                                   TABLE OF CONTENTS
CONTENTS                                                                                                                          PAGE
XII.      CONCLUSION REGARDING THE COLLOCATION COST MODEL...................78

XIII.     EVALUATION OF THE SBC-MICHIGAN COLLOCATION COST FILING........79
          A.  BUILDING MODIFICATION/SAFETY & SECURITY ...............................83
              1.   Building Modification..........................................................................83
              2.   Safety & Security.................................................................................94
          B.  CAGE PREPARATION ..................................................................................99
          C.  LAND AND BUILDING ..............................................................................106
          D.  CABLE RACKING/CAGE COMMON SYSTEMS.....................................110
          E.  DC POWER CONSUMPTION .....................................................................116
          F.  VOICE GRADE ARRANGEMENTS...........................................................119

XIV. METERING OF DC POWER ...................................................................................122
     A.  DISCUSSION OF THE BILLING APPROACH FOR DC POWER COST 123
         1.    The Components of DC Power ..........................................................123
         2.    Sizing the DC Power Delivery Infrastructure....................................124
         3.    Sizing the DC Power Plant Infrastructure..........................................128
     B.  RECOMMENDATIONS FOR METERING POWER AND FOR
         ALTERNATIVE COST AND ORDERING EFFICIENCIES ......................134

XV.       REDUNDANT POWER ISSUE................................................................................141


                                                      LIST OF FIGURES

Figure 1 - Relationships Among Collocation Options.................................................................18
Figure 2 - Collocation Elements Example ...................................................................................21
Figure 3 - Office Area..................................................................................................................25
Figure 4 - Best Practice Space Planning......................................................................................26
Figure 5 - Forward-Looking Best Practice Collocation Space ....................................................29
Figure 6 - Collocation Cost Model – 48v DC Power Delivery ...................................................35
Figure 7 - Typical Cageless Collocation Arrangement ...............................................................64
Figure 8 - Connectivity for Adjacent On-Site .............................................................................67
Figure 9 - Connectivity For Adjacent Off-Site............................................................................75




                                                                    ii
                                                TABLE OF CONTENTS
CONTENTS                                                                                                                 PAGE
                                                   LIST OF TABLES

Table 1 - Power Delivery Elements .............................................................................................36
Table 2 – Maintenance and Escort Response Times ...................................................................56
Table 3 – Maintenance and Escort Charging Increments ............................................................56
Table 4 - Adjacent to Telecommunications Space – Best Case ..................................................69
Table 5 - Adjacent to Telecommunication Space - Worst Case ..................................................69
Table 6 - Adjacent to Administrative Space - Best Case.............................................................70
Table 7 - Adjacent to Administrative Space - Worst Case ..........................................................70
Table 8 - Adjacent Collocation Incumbent Manpower Requirements ........................................72
Table 9 - Adjacent Off-Site Collocation Incumbent Manpower Requirements ..........................78




                                                               iii
          (PUBLIC VERSION)                   Initial Testimony of Steven E. Turner (Collocation)
                                                                       MPSC Case No. U-13531
                                                                                   Page 1 of 153

 1   I.    BACKGROUND AND EDUCATION

 2   Q.    PLEASE STATE YOUR NAME AND BUSINESS ADDRESS.

 3   A.    My name is Steven E. Turner. My business address is Kaleo Consulting, 2031 Gold Leaf

 4         Parkway, Canton, Georgia 30114.

 5   Q.    BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY?

 6   A.    I own and direct my own telecommunications and financial consulting firm, Kaleo

 7         Consulting.

 8   Q.    PLEASE DESCRIBE YOUR EDUCATION BACKGROUND.

 9   A.    I hold a Bachelor of Science degree in Electrical Engineering from Auburn University in

10         Auburn, Alabama. I also hold a Masters of Business Administration in Finance from

11         Georgia State University in Atlanta, Georgia.

12   Q.    PLEASE DESCRIBE YOUR WORK EXPERIENCE.

13   A.    From 1986 through 1987, I was a Research Engineer for General Electric in its Advanced

14         Technologies Department developing high-speed graphics simulators. In 1987, I joined

15         AT&T and, during my career there, held a variety of engineering, operations, and

16         management positions. These positions covered the switching, transport, and signaling

17         disciplines within AT&T. From 1995 until 1997, I worked in the Local Infrastructure

18         and Access Management organization within AT&T. In this organization, I gained

19         familiarity with many of the regulatory issues surrounding AT&T’s local market entry,

20         including issues concerning the unbundling of incumbent local exchange company

21         (“incumbent” or “ILEC”) networks. I was on the AT&T team that negotiated with

22         Southwestern Bell Telephone Company concerning unbundled network element
           (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                     Page 2 of 153

 1          definitions and methods of interconnection. A copy of my resume is attached as Exhibit

 2          SET-NRC-1 to my nonrecurring testimony filed in this same proceeding.

 3   Q.     HAVE YOU PREVIOUSLY TESTIFIED OR FILED TESTIMONY BEFORE A
 4          PUBLIC UTILITY OR PUBLIC SERVICE COMMISSION?

 5   A.     I have testified or filed testimony before the Michigan Public Service Commission

 6          (“Commission”) in case numbers U-11831 and U-12320. I have also been a witness in

 7          commission proceedings in the states of Alabama, Arkansas, California, Colorado,

 8          Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Kansas, Kentucky, Louisiana,

 9          Massachusetts, Minnesota, Mississippi, Missouri, Nebraska, Nevada, New Hampshire,

10          New York, North Carolina, Ohio, Oklahoma, Pennsylvania, South Dakota, Tennessee,

11          Texas, Washington, and Wisconsin. Additionally, I have filed testimony before the

12          Federal Communications Commission (“FCC”).

13   II.    PURPOSE OF TESTIMONY

14   Q.     WHAT IS THE PURPOSE OF YOUR TESTIMONY?

15   A.     I am testifying on behalf of AT&T Communications of Michigan, Inc. and TCG Detroit

16          (“AT&T”) and will address three issues in this testimony.

17                 First, I will review this Commission’s prior collocation rate decisions, both from

18          a methodological and a results standpoint. Moreover, I will also outline what has

19          happened regarding collocation rates and the use of the AT&T/MCI Collocation Cost

20          Model, which this Commission adopted, across the SBC 13-state territory since its prior

21          determination regarding SBC Michigan collocation rates.

22                 Second, I will review the Collocation Cost Model that I prepared on behalf of

23          AT&T to establish the forward-looking economic cost of six forms of collocation in
            (PUBLIC VERSION)                       Initial Testimony of Steven E. Turner (Collocation)
                                                                             MPSC Case No. U-13531
                                                                                         Page 3 of 153

 1           SBC-Michigan central offices.1 To this end I will: (a) provide an overview of the six

 2           forms of collocation and outline how each of these forms relates to one another; (b)

 3           outline the conceptual basis for, and the major components of, the Central Office and

 4           Collocation Model Layouts; (c) explain the development of the Collocation Cost Model;

 5           (d) discuss the components of the Collocation Cost Model; and (e) present the results

 6           from use of the Collocation Cost Model by addressing how these investments were

 7           converted into the non-recurring and recurring costs. A summary of my proposed non-

 8           recurring and recurring rates for the six forms of collocation is attached as Exhibit SET-

 9           COLLO-1. A summary of my proposed non-recurring and recurring costs for the six

10           forms of collocation is attached as Exhibit SET-COLLO-2.

11                   Third, I will review the collocation cost filing made by SBC-Michigan in this

12           proceeding to provide the Commission with an overview of its major shortcomings.

13   III.    SUMMARY OF TESTIMONY

14   Q.      PLEASE PROVIDE A SUMMARY OF YOUR TESTIMONY.

15   A.      I provide an overview of collocation rates in the SBC territory showing that the rates this

16           Commission ordered in Case No. U-11831 are still reasonable, particularly in light of

17           rates that SBC readily agrees to across its territory, including recently. I also show how

18           outrageous SBC-Michigan’s proposed collocation rates are when compared to those that

19           SBC readily agrees to in other states. To perform this comparison, I develop a typical

20           collocation arrangement that a CLEC would likely order and price this collocation


     1       Thus, unlike SBC Michigan, which seeks in this case to introduce new cost models (in some
             cases, its third successive attempt at seeking this Commission’s approval of a new cost model),
     (continued)
     (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                   MPSC Case No. U-13531
                                                                               Page 4 of 153

 1    arrangement using SBC-Michigan’s proposed rates in this proceeding, the rates that this

 2    Commission ordered in MPSC Case No. U-11831, and then compare the results to those

 3    rates that SBC has readily agreed to in elsewhere. My analysis shows that SBC-

 4    Michigan’s proposal here is completely out of line. As part of this analysis, I show SBC

 5    Michigan’s proposal to dramatically increase collocation rates should not be viewed in a

 6    vacuum; it is indicative of the generally outrageous proposals that SBC-Michigan has

 7    made in this cost proceeding. Finally, I summarize why the Commission’s prior

 8    determination to use the AT&T/MCI Collocation Cost Model continues to be an

 9    appropriate decision, even if the Commission were to determine that it wants to update

10    collocation rates in Michigan.

11           Because some time has passed since the Commission selected it in Case No. U-

12    11831, I provide an overview of the AT&T/MCI Collocation Cost Model. In conducting

13    this review, I provide an overview, including defining, each of the six methods of

14    collocation studied in the Collocation Cost Model studies. I then provide a detailed

15    explanation of how the Collocation Cost Model develops cost estimates for each of these

16    methods.

17           The first method I describe is physical collocation. In that section I describe the

18    development of the Model Central Office and Collocation Area Model Layout, which

19    incorporate the forward-looking technologies and procedures that are the fundamental

20    basis for the Collocation Cost Model’s analysis. I also describe the manner in which



      AT&T proposes to use essentially the same AT&T/MCI Collocation Cost Model that was
      proposed in Case No. U-11831.
     (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                    MPSC Case No. U-13531
                                                                                Page 5 of 153

 1    investments and expenses were identified and entered as values in the Model Central

 2    Office and Collocation Area Model Layout, and the way in which those investments and

 3    expenses were converted into recurring and non-recurring costs.

 4           I then describe how the Collocation Cost Model applies the same Model Central

 5    Office and best-practices principles to develop costs for the other five types of

 6    collocation. I describe the identification of the investments and expenses necessary for

 7    virtual collocation, and how those investments are converted into recurring and non-

 8    recurring costs.

 9           While discussing each type of collocation, I identify some of the most important

10    underlying logic and assumptions of the Collocation Cost Model and explain how they

11    are reflected in the Model Central Office. Changes to the specific configuration of the

12    Model Central Office entails changes to the underlying logic of the Collocation Cost

13    Model, and, if attempted, impact the compliance of the Collocation Cost Model with a

14    forward-looking, economic cost methodology.

15           I also review the cost submission made by SBC-Michigan. In short, my

16    testimony will go through the most egregious examples of cost overstatements in SBC-

17    Michigan’s filing to provide the Commission with a basis for rejecting the model outright

18    and instead continue with the use of the existing Commission Model, which is used by

19    most states in SBC’s territory.
           (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                      Page 6 of 153

 1   IV.    OVERVIEW OF COLLOCATION RATES AND MODEL ADOPTION

 2          A.        STATUS OF AT&T/MCI COLLOCATION COST MODEL

 3   Q.     COULD YOU BRIEFLY REVIEW WHAT HAPPENED IN CASE NO. U-11831
 4          REGARDING COLLOCATION RATES AND THE TARIFF DOCUMENTING
 5          THE APPLICATION OF THOSE RATES?

 6   A.     Yes. In Case No. U-11831, SBC-Michigan filed its proposed collocation costs. On

 7          behalf of AT&T, I filed the AT&T/MCI Collocation Cost Model and also critiqued many

 8          of the problems with the SBC-Michigan’s proposals. Ultimately, the Commission chose

 9          the AT&T/MCI Collocation Cost Model along with all of the inputs that I proposed to

10          establish SBC Michigan’s collocation rates. SBC-Michigan was then given the

11          opportunity to draft a tariff to implement the rates from the AT&T/MCI Collocation Cost

12          Model. SBC-Michigan ultimately did not provide the Commission with a compliant

13          tariff. Therefore, AT&T filed a proposed tariff based on the AT&T/MCI Collocation

14          Cost Model that was largely developed through a collaborative effort of SBC and CLECs

15          in Texas, in which I had participated. The Commission ultimately adopted AT&T’s

16          tariff.

17   Q.     HAS THE AT&T/MCI COLLOCATION COST MODEL RECEIVED SIMILAR
18          ACCEPTANCE BY COMMISSIONS IN OTHER STATES?

19   A.     Yes. This is particularly so in the SBC territory. In Texas, the Texas Public Utilities

20          Commission (“Texas PUC”) evaluated the collocation cost filings made by SBC and

21          AT&T/MCI during the Section 271 collaborative. Ultimately, the Texas PUC elected to

22          use the AT&T/MCI Collocation Cost Model. SBC was then required to file its preferred

23          inputs to the AT&T/MCI Collocation Cost Model. I filed inputs on behalf of AT&T and
         (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                    Page 7 of 153

 1        MCI. Ultimately, the Commission then made final input determinations but used the

 2        AT&T/MCI Collocation Cost Model to set rates for collocation in Texas.2

 3               California followed a similar process. In California, AT&T and MCI and a

 4        collection of other CLECs filed the AT&T/MCI Collocation Cost Model and SBC filed

 5        its alternative proposal before the California Commission. The California Commission

 6        selected the AT&T/MCI Collocation Cost Model. A proceeding was then held to

 7        develop collocation rates, allowing the parties to offer contested inputs to the model.

 8        Testimony was filed by the respective parties on the inputs and hearings were held, but

 9        the California Commission never made a final determination on the inputs. Instead, in

10        2002 the California Commission chose in connection with the § 271 proceeding going on

11        in California to simply use the inputs proposed by AT&T, MCI, and other CLECs for

12        collocation rates on an interim basis. That “interim” period continues until today.

13               Missouri and Oklahoma have followed a similar pattern. Each of these state

14        commissions began their collocation proceedings by first making a determination of

15        which model should be used: the AT&T/MCI Collocation Cost Model or SBC’s

16        alternative proposal. In both states the AT&T/MCI Collocation Cost Model was

17        selected. Both states then established proceedings to select inputs. However, the

18        commissions were never required to make a final determination as SBC settled with the

19        CLECs in these respective states on rates and tariff language. The nature of this

20        settlement will be discussed in more detail below.


     2    Texas Public Utilities Commission, Revised Arbitration Award, Docket No. 21333, Proceeding
          to Establish Permanent Rates for Southwestern Bell Telephone Company’s Revised Physical and
          Virtual Collocation Tariffs, April 12, 2001.
     (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                   MPSC Case No. U-13531
                                                                               Page 8 of 153

 1           Unlike these other states, Kansas did not have a two-phase proceeding, but rather

 2    simultaneously considered both methodological and rate issues. AT&T and other CLECs

 3    submitted the AT&T/MCI Collocation Cost Model, and SBC submitted its alternative

 4    proposal, each with their own recommended inputs. Testimony was filed and the hearing

 5    was conducted, but the case was ultimately settled, with rates and tariff language selected

 6    using the same basis as was done for Missouri and Oklahoma.

 7           Nevada followed a similar pattern to Kansas. A proceeding was established to

 8    develop rates for collocation and both sides filing competing cost models and inputs.

 9    SBC and the CLECs settled on collocation rates and tariff language using the same

10    construct as had been developed for Kansas, Missouri, and Oklahoma, but with one slight

11    increase in rates for DC Power Delivery for Cageless Collocation.

12           Finally, Wisconsin held a lengthy UNE cost proceeding, which included

13    collocation. AT&T filed the AT&T/MCI Collocation Cost Model and proposed inputs.

14    SBC filed its alternative proposal. The Wisconsin Commission adopted the AT&T/MCI

15    Collocation Cost Model, and elected to use a combination of AT&T- and SBC proposed

16    inputs. During the implementation of the Wisconsin Commission’s decision, SBC and

17    the CLECs ended up settling on rates for collocation using the Kansas, Missouri,

18    Oklahoma, and Nevada precedents.

19           In short, eight of SBC’s states – California, Kansas, Michigan, Missouri, Nevada,

20    Oklahoma, Texas, and Wisconsin – have either been ordered to use the AT&T/MCI

21    Collocation Cost Model or have had collocation rates based largely on this model

22    implemented in them.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                     Page 9 of 153

 1   Q.    WHY HAVE YOU GONE THROUGH THIS LENGTHY HISTORY OF THE
 2         TARIFF LANGUAGE AND RATE DEVELOPMENT IN THESE EIGHT
 3         STATES?

 4   A.    I have done so for two reasons. First, I think this Commission needs to know how

 5         broadly in the SBC territory the use of the AT&T/MCI Collocation Cost Model has been.

 6         Michigan is not an exception – in large part Michigan set the standard. My testimony

 7         that follows will encourage the Commission to retain the use of this model even if it feels

 8         that it is even necessary to update collocation rates. Doing so will allow the CLECs to

 9         continue to have stability in the terms and conditions and consistency in rates for

10         collocation across the various SBC states. Second, this history and its demonstration of

11         how often SBC has agreed to settle on collocation rates sets the stage for my next

12         discussion regarding the extraordinary collocation rate proposal that SBC has made here.

13         B.     STATUS OF COLLOCATION RATES ACROSS THE SBC TERRITORY

14   Q.    HOW WILL YOU COMPARE THE COLLOCATION RATES ACROSS THE
15         SBC STATES?

16   A.    As the Commission knows, collocation is made up of a large number of rate elements

17         related to the various items that a CLEC must purchase to establish collocation in an SBC

18         central office. Examples of such rate elements are planning, space, a cage partition,

19         entrance facilities, DC power, and interconnection arrangements. I have found that

20         simply lining up the various rate proposals of elements side-by-side does not make for a

21         meaningful comparison because ultimately what is important to the CLEC, SBC, and this

22         Commission is the real cost for the collocation arrangement.

23                As such, to make these types of comparisons, I developed a prototype collocation

24         arrangement that a CLEC would order from SBC-Michigan, and calculated the amount
           (PUBLIC VERSION)                         Initial Testimony of Steven E. Turner (Collocation)
                                                                              MPSC Case No. U-13531
                                                                                        Page 10 of 153

 1           the CLEC would be charged for such an arrangement. The primary purpose of this

 2           prototype is simply to apply the rate elements in a “real-world” collocation scenario to

 3           allow comparison of the various rates for collocation that are in effect presently in

 4           Michigan compared to what is in effect in other states, and what SBC-Michigan has

 5           proposed in this present proceeding.

 6   Q.      GIVEN THAT COLLOCATION RATES ARE A COMBINATION OF
 7           NONRECURRING AND RECURRING CHARGES, HOW HAVE YOU
 8           PERFORMED THIS COMPARISON?

 9   A.      The analysis that follows will give the Commission a summary of the nonrecurring and

10           recurring rates that the CLEC would pay for this prototype collocation arrangement.

11           However, to help normalize rate structures that lean more heavily towards nonrecurring

12           charges versus recurring charges, I have calculated a net present value across seven years

13           that effectively allows for a combination of the nonrecurring and recurring charges into a

14           single “cost” to the CLEC for collocation under the different rates that I evaluate.3

15                   As such, to make these types of comparisons, I developed a prototype collocation

16           arrangement that a CLEC would order from SBC-Michigan, and calculated the amount

17           the CLEC would be charged for such an arrangement. The primary purpose of this

18           prototype is simply to apply the rate elements in a “real-world” collocation scenario to

19           allow comparison of the various rates for collocation that are in effect presently in


     3       The seven-year period was selected to allow for combining the net present value effects of both
             the nonrecurring and recurring charges into a single cost. I chose seven years because this is, in
             my opinion, a reasonable period for evaluating a collocation business plan. However, if I had
             chosen a much longer period, the effect of the recurring charges in the total net present value
             would have become so significant as to overwhelm the effect of the total nonrecurring charges.
             The reverse holds true if I had selected a much shorter time period – the nonrecurring effect
     (continued)
          (PUBLIC VERSION)                        Initial Testimony of Steven E. Turner (Collocation)
                                                                            MPSC Case No. U-13531
                                                                                      Page 11 of 153

 1         Michigan compared to what is in effect in other states, and what SBC-Michigan has

 2         proposed in this present proceeding.

 3   Q.    CAN YOU BRIEFLY DESCRIBE THE PROTOTYPE COLLOCATION
 4         ARRANGEMENT THAT YOU HAVE SELECTED FOR COMPARISON?

 5   A.    Yes. I have selected a 300 square foot caged collocation arrangement, with a DC Power

 6         Delivery Arrangement capable of delivering 100 Amps of DC Power over both the A-

 7         Feed and B-Feed (a 200 Amp arrangement in the current SBC-Michigan tariff), a fiber

 8         entrance facility, 3400 Voice Grade Arrangements, 280 DS1 Arrangements, and 48 DS3

 9         Arrangements. The EXCEL spreadsheet that I used to develop these comparisons can

10         easily be modified to allow for comparisons of different sized collocation arrangements.

11         However, I selected this arrangement to simply evaluate the effects of comparing

12         numerous collocation rate elements between various tariffs that would represent a

13         reasonable collocation arrangement.4

14   Q.    WHAT COLLOCATION RATE STRUCTURES HAVE YOU COMPARED?

15   A.    The table that follows summarizes the results that I found for six rate structures: (1) the

16         current SBC-Michigan collocation rates in effect based on the Commission’s

17         determination in MPSC Case No. U-11831; (2) the current rates in effect in Texas; (3)

18         the rates in Kansas, Missouri, and Oklahoma which were all simultaneously settled

19         between SBC and the CLECs; (4) the rates in Nevada and Wisconsin which were settled



           would have overwhelmed the recurring effect. In short, I selected seven years to attempt to
           balance the impact of both nonrecurring and recurring charges in the resulting net present value.
     4     Other forms of collocation could be evaluated in a similar manner. I chose Physical Caged
           Collocation to illustrate the gaps between the various alternatives, but a similar analysis could be
           conducted for Cageless Collocation if the Commission so desired.
     (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                    MPSC Case No. U-13531
                                                                              Page 12 of 153

 1    using the exact same template and rates; (5) the rates currently in effect in California that

 2    are based on the AT&T/MCI Collocation Cost Model with the AT&T/MCI proposal on

 3    inputs; and (6) the rates that SBC-Michigan has proposed in this current proceeding. The

 4    details of this analysis are provided as an EXCEL spreadsheet as part of Exhibit SET-

 5    COLLO-4, which is a CD-ROM containing the AT&T/MCI Collocation Cost Model and

 6    various work papers.

        State                  Nonrecurring Recurring   NPV    NPV Gap %
        Current Michigan         $64,302     $5,075   $351,806     NA
        Texas                     $88,791    $4,670   $353.346    0.44%
        KS-MO-OK                 $121,768    $3,871   $341,073   (3.05%)
        Nevada-Wisconsin         $121,768    $3,871   $341,073   (3.05%)
        California                $69,363    $5,986   $408,434   16.10%
        Proposed                 $279,025    $8,887   $782,481  122.42%
        Michigan
 7

 8           The NPV Gap Percentage in the last column all compare back to the current rates

 9    in effect in Michigan. As can readily be seen from this analysis, the current rates in

10    effect in Michigan are almost identical to those that were ordered by the Texas Public

11    Utilities Commission. There is only a 0.44 percent gap. Moreover, the current rates in

12    Michigan are almost identical to those that SBC settled in Kansas, Missouri, and

13    Oklahoma. There is only a 3.05 percent gap with the settled rates in Kansas, Missouri,

14    and Oklahoma being slightly lower than those that this Commission ordered in Michigan.

15    The rates that were ordered in California based on the AT&T/MCI Collocation Cost

16    Model and the CLECs’ proposed inputs are 16.10 percent higher than those rates in the

17    SBC-Michigan current tariff, with the primary difference related to the higher cost of

18    land and buildings in California versus Michigan. Nonetheless, all eight of these states
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 13 of 153

 1         are reasonably close to one another regardless of whether a settlement was reached

 2         (Kansas, Missouri, Nevada, Oklahoma, and Wisconsin), the Commission ordered the

 3         rates (Texas), or the AT&T/MCI Collocation Cost Model was used with the CLECs’

 4         proposed inputs (California and Michigan).

 5                This places the SBC-Michigan proposed rates in a clear light. SBC-Michigan has

 6         proposed rate increases for collocation in Michigan that would represent an increase of

 7         122.42 percent over those already in effect in Michigan, and over 90 percent higher than

 8         the second most expensive state, California. Indeed, SBC-Michigan seeks massive rate

 9         hikes for both the nonrecurring rates (from $64,302 to $279,025 – an increase of 334

10         percent) and recurring rates ($5,075 to $8,887 – an increase of 75 percent).

11   Q.    COULD THIS HUGE RATE HIKE REASONABLY BE JUSTIFIED BY SBC-
12         MICHIGAN BECAUSE THIS COMMISSION MADE A BAD DECISION IN
13         CASE NO. U-11831?

14   A.    No. One does not need to look far – just across Lake Michigan – to see how ridiculous

15         SBC-Michigan’s proposal is in this current proceeding. SBC settled collocation rates 15

16         months ago in Wisconsin. The rates that SBC settled for in Wisconsin are actually lower

17         than are what are in effect in Michigan currently for this prototype collocation

18         arrangement. In short, when compared to the settled rates in Wisconsin, SBC-Michigan

19         wants to increase the nonrecurring cost for the prototype collocation arrangement that I

20         have described from $121,768 to $279,025 – an increase of 129 percent. SBC-Michigan

21         also wants to increase the recurring cost for the prototype collocation arrangement from

22         $3,871 to $8,887 – an increase of 130 percent. It is simply not plausible that SBC-

23         Michigan would believe that its costs have increased by more than double from what it
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 14 of 153

 1         was willing to settle for in Wisconsin – a state where many of its inputs were actually

 2         selected by the Wisconsin Commission.

 3                I believe the Commission should be indignant that SBC-Michigan would make

 4         such an outrageous proposal here. If SBC-Michigan is quite content to settle collocation

 5         issues in Kansas, Missouri, Nevada, Oklahoma, and Wisconsin at levels that are so

 6         dramatically lower – less than half – than what SBC-Michigan proposes now in

 7         Michigan, then it is almost impossible to take SBC-Michigan’s current proposal

 8         seriously.

 9   Q.    GIVEN SBC’S PROPOSAL HERE VERSUS OTHER STATES, WHAT
10         RECOMMENDATION DO YOU MAKE REGARDING SBC-MICHIGAN’S
11         PROPOSED COLLOCATION RATES AND STUDIES?

12   A.    Quite simply, I believe the Commission needs to reject them outright. SBC-Michigan

13         has not made even a remote effort at filing reasonable collocation costs in Michigan. I

14         also hope that this reveals to Commission how egregious SBC-Michigan’s overall filing

15         of costs in this proceeding is in other areas where the discrepancy might not be so

16         obvious as it is in collocation (such as for Zone A 2-Wire Analog Loops where SBC-

17         Michigan seeks an increase over current rates of 175 percent). In short, the Commission

18         should see SBC-Michigan’s cost filing for what it truly is – a transparent effort to drive

19         up costs for Michigan CLECs in Michigan to a level far above what even SBC would

20         readily acknowledge as being reasonable, based on its actions in numerous states over the

21         past two years.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 15 of 153

 1   V.    OVERVIEW OF THE SIX METHODS OF COLLOCATION AND COST MODEL

 2   Q.    PLEASE DESCRIBE THE PURPOSE OF THE COLLOCATION COST MODEL.

 3   A.    In an effort to estimate the forward-looking economic costs associated with various forms

 4         of collocation, AT&T and MCI assembled a team of experts knowledgeable with all

 5         aspects of collocation. Specifically, the team was comprised of individuals with

 6         extensive backgrounds in central office space planning, cable engineering, power

 7         engineering, outside plant design, and other areas pertinent to collocation.

 8                The team of experts developing the Collocation Cost Model identified six types of

 9         collocation: (1) Physical Collocation; (2) Virtual Collocation; (3) Common Collocation;

10         (4) Cageless Collocation; (5) Adjacent On-Site Collocation; and (6) Adjacent Off-Site

11         Collocation.

12                Physical Collocation is a means by which the competitive local exchange carrier

13         (“CLEC”) places telecommunications equipment within a segregated area (normally a

14         cage) inside the incumbent’s central office. The CLEC leases the space and supporting

15         infrastructure (e.g. DC power, cabling, overhead structure) from the incumbent, but the

16         CLEC provides the collocated equipment and its own maintenance.


17                Virtual Collocation is a means by which the CLEC places its telecommunications

18         equipment along side the incumbent’s own telecommunications equipment. The CLEC

19         purchases equipment and sells the equipment to the incumbent for a nominal sum

20         (typically $1) while maintaining a repurchase option. The equipment is then installed in

21         vacant space beside the incumbent’s equipment. The incumbent handles day-to-day

22         maintenance activities and the CLEC must pay not only for such maintenance activities,
     (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                   MPSC Case No. U-13531
                                                                             Page 16 of 153

 1    but also for training for the incumbent’s personnel performing the maintenance on the

 2    CLEC’s equipment. The CLEC is permitted to enter the central office upon request, but

 3    requires a security escort.


 4           Common Collocation, like Physical Collocation, involves placement of CLEC

 5    equipment within a segregated area of the central office. However, instead of each

 6    CLEC placing its equipment in a separate collocation cage, the CLECs share a

 7    “common” collocation cage. In this arrangement, CLECs have direct access to their

 8    equipment and provide maintenance for it.


 9           Cageless Collocation, like Virtual Collocation, involves the CLEC placing its

10    telecommunications equipment alongside the incumbent’s equipment. However, unlike

11    Virtual Collocation, the CLEC retains ownership of the collocated equipment. CLEC

12    ownership of the equipment creates three important differences from Virtual Collocation.

13    First, the CLEC provides the physical maintenance of the equipment rather than having

14    the incumbent technicians perform the work. Second, because the incumbent does not

15    perform any maintenance on the equipment, there is no need for incumbent personnel to

16    be trained on how to maintain the CLEC’s equipment. Third, some type of security,

17    either electronic card or a security escort may be required by the incumbent LEC in order

18    for CLECs to access the equipment.


19           There are two types of Adjacent Physical Collocation: (1) Adjacent On-Site and

20    (2) Adjacent Off-Site. Both types of Adjacent Collocation involve the placement of

21    CLEC equipment outside of the incumbent’s central office. In the case of Adjacent On-
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 17 of 153

 1         Site Collocation, the CLEC’s equipment is located on the incumbent’s property as close

 2         as possible to the central office exterior wall. Interconnection cabling and DC power are

 3         run from the CLEC’s equipment to the central office usually by drilling through the wall.

 4         Incumbent LECs utilize similar procedures to those accounted for in the Collocation

 5         Cost Model to interconnect to equipment outside of the central office by drilling through

 6         the wall in the same manner. In the case of Adjacent Off-Site Collocation, the CLEC’s

 7         equipment is placed outside the central office and on nearby property not part of the

 8         central office parcel. The location chosen is as close as possible. In this scenario, only

 9         interconnection cabling is run from the incumbent to the telecommunications equipment

10         provided by the CLEC.

11   Q.    COULD YOU DESCRIBE IN MORE DETAIL HOW THESE SIX FORMS OF
12         COLLOCATION RELATE TO ONE ANOTHER?

13   A.    Rather than thinking of these six forms of collocation as six different models, it is more

14         helpful to understand that the latter forms of collocation are really variations on the first

15         two: Physical Collocation and Virtual Collocation. In viewing the six forms of

16         collocation in this way, it makes it easier to understand how the Collocation Cost Model

17         “fits together.” The following diagram illustrates how these six types of collocation are

18         derived from one another.

19
        (PUBLIC VERSION)                             Initial Testimony of Steven E. Turner (Collocation)
                                                                               MPSC Case No. U-13531
                                                                                         Page 18 of 153

1


    Figure 1 - Relationships Among Collocation Options


                                        Physical                   Virtual
                                       Collocation               Collocation
                                   • CLEC equipment          • CLEC equipment
              Common                 placed in individual      placed in ILEC             Cageless
             Collocation             cages                     equipment rows            Collocation
                                   • CLEC performs its       • ILEC performs
         • CLEC equipment            own maintenance           maintenance at        • CLEC equipment
           placed in 550 sq.       • Space provided in         CLEC direction          placed in ILEC
           ft. cage with other       wire center in 100      • Space provided in       equipment rows
           CLECs                     sq. ft. increments        ILEC relay rack in    • CLEC performs its
         • CLEC performs its       • All forms of              full rack increment     own maintenance
           own maintenance           connectivity            • ILEC owns             • Space provided in
         • Space provided in                                   equipment               ILEC relay rack in
           linear feet of lineup                                                       full rack increment
           area within cage                                                          • CLEC owns
         • All forms of                                                                equipment
           connectivity                                                              • All forms of
                                                                                       connectivity
                                        Adjacent                   Adjacent
                                        On-Site                    Off-Site

                                   • CLEC equipment          • CLEC equipment
                                     placed in trailer         placed in off-site
                                     outside but               location
                                     adjacent to ILEC        • CLEC performs its
                                     building                  own maintenance
                                   • CLEC performs its       • Fiber and copper
                                     own maintenance           (VG and DS1)
                                   • Interior space not        connectivity
                                     required, but trailer     through entrance
                                     rental space              cables
                                     required                • DC power self-
                                   • All forms of              provided
                                     connectivity
                                     through entrance
                                     cables
                                   • DC power provided
                                     by ILEC plant

2          This diagram illustrates several important points. First, costs for Common Collocation

3          are not derived from an entirely new cost model, but rather, they are derived from the

4          Physical Collocation Cost Model. Similarly, the costs for Cageless Collocation are

5          derived almost entirely from the costs associated with Virtual Collocation. Finally, the
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 19 of 153

 1         costs for the two forms of Adjacent Collocation are variations on the costs associated

 2         with Physical Collocation, with adjustments for placement of a collocation trailer (instead

 3         of a cage) located outside of the incumbent’s central office. Thus, once one understands

 4         the costing approach used in Physical and Virtual Collocation, the additional four types

 5         require only analysis of their unique cost elements; they do not require an entirely new

 6         cost analysis.

 7   Q.    PLEASE DESCRIBE THE PROCESS USED TO DEVELOP THE
 8         COLLOCATION COST MODEL.

 9   A.    AT&T and MCI retained a team of subject matter experts on all components of the

10         Collocation Cost Model. The purpose of the Collocation Cost Model is to identify all

11         incumbent investments needed to provide collocation. As the first step, the team

12         constructed a forward-looking Central Office Model Layout and a forward-looking

13         Collocation Area Model Layout based upon the use of best practice central office space-

14         planning strategies, efficient suppliers, and competitive processes. From these two model

15         layouts, subject mater experts identified all relevant investments and provided these to

16         the consulting firm of FTI Consulting to develop collocation cost estimates in the

17         Collocation Cost Model.

18   Q.    HOW WILL YOU STRUCTURE THE TESTIMONY IN SUPPORT OF THE
19         COLLOCATION COST MODEL?

20   A.    I will start out by describing in detail the development of the Physical Collocation portion

21         of the Collocation Cost Model. In this portion of the testimony, I will describe the

22         underlying approach used in developing the costs for physical collocation. This approach

23         is central to understanding the development of the other forms of collocation included in

24         the Collocation Cost Model. Second, I will provide testimony describing the unique
           (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 20 of 153

 1          attributes associated with virtual collocation within the Collocation Cost Model. Finally,

 2          I will discuss the unique attributes associated with the remaining four forms of

 3          collocation.

 4   VI.    PHYSICAL COLLOCATION COST MODEL

 5          A.     IMPORTANCE OF PHYSICAL COLLOCATION

 6   Q.     WHAT IS REQUIRED FOR PHYSICAL COLLOCATION?

 7   A.     Physical collocation is nothing more than an arrangement that allows a CLEC to locate

 8          its own telecommunications equipment in a segregated portion of the incumbent’s central

 9          office. The CLEC then pays the incumbent for the use of that space and the incumbent

10          allows sufficient access to the space for the CLEC’s employees or contractors to enter the

11          central office to install, repair, and maintain its collocated equipment. Figure 2 displays

12          the limited number of elements required to establish CLEC collocation areas in an

13          incumbent building. As shown, the only requirements are for fiber connectivity between

14          the first manhole outside the central office and the CLEC’s terminal equipment; -48V DC

15          power connectivity between the CLEC equipment and a battery distribution fuse bay

16          (“BDFB”); and copper connectivity (Voice Grade, DS-1, DS-3) between the collocation

17          area and an appropriate incumbent cross-connect. Each of these is discussed in detail

18          below. The physical demarcation point between the incumbent and CLEC is at a point of

19          termination (“POT”) bay, normally placed in close proximity to CLEC equipment.
         (PUBLIC VERSION)                               Initial Testimony of Steven E. Turner (Collocation)
                                                                                  MPSC Case No. U-13531
                                                                                            Page 21 of 153

    Figure 2 - Collocation Elements Example


                                                                              BDFB

                                                ILEC -48V
               Manhole                         POWER PLANT
                                                                                              Collocation Area

                                                                                       POT
                                                                                       BAYS
                         Loop                                     VG
                                                                                               Access   Transport   Fiber
                         Loop
                                     ILEC                                       DS-1
                ILEC
               CABLE                 MDF                                                      DS-3
               VAULT



                                            DS-1


                                                      ILEC
                                            DS-1     DIGITAL
                                                     CROSS
                                            DS-1
                                                    CONNECT
                                  ILEC      DS-3    SYSTEMS
                                NETWORK




                                                   FIBER RISER CABLE - CLEC SUPPLIED




1   Q.    IS PHYSICAL COLLOCATION A HIGH TECHNOLOGY ACTIVITY?

2   A.    No. Physical collocation is a low technology, nuts-and-bolts, activity used by a high

3         technology industry. It primarily consists of setting up metal cages to hold CLEC

4         telecommunications equipment, and providing the following connectivity: fiber from the

5         CLEC coming from the manhole into the cable vault and to the collocation cage; copper

6         connections to the incumbent cross-connects to pick up unbundled loops or connect to

7         the incumbent network; and connectivity to the -48V DC power source. This set-up

8         requires building the cage, installing cables on racks, and properly grounding the

9         equipment.
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 22 of 153

 1         B.     DEVELOPMENT OF THE PHYSICAL COLLOCATION MODULE OF
 2                THE COLLOCATION COST MODEL

 3                1.      COSTS FOR PHYSICAL COLLOCATION WERE DEVELOPED
 4                        USING THE COLLOCATION COST MODEL, MODEL LAYOUTS
 5                        AND BEST PRACTICES ASSUMPTIONS

 6   Q.    HOW DID YOU APPROACH DEVELOPMENT OF THE COLLOCATION COST
 7         MODEL AND MODEL LAYOUTS IN ESTIMATING THE COST OF PHYSICAL
 8         COLLOCATION?

 9   A.    The subject matter expert team determined that the most appropriate method to develop

10         the Collocation Cost Model would be to identify all investments for physical collocation

11         in central offices incorporating the use of "best practices."

12   Q.    WHAT FACTORS DID THE SUBJECT MATTER EXPERTS CONSIDER IN
13         DETERMINING THE BEST PRACTICES FOR IMPLEMENTING
14         COLLOCATION?

15   A.    "Best practices" assume the use of cost efficient, forward-looking technology and utilize

16         only as much building space, labor, and materials as needed to properly place all

17         equipment, including the appropriate amount of space for auxiliary equipment. "Best

18         practices" also assume that the incumbent would make decisions relating to collocation of

19         a CLEC at the incumbent's central office in the same manner that the incumbent places its

20         own equipment and that of its affiliates.

21   Q.    WHY IS IT IMPORTANT TO IDENTIFY THE INVESTMENTS ASSOCIATED
22         WITH PHYSICAL COLLOCATION BASED ON THE USE OF BEST PRACTICE
23         SPACE-PLANNING STRATEGIES?

24   A.    CLEC collocation at an incumbent's central office is essential for the CLEC to provide

25         local service efficiently using the incumbent’s unbundled network elements. Without

26         collocation, there would be no way for the CLEC to efficiently pick up and transport the

27         traffic coming from unbundled loops it has purchased, or to interconnect with the
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 23 of 153

 1         incumbent’s network. Thus, collocation is essential for new entrants who plan facilities-

 2         based entry.

 3                At the same time, collocation at the incumbent's central office is largely under the

 4         control of the incumbent. In a competitive environment, an incumbent will not have the

 5         incentive to minimize the costs to CLECs for collocation. For example, the incumbent

 6         will not have the incentive to make space in its central office available to a CLEC on the

 7         same basis as it uses space in the central office for additional equipment of its own.

 8         Basing the Model Central Office and Model Collocation space – and thus investments –

 9         on best practice space planning ensures the inclusion only of costs associated with an

10         efficiently located collocation space. Indeed, the incumbent has the incentive to gold

11         plate the collocation arrangement to drive up the costs of competitors, unless the

12         Commission vigorously applies the best practice standards to counter-balance that

13         incentive.

14   Q.    PLEASE DESCRIBE THE FORWARD-LOOKING CENTRAL OFFICE MODEL
15         LAYOUT.

16   A.    The Central Office Model Layout assumes a new urban central office designed for up to

17         150,000 lines, together with associated transport, power, multi-media, and miscellaneous

18         equipment space. Such an office would consist of approximately 36,000 square feet of

19         equipment space – or three equipment floors of about 12,000 square feet (100’ x 120’)

20         each – plus a below-ground cable vault. See Figure 3 and Figure 4. The Central Office

21         Model Layout also assumes an additional 3,000 square feet on each floor and the entire

22         basement (except for the cable vault area) to provide a generous allowance for building

23         support services such as main corridors, elevators, washrooms, lunch rooms, conference
         (PUBLIC VERSION)                        Initial Testimony of Steven E. Turner (Collocation)
                                                                           MPSC Case No. U-13531
                                                                                     Page 24 of 153

 1        facilities, administrative areas, electrical rooms, and mechanical rooms. This results in

 2        an overall footprint of 15,000 square feet. The best practice central office planning

 3        strategy (see Figure 4) provides adequate space for the long-term requirements associated

 4        with a forward-looking, urban central office and is representative of central office layouts

 5        that would have been constructed in recent years to accommodate growth in a downtown

 6        urban environment. New central offices designed for areas outside of urban centers

 7        would likely consist of only one or two floors above the cable vault, requiring shorter

 8        cable connectivity lengths. I understand that in Michigan, most SBC-Michigan central

 9        offices resemble these suburban and rural offices. Hence, the forward-looking Central

10        Office Model Layout incorporates conservative assumptions in terms of recent actual

11        central office builds and is likely to be significantly larger than the average central office

12        across the incumbent territory.5




     5    Basing the Central Office Model Layout on a large urban central office does not make the
          Collocation Cost Model any less appropriate for modeling physical collocation cost in Michigan.
           A large urban central office was chosen so that the cable lengths for fiber, power, and copper
          connectivity would be their longest due to the size of the central office. Therefore, applying these
          costs in a smaller central office in Michigan will ensure that SBC-Michigan is still being fully
          compensated (if not overcompensated) for the investments associated with physical collocation.
    (PUBLIC VERSION)                             Initial Testimony of Steven E. Turner (Collocation)
                                                                           MPSC Case No. U-13531
                                                                                     Page 25 of 153

Figure 3 - Office Area


                                                       100’-0”




                                     EQUIPMENT SPACE             = 12,000 SQ. FT.
                                                                    (PER FLOOR)
                           120’-0”




                                     TOTAL BUILDING SPACE = 15,000 SQ. FT.
                                                            (PER FLOOR)




                                     ADDITIONAL BUILDING SUPPORT SPACE (APPROX. 25%)




                                                   SUMMARY
                         EQUIPMENT SPACE PER FLOOR                   = 12,000 SQ. FT.
                         TOTAL FOOTPRINT PER FLOOR                   = 15,000 SQ. FT.
                         NUMBER OF FLOORS                            =        3
                         TOTAL EQUIPMENT SPACE                       =   36,000 SQ. FT.
                         TOTAL ABOVE GROUND FLOOR SPACE              =   45,000 SQ. FT.

                         CABLE VAULT AND BUILDING SERVICES           = BELOW GROUND



                     FORWARD LOOKING URBAN CENTRAL OFFICE
         (PUBLIC VERSION)                             Initial Testimony of Steven E. Turner (Collocation)
                                                                                MPSC Case No. U-13531
                                                                                          Page 26 of 153

    Figure 4 - Best Practice Space Planning




                          MULTI-MEDIA & DATA     SUPPORT COMPUTER           TANDEM            COLLO
                             EQUIPMENT               SYSTEMS               SWITCHING           AREA
                               5000 S. F.            3400 S. F.             2500 S. F.       1100 S. F.

           FLOOR 3



                        HIGHER
                         LEVEL          TRANSPORT              MISC.           -48V POWER      COLLO
                     X-CONNECTS         EQUIPMENT           EQUIPMENT      (DIGITAL & COMMON)  AREA
                       2000 S. F.        4450 S. F.          2000 S. F.          3000 S. F.   550 S. F.


           FLOOR 2




                                                                                             COLLO
                                                       DIGITAL SWITCHING
                     MDF COMPLEX                                                              AREA
                                                          2 x 75 k LINES
                       2400 S. F.                                                           1100 S. F.
                                                            8500 S. F.


           FLOOR 1


                     DUAL ENTRANCE                BUILDING SERVICES / LUNCHROOMS /
                            &                    CONFERENCE FACILITIES / ADMIN. AREAS
                      CABLE VAULT                             9600 S. F.
                        2400 S. F.
          BASEMENT


                              BEST PRACTICE SPACE PLANNING MODEL


1   Q.    HOW COULD THIS THREE-STORY BUILDING BE USED TO MODEL THE
2         INVESTMENTS NEEDED TO PLACE COLLOCATION AREAS IN EXISTING
3         CENTRAL OFFICES IN URBAN AREAS THAT MAY HAVE, FOR EXAMPLE,
4         EIGHT FLOORS?

5   A.    The Central Office Model Layout contains enough space to house all the equipment

6         needed in the largest urban central offices and, indeed, is the general layout used over the

7         past five years in planning new central offices. If the equipment in a particular central

8         office currently is spread out across eight floors, that is because the old analog equipment

9         required an extraordinary amount of space. However, as that equipment has been
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 27 of 153

 1         replaced by digital equipment, pockets of space have become available throughout the

 2         eight stories that can be used for collocation space. If such space is not available, that is

 3         due to one of two things: the incumbent has not removed old equipment that it is no

 4         longer using, or the incumbent is now housing administrative personnel in otherwise

 5         available equipment space.

 6                If the incumbent needed space for its own equipment, it would not locate its

 7         equipment far from the cross-connects, but rather would remove any unused equipment

 8         or relocate administrative personnel to convenient spaces in the central office and place

 9         its telecommunications equipment there. Thus, use of the Central Office Model Layout

10         simply is consistent with the way the incumbent would make space available for itself.

11   Q.    IF THE MODEL CENTRAL OFFICE LAYOUT IS BASED ON A LARGE
12         URBAN ENVIRONMENT, CAN IT ALSO BE USED FOR SMALLER URBAN,
13         SUBURBAN AND RURAL COLLOCATIONS?

14   A.    Yes, it can. Smaller urban, suburban, and rural situations will require less

15         telecommunications equipment, so the central office likely would be only one or two

16         floors plus the basement, with each floor having approximately the same 15,000 square

17         foot footprint. The connectivity lengths required would be shorter, thereby reducing

18         costs; land costs should be lower; and there may be no costs associated with elevators.

19         Thus, even if there are some structural scale economies in the large urban central office,

20         overall collocation costs are likely to be lower in smaller urban, suburban and rural

21         locations than in the large urban locations modeled. Thus, the Central Office Model

22         Layout provides a conservatively high estimate of collocation investments and costs for

23         other areas.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 28 of 153

 1   Q.    PLEASE DESCRIBE THE MODEL COLLOCATION AREA LAYOUT.

 2   A.    The Model Collocation Area Layout assumes a best practice planning strategy in which

 3         the incumbent designates more than one collocation area in a central office in order to

 4         maximize the use of and to increase the options for space in close proximity to the

 5         incumbent’s cross-connects. This approach is in sharp contrast to the arbitrary

 6         assumption sometimes made by incumbents that the first collocation area in a central

 7         office must be sized to accommodate all potential future CLECs, even though such a

 8         decision results in placement of the collocation area in a remote location far from the

 9         cross-connects.

10                As shown in Figure 5, the Collocation Area Model Layout is 550 square feet to

11         take advantage of smaller areas that would be in relatively close proximity to incumbent

12         cross-connects. These pockets of space include those made available by prior

13         replacements of older technologies with more space efficient digital equipment, vacant

14         areas, telecommunications space occupied by administrative staff, or locations occupied

15         by redundant equipment that an efficient incumbent would have removed long ago. This

16         assumption reflects an expectation by the Collocation Cost Model layout developers that,

17         in terms of placement, the incumbent would employ the same best planning process that

18         it would use when planning efficient equipment space allocations for its own equipment.
        (PUBLIC VERSION)                                   Initial Testimony of Steven E. Turner (Collocation)
                                                                                     MPSC Case No. U-13531
                                                                                               Page 29 of 153

    Figure 5 - Forward-Looking Best Practice Collocation Space

                                                              27’-6”

                                             10’-0”            7’-6”            10’-0”




                                                                POT BAYS
                             10’-0”
                    20’-0”




                                              CLEC EQPT.                   CLEC EQPT.




                                                                BDFB
                                              CLEC EQPT.                   CLEC EQPT.




                                                                POT BAYS
                             10’-0”




                                                            SUMMARY
                                      OVERALL SPACE REQUIREMENT                =    550 SQ. FT.

                                      NUMBER OF 100 SQ. FT. ALLOCATIONS        =         4

                                      CLEC CAGE SPACE                          =    100 SQ. FT.

                                      SHARED COMMON SPACE                      =    150 SQ. FT.

                                      CLEC CONTRIBUTION FOR EACH 100 SQ. FT.   =   137.5 SQ. FT.
                                      POT BAYS + TERMINATION PANELS            =     BY CLEC

                                      DC POWER PANELS IN CAGE (IF REQUIRED)    =     BY CLEC

                                      BDFB (INCLUDED IN POWER CONSUMPTION)     =     BY ILEC


                  FORWARD-LOOKING BEST PLANNING COLLOCATION MODEL




1         The 550 square feet included in the Model Collocation Area Layout provides sufficient

2         space to accommodate interface equipment such as POT bays and remote power

3         distribution BDFB equipment in the common space, while avoiding the economic

4         disadvantages of exceptionally large collocation areas. For those central offices where

5         more than 550 square feet of collocation space is required, the incumbent would select a

6         second collocation area. Proceeding in this manner is consistent with the FCC First
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 30 of 153

 1         Report and Order (¶585)6 and FCC Rule §51.323(f)(1), which support the concept of

 2         CLECs obtaining reasonable amounts of space in an incumbent’s premises on a first-

 3         come, first-served basis.

 4   Q.    HOW DOES THE ASSUMPTION OF MULTIPLE, SMALLER COLLOCATION
 5         SPACES AFFECT CONNECTIVITY LENGTHS IN THE MODEL?

 6   A.    As discussed above, to ensure efficient connectivity arrangements, similar to those the

 7         incumbent enjoys in deploying its equipment, the model collocation area layout

 8         establishes collocation areas using pockets of existing vacant or administrative space in

 9         the central office. To be conservative, the collocation cost model calculates the average

10         connectivity lengths based on a minimum and maximum scenario.

11                The maximum cable length represents a worst-case scenario in which the

12         collocation area is located as far as possible from the cross-connects. The collocation

13         area is located on the top floor (floor 3) of the central office layout, the cross-connects

14         located on the bottom floor (floor 1), and the collocation area is located at the opposite

15         corner of the building from where the cross connects are located. Based on this premise,

16         the floor distance would be would be two-stories plus the entire length and width of the

17         floor between the collocation area and the incumbent cross-connects.

18                The minimum cable length represents a best-case scenario in which the

19         collocation area is located on the same floor and in close proximity to the incumbent

20         cross-connect. However, because physical collocation requires the construction of cages,



     6     First Report and Order, Implementation of the Local Competition Provisions in the
           Telecommunications Act of 1996, CC Docket No. 96-98 (rel. October 8, 1996) (“First Report and
           Order”).
          (PUBLIC VERSION)                       Initial Testimony of Steven E. Turner (Collocation)
                                                                           MPSC Case No. U-13531
                                                                                     Page 31 of 153

 1         it is unlikely that a new collocation area could be built directly adjacent to incumbent

 2         cross-connects. Therefore, the best-case scenario includes a 40-foot minimum length

 3         between the collocation area and the incumbent cross-connects.

 4                 Both the best-case and worst-case scenarios include a 15-foot cable drop (i.e., 7.5

 5         feet on each end). Hence, the forward-looking best practice Central Office Model Layout

 6         generates minimum and maximum copper connectivity lengths of 55 and 275 feet,

 7         respectively.7 The investment generated therefore is based on an average connectivity

 8         length of 165 feet for Voice Grade, DS-1, or DS-3 cabling between the CLEC collocation

 9         area and the appropriate incumbent cross-connect.

10   Q.    DO YOU BELIEVE THAT THE DETERMINATION OF DISTANCE IS
11         CRITICAL TO THE UNDERLYING LOGIC OF THE COLLOCATION COST
12         MODEL?

13   A.    Yes. One of the most critical issues in developing the cost for collocation is the distance

14         that various elements are from one another. The spatial relationships between frames

15         (MDF, DSX, and FDF) and the collocation cage or between critical pieces of equipment

16         (DCS and BDFB) and the collocation significantly affect the cost of collocation. In order

17         to be consistent with forward-looking, economic cost principles, the Model Office

18         Layout must be forward-looking, efficient and nondiscriminatory. Careful attention was

19         given by the developers of the Collocation Cost Model to ensure that the distances




     7     These extremes were determined as follows: equipment area width = 100 feet; equipment area
           length = 120 feet; distance between floors = 20 feet; and cable drop to equipment at both ends =
           15 feet. Therefore, the maximum two-floor distance would be 275 feet (100 + 120 + 20 + 20 +
           15), and the minimum same-floor distance would be 55 feet (20 + 20 + 15).
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                  Page 32 of 153

 1         calculated for all connectivity arrangements were based on total demand and were

 2         forward looking, efficient and non-discriminatory.

 3   Q     WHAT ARE THE DESIGN ASSUMPTIONS FOR THE 550 SQUARE FOOT
 4         COLLATION AREA?

 5   A.    Within the 550 square foot collocation area, the Collocation Area Model Layout assumes

 6         the construction of four 100 square foot equipment areas and a common area of 150

 7         square feet (to accommodate incumbent and CLEC POT interface equipment bays and a

 8         BDFB). The Collocation Cost Model anticipates that CLECs would share the cost of the

 9         entire common area (with no contribution from the incumbent) and that CLECs would

10         request collocation space in increments of 100 square feet, without any guarantee of

11         expanding into an adjacent space. If a CLEC requires additional space for expansion, it

12         would have to take the next closest available space in much the same way as an

13         incumbent would. However, when a CLEC is unable to obtain an additional, adjacent

14         collocation space, the incumbent must allow cage-to-cage cabling for cages occupied by

15         the same CLEC.

16   Q.    DO YOU BELIEVE THAT THE DESIGN ASSUMPTIONS OF THE LAYOUT
17         AREA ARE CRITICAL TO THE UNDERLYING LOGIC OF THE
18         COLLOCATION COSTING MODEL?

19   A.    Yes. The Collocation Cost Model development team spent considerable time evaluating

20         the trade-offs in different collocation arrangements in terms of the amount of material

21         that would be required to construct the collocation as compared to the amount of

22         collocation space that would be provided. The Model Collocation Layout reflects the

23         most efficient layout that also uses the minimum amount of space within the central

24         office.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 33 of 153

 1   Q.    DO YOU HAVE ANY INFORMATION THAT INDICATES SBC-MICHIGAN
 2         ENGINEERS ITS OFFICES CONSISTENTLY WITH THE PRINCIPLES USED
 3         TO DEVELOP COSTS WITHIN THE COLLOCATION COST MODEL?

 4   A.    Yes. First, information provided by SBC in a Texas proceeding – particularly through

 5         tours of SBC-Texas’ central offices – indicates a layout for the central office that is

 6         almost precisely like that found in the description of the Model Central Office for the

 7         Collocation Cost Model. The engineering guidelines used to develop the Collocation

 8         Cost Model are documented in the Technical White Paper submitted as Exhibit SET-

 9         COLLO-3 with this testimony. Second, SBC-Texas’ affiliate, SBC-California, was

10         required to provide me with tours of their central offices in a California collocation cost

11         proceeding. My observation on these tours is that SBC-California’s practices in

12         engineering its central offices and the collocation arrangements closely approximate

13         those incorporated in the White Paper. Therefore, in my expert opinion, the costs

14         developed using the Model Central Office will provide an accurate estimate of SBC-

15         Michigan’s forward-looking costs for collocation.

16                2.      USE OF MODEL LAYOUTS TO CALCULATE INVESTMENTS
17                        FOR PHYSICAL COLLOCATION

18   Q.    HAVING CONSTRUCTED THE MODEL CENTRAL OFFICE AND
19         COLLOCATION SPACE LAYOUTS, WHAT WERE THE INVESTMENT
20         COMPONENTS YOU ESTIMATED FOR PHYSICAL COLLOCATION?

21   A.    The subject matter experts estimated investments associated with the following:

22         •      overhead common systems infrastructure (cable racks, cable, etc.);

23         •      power delivery, including backup capability;

24         •      power consumption;

25         •      equipment grounding;
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                  Page 34 of 153

 1         •      entrance fiber (bringing the CLEC's fiber from the manhole to the collocation

 2                space);

 3         •      copper connectivity between the collocation space and the cross-connects at the

 4                voice grade level;

 5         •      copper connectivity between the collocation space and the cross-connects at the

 6                DS-1 level (estimated separately using DSX and DCS technology);

 7         •      copper connectivity between the collocation space and the cross-connects at the

 8                DS-3 level (estimated separately using DSX and DCS technology);

 9         •      construction elements associated with building the cage and maintaining the

10                environment in the cage (partitioning, floor covering, electrical distribution panel,

11                HVAC, lighting);

12         •      land and building;

13         •      manpower resources to plan both the entire 550 square foot collocation area and

14                each collocation request within that area; and

15         •      security.

16   Q.    HOW DID YOU ESTIMATE THESE INVESTMENT COMPONENTS?

17   A.    The general methodology used was as follows:

18         •      Identify, end-to-end, all the specific elements needed to provide the components.

19                See, for example, Figure 6 depicting the end-to-end requirements for power

20                delivery. Similar charts are provided in the White Paper for each investment

21                component.
        (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                       MPSC Case No. U-13531
                                                                                 Page 35 of 153

1         •      Obtain quotes (in hours or dollars, as appropriate) for the engineering, furnishing,

2                and installing these elements.

3         •      The subject matter experts, using their experience and knowledge, evaluated this

4                information and selected input values for the Collocation Cost Model to calculate

5                the investment costs. (The supporting Backup Documentation for the inputs in

6                the Collocation Cost Model is found in Exhibit SET-COLLO-4, which is a CD-

7                ROM containing the AT&T/MCI Collocation Cost Model and various supporting

8                work papers.)


    Figure 6 - Collocation Cost Model – 48v DC Power Delivery

                COLLOCATION MODEL - -48V DC POWER DELIVERY

      Co-location Area

           DC Panel                               BDFB               Cable               -48V DC
                                                                     Hole                 Power
                                  Cable                              Cable                 Plant
                                   B                                  A


                              Cable Rack



                  Power Distribution                               Power Consumption
          (PUBLIC VERSION)                          Initial Testimony of Steven E. Turner (Collocation)
                                                                              MPSC Case No. U-13531
                                                                                        Page 36 of 153

    Table 1 - Power Delivery Elements

    Power Delivery Elements (-48V DC Option)
      Element         Description     Provider              Quantity                Remarks
    -48V DC Power       Located in Cage         CLEC        -          CLEC installs -48V DC panels in cage
    Panel                                                              and terminates incumbent provided feed
    Cable ‘B’           4 – #2 Cables between   Incumbent   35 Feet    One time charge for 20 Amp A-Feed
                        Cage and Collocation                           (Battery and Return and B-Feed
                        BDFB                                           (Battery and Return) as requested by
                                                                       CLEC - Includes 20 foot drop in cage
    Cable ‘B’           4 – 1/0 Cables          Incumbent   35 Feet    One time charge for 50 Amp A-Feed
                        between Cage and                               (Battery and Return) and B-Feed
                        Collocation BDFB                               (Battery and Return) as requested by
                                                                       CLEC - Includes 20 foot drop in cage
    Cable ‘B’           4 – 4/0 Cables          Incumbent   35 Feet    One time charge for 100 Amp A-Feed
                        between Cage and                               (Battery and Return) and B-Feed
                        Collocation BDFB                               (Battery and Return) as requested by
                                                                       CLEC - Includes 20 foot drop in cage
    Cable Rack          15” CLEC specific       Incumbent   5 Feet     Included in cage investment
    BDFB                Located close to        Incumbent   -          Included in -48V DC Power
                        Collocation Cages                              Consumption Charge
    Cable Rack          Shared support for      Incumbent   -          Included in -48V DC Power
    Occupancy           Cable ‘A’ below                                Consumption Charge
    Cable ‘A’           Cable between –48V      Incumbent   -          Included in -48V DC Power
                        Power Plant &BDFB                              Consumption Charge
    -48V DC Power       Shared use between      Incumbent   -          Included in -48V DC Power
    Plant               CLEC’s & incumbent                             Consumption Charge
    Auto-start Diesel   Required for Battery    Incumbent   -          Included in -48V DC Power
    Fuel Tanks, etc.    Back-up                                        Consumption Charge
    AC Energy           Required for AC         Incumbent   -          Included in -48V DC Power
                        Energy used                                    Consumption Charge

1

2   Q.       DID YOU USE MAJOR SUPPLIERS, SUCH AS LUCENT AND NORTEL, FOR
3            YOUR QUOTES ON PRICES AND HOURS?

4   A.       No. The common systems infrastructure components and the magnitude of the

5            construction project associated with physical collocation are relatively minor and smaller

6            contractors can manage such installation at competitive prices. Indeed, even if larger

7            suppliers, such as Lucent and Nortel, bid competitively, they are unlikely to be able to

8            meet the short time intervals required for these very small jobs. For that reason,

9            incumbents typically have various smaller contractors who specialize in ironwork,
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 37 of 153

 1         cabling, etc., authorized to complete short interval installations. The same is true with

 2         regard to the construction elements associated with preparing the cage. The use of a

 3         telecommunications giant or a major construction company for collocation components is

 4         akin to using a Big Eight accounting firm to handle a simple income tax return or using a

 5         major law firm in traffic court.

 6   Q.    DID YOU ASSUME THAT THE INCUMBENT PROVIDES ALL THE
 7         EQUIPMENT?

 8   A.    No. It is assumed that the CLEC provides its own equipment wherever possible. This

 9         provides another protection against inflated costs to CLECs by providing them the

10         opportunity to purchase their own equipment whenever they believe they can do so more

11         efficiently than the ILEC.

12   Q.    YOU INDICATE THAT YOU INCLUDED AN INVESTMENT ASSOCIATED
13         WITH BUILDING SPACE AND, SEPARATELY, THE INVESTMENTS
14         ASSOCIATED WITH HVAC, FLOOR COVERING, SECURITY, AND OTHER
15         ITEMS THAT OFTEN ARE PROVIDED AS PART OF THE CHARGE FOR
16         SPACE IN A BUILDING. WHY DID YOU DO THIS?

17   A.    This was done to ensure that all investment costs were included, although consequently,

18         this provides a conservatively high estimate of investment requirements. For SBC-

19         Michigan, the source that the I use for the per square foot cost of building space, R. S.

20         Means, is a data sourcebook widely used in the industry. The data provided are compiled

21         from submissions from incumbents who actually have constructed central offices, but

22         there is no explanation of what costs are included in those submissions. It is likely that

23         these estimates include costs associated with sufficient air conditioning, floor covering,

24         and other components. To fully support the collocation space, and thus by including
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 38 of 153

 1         these items separately, our investments may conservatively overstate investment

 2         requirements.

 3   Q.    DO THE INVESTMENTS GENERATED BY YOUR MODEL CENTRAL OFFICE
 4         AND COLLOCATION LAYOUTS INCLUDE THE COSTS ASSOCIATED WITH
 5         BUILDING MODIFICATIONS THAT INCUMBENTS FREQUENTLY INCLUDE
 6         IN THEIR COLLOCATION COST STUDIES?

 7   A.    No. The model layouts generate investments necessary for the provision of collocation,

 8         but it does not, and should not, include the cost of building modifications an incumbent

 9         would have to undertake just to bring space in the central office up to the level needed to

10         house equipment. For example, the Collocation Cost Model incorporates the appropriate

11         share of costs associated with meeting all regulatory requirements by including in the

12         building cost per square foot used in the investment calculation the costs associated with

13         full regulatory compliance. However, it does not add to those costs any special costs

14         associated with bringing a particular building or portion of a building to compliance.

15         Building modifications to remove unused equipment also are not included, as they

16         represent additional costs to make a specific building space up to standard. Also,

17         building modifications allegedly required to provide a “secure environment,” such as the

18         addition of costly new external entrances, are not included because they are not part of a

19         cost efficient, forward-looking solution to security problems.

20   Q.    WHAT SECURITY REQUIREMENTS DID YOU INCLUDE FOR YOUR
21         MODEL CENTRAL OFFICE AND COLLOCATION LAYOUTS?

22   A.    Central offices today are constructed with electronic security card systems to monitor

23         access and egress. Each doorway will have an electronic card reader that will only admit

24         the holders of pre-screened cards. These costs are included in the basic per square foot

25         cost of a central office building just as the cost of locks on outside doors are included in
          (PUBLIC VERSION)                       Initial Testimony of Steven E. Turner (Collocation)
                                                                           MPSC Case No. U-13531
                                                                                     Page 39 of 153

 1         the rent for office or apartment space. However, to be conservative, the Collocation Cost

 2         Model separately identifies the investment for the security card system in the event that it

 3         was not included in the per square foot cost in R.S. Means.

 4   Q.    ARE THE SECURITY COSTS INCLUDED IN THE COLLOCATION COST
 5         MODEL CONSISTENT WITH THOSE REQUIRED IN THE FCC’S ADVANCED
 6         SERVICES ORDER?

 7   A.    Yes. The principle that the FCC authorized is as follows: “We conclude, based on the

 8         record, that incumbent LECs may impose security arrangements that are as stringent as

 9         the security arrangements that incumbent LECs maintain at their own premises either for

10         their own employees or for authorized contractors.”8 Effectively, this principle

11         constrains the incumbent LEC from securing its network in a discriminatory manner. In

12         other words, if SBC-Michigan does not presently “maintain” a standard of security for

13         “their own employees or for authorized contractors,” SBC-Michigan can neither establish

14         new security arrangements nor impose the costs arising from such arrangements solely on

15         the CLECs. The FCC goes on to write: “We further permit incumbent LECs to require

16         CLECs’ employees to undergo the same level of security training, or its equivalent, that

17         the incumbent’s own employees, or third party contractors providing similar functions,

18         must undergo.”9 Based on the FCC’s rules in the Advanced Services Order, SBC-

19         Michigan cannot do more than this to the CLECs using SBC collocation services.10



     8     Advanced Services Order at ¶ 47.
     9     Advanced Services Order at ¶ 48.
     10    Based on the tours of SBC offices that I have participated in California, Oklahoma, and Texas,
           SBC is not using anything more than badges and key cards (if even the latter) to secure its
           premises for its own employees and contractors.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 40 of 153

 1   Q.    ARE THE INVESTMENT INPUTS AND COSTS EMPLOYED IN THE
 2         COLLOCATION COST MODEL SPECIFIC TO THE STATE OF MICHIGAN
 3         AND SPECIFIC TO SBC?

 4   A.    Yes. The Collocation Cost Model has a worksheet within it where I am able to

 5         incorporate the specific SBC-Michigan factors that have been developed by Mssrs. Fisher

 6         and Starkey. Moreover, these factors also incorporate the cost of capital

 7         recommendations made by Ms. Murray. Finally, the Inputs worksheet for the

 8         Collocation Cost Model allows one to incorporate SBC-Michigan specific labor rates. I

 9         have incorporated those proposed by Mr. Flappan with the exception of the Contractor

10         Labor rate for which I have used the labor rate contained in SBC-Michigan’s own

11         collocation cost study. In short, I have used the same cost of debt, cost of equity,

12         weighted average cost of capital, depreciation lives, labor costs (and other areas) as do

13         other AT&T witnesses. Additionally, the use of R.S. Means data includes information

14         which provides Michigan-specific adjustment factors for many different investment

15         components. Where these adjustment factors were available, they were used to develop

16         Michigan-specific inputs from the R.S. Means data. The methodology used to make

17         these adjustments is found in the supporting documents filed as part of Exhibit SET-

18         COLLO-4 with this testimony. Finally, a Michigan-specific electricity rate was used

19         based on information provided by the Department of Energy for the State of Michigan.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 41 of 153

 1                3.      APPLICATION AND OPERATION OF THE COLLOCATION
 2                        COST MODEL IN ESTIMATING THE COSTS OF PHYSICAL
 3                        COLLOCATION

 4   Q.    CAN YOU BRIEFLY SUMMARIZE THE ANALYTICAL APPROACH FOR
 5         ESTIMATING COSTS AS REFLECTED IN THE COLLOCATION COST
 6         MODEL?

 7   A.    The focus of the Collocation Cost Model is to determine the investment and operating

 8         costs that would be incurred by an efficient incumbent to provide collocated space in its

 9         central office, using forward-looking technology that is currently available.

10                In doing so, the Collocation Cost Model developers recognized that it would be

11         most efficient for incumbents to locate space for multiple collocators together, so that

12         they could more effectively utilize certain facilities (such as, the DC Power Plant and

13         common space). On the other hand, requiring all collocators to be in contiguous space

14         within a central office would be inefficient, because such a large, single block of space is

15         unlikely to be available within a central office, or it may be located several floors away

16         from the existing incumbent cross-connect systems. Thus, the Model Layout as

17         constructed struck a rational balance by designing and equipping a 550 square-foot area

18         that would provide four 100 square-foot collocation areas.

19   Q.    DOES THE COLLOCATION COST MODEL INCLUDE SECURITY COSTS?

20   A.    Yes. As I stated earlier, the Collocation Cost Model addresses incumbent security

21         concerns by including the cost of security access cards for controlled access by CLEC

22         representatives into the central office. The Central Office Model Layout assumes the

23         central office is equipped with an automated security card reading system. The

24         investment associated with the automated security card reading system is separately

25         identified to conservatively estimate the costs associated with central office building.
          (PUBLIC VERSION)                        Initial Testimony of Steven E. Turner (Collocation)
                                                                            MPSC Case No. U-13531
                                                                                      Page 42 of 153

 1         Again, this is consistent with the forward-looking, least cost approach of the Collocation

 2         Cost Model.

 3   Q.    DOES THE COLLOCATION COST MODEL INCLUDE COSTS FOR
 4         RETROFITTING?

 5   A.    No, it does not, and it should not. Specifically, it does not include the costs of retrofitting

 6         the central office to meet asbestos removal or ADA requirements, nor does it include

 7         other costs that could be associated with repairing or remodeling existing building space.

 8         It does not include these costs because these costs are not consistent with the forward-

 9         looking, least-cost approach of the Collocation Cost Model.

10   Q.    HOW DOES THE COLLOCATION COST MODEL USE THE INVESTMENT
11         INPUTS NEEDED FOR PHYSICAL COLLOCATION?

12   A.    The investment required to construct the collocation space identified in the Collocation

13         Area Model Layout was separated by the technical experts into four categories: Category

14         1 – assets that the four potential CLEC collocators and the incumbent would share;

15         Category 2 – assets that the four potential collocators, but not by the incumbent, would

16         share; Category 3 – assets that only one of the collocators exclusively would use but are

17         reusable; and Category 4 – assets that only one of the collocators exclusively would use

18         and are not reusable.11

19   Q.    WHY DOES THE COLLOCATION COST MODEL SEPARATE THE TYPES OF
20         INVESTMENT FOR PHYSICAL COLLOCATION?

21   A.    A major concern with the cost of collocation is the substantial barrier to entry that it

22         poses if sizable, one-time, up-front expenditures are required of CLECs to obtain


     11    Both the first and all subsequent occupants of a collocated space can use all investments in
           Categories 1, 2, and 3. Further, all investments in Categories 1, 2, and 3 are reusable.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 43 of 153

 1         collocated space – space that can be used over a period of years by multiple occupants.

 2         This is especially troublesome at a time when CLECs have relatively few customers and

 3         are, therefore, most vulnerable competitively. On the other hand, incumbents express

 4         concern that if collocators abandon the space before its economic life is exhausted,

 5         incumbents could somehow be saddled with an expense that they would be unable to

 6         recover over the long run. The Collocation Cost Model developed by AT&T and MCI

 7         balances these competing concerns as well.

 8   Q.    HOW ARE THESE INVESTMENT CATEGORIES USED IN THE
 9         COLLOCATION COST MODEL?

10   A.    Investments that are incurred for the benefit of a single collocator and cannot be used by

11         subsequent occupants of the collocation space (i.e., Category 4 investments) are treated

12         by the Collocation Cost Model as non-recurring costs. Investments that are shared by

13         more than one CLEC and/or can be used by subsequent occupants of the same

14         collocation space (i.e., Categories 1 through 3) are treated as recurring costs that would

15         be paid for on a monthly basis by the collocators.

16   Q.    HOW DOES THE COLLOCATION COST MODEL TRANSLATE THE
17         COLLOCATION INVESTMENTS INTO COSTS?

18   A.    Calculation of both the monthly capital costs and the monthly operating expenses that the

19         incumbent would incur in efficiently providing collocation space on a recurring basis are

20         reflected in the cost outputs of the Collocation Cost Model. Additionally, in converting

21         these investments to monthly costs, the Collocation Cost Model incorporates the cost

22         factors that reflect a cost of capital that compensates the incumbent for both the time

23         value of money and the business risk it incurs. In addition, the Collocation Cost Model

24         includes a user-adjustable “occupancy adjustment factor” to explicitly recognize that
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 44 of 153

 1         each collocation space provided in the collocation area model layout may not be fully

 2         occupied over its economic life. Use of this factor has the effect of increasing monthly

 3         costs to account for those time-periods in which a collocator may not occupy the

 4         collocation space.

 5   Q.    CAN YOU SUMMARIZE THE OUTPUTS OF THE COLLOCATION COST
 6         MODEL FOR PHYSICAL COLLOCATION IN MICHIGAN?

 7   A.    Yes, the Collocation Cost Model estimates costs for the following 12 collocation

 8         elements:

 9         •      Planning

10         •      Entrance Fiber

11         •      Power Delivery

12         •      Power Consumption

13         •      Voice Grade Connectivity

14         •      DS-1 (DCS or DSX) Connectivity

15         •      DS-3 (DCS or DSX) Connectivity

16         •      Fiber Connectivity

17         •      Grounding

18         •      Realty (Cage Construction)

19         •      Land and Building

20         •      Cage-to-Cage Connectivity


21         The DS-1 and DS-3 connectivity costs are presented in two alternative ways; each

22         modeled with either a DCS cross-connect or a DSX cross-connect. This flexibility
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 45 of 153

 1         permits the output from the Collocation Cost Model to be tailored to the collocation

 2         requirements experienced by a particular incumbent at a specific Central Office location.

 3   Q.    WHAT ARE THE COSTS FOR PHYSICAL COLLOCATION
 4         ARRANGEMENTS?

 5   A.    The costs reflected in the Collocation Cost Model’s Summary Cost sheet are categorized

 6         as either non-recurring or monthly recurring costs. Costs are represented in a “cafeteria-

 7         style” menu format. The total cost for collocation space is dependent upon the

 8         requirement for elements such as connectivity, usage of power, and number of cages

 9         required by a CLEC at a particular location. For example, a CLEC may request a

10         combination of copper connectivity such as voice grade and DS-1 (DSX), or only voice

11         grade service. It would be inaccurate to sum all of the recurring costs to arrive at a grand

12         total, because several alternative costs are presented for elements such as Power Delivery

13         and Circuitry. This format also encourages efficient use of collocation arrangements by

14         enabling the collocator to "choose" the specific arrangements it needs for a central office-

15         specific arrangement.

16   Q.    THE STANDARD COLLOCATION CAGE SIZE IN THE COLLOCATION COST
17         MODEL IS 100 SQUARE FEET. IF THIS COMMISSION WANTED PRICES
18         FOR OTHER SMALLER SIZED CAGES, HOW COULD THIS BE
19         ACCOMPLISHED?

20   A.    The most straightforward manner that would capture the vast majority of the cost

21         differential associated with a different sized cage than a 100 square foot interval would

22         be to use a formula to adjust the cost of cage to account for its smaller size. Specifically,

23         there are two primary elements that would be reduced as the cage size would be reduced:

24         (1) the cost for partitioning; and (2) the cost for floor tiles. The first element

25         (partitioning) is a function of the linear distance around the perimeter of the cage. The
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 46 of 153

 1         second element (floor tiles) is a function of the area of the cage. While there are other

 2         elements that could change depending on the size of the cage (e.g. overhead lighting and

 3         electrical receptacles), an adjustment formula for these two elements would simply and

 4         effectively provide for a cost-based price for the collocation cage.

 5   Q.    WOULD ANY OTHER ADJUSTMENT BE NECESSARY?

 6   A.    Yes. The rental for the land and building would need to be prorated based on the area

 7         occupied. Since the rental rate is per 100 square feet of collocation space (grossed up for

 8         the common area in the cage and unassigned space throughout the central office), this

 9         rental rate would simply have to be multiplied by the amount of area in the nonstandard

10         collocation cage divided the 100 square feet (the cost for the standard cage). This result

11         would yield an appropriate rental for the amount of space actually occupied within the

12         nonstandard cage.

13   Q.    WERE ANY CHANGES MADE TO THE COLLOCATION COST MODEL TO
14         ACCOUNT FOR THE SPACE AVAILABILITY REPORT?

15   A.    Yes. The Space Availability Report charge is required by the Advanced Services Order.

16         The labor inputs and categories for this element were incorporated into the Planning

17         worksheets within the Collocation Cost Model. Several intermediate worksheets within

18         the Collocation Cost Model were also modified to reflect the addition of this new cost

19         element. Finally, this charge was added to each of the output worksheets for the six

20         forms of collocation. The Space Availability Report nonrecurring charge was developed

21         based on the cost of producing one report for one central office.

22                Although not a change to the model, the Commission should be aware that the

23         Collocation Cost Model accounts for the costs of Microwave Collocation. Based on my
            (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                           MPSC Case No. U-13531
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 1           understanding of how CLECs implement Microwave Collocation, the cost of this

 2           arrangement is equivalent to the cost of a cage-to-cage coaxial cabling arrangement,

 3           which is already included in the Collocation Cost Model. Essentially, Microwave

 4           Collocation requires that space be made available on the roof of the central office and a

 5           DS-3 (coaxial) cabling arrangement be established from the roof back to the CLEC’s

 6           collocation arrangement inside of the central office. Assuming that the CLEC bears the

 7           cost of installing the microwave tower on the roof itself, the only other cost that the

 8           incumbent must be compensated for would be those associated with a cage-to-cage

 9           cabling arrangement.

10   VII.    VIRTUAL MODULE IN THE COLLOCATION COST MODEL

11           A.     IMPORTANCE OF VIRTUAL COLLOCATION

12   Q.      WHAT IS VIRTUAL COLLOCATION?

13   A.      Virtual collocation is nothing more than an arrangement that allows a CLEC to place its

14           own telecommunications equipment in an area of a central office currently used by the

15           incumbent to house its equipment (and not segregated from incumbent equipment).

16           Typically, the CLEC purchases the equipment and sells the equipment to the incumbent

17           for a nominal sum (typically $1) while maintaining a repurchase option. The equipment

18           is then installed in vacant space beside the incumbent’s equipment. The incumbent

19           handles day-to-day maintenance activities and the CLEC must pay not only for such

20           maintenance activities, but also for training for the incumbent’s personnel performing the

21           maintenance on the CLEC’s equipment.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
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 1   Q.    WHAT IS THE DIFFERENCE BETWEEN PHYSICAL AND VIRTUAL
 2         COLLOCATION?

 3   A.    In both physical and virtual collocation, the incumbent uses the same equipment, and

 4         performs similar tasks. The difference lies in ownership with implications for

 5         maintenance responsibility. In physical collocation, the CLEC holds title to the

 6         equipment and is responsible for maintaining that equipment. In virtual collocation, once

 7         the equipment is installed, the title is transferred to the incumbent. The security and

 8         maintenance of the equipment is the responsibility of the incumbent. The incumbent

 9         charges the CLEC for these services.

10   Q.    WHY IS VIRTUAL COLLOCATION IMPORTANT?

11   A.    Like physical collocation, virtual collocation provides a means by which new entrants

12         can concentrate traffic from unbundled loops (or other unbundled elements) in order to

13         transport that traffic to the CLEC’s switch. A CLEC may wish to use virtual collocation

14         if it lacks sufficient customer demand to justify a physical collocation arrangement, or

15         because physical collocation cage construction costs render that method of collocation

16         too costly. In addition, §251c(6) of the Telecommunications Act of 1996 requires that an

17         incumbent provide virtual collocation when physical collocation is not practical for

18         technical reasons or because of space limitations.

19         B.     DEVELOPMENT OF THE VIRTUAL COLLOCATION MODULE OF
20                THE COLLOCATION COST MODEL

21   Q.    PLEASE EXPLAIN THE STEPS USED TO DEVELOP YOUR PROPOSED
22         COSTS FOR VIRTUAL COLLOCATION.

23   A.    The first step was to develop a Virtual Collocation Cost Model that could be used in any

24         state to develop company-specific forward-looking investments. The Collocation Cost
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
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 1         Model identifies a Central Office Model Layout. This model layout then establishes the

 2         forward-looking investments for virtual collocation. Second, the resulting investments

 3         were used in the development of a cost study to develop proposed costs (which also

 4         include a joint and common cost factor of 10 percent).

 5                1.      DEVELOPMENT OF THE COLLOCATION COST MODEL AND
 6                        MODEL LAYOUTS FOR VIRTUAL COLLOCATION

 7   Q.    HOW DID YOU APPROACH DEVELOPMENT OF THE COLLOCATION COST
 8         MODEL AND MODEL LAYOUT FOR VIRTUAL COLLOCATION?

 9   A.    As with Physical Collocation, the subject matter expert team determined that the most

10         appropriate method to develop the Virtual Collocation Cost Model would be to identify

11         all investments for virtual collocation in central offices incorporating the use of “best

12         practices.” The implications described in the previous section of this testimony regarding

13         the use of best practices for Physical Collocation apply to Virtual Collocation as well.

14   Q.    DOES THE VIRTUAL COLLOCATION COST MODEL UTILIZE THE SAME
15         CENTRAL OFFICE MODEL LAYOUT AS THE PHYSICAL COLLOCATION
16         COST MODEL?

17   A.    Yes it does. The Collocation Cost Model principally uses the Central Office Model

18         Layout, as I described above, for two purposes. First, to determine the distances between

19         various points within the central office to incorporate these distances into cost

20         calculations within the cost models that are distance-sensitive. Second, to determine the

21         investments associated with constructing the central office itself. These aspects of the

22         Central Office Model Layout are directly relevant to the cost development for both

23         Physical and Virtual Collocation.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
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 1                2.        USE OF THE MODEL LAYOUT TO CALCULATE
 2                          INVESTMENTS FOR VIRTUAL COLLOCATION

 3   Q.    APPLYING THE MODEL CENTRAL OFFICE, WHAT WERE THE
 4         INVESTMENT COMPONENTS YOU ESTIMATED FOR VIRTUAL
 5         COLLOCATION?

 6   A.    The Collocation Cost Model development team estimated investments associated with

 7         the following:

 8         •      Overhead common systems infrastructure (cable racks, cable, etc.);

 9         •      Power delivery, including backup capability;

10         •      Power consumption;

11         •      Entrance fiber (bringing the CLEC's fiber from the manhole to the virtual

12                collocation frame);

13         •      Copper connectivity between the virtual collocation frame and the cross-connects

14                at the voice grade level;

15         •      Copper connectivity between the virtual collocation frame and the cross-connects

16                at the DS-1 level (estimated separately using DSX and DCS technology);

17         •      Copper connectivity between the virtual collocation frame and the cross-connects

18                at the DS-3 level (estimated separately using DSX and DCS technology);

19         •      Optical connectivity between the virtual collocation frame and the cross-connects

20                at the fiber level;

21         •      Virtual collocation to virtual collocation connectivity;

22         •      Relay rack used for virtual collocation;

23         •      Land and building;

24         •      Manpower resources to plan the virtual collocation request; and
          (PUBLIC VERSION)                        Initial Testimony of Steven E. Turner (Collocation)
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 1         •      Equipment maintenance and security escorts.

 2   Q.    HOW DID YOU ESTIMATE THESE INVESTMENT COMPONENTS?

 3   A.    The general methodology used was as follows:

 4         •      Identify, end-to-end, all the specific elements needed to provide the virtual

 5                collocation components. Charts are provided in the White Paper detailing the

 6                specific elements for each virtual collocation investment.

 7         •      Obtain quotes (in hours or dollars, as appropriate) for the engineering, furnishing,

 8                and installing of these elements.

 9         •      The subject matter experts, relying on their experience and knowledge, review

10                this information and selected the input values for the Collocation Cost Model to

11                use in calculated the investment costs.

12   Q.    DID YOU USE MAJOR SUPPLIERS, SUCH AS LUCENT AND NORTEL, FOR
13         YOUR QUOTES ON PRICES AND HOURS?

14   A.    No. As described previously with Physical Collocation, the common systems

15         infrastructure components and the magnitude of the installation project associated with

16         virtual collocation are relatively minor and many smaller contractors are capable of such

17         installations at competitive prices.

18   Q.    DID YOU ASSUME THAT THE INCUMBENT PROVIDES ALL THE
19         EQUIPMENT?

20   A.    No. The Collocation Cost Model assumes that the CLEC provides its own equipment

21         wherever possible. This provides another protection against inflated ILEC costs to

22         CLECs by giving them the opportunity to purchase their own equipment whenever they

23         believe they can do so more efficiently.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
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 1   Q.    HOW DID YOU IDENTIFY INVESTMENTS ASSOCIATED WITH BUILDING
 2         SPACE FOR VIRTUAL COLLOCATION?

 3   A.    The R.S. Means Building Construction Cost Data guide provides estimates for the cost of

 4         constructing telecommunications central offices. This guidebook is developed based on

 5         inputs provided by incumbents. Using information provided in this guidebook, the

 6         Collocation Cost Model develops a building investment per square foot of

 7         telecommunications space.

 8   Q.    HOW DID YOU USE THE R.S. MEANS INFORMATION TO ESTIMATE THE
 9         INVESTMENT NEEDED FOR BUILDING SPACE RELATED TO THE
10         STRUCTURES ON WHICH THE COLLOCATED EQUIPMENT IS PLACED?

11   A.    The subject matter experts used a best practice space planning approach to ensure that

12         incumbent equipment space, and hence central office floor space, is used efficiently.

13         Incumbent equipment space is comprised of rows (called “lineups”) of relay racks that,

14         when installed, resemble empty metal bookcases without shelves. Relay racks are

15         fabricated to permit the installation of equipment shelves on an “as required” basis. The

16         telecommunications equipment in use today comes in various sizes (heights) and thus

17         requires varying amounts of vertical “shelf space” on a relay rack. While this

18         conceivably permits relay racks – and the building space they take up – to be

19         administered by the “rack inch,” for administrative simplicity, the Virtual Collocation

20         Cost Model develops the investments for the relay racks and for the building space they

21         take up based on units of ¼ relay rack. Using units of ¼ relay rack ensures that

22         incumbent equipment space is used efficiently and allows CLECs to pay only for the

23         space used. In many instances, relay racks with empty space will be available. In some

24         cases, however, the incumbent may need to install a new relay rack in which a CLEC can
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 53 of 153

 1         place its equipment. In either situation, it is appropriate to include – and therefore the

 2         Collocation Cost Model includes – investment for a relay rack.

 3   Q.    HOW DID YOU CALCULATE THE AMOUNT OF BUILDING SPACE
 4         INVESTMENT ASSOCIATED WITH ¼ RELAY RACK?

 5   A.    The telecommunications relay racks used to house equipment in a central office are

 6         typically two feet wide, one foot deep, and seven feet high. The racks are placed in

 7         “lineups” (rows) located 2.5 to three feet apart to provide for aisle space in front and back

 8         for maintenance purposes. Including the relay rack footprint (two feet by one foot) plus

 9         50 percent of the front and rear aisles (1.5 feet + 1.5 feet = 3.0 feet) would require eight

10         square feet (two feet by four feet). The Virtual Collocation Cost Model assumes that

11         each relay rack uses nine square feet of floor space, which is sufficiently generous to

12         incorporate end guards (which are only used when a relay rack is at the end of a lineup)

13         and 15 inch deep frames. Thus, the Collocation Cost Model develops the investment for

14         floor space based on units of ¼ relay racks, the equivalent of 2.25 square feet of space.

15   Q.    ARE THE INVESTMENT COSTS AND INPUTS THAT YOU USED MICHIGAN-
16         SPECIFIC FOR SBC-MICHIGAN?

17   A.    Yes. As discussed previously with the Physical Collocation Cost Model, where possible,

18         Michigan-specific and company-specific inputs, including those recommended by other

19         AT&T witnesses in this same proceeding, were used in the Collocation Cost Model. As

20         such, these inputs would have also been used in developing the costs for virtual

21         collocation.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
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 1   Q.    DOES THE VIRTUAL COLLOCATION COST MODEL INCLUDE
 2         INVESTMENTS FOR INITIAL CABLING?

 3   A.    Yes. The Virtual Collocation Cost Model includes all investments that the incumbent

 4         must make in order to provide virtual collocation to the CLEC. Investments made by the

 5         CLEC itself are not included in the Collocation Cost Model. The Collocation Cost

 6         Model includes investments for initial connectivity cabling, but does not include

 7         investments for power or grounding cabling. Power and grounding cables are part of the

 8         equipment installation paid for by the CLEC, because they are necessary to ensure the

 9         equipment is operational, functional and ready to accept connectivity cabling. Because

10         power and grounding cables are installed (and paid for by the CLEC) at the time the

11         CLEC’s equipment is installed, the incumbent requires no initial investment for power

12         and grounding cabling.

13                In an ideal scenario, the CLEC would similarly be responsible to an installer for

14         the total invoice associated with equipment and all cabling installation, and the

15         incumbent would incur no initial cabling costs. However, the incumbent would have the

16         incentive and ability to impose unnecessary cabling costs on CLECs. If an incumbent

17         knew that the CLEC would have to pay an installer cabling costs no matter where the

18         incumbent chose to place the collocated equipment, the incumbent would have the

19         incentive to require the installer to place CLEC equipment in a remote area of the central

20         office, far from cross connects. To overcome the incumbent’s incentive to impose

21         unnecessary costs by virtue of its ability to dictate placement of virtually collocated

22         equipment, the Collocation Cost Model includes incumbent investments for initial

23         connectivity cabling based on cable lengths described below. By basing the connectivity
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 55 of 153

 1         installation on established cable lengths, the incentive for the incumbent to impose excess

 2         cabling costs on the CLECs is mitigated.

 3   Q.    HOW IS MAINTENANCE HANDLED IN THE VIRTUAL COLLOCATION
 4         COST MODEL?

 5   A.    The CLEC is responsible for directing all maintenance activities associated with the

 6         virtual equipment. This includes system surveillance, direction of repair activity, and

 7         requests to the incumbent for maintenance assistance. The incumbent is responsible for

 8         hardware functions such as circuit pack replacement and changing fuses. Work will be

 9         performed by the incumbent upon the request of the CLEC, and the CLEC reimburse the

10         incumbent for the labor cost for the appropriate qualified technician.

11   Q.    ARE SECURITY REQUIREMENTS NECESSARY FOR VIRTUAL
12         COLLOCATION?

13   A.    Yes. While CLEC personnel will not normally visit virtually collocated equipment for

14         day-to-day operations, there may be instances when it is necessary for CLEC engineering

15         or maintenance personnel to visit the incumbent’s central office. Because virtual

16         equipment is located in incumbent equipment areas and not segregated from incumbent

17         equipment, it is reasonable to expect that an incumbent security escort will attend during

18         the entire time of a CLEC visit.

19                It is also reasonable to establish maximum response times for the elapsed interval

20         between when a CLEC requests an appropriately qualified incumbent technician at a

21         particular central office, and when a technician arrives and makes contact with the

22         CLEC. The response times and cost increments for both maintenance and security escort

23         requests vary depending on the type of central office. Specifically, the costs will vary

24         based on whether a central office is staffed (technicians scheduled to work at the central
        (PUBLIC VERSION)                         Initial Testimony of Steven E. Turner (Collocation)
                                                                           MPSC Case No. U-13531
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1         office) or attended (the hours during which technicians are required to be at the central

2         office). In addition, the costs will vary based on whether the request is during normal

3         business hours (usually Monday to Friday, 8AM to 5PM). The charts below indicate

4         appropriate response times and costing increments. Note that the incumbent must

5         identify for CLECs which central offices are staffed, attended, and the actual attended

6         hours of any staffed central office.


    Table 2 – Maintenance and Escort Response Times

                      MAINTENANCE AND ESCORT RESPONSE TIMES
                CENTRAL OFFICE TYPE                             RESPONSE TIME
         Staffed and Attended                                         1 hour
         Staffed and Unattended                                       4 hours
         Not staffed and Normal Business Day                          2 hours
         Not staffed and non-Normal Business Day                      4 hours
         Definitions:
         Staffed – technicians are scheduled to work in the location.
         Attended – hours during which technicians are required to be at the central office.

    Table 3 – Maintenance and Escort Charging Increments

                  MAINTENANCE AND ESCORT CHARGING INCREMENTS
           CENTRAL OFFICE TYPE               INITIAL COST SUBSEQUENT COST
     Staffed and Attended                        ¼ hour        ¼ hour
     Staffed and Unattended                      4 hours       ¼ hour
     Not staffed and Normal Business Day         ¼ hour        ¼ hour
     Not staffed and non-Normal Business Day     4 hours       ¼ hour
7
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 57 of 153

 1                3.      APPLICATION AND OPERATION OF THE COLLOCATION
 2                        COST MODEL IN ESTIMATING THE COST OF VIRTUAL
 3                        COLLOCATION

 4   Q.    CAN YOU BRIEFLY SUMMARIZE THE ANALYTICAL APPROACH
 5         REFLECTED IN THE COLLOCATION COST MODEL TO ESTIMATE THE
 6         COSTS OF VIRTUAL COLLOCATION?

 7   A.    The focus of the Collocation Cost Model is to determine the investment and operating

 8         costs that an efficient incumbent would incur to provide virtual collocated space in its

 9         central office, using least-cost forward-looking technology that is currently available.

10   Q.    DOES THE COLLOCATION COST MODEL INCLUDE COSTS FOR
11         RETROFITTING WHEN ESTIMATING THE COSTS OF VIRTUAL
12         COLLOCATION?

13   A.    No. As with physical collocation, neither does it include the costs of retrofitting the

14         central office to meet asbestos removal or ADA requirements, nor does it include other

15         costs of repairing or remodeling existing building space. It does not include these costs

16         because these costs are not consistent with the forward-looking, least-cost approach of

17         the Collocation Cost Model.

18   Q.    DOES THE COLLOCATION COST MODEL HANDLE THE FOUR
19         INVESTMENT CATEGORIES DESCRIBED EARLIER FOR PHYSICAL
20         COLLOCATION IN A SIMILAR MANNER WITH VIRTUAL COLLOCATION?

21   A.    Yes. The treatment of investments based on the category in which the subject matter

22         experts have placed them is consistent throughout the Collocation Cost Model for each

23         collocation alternative.

24   Q.    HOW DOES THE COLLOCATION COST MODEL TRANSLATE THE
25         COLLOCATION INVESTMENTS INTO COSTS FOR VIRTUAL
26         COLLOCATION?

27   A.    The Collocation Cost Model incorporates both the monthly capital costs and the monthly

28         operating expenses based on the cost factors provided by Messrs. Fisher and Starkey and
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
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 1         also based on the cost of capital input provided by Ms. Murray that the incumbent would

 2         incur in efficiently providing virtual collocation on a recurring basis to include items

 3         such as taxes, general support investment, and other expenses. Additionally, in

 4         converting these investments to monthly costs as noted above, the Collocation Cost

 5         Model incorporates a cost of capital in the cost factors from Messrs. Fisher and Starkey

 6         that compensates the incumbent for both the time value of money and the business risk it

 7         incurs.

 8   Q.    CAN YOU SUMMARIZE THE OUTPUTS OF THE VIRTUAL COLLOCATION
 9         COST MODEL FOR MICHIGAN?

10   A.    Yes, the Collocation Cost Model estimates costs for the following 13 collocation

11         elements:

12         •         Planning

13         •         Land and Buildings

14         •         Relay Rack

15         •         Entrance Fiber

16         •         Power Delivery

17         •         Power Consumption

18         •         Voice Grade Connectivity

19         •         DS-1 (DCS or DSX) Connectivity

20         •         DS-3 (DCS or DSX) Connectivity

21         •         Optical Circuits Connectivity

22         •         Virtual to Virtual Connectivity

23         •         Equipment Maintenance and Security Escort
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
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 1         •      Entrance Fiber Structure Tariff


 2         The DS-1 and DS-3 connectivity costs are presented in two alternative ways; each

 3         modeled with either a DCS cross-connect or a DSX cross-connect. This flexibility

 4         permits the user to tailor the output from the Collocation Cost Model to the collocation

 5         requirements a particular incumbent experiences at a specific Central Office location.

 6   Q.    WHAT ARE THE COSTS FOR VIRTUAL COLLOCATION ARRANGEMENTS?

 7   A.    The costs reflected in the Collocation Cost Model’s Summary Cost sheet are categorized

 8         as either non-recurring or monthly recurring costs. As with physical collocation, costs

 9         are represented in a “cafeteria-style” menu format. The total cost for virtual collocation

10         is dependent upon the requirement for elements such as connectivity, usage of power, and

11         rack space required by a CLEC at a particular location. For example, a CLEC may

12         request a combination of copper connectivity such as voice grade and DS-1 (DSX), or

13         only voice grade service. It would be inaccurate to sum all of the recurring costs to arrive

14         at a grand total, because several alternative costs are presented for elements such as

15         Circuitry. This format also encourages efficient use of collocation arrangements by

16         enabling the collocator to “choose” the specific arrangements it needs for a central office-

17         specific arrangement.

18   VIII. COMMON COLLOCATION

19   Q,    PLEASE PROVIDE A DEFINITION AND DESCRIBE THE NEED FOR
20         COMMON COLLOCATION.

21   A.    Common Collocation is similar to Physical Collocation in that a CLEC’s equipment is

22         placed in a segregated area of the central office. In this form of collocation, however, the

23         equipment of multiple collocators may be placed in the same segregated area. The
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
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 1         principle difference between this form of collocation and Physical Collocation is that the

 2         internal cage partitions are eliminated.

 3                There are many different reasons why Common Collocation is an important

 4         collocation alternative that should be made available to CLECs. First, many CLECs may

 5         have collocation requirements that do not demand much space. Common Collocation

 6         provides the CLEC an opportunity to collocate in the incumbent’s central office without

 7         reserving space that the CLEC may never need. Second, Common Collocation has a

 8         significant advantage over Physical Collocation in that it permits a more efficient use of

 9         the telecommunications space. Specifically, the internal walls within the collocation area

10         that divide it into 100 square foot areas reduce the number of relay racks that can be

11         installed. The walls themselves take up space and break the equipment lineups into short

12         and less efficient sections. If an incumbent nears the point of space exhaustion within its

13         central office, the incumbent should explore providing a portion of its central office

14         reserved specifically for Common Collocation so as to continue providing an opportunity

15         for collocation.

16   Q.    WHAT CHARACTERISTICS OF COMMON COLLOCATION ARE UNIQUE
17         AND THEREFORE REQUIRE THIS ADDITIONAL FORM OF
18         COLLOCATION?

19   A.    Common Collocation has three unique attributes making its cost development and

20         recovery different from that of Physical Collocation.

21         1.     There are no internal cage partitions within the Common Collocation area.

22         2.     Rather than recovering the investment associated with the Common Collocation

23                area through a per square foot element, the cost is recovered through a per linear

24                foot basis.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
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 1         3.     The placement of cabinetized relay racks has been assumed in developing the per

 2                linear foot costs for Common Collocation

 3   Q.    HOW IS THE CAGE PARTITIONING DONE DIFFERENTLY FOR COMMON
 4         COLLOCATION?

 5   A.    The dimensions of the collocation area for Common Collocation are precisely the same

 6         as those for Physical Collocation: 27.5 feet by 20.0 feet. However, in Physical

 7         Collocation 60 feet of additional cage partitioning material are required to provide the

 8         four separate 100 square foot cages that will not be required for Common Collocation.

 9         Further, there are five gates included in the cage partitioning costs for Physical

10         Collocation. In Common Collocation only one gate is required. The net effect of these

11         assumptions for Common Collocation is that the Cage Partitioning investment is based

12         on 95 linear feet of material (the perimeter of the Common Collocation Cage) rather than

13         155 linear feet for Physical Collocation. Second, the partitioning investment only

14         includes the capital for one gate. These changes are reflected in a lower per foot price for

15         the partitioning material.

16   Q.    COULD YOU EXPLAIN WHY YOU HAVE MOVED TO A LINEAR FOOT
17         RATHER THAN A SQUARE FOOT COST RECOVERY METHOD?

18   A.    In Physical Collocation, the investments associated with Land and Building and the

19         collocation area are recovered on a square foot basis. This is appropriate in that the costs

20         can be easily tracked or allocated back to one of the 100 square foot areas into which the

21         collocation area is divided. However, there are no interior walls in Common Collocation.

22         Therefore, there is no straightforward means to utilize area as an appropriate cost

23         recovery metric. Instead, all of the costs associated with the cage preparation and Land

24         and Building investment are allocated across the number of linear feet of relay racks that
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
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 1         can be placed within the Common Collocation area. Further, the possibility exists that all

 2         of the relay rack space within the Common Collocation area may not be “rented” from

 3         the incumbent at any given point in time. To account for this possibility, these costs are

 4         increased by an occupancy fill factor to adjust for the potential unused area within the

 5         Common Collocation layout. This fill factor mitigates the risk that incumbent bears from

 6         not having all of the space rented at any given time within the Common Collocation area.

 7   Q.    WHY HAVE CABINETIZED RELAY RACKS BEEN USED IN DEVELOPING
 8         THE COSTS FOR COMMON COLLOCATION?

 9   A.    Telecommunications equipment can be “packaged” in cabinetized relay racks or in

10         standard relay racks where the telecommunications equipment is exposed. The later form

11         is the normal application used within central offices. However, because there could be

12         numerous CLECs within the same Common Collocation area, the costs for Common

13         Collocation have been derived assuming that cabinetized relay racks are installed in the

14         collocation area by the CLECs. The impact on the cost study for Common Collocation

15         comes from the difference in depth between these two types of relay racks. Cabinetized

16         relay racks have a depth of 24 inches, whereas standard relay racks (exposed) have a

17         depth of 12 inches. Because of the greater depth on the cabinetized relay rack, four rows

18         of cabinetized relay racks (one fewer row than if standard relay racks were used) can fit

19         within the 27.5 foot by 20.0 foot Common Collocation area. A detailed explanation for

20         this difference can be found in the White Paper (beginning at page 104).

21                Once the number of rows was determined, the next step was to determine the

22         number of linear feet that could fit within the Common Collocation area. Again,

23         assuming cabinetized relay racks, the subject matter experts used a width for the relay
           (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 63 of 153

 1          rack of 26.5 inches. Further, the subject matter experts provided four feet of space on

 2          one end of the Common Collocation area (the side with the gate) and 1.5 feet on the

 3          other. Given these dimensions, 10 cabinetized relay racks fit in each of the four rows.

 4                 Finally, one relay rack was removed to allow space for a BDFB. The net result is

 5          that 39 cabinetized relay racks fit within the Common Collocation area. Using the 26.5-

 6          inch width noted previously, this yields a total of 86.125 linear feet of relay rack space

 7          within the Common Collocation area. It is this quantity of linear feet within the Common

 8          Collocation area, grossed up for an occupancy adjustment factor, that is used to derive

 9          the costs per linear foot of relay rack space ordered by the CLEC.

10   IX.    CAGELESS COLLOCATION

11   Q.     PLEASE PROVIDE A DEFINITION AND DESCRIBE THE NEED FOR
12          CAGELESS COLLOCATION.

13   A.     Much like Virtual Collocation, Cageless Collocation involved the placement of the

14          CLEC’s equipment within the incumbent’s equipment lineups without using a segregated

15          area of the central office. The only difference between Cageless Collocation and Virtual

16          Collocation is that a cageless collocator retains ownership of the collocated equipment.

17                 Cageless Collocation is an important form of collocation for CLECs requiring

18          little in the way of telecommunications space or those wanting to introduce new

19          technology in the marketplace. Specifically, Digital Subscriber Loop (DSL) technology

20          is one that is ideally suited to a Cageless Collocation arrangement. First, this technology

21          does not require much floor space, only requiring approximately two relay racks for a

22          configuration that can serve a substantial number of customers. Second, because this

23          technology is comparatively new and a large number of vendors sell this equipment, the
          (PUBLIC VERSION)                                                             Initial Testimony of Steven E. Turner (Collocation)
                                                                                                                 MPSC Case No. U-13531
                                                                                                                           Page 64 of 153

 1         incumbent’s employees would most certainly need training on the equipment chosen by

 2         the CLEC. The cost of this training could be formidable in the face of deploying a new

 3         technology.

 4   Q.    DO YOU HAVE A DIAGRAM OF CAGELESS COLLOCATION?

 5   A.    Yes, I have provided a diagram of Cageless Collocation in the figure below.

 6   Figure 7 - Typical Cageless Collocation Arrangement


                                            T Y PIC A L C A G E L E S S C O L L O C A TIO N A R R A N G E M E N T

                                                                                                         C E N T R A L O F F I C E E Q U IP M E N T L IN E U P S

             M a n h o le                                                  IL E C - 4 8 V                               BDFB                          BDFB

                                                                        P O W ER P LA N T




                                Loop                                                             VG
                              (C op p er)

                                Loop                      IL E C
              IL E C          (C op p er)
             C AB LE                                       MDF
             VAU LT
                             Loop
                                                               D S -1
                            ( F ib e r )
                                                                                  IL E C       D S -3
                                                                               D IG I T A L
                                                                   D S -1
                                                                                CROSS
                                                                                               D S -1
                                                                   D S -1     CONNECT
                                              IL E C                          S Y S TE M S
                                                                   D S -3
                                            NETW ORK

                                                                   F IB E R
                                                                                              F IB E R
                                                                   F IB E R
                                                                                  IL E C
                                                                                  FDF

                    F IB E R E N T R A N C E C A B L E - C L E C
                    S U P P L IE D




 7

 8   Q.    WHAT CHARACTERISTICS OF CAGELESS COLLOCATION ARE UNIQUE
 9         AND THEREFORE REQUIRE THIS ADDITIONAL FORM OF
10         COLLOCATION?

11   A.    As I have already testified, Cageless Collocation is almost identical to Virtual

12         Collocation except in three respects. First, ownership of the equipment will remain with

13         the CLEC. In Virtual Collocation, the equipment is transferred to the incumbent for a

14         nominal sum (normally $1.00). However, in Cageless Collocation the equipment will

15         remain in the ownership and control of the CLEC. Second, because the equipment will
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 65 of 153

 1         remain in the control of the CLEC, there will be no need to train the incumbent personnel

 2         in the maintenance of the equipment. Third, the CLEC will be responsible to perform the

 3         on-site maintenance of the equipment that is placed in a Cageless Collocation

 4         arrangement. In this respect, Cageless Collocation is like Physical Collocation – the

 5         CLEC is directly responsible for all on-site maintenance activity.

 6   Q.    IS THERE ANY DIFFERENCE BETWEEN VIRTUAL COLLOCATION AND
 7         CAGELESS COLLOCATION FROM A COST PERSPECTIVE?

 8   A.    From a cost perspective, there is no difference between Cageless Collocation and Virtual

 9         Collocation. Although there is a separate output sheet for Cageless Collocation than for

10         Virtual Collocation in the Collocation Cost Model, there are no differences in the costs

11         that have been developed for the two options. Effectively, the difference in these two

12         options is one of terms and conditions, not cost. As such, the explanation provided above

13         regarding the development of costs for Virtual Collocation applies for Cageless

14         Collocation with the terms and conditions exceptions as outlined above.

15   X.    ADJACENT PHYSICAL COLLOCATION – ON-SITE

16   Q.    PLEASE PROVIDE A DEFINITION AND DESCRIBE THE NEED FOR
17         ADJACENT PHYSICAL COLLOCATION – ON-SITE.

18   A.    The Adjacent Physical Collocation – On-Site alternative assumes that the placement of

19         additional telecommunications equipment via collocation may occur through CLECs

20         placing telecommunications equipment in a walk-in cabinet (“WIC”), hut, trailer, or

21         similar environmentally protected structure near the incumbent’s central office. The

22         critical point here is that this option is being developed to provide a means to collocate

23         near the incumbent’s central office when space is otherwise unavailable inside the central

24         office.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                  Page 66 of 153

 1                The WIC is placed within four feet of the outside wall of the central office. Two

 2         holes in the central office are used to route cables to the WIC, one for power and the

 3         other for fiber and copper, which are carried in separate cable racks. The CLECs draw

 4         power from the central office. However, fusing is self-provided in the WIC. Thus, in

 5         contrast to the physical collocation model, the incumbent’s BDFB is replaced by self-

 6         provided CLEC equipment, and the power distribution element (from the BDFB to the

 7         collocator’s equipment) is replaced by self-provided cabling.

 8   Q.    COULD YOU PLEASE PROVIDE A DIAGRAM THAT GENERALLY
 9         ILLUSTRATES THE COMPONENTS OF ADJACENT PHYSICAL
10         COLLOCATION – ON-SITE?

11   A.    Yes. The diagram below generally defines the relationship between the Adjacent

12         Physical Collocation – On-Site arrangement and the key incumbent connectivity points.
    (PUBLIC VERSION)                                   Initial Testimony of Steven E. Turner (Collocation)
                                                                                 MPSC Case No. U-13531
                                                                                           Page 67 of 153

Figure 8 - Connectivity for Adjacent On-Site




                     CONNECTIVITY FOR ADJACENT ON-SITE



                                                                                      ILEC                              ILEC
                                                                                                                       FIBER
                                                                                                             HIGH     FRAME
                                                                                      DSX/                   HIGH
                                                    SHARED -48V
                                                        DC
                                                                                      DC                  BANDWIDTH




                                     FLOOR

                                                      DS-1/DS-3 SERVICE
                                                                                                        OPTICAL




      CLEC CABINET / TRAILER         FLOOR

                                                                                             VGSERVIC
                    DC   POWER
    FUSE PANELS

                     DS-1/DS-3
                                                                          ILEC COPPER
      PO              V
                     OPTICA                                               MDF
                                                              EXISTING COPPER LOOPS
                  ENTRANCE                                           ON ILEC
     FIBER
     PANEL                           FLOOR



 MANHOLE
                         STRUCTURE
                                      12-24 FIBER
                                                                               12-24 FIBER
                                                                  FIBER

                                                                  SPLIC
                                     CABLE VAULT
                                                        WORST CASE 3 FLOOR ILEC CENTRAL OFFICE
                                                     (SUBURBAN LOCATIONS WILL HAVE FEWER FLOORS)




    TO CLEC
    CENTRAL
     OFFICE
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 68 of 153

 1   Q.    HOW ARE THE COSTS FOR ADJACENT PHYSICAL COLLOCATION – ON-
 2         SITE DEVELOPED?

 3   A.    Several items in the Physical Collocation Model required modification to implement the

 4         Adjacent Physical Collocation – On-Site alternative. However, although many input

 5         values changed between these two scenarios, the on-site alternative still heavily relied on

 6         the Model Central Office defined above in the Physical Collocation portion of this

 7         testimony. The following is a list of the elements that were modified for Adjacent

 8         Physical Collocation – On-Site:

 9         1.     Cabling Distances

10         2.     Planning

11         3.     Land and Building

12         4.     Power Delivery

13   Q.    HOW WERE THE CABLING DISTANCES MODIFIED TO DEVELOP THE
14         ADJACENT PHYSICAL COLLOCATION – ON-SITE COSTS?

15   A.    Of the changes necessary to implement Adjacent Physical Collocation – On-Site, the

16         most substantial was in developing the distances associated with this collocation option.

17         In determining the cable lengths, the subject matter experts had to assume a range of

18         positions in which the telecommunications trailer outside of the incumbent’s central

19         office could be placed. Specifically, the subject matter experts determined that the

20         outside wall of the telecommunications trailer would be within four feet of the outside

21         wall of the incumbent’s central office. Second, the subject matter experts determined that

22         the telecommunications area within the incumbent’s central office would have common

23         walls with the exterior walls of the incumbent’s central office on two sides of the

24         building. On the other two sides of the incumbent’s central office, it was assumed that
        (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                  Page 69 of 153

1         there would be “administrative” areas between the exterior wall of the incumbent’s

2         central office and the nearest exterior wall of the telecommunications space. As such,

3         four scenarios for cable lengths were developed: (1) Adjacent to Telecommunications

4         Space – Best Case; (2) Adjacent to Telecommunications Space – Worst Case; (3)

5         Adjacent to Administrative Space – Best Case; and (4) Adjacent to Administrative Space

6         – Worst Case. The length calculations for these four scenarios are identified in the tables

7         below.


    Table 4 - Adjacent to Telecommunications Space – Best Case

                   Cable Section                                      Length in Feet
                   Length on One Floor                                     20
                   Width on One Floor                                      20
                   Vertical Climb Inside First Floor                       10
                   Length between Hut and Incumbent Central                 6
                   Office
                   Distance within the Hut                                  10
                   Drops on Each End                                        15
                   Total Cable Length                                       81
                   Total Incumbent Rack Length                              56
8


    Table 5 - Adjacent to Telecommunication Space - Worst Case

                   Cable Section                                      Length in Feet
                   Length on One Floor                                    120
                   Width on One Floor                                     100
                   Vertical Climb Inside First Floor                       10
                   Vertical Climb to Third Floor                           40
                   Length between Hut and Incumbent Central                 6
                   Office
                   Distance within the Hut                                 10
                   Drops on Each End                                       15
                   Total Cable Length                                      301
                   Total Incumbent Rack Length                             276
9
        (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                       MPSC Case No. U-13531
                                                                                 Page 70 of 153

    Table 6 - Adjacent to Administrative Space - Best Case

                   Cable Section                                    Length in Feet
                   Length on One Floor                                   20
                   Width on One Floor                                    20
                   Distance within Administrative Area                   40
                   Vertical Climb Inside First Floor                     10
                   Length between Hut and Incumbent Central               6
                   Office
                   Distance within the Hut                                10
                   Drops on Each End                                      15
                   Total Cable Length                                     121
                   Total Incumbent Premium Rack Length                    50
                   Total Incumbent Non-Premium Rack Length                 46
1


    Table 7 - Adjacent to Administrative Space - Worst Case

                   Cable Section                                    Length in
                                                                    Feet
                   Length on One Floor                                   120
                   Width on One Floor                                    100
                   Distance within Administrative Area                    40
                   Vertical Climb Inside First Floor                     10
                   Vertical Climb to Third Floor                         40
                   Length between Hut and Incumbent Central               6
                   Office
                   Distance within the Hut                                10
                   Drops on Each End                                      15
                   Total Cable Length                                     341
                   Total Incumbent Premium Rack Length                    50
                   Total Incumbent Non-Premium Rack Length                266
2


3         The subject matter experts next assigned weightings to each of these scenarios. The

4         subject matter experts determined that there was a 50 percent probability of being placed

5         adjacent to the telecommunications area. Further, within these scenarios, there was an

6         even probability of being placed anywhere within the best and worst case within the
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 71 of 153

 1         incumbent’s telecommunications space. The net effect was that these four scenarios were

 2         each weighted at 25 percent to develop the overall calculations. The net result was that

 3         power, fiber, DS1, and DS3 connectivity had a cabling length of 211 feet, incumbent

 4         premium racking of 25 feet, and incumbent non-premium racking length of 161 feet.

 5         Voice grade connectivity is 20 feet less than the cabling length for power, fiber, DS1, and

 6         DS3 connectivity in that the MDF is always on the first floor. Therefore, the average 20

 7         foot distance included to traverse floors for the power, fiber, DS1, and DS3 connectivity

 8         is not necessary for the voice grade connectivity. The result was the voice grade

 9         connectivity had a cabling length of 191 feet, incumbent premium racking length of 25

10         feet, and incumbent non-premium racking length of 141 feet.

11   Q.    WHAT IS THE REFERENCE TO INCUMBENT PREMIUM RACKING?

12   A.    The reference to premium racking in these calculations applies whenever cable rack is

13         installed within administrative areas. Specifically, the engineering and installation

14         components of the total investment in premium cable rack are increased by 20 percent

15         over non-premium cable rack to account for the more difficult environment in which the

16         rack is being installed.

17   Q.    HOW WAS PLANNING MODIFIED TO DEVELOP THE ADJACENT
18         PHYSICAL COLLOCATION – ON-SITE COSTS?

19   A.    Similarly to Physical Collocation and Virtual Collocation, planning and implementation

20         of a collocation area adjacent to the incumbent’s central office requires manpower effort

21         on the part of the incumbent. To ensure fair and reasonable compensation for incumbent

22         manpower, the central office model layout incorporates a planning component outlining

23         the expected incumbent manpower requirements to implement a CLEC collocation
          (PUBLIC VERSION)                              Initial Testimony of Steven E. Turner (Collocation)
                                                                                  MPSC Case No. U-13531
                                                                                            Page 72 of 153

 1           request using best practice processes in a competitive environment. As shown in the

 2           chart below, the incumbent resource requirements have been separated into manpower

 3           required to establish the initial collocation area and manpower requirements to

 4           implement each CLEC request. The first CLEC request includes both requirements.


     Table 8 - Adjacent Collocation Incumbent Manpower Requirements

            ADJACENT ON SITE COLLOCATION INCUMBENT MANPOWER REQUIREMENTS
       FUNCTION        Overall Colo Area or Labor        Unit     Hours to Plan      Investment      Used By     Notes
                           Per CLEC          Rate                   Specified       for Element
                          Request (6, 7)                           Collocation       Per CLEC
                                                                      Area
     Outside Plant     Per CLEC Request        $55.03    per Hr         6             $330.18        1 CLEC
     Access Design     Subsequent Cabling      $55.03    per Hr         0              $0.00         1 CLEC
     Building Planning Per CLEC Request        $55.03    per Hr         8             $440.24        1 CLEC
                       Subsequent Cabling      $55.03    per Hr         0              $0.00         1 CLEC
     MDF Planning      Per CLEC Request        $55.03    per Hr         4             $220.12        1 CLEC
                       Subsequent Cabling      $55.03    per Hr         2             $110.06        1 CLEC
     Real Estate       Per CLEC Request        $55.03    per Hr         6             $330.18        1 CLEC
     Project
     Management        Subsequent Cabling      $55.03    per Hr         0              $0.00         1 CLEC
     Real Estate       Per CLEC Request        $55.03    per Hr         10            $550.30        1 CLEC
     Construction Mgr. Subsequent Cabling      $55.03    per Hr         0              $0.00         1 CLEC
     Architectural     Per CLEC Request        $55.03    per Hr         24           $1,320.72       1 CLEC        1
                       Subsequent Cabling      $55.03    per Hr         0              $0.00         1 CLEC
     Power Engineer Per CLEC Request           $55.03    per Hr         6             $330.18        1 CLEC        2
                       Subsequent Cabling      $55.03    per Hr         0              $0.00         1 CLEC
     Equipment         Per CLEC Request        $55.03    per Hr         4             $220.12        1 CLEC        3
     Engineer          Subsequent Cabling      $55.03    per Hr         3             $165.09        1 CLEC
     Equipment         Per CLEC Request        $55.03    per Hr         8             $440.24        1 CLEC        4
     Installation      Subsequent Cabling      $55.03    per Hr         4             $220.12        1 CLEC
     Project Manager
     Operations Group Per CLEC Request         $55.03    per Hr         4             $220.12        1 CLEC
                       Subsequent Cabling      $55.03    per Hr         1              $55.03        1 CLEC
     Application Fee Per CLEC Request          $55.03    per Hr         10            $550.30        1 CLEC        5
                       Subsequent Cabling      $55.03    per Hr         8             $440.24        1 CLEC
 5
 6           NOTES
 7           1.      Assumes in-house architect with no external charges for architects.
 8           2.      Distribution only. (BDFB to DC Panel); -48V DC Power assessments are demand functions
 9                   covered under power consumption.
10           3.      Should not include cable and cable racking for demand activity.
11           4.      Should not include coordination of growth projects.
12           5.      Application fee to cover activities of various incumbent administrative groups (customer service,
13                   billing, etc.).
14           6.      Assumes that the first CLEC coincides with the planning of initial collocation area.
          (PUBLIC VERSION)                          Initial Testimony of Steven E. Turner (Collocation)
                                                                              MPSC Case No. U-13531
                                                                                        Page 73 of 153

 1         7.     If subsequent cabling job is for additional power – Equipment Engineer allocation is transferred to
 2                Power Engineer.
 3   Q.    HOW WERE THE LAND AND BUILDING CALCULATIONS MODIFIED TO
 4         DEVELOP THE ADJACENT PHYSICAL COLLOCATION – ON-SITE COSTS?

 5   A.    Given that the telecommunications trailer exists outside of the incumbent’s central office,

 6         there is no reason to incorporate any building investment in this cost category. However,

 7         the CLEC will utilize space adjacent to the central office to place the telecommunications

 8         trailer. To evaluate the appropriate cost for this space, the subject matter experts

 9         determined that the cost of this space could be approximated by identifying a market rate

10         for parking, determining the area of the parking space, and incorporating this per square

11         foot cost into the model for incumbent land rental. It is possible that the space the CLEC

12         would place its telecommunications trailer would be unimproved. However, to be

13         conservative, an improved cost (parking space) is included in the Collocation Cost Model

14         for the development of this cost element.

15   Q.    HOW WAS POWER DELIVERY MODIFIED TO DEVELOP THE ADJACENT
16         PHYSICAL COLLOCATION – ON-SITE COSTS?

17   A.    Three key components changed in the calculation of Power Delivery for Adjacent

18         Physical Collocation – On-Site as compared to Physical Collocation: (1) the length of

19         the cable; (2) the quantity of DC power being requested; and (3) the size of the cable.

20         The first of these issues has been described above. The principle change with regards to

21         the quantity of DC power is that power is now being delivered to the CLEC’s own BDFB

22         so that the CLEC can individually deliver DC power to the equipment that requires it.

23         BDFBs come in different sizes. However, the approach that the team of subject matter

24         experts took was that the CLECs would used BDFBs with DC power requirements of

25         200, 400, 600, or 800 amps. Finally, once the length of cable is determined and the
           (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 74 of 153

 1          power requirements established, then the diameter and quantity of cables can be

 2          developed.

 3   XI.    ADJACENT PHYSICAL COLLOCATION – OFF-SITE

 4   Q.     PLEASE PROVIDE A DEFINITION AND DESCRIBE THE NEED FOR
 5          ADJACENT PHYSICAL COLLOCATION – OFF-SITE.

 6   A.     The Adjacent Physical Collocation – Off-Site arrangement occurs when the CLEC’s

 7          telecommunications equipment is not located on the central office property. In this form

 8          of collocation, the CLEC arranges its own rights-of-way, etc. and provides cabling at the

 9          nearest manhole to the central office with enough slack to be pulled into the central office

10          cable vault. All components except connectivity are self-provided.

11   Q.     COULD YOU PLEASE PROVIDE A DIAGRAM THAT GENERALLY
12          ILLUSTRATES THE COMPONENTS OF ADJACENT PHYSICAL
13          COLLOCATION – OFF-SITE?

14   A.     Yes. The diagram below generally defines the relationship between the Adjacent

15          Physical Collocation – Off-Site arrangement and the key incumbent connectivity points.
         (PUBLIC VERSION)                         Initial Testimony of Steven E. Turner (Collocation)
                                                                            MPSC Case No. U-13531
                                                                                      Page 75 of 153




     Figure 9 - Connectivity For Adjacent Off-Site

1



              CONNECTIVITY FOR ADJACENT OFF-SITE




                                                                   ILE                           ILEC
                                                                    C                           FIBER
                                                                                       HIGH
                                                                   DSX/                         FRAME
                                                                   DCS
                                                                                    BANDWIDTH
                                                                                      LOOPS

                            FLOOR 3




                            FLOOR 2



                                                           ILEC COPPER   MDF
                                             EXISTING COPPER
                                                   LOOP                      JUMPE


                            FLOOR 1                                      9 CLEC

                                                                     9 X 100 PAIR
     MANHOLE                    900 PAIR
                                                        COPPER
                                                        SPLICE
                                                         BOX
                STRUCTURE
                              COPPER CABLE


                                                         FIBER               12-24 FIBER
                             12-24 FIBER
                            CABLE VAULT

                                                 WORST CASE 3 FLOOR ILEC CENTRAL OFFICE
                                              (SUBURBAN LOCATIONS WILL HAVE FEWER FLOORS)



    TO CLEC
    CENTRAL
     OFFICE
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 76 of 153

 1   Q.    HOW ARE THE COSTS FOR ADJACENT PHYSICAL COLLOCATION – OFF-
 2         SITE DEVELOPED?

 3   A.    Several items in the Physical Collocation Model required modification to implement the

 4         Adjacent Physical Collocation – Off-Site alternative. The following is a list of the

 5         elements that were modified for Adjacent Physical Collocation – Off-Site:

 6         1.     Cabling Distances

 7         2.     Planning

 8   Q.    HOW WERE THE CABLING DISTANCES MODIFIED TO DEVELOP THE
 9         ADJACENT PHYSICAL COLLOCATION – OFF-SITE COSTS?

10   A.    In developing the costs for Adjacent Physical Collocation – Off-Site, there is one cost

11         category for connectivity cabling that does not occur in this alternative that occurred in

12         all others: DS3 Cabling. Because of the potential distances that can be involved to

13         model a circuit to an off-site location, and the high costs of providing a DS3 over long

14         copper facilities, the decision was made to remove DS3 connectivity as an option.

15         However, DS3 circuits can still be delivered via fiber connectivity between the CLEC

16         and incumbent. What remains are two types of entrance facilities: copper and fiber. In

17         developing the costs for copper entrance facilities, the subject matter experts assumed

18         that a 900 pair cable would be brought into the vault through the manhole. Further, it

19         was assumed that the terminations that would be available on the MDF would drop down

20         into the cable vault at the far end of the room. In other words, the calculation for the

21         voice grade connectivity cost assumes a worst case cost associated with going to the far

22         end of the cable vault. In developing the costs for fiber facilities, the subject matter

23         experts assumed that the fiber cable would come into the splice point in the cable vault
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 77 of 153

 1         and be able to go up a riser rack at that point. The splice point inside the vault is

 2         assumed to be 50 feet inside the vault wall (looking towards the manhole).

 3   Q.    HOW WAS PLANNING MODIFIED TO DEVELOP THE ADJACENT
 4         PHYSICAL COLLOCATION – OFF-SITE COSTS?

 5   A.    Similar to Physical Collocation and Virtual Collocation, planning and implementation of

 6         a collocation area adjacent to the incumbent’s central office requires manpower effort on

 7         the part of the incumbent. To ensure fair and reasonable compensation for incumbent

 8         manpower, the central office model layout incorporates a planning component outlining

 9         the expected incumbent manpower requirements to implement a CLEC collocation

10         request using best practice processes in a competitive environment. As shown in the

11         chart below, the incumbent resource requirements have been separated into manpower

12         required to establish the initial collocation area and manpower requirements to

13         implement each CLEC request. The first CLEC request includes both requirements.
            (PUBLIC VERSION)                             Initial Testimony of Steven E. Turner (Collocation)
                                                                                   MPSC Case No. U-13531
                                                                                             Page 78 of 153

     Table 9 - Adjacent Off-Site Collocation Incumbent Manpower Requirements

                  ADJACENT OFF-SITE COLLOCATION INCUMBENT MANPOWER REQUIREMENTS
            FUNCTION              Per CLEC         Labor     UnitHours to Plan           Investment      Used By       Notes
                                  Request (4)       Rate           Specified            for Element
                                                                  Collocation            Per CLEC
                                                                     Area
     Outside Plant Access     Per CLEC             $55.03 per Hr       8                  $440.24         1 CLEC
     Design                   Request
     Building Planning        Per CLEC             $55.03 per Hr            0              $0.00          1 CLEC
                              Request
     MDF Planning             Per CLEC             $55.03 per Hr            4             $220.12         1 CLEC
                              Request
     Real Estate Project      Per CLEC             $55.03 per Hr            0              $0.00          1 CLEC
     Management               Request
     Real Estate Construction Per CLEC             $55.03 per Hr            0              $0.00          1 CLEC
     Manager                  Request
     Architectural            Per CLEC             $55.03 per Hr            0              $0.00          1 CLEC
                              Request
     Power Engineer           Per CLEC             $55.03 per Hr            0              $0.00          1 CLEC
                              Request
     Equipment Engineer       Per CLEC             $55.03 per Hr            2             $110.06         1 CLEC         1
                              Request
     Equipment Installation Per CLEC               $55.03 Per Hr            2             $110.06         1 CLEC         2
     Project Manager          Request
     Operations Group         Per CLEC             $55.03 per Hr            2             $110.06         1 CLEC
                              Request
     Application Fee          Per CLEC             $55.03 per Hr            10            $550.30         1 CLEC         3
                              Request
 1
 2           NOTES
 3           1.       Should not include cable and cable racking for demand activity.
 4           2.       Should not include coordination of growth projects.
 5           3.       Application fee to cover activities of various administrative groups (customer service, billing, etc.).
 6           4.       Each installation requires the same number of hours.

 7   XII.    CONCLUSION REGARDING THE COLLOCATION COST MODEL

 8   Q.      COULD YOU PLEASE SUMMARIZE THIS PORTION OF YOUR
 9           TESTIMONY?

10   A.      The Collocation Cost Model provides the forward-looking economic costs for six

11           different collocation alternatives. The cost for these six alternatives were developed

12           because the answer to a collocation request can never be that space is unavailable.

13           Collocation is too important to the development of facilities-based competition for it to

14           be withheld from CLECs. Finally, the Collocation Cost Model presents the costs and
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 79 of 153

 1         algorithms associated with each of these six forms of collocation in such a way that the

 2         calculations can be easily traced through the model and modified as necessary by this

 3         Commission. In short, the Collocation Cost Model should be retained by this

 4         Commission as the basis for developing the costs for collocation including all six forms

 5         incorporated within the model.

 6   XIII. EVALUATION OF THE SBC-MICHIGAN COLLOCATION COST FILING

 7   Q.    THERE ARE NUMEROUS RATE ELEMENTS ASSOCIATED WITH
 8         COLLOCATION. WILL YOUR REBUTTAL OF SBC-MICHIGAN’S
 9         COLLOCATION COSTS ADDRESS ALL OF THEM?

10   A.    No.

11   Q.    HOW HAVE YOU PRIORITIZED YOUR CRITIQUE OF SBC-MICHIGAN’S
12         COLLOCATION COST STUDY?

13   A.    I have prepared an analysis to identify the important gaps between the present approved

14         rates for collocation in Michigan and the much higher proposed rates that SBC-Michigan

15         sets forth in its cost study.

16   Q.    HOW DID YOU IDENTIFY THE IMPORTANT GAPS BETWEEN CURRENT
17         RATES AND SBC-MICHIGAN’S COST STUDY?

18   A.    First, as I discussed earlier in this testimony, I developed a prototype collocation

19         arrangement that a CLEC would order from SBC-Michigan and calculated the amount

20         the CLEC would be charged for such an arrangement, both under SBC-Michigan’s

21         proposed rates and under those previously ordered by the Commission and incorporated

22         into the current tariff. As noted earlier, the primary purpose of this prototype is simply to

23         apply the rate elements in a “real-world” collocation scenario to allow comparison of the

24         effect of SBC-Michigan’s proposed collocation rates on the total cost of collocation. So,

25         for instance, even though SBC-Michigan has proposed nonrecurring charges for
          (PUBLIC VERSION)                       Initial Testimony of Steven E. Turner (Collocation)
                                                                           MPSC Case No. U-13531
                                                                                     Page 80 of 153

 1         collocation planning of $15,884.69 and the present collocation tariff contains a

 2         nonrecurring charge of $3,805.77 and a recurring charge of $22.29 per month per 100

 3         square feet – amounts that are much lower than SBC-Michigan’s current proposal – this

 4         discrepancy only accounts for 1.92 percent of the gap between SBC-Michigan’s proposed

 5         rates and those that are currently contained in the tariff for a typical collocation.12

 6                 Second, once I had developed the comparative rates for the prototype collocation

 7         arrangement, I calculated the net present value over a seven-year period to account for

 8         both the nonrecurring and recurring aspects of collocation rates from a total rate

 9         perspective.

10                 Third, I compared those elements where SBC-Michigan’s purported costs are

11         higher than those found in the present collocation tariff to identify the primary

12         discrepancies. The gaps were calculated based on net present value comparisons for the

13         prototype collocation – not based on the rate element by itself. This analysis yielded the

14         gaps for the rate element categories identified below for physical caged collocation.13

15         The table below summarizes the results of the analysis, and the full analysis can be found

16         in Exhibit SET-COLLO-4.




     12    Generally, I will not discuss those elements that make up a negligible amount of the difference
           between the current tariff rates in Michigan and SBC-Michigan’s proposal. However, because of
           the staggering increase proposed by SBC-Michigan for this particular element compared to the
           existing Michigan tariff rates and, more importantly, compared to the planning charges SBC
           typically proposes in other states, I will address this nonrecurring charge.
     13    There are additional forms of collocation other than physical caged collocation and a similar
           analysis could have been conducted for these as well. I have prioritized this discussion around
           physical caged collocation to illustrate the numerous problems with SBC-Michigan’s proposed
           inputs.
          (PUBLIC VERSION)                        Initial Testimony of Steven E. Turner (Collocation)
                                                                            MPSC Case No. U-13531
                                                                                      Page 81 of 153

                                     Rate Element                       Gap Percentage
                      Planning/Engineering                                      1.92
                      Building Modification/Safety & Security                  12.85
                      HVAC                                                     2.93
                      Grounding                                               0.0014
                      Cage Preparation                                         19.60
                      Land & Building                                         16.44
                      Cable Racking/Cage Common Systems                        11.99
                      Entrance Fiber                                            0.62
                      DC Power Delivery                                         2.65
                      Power Consumption                                        14.52
                      Voice Grade Arrangements                                 11.25
                      DS1 Arrangements                                         4.44
                      DS3 Arrangements                                         0.72
                      Security Access                                           0.02
                      Entrance Fiber Structure Charge                           0.06
                      Grand Total                                             100.00
 1

 2   Q.    BASED UPON THIS ANALYSIS, WHAT ARE THE MOST IMPORTANT
 3         ISSUES YOU ADDRESS?

 4   A.    There are six rate elements that should be addressed in the following sections of

 5         testimony. In many cases these elements apply to multiple forms of collocation and

 6         represent significant gaps between the current collocation tariff in Michigan and SBC-

 7         Michigan’s proposed costs: (1) Building Modification/Safety & Security; (2) Cage

 8         Preparation; (3) Land & Building; (4) Cable Racking/Cage Common Systems; (5) Power

 9         Consumption; and (6) Voice Grade Arrangements. These six elements alone account for

10         86.64 percent of the gap between the present costs in Michigan and what SBC-Michigan

11         is proposing. As I will demonstrate below, SBC-Michigan’s proposed costs for these




     14    An entry of 0.00 percent in this table does not indicate that the present collocation tariff and SBC-
           Michigan’s proposed rates are the same. Rather, it indicates that the SBC-Michigan’s purported
           cost is lower than the present tariff.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 82 of 153

 1         elements are not cost based, nor are they even within reason when compared to cost

 2         filings across the country, particularly the new outrageous prices for DC power.

 3   Q.    ARE THESE THE ONLY COLLOCATION ISSUES WITH WHICH YOU
 4         BELIEVE THE COMMISSION SHOULD BE CONCERNED?

 5   A.    No. There are two other extremely significant issues that I will address related to how

 6         DC Power Consumption should be charged. Specifically, the current tariff in Michigan

 7         notes that DC Power Consumption should be charged on a per amp basis. However, as

 8         the Texas PUC recently noted, and as I will discuss in more detail below, the current

 9         tariff does not have terms and conditions related to how to ensure that CLECs only pay

10         for the DC Power that they use. My testimony on this issue will address why it is

11         important from a cost causation standpoint that CLECs should only pay for the power

12         that they use. I will also explain how to implement provisions in the current tariff that

13         will allow for this to occur.

14                In addition, I will address how SBC-Michigan is systematically overcharging for

15         DC Power through a clear misapplication of the terms and conditions within the existing

16         collocation tariff. This problem is generally referred to as the “redundant power issue.”

17         My testimony will explain how metering DC power would eliminate this problem

18         altogether. However, absent this, I will explain why SBC-Michigan’s implementation of

19         the current collocation is wrong and document that SBC-Michigan is readily offering to

20         correct this problem in other states such as Indiana and Ohio and being forced to correct

21         this problem in Texas.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 83 of 153

 1         A.     BUILDING MODIFICATION/SAFETY & SECURITY

 2                1.      Building Modification

 3   Q.    WHY HAVE YOU INCLUDED THESE TWO ELEMENTS TOGETHER IN
 4         YOUR CRITICISM OF SBC-MICHIGAN’S COST STUDY?

 5   A.    First, both of these rate elements in SBC-Michigan’s cost study represent costs that are

 6         not consistent with TELRIC cost principles in that SBC-Michigan is double-charging for

 7         costs that are already included in the forward-looking cost of the central office land and

 8         building space. Second, these rate elements also represent costs that are inconsistent with

 9         FCC rules found in the Advanced Services Order and with the Michigan Collocation

10         Tariff adopted by this Commission for Michigan.

11   Q.    WHAT CONCERNS HAVE YOU FOUND WITH SBC-MICHIGAN’S BUILDING
12         MODIFICATION CHARGES?

13   A.    SBC-Michigan has incorporated a tremendous amount of unjustifiable costs into its

14         Building Modification (or as SBC-Michigan prefers to call it – Site Conditioning)

15         element. Specifically, SBC-Michigan appears to include costs for the following elements

16         in its Building Modification element: General Contractor Fees, Consulting Fees,

17         Electrical Panel, Panel Feeder, Core Drill, Floor Mark, Gypsum Board, and Door.

18         Normally, SBC-Michigan does not provide much in the way of detail regarding its cost

19         development. That is not the case here. The problem, however, is that with the detail,

20         there are so many problems that it is almost overwhelming to deal with it all.

21   Q.    COULD YOU GIVE THE COMMISSION SOME SENSE OF THE PROBLEMS
22         WITH SBC-MICHIGAN’S INPUTS FOR SITE CONDITIONING?

23   A.    Yes. SBC-Michigan has probably identified approximately 180 different sub-tasks that

24         must be performed to provide for the electrical panel, panel feeder, core drill, floor mark,
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 84 of 153

 1         gypsum board, and door. For each of these different sub-tasks, an hourly wage rate for

 2         urban and out-state areas in Michigan is specified and a number of hours associated with

 3         each tasks is identified. In addition, SBC-Michigan has identified over 60 material

 4         components that must be installed through these sub-tasks, including material costs and a

 5         quantity required. These 180 tasks and 60 material components are just for one element

 6         in SBC-Michigan’s collocation cost study.

 7                The problem for the Commission and for the participants in this cost proceeding

 8         is that the evaluation of 240 inputs just for site preparation related to these few elements

 9         is overwhelming. It is also completely unnecessary.

10   Q.    WHY DO YOU BELIEVE THIS LEVEL OF DETAIL IS UNNECESSARY?

11   A.    It is unnecessary because this Commission does not need to become an expert in the

12         installation of gypsum board to make a determination on whether this cost component

13         should be included in the development of collocation costs in Michigan. Moreover, if the

14         Commission determined that gypsum board should be included, there are much better

15         ways to estimate this cost than to review a large portion of the 240 inputs related to just

16         his element. Further, this is just one of the inputs related to Site Conditioning. The

17         Commission similarly does not need to become an expert in electrical panel installation

18         to evaluate these costs in this proceeding either.

19   Q.    WHAT ALTERNATIVE SOURCE COULD THE COMMISSION UTILIZE FOR
20         THIS ANALYSIS?

21   A.    The source that I would recommend and the one that SBC itself has used in other cost

22         proceedings is R.S. Means. R.S. Means is a guidebook used throughout the construction
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 85 of 153

1          industry to estimate the cost of construction projects in a variety of areas – including

2          areas such as gypsum board, electrical panel installation, and the like.

3                 Here, however, SBC-Michigan has not used an external, verifiable source for any

4          of its Site Preparation cost elements. As such, even though SBC-Michigan has included

5          a tremendous amount of detail and I could go through and evaluate the problems with

6          scores of these inputs for just the Site Preparation element, it is far better to use values

7          from an independent, verifiable source – R.S. Means. This is an approach that has been

8          adopted by the Texas Public Utilities Commission in developing collocation investments

9          where that Commission noted the following:

10                In an effort to determine accurate forward-looking costs, the
11                Arbitrators agree with AT&T/WorldCom and the Coalition that
12                R.S. Means should be used as a cost reference. R.S. Means
13                provides costing figures on a national average. The Arbitrators
14                believe that R.S. Means provides an objective and independent
15                cost reference in this proceeding where real costs of the incumbent
16                are in dispute. … Without evidence to support the conclusion that
17                the vendor quotes were not obtained solely for the use of this
18                regulatory costing proceeding, the Arbitrators find that SWBT’s
19                “real world” vendor quotes are inflated and overstated when
20                compared to R.S. Means data in similar categories.15

21                R.S. Means has every reason to be accurate in its cost estimation tools or else it

22         would not continue to be of use in the construction industry. That said, in a competitive

23         environment (as opposed to one where the monopolist sets the price for interconnecting

24         to its bottleneck facilities), there would be no reason to use a vendor whose costs are

25         significantly higher that those found in R.S. Means. Moreover, simply because SBC-


     15    See Revised Arbitration Award, Docket No. 21333, Proceeding to Establish Permanent Rates for
           Southwestern Bell Telephone Company’s Revised Physical and Virtual Collocation Tariffs, April
           12, 2001, p. 60.
          (PUBLIC VERSION)                       Initial Testimony of Steven E. Turner (Collocation)
                                                                           MPSC Case No. U-13531
                                                                                     Page 86 of 153

 1         Michigan may document all of this detail does not make the costs consistent with

 2         TELRIC. The bottom line is that the values SBC-Michigan has used are so out of line

 3         with R.S. Means that they should not be relied upon at all.

 4   Q.    COULD YOU GIVE THE COMMISSION AN EXAMPLE?

 5   A.    Yes. SBC-Michigan has identified a material cost of ***CONFIDENTIAL $

 6         END CONFIDENTIAL*** for a 240 Volt, 400 Amp, 30 Space Electrical Panel.16

 7         SBC-Michigan has also identified an installation cost of ***CONFIDENTIAL $                   . .

 8         .     END CONFIDENTIAL*** for the same component.17 This yields a total

 9         proposed cost for this component of ***CONFIDENTIAL $                       END

10         CONFIDENTIAL***. R.S. Means includes an almost identical component in its

11         estimated costs. Specifically, R.S. Means provides the cost for a 240 Volt, 225 Amp

12         (which is sufficient), 30 Space Electrical Panel. The cost for this panel is $1,850.00.18

13         R.S. Means also provides information that allows its costs to be adjusted to specific cities

14         across the United States or an average of cities as I have done for a particularly state. For

15         electrical components in Michigan, the adjustment is to take 92.1 percent of the national

16         average to make the value state-specific.19 As such, the Michigan-specific value from


     16    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.1.Caged.SiteCond”
           Worksheet, Rows 10-45. I have included the Overhead and Profit and Consulting costs in the
           total for comparison to the R.S. Means value because this is necessary for an apples-to-apples
           comparison.
     17    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.0.Caged.SiteCond”
           Worksheet, Rows 11-31.
     18    R.S. Means Building Construction Cost Data 2003, 61st Annual Edition, p. 474.
     19    Please see the AT&T/MCI Collocation Cost Model Work Papers found in Exhibit SET-COLLO-
           4 for the support for this adjustment factor.
           (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                           MPSC Case No. U-13531
                                                                                     Page 87 of 153

 1           R.S. Means for an installed electrical panel including all Contractor Overhead and Profit

 2           is $1,703.85. This is an independently developed value from a nationally respected

 3           source on construction cost estimation. It shows that SBC-Michigan has overstated the

 4           cost of this element by at least ***CONFIDENTIAL             END CONFIDENTIAL***

 5           percent.

 6   Q.      IS THIS THE ONLY ELEMENT WITH THIS TYPE OF DIFFICULTY IN SBC-
 7           MICHIGAN’S DEVELOPMENT OF SITE CONDITIONING COSTS?

 8   A.      No. This type of problem inflicts all of the elements that SBC-Michigan has included in

 9           Site Preparation. I will also give other examples of these problems in a related area of

10           SBC-Michigan’s collocation cost filing for Cage Preparation later in this testimony.

11           However, I will provide at least one other example here with Site Conditioning where

12           SBC-Michigan’s detailed development of cost does not even agree with SBC-Michigan’s

13           internal development of cost contained in another section of the cost study.

14                  Specifically, in the Safety and Security portion of its cost study, SBC-Michigan

15           has incorporated the cost for a “HM Door & Frame w/Hardware” for a total cost of

16           ***CONFIDENTIAL $                END CONFIDENTIAL***.20 By comparison, with

17           the detailed cost development, SBC-Michigan has actually included

18           ***CONFIDENTIAL $                END CONFIDENTIAL*** for this same element –

19           “HM Doors, Frames, and Hardware.”21 The cost that SBC-Michigan has developed




     20      SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.1.Caged.S&S”
             Worksheet, Cells C40-D40.
     21      See sum of SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab
             7.0.Caged.SiteCond” Worksheet, Cell K146 (Installation Cost), and SBC-Michigan Cost Study,
     (continued)
          (PUBLIC VERSION)                       Initial Testimony of Steven E. Turner (Collocation)
                                                                           MPSC Case No. U-13531
                                                                                     Page 88 of 153

 1         through its detailed analysis is not even close (42 percent higher) to that SBC-Michigan

 2         claims comes from actual vendor quotes. Based on R.S. Means, neither of these values is

 3         correct. A more appropriate value from R.S. Means is around $1,000 for the door and

 4         related hardware. However, my point here is that SBC-Michigan’s own cost study does

 5         not agree on what the appropriate cost is for the same door.

 6   Q.    WHEN YOU LOOK AT THE DETAILS PROVIDED BY SBC-MICHIGAN DO
 7         YOU SEE OBVIOUS PROBLEMS WITH WHAT SBC-MICHIGAN HAS
 8         INCLUDED?

 9   A.    Yes. Notwithstanding the overall problem of using SBC-Michigan’s inflated elements

10         for Site Conditioning, there are obvious problems when you look at the details included

11         in SBC-Michigan’s cost development. For example, SBC-Michigan has included

12         “Travel to wholesale house” of ***CONFIDENTIAL                END CONFIDENTIAL***

13         hour for the electrician associated with the electrical panel.22 However, if the technician

14         is installing the electrical panel, the electrician would also install the electrical feeder to

15         the electrical panel. As such, SBC-Michigan’s inclusion of yet another

16         ***CONFIDENTIAL              END CONFIDENTIAL*** hour for another “Travel from

17         shop to wholesale house” should not be required.23

18                 This illustrates duplicated and unnecessary tasks of which there appear to be

19         many in the cost study. However, the times that SBC-Michigan has assumed also seem


           “MI Physical Caged Costs” Workbook, “Tab 7.1.Caged.SiteCond” Worksheet, Cell J176
           (Material Cost).
     22    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 8.0.Caged.SiteCond”
           Worksheet, Row 19.
     23    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 8.0.Caged.SiteCond”
           Worksheet, Row 47.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 89 of 153

 1         ridiculous. For example, SBC-Michigan notes that one of the tasks that must be done to

 2         mark the area in the central office for the collocation arrangement (Floor Mark) is to

 3         “Write collocator’s name on the tape.” Somehow, SBC-Michigan believes that it will

4          take a contractor ***CONFIDENTIAL            END CONFIDENTIAL*** hour to do this

 5         writing.24   This is a ridiculous amount of time to write “AT&T” or “MCI” on a piece of

 6         tape even if it were done several times. But this is more ridiculous when compared to the

 7         time an outstate Michigan contractor who can write the name twice as fast only taking

8          ***CONFIDENTIAL             END CONFIDENTIAL*** hours to perform the writing on

 9         the same amount of tape.25 Neither one of these values is reasonable, but when both are

10         reviewed, they simply do not make sense.

11                I would also point out that this is not an isolated instance. SBC-Michigan’s costs

12         for material components are filled with these internal inconsistencies. There are

13         numerous examples like this. I will just provide one more in detail. For every main

14         component (electrical panel, panel feeder, core drill, gypsum board, and door), SBC-

15         Michigan has included time to unload the materials for each individual component. In

16         total, SBC-Michigan has included ***CONFIDENTIAL                END

17         CONFIDENTIAL*** hours just to unload materials. Additionally, SBC-Michigan has

18         included the time to load this material as well. Without addressing whether it should take

19         more than a day just to unload material at the location, I wanted to take the unloading of


     24    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 8.0.Caged.SiteCond”
           Worksheet, Row 100.
     25    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 8.0.Caged.SiteCond”
           Worksheet, Rows 99-100.
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 90 of 153

1          the door to illustrate the ludicrous cost that SBC-Michigan has included. Specifically,

2          SBC-Michigan has noted that it takes ***CONFIDENTIAL                 END

3          CONFIDENTIAL*** hours to unload the door and related hardware for the door (which

 4         is limited).26 I think it is important for the Commission to stop for a moment and

 5         consider how long it would take to remove a door from a truck, place it on a cart, wheel it

 6         to a freight elevator (there normally is one in central offices), and take the door to the

 7         work area. I cannot imagine any scenario where the average time to unload a door would

 8         take two hours. I have personally worked in central offices and seen the delivery of

 9         much heavier and costly material than a door. For example, I have watched the delivery

10         of switching equipment, which was then delivered to a work area to be installed. This

11         equipment took no more than 15 minutes to deliver to the work area and it was much

12         heavier and more sensitive than a door would be.

13                I could go on and on. The problem here is that SBC-Michigan has incorporated a

14         tremendous amount of detail requiring modification to over 240 time and material

15         elements representing hundreds of inputs, but the bottom line is that all of the detail only

16         illustrates how outrageous the cost inputs are when compared to practical experience.

17         These overall costs are also completely outlandish when compared to industry guides

18         such as the R.S. Means Building Construction Cost Data.




     26    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 8.0.Caged.SiteCond”
           Worksheet, Rows 136.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 91 of 153

 1   Q.    DO YOU HAVE ANY OTHER CONCERNS RELATED TO SITE
 2         CONDITIONING?

 3   A.    Yes. I have addressed the overstated nature of the cost inputs that SBC-Michigan has

 4         used for Site Conditioning. However, the problems with this element go beyond this.

 5         Site Conditioning should not be included in the forward-looking cost for collocation.

 6         SBC-Michigan has really developed the cost for building modification or retrofitting in

 7         the way that is has developed most of these costs.

 8                For example, SBC-Michigan already recovers the cost for the construction of an

 9         efficient, forward-looking central office that is ready for the provision of

10         telecommunications equipment through the Land and Building rate element for

11         collocation. This rate element includes the cost for doors to the central office, and walls

12         that partition the telecommunications space away from other areas of the central office.

13         It also includes all of the other related costs of creating a working environment for

14         personnel and telecommunications equipment. The Cage Preparation element also

15         includes the costs for partitioning (wire mesh) and doors to separate the collocation

16         arrangement from other telecommunications space within the central office. As such, the

17         retrofitting costs that SBC-Michigan has included here for gypsum board partitions,

18         doors, and the like really represent non-TELRIC compliant costs that if recovered, will

19         effectively double-recover costs that are already included in the Land- and Building rate

20         and Cage Preparation rate. This should not be permitted in a forward-looking cost study.
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 92 of 153

 1   Q.    DO YOU AGREE, HOWEVER, THAT THE ELECTRICAL PANEL COST
 2         SHOULD BE INCLUDED IN THE RECOVERY ASSOCIATED WITH A
 3         COLLOCATION ARRANGEMENT?

 4   A.    Yes. I have included the cost for the electrical panel and its installation in the cost

 5         recovery for the Cage Preparation element in the AT&T/MCI Collocation Cost Model. I

 6         agree that the cost for this element should be recovered and have set up the cost recovery

 7         of this element to be spread across the collocators that occupy the cage based on the

 8         amount of space that they use. Moreover, given that this element is able to be reused by

 9         subsequent collocators, I have made the cost recovery for this element a recurring charge.

10   Q.    SBC-MICHIGAN HAS A RECURRING CHARGE COMPONENT FOR THE
11         SITE CONDITIONING ELEMENT. IS THIS THE SAME APPROACH THAT
12         YOU USED?

13   A.    No. This is extremely misleading on SBC-Michigan’s part. It is actually recovering the

14         entirety of the Site Conditioning investment (including the electrical panel cost that I

15         agree with) as a nonrecurring charge. However, SBC-Michigan has then applied

16         maintenance cost factors to these nonrecurring charges assuming that SBC-Michigan will

17         have to perform maintenance on these elements at a rate of ***CONFIDENTIAL

18         END CONFIDENTIAL*** percent of the invested amount per year.27 I do not believe

19         it is reasonable to expect that gypsum board that might cost $15,000 in SBC-Michigan’s

20         cost study would require approximately $750 in maintenance on the gypsum board every

21         year. Nonetheless, this is the recurring cost that SBC-Michigan has developed for these




     27    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 5.2.Caged.SiteCond”
           Worksheet, Column H.
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 93 of 153

 1         elements. The charge is fundamentally a nonrecurring charge, but SBC-Michigan also

 2         wants to recover recurring expense as well.

 3   Q.    DOES SBC-MICHIGAN APPLY THIS MAINTENANCE FACTOR TO ALL OF
 4         THE INVESTMENTS RELATED TO SITE CONDITIONING?

 5   A.    Yes. For example, the Commission may recall my earlier discussion regarding how long

 6         SBC-Michigan assumes that it will take to write the CLEC’s name on a piece of tape on

 7         the floor of the central office. SBC-Michigan actually applies the ***CONFIDENTIAL

 8             END CONFIDENTIAL*** percent maintenance factor to the cost of the tape, and

 9         cost of applying the tape to the ground, and the cost of writing the CLEC’s name on the

10         tape. This does not make sense as an “investment” that would require future

11         maintenance.

12   Q.    COULD YOU SUMMARIZE YOUR CONCERNS WITH SBC-MICHIGAN’S
13         SITE CONDITIONING ELEMENT AND YOUR RECOMMENDATIONS
14         CONCERNING THIS ELEMENT?

15   A.    Yes. SBC-Michigan fundamentally should not include the cost for this element in its

16         development of TELRIC-compliant collocation costs. Building retrofitting is

17         inappropriate in light of the forward-looking cost for constructing the central office,

18         which is included in the Land and Building rate element. Similarly, the forward-looking

19         cost for the collocation arrangement construction is included in the Cage Preparation rate

20         element, so it, too, is not properly included as a “building retrofitting cost.” Further, the

21         costs for the elements that SBC-Michigan has included are egregiously overstated.

22         Industry guidelines exist for the cost of components that SBC-Michigan has included

23         (including the one that I agree with) and there is no reason to resort to SBC-Michigan’s

24         supposedly detailed analysis to develop these costs when industry guidelines already
          (PUBLIC VERSION)                        Initial Testimony of Steven E. Turner (Collocation)
                                                                            MPSC Case No. U-13531
                                                                                      Page 94 of 153

 1         exist. As such, the detail that SBC-Michigan has developed only serves to cloak the

 2         excessively high proposed costs in the study with an air of credibility that are undeserved

 3         in light of comparisons to reasonable public construction cost data. Finally, even a

 4         cursory review of the tasks and times that SBC-Michigan has included in the cost study

 5         demonstrate that the costs that SBC-Michigan has incorporated are unreasonable and

 6         should be rejected. In short, I would encourage the Commission to retain its use of the

 7         AT&T/MCI Collocation Cost Model and not even enter into the hundreds of corrections

 8         that would be necessary to correct the Site Conditioning element, if this element were

 9         even included in the final analysis.

10                2.      Safety & Security

11   Q.    WHAT ARE YOUR CONCERNS WITH THE SBC-MICHIGAN’S COSTS FOR
12         SAFETY AND SECURITY?

13   A.    SBC-Michigan’s assumptions for security are inconsistent with the Advanced Services

14         Order. Specifically, SBC-Michigan has implemented a security method that

15         discriminates against CLECs compared to SBC-Michigan’s treatment of its authorized

16         vendors that work on its equipment.

17   Q.    WHAT SECURITY TECHNIQUES HAS SBC-MICHIGAN INCLUDED IN THE
18         COST STUDY?

19   A.    ***CONFIDENTIAL

20

21

22

23

24
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 95 of 153

 1

 2

 3

 4                                       .28 END CONFIDENTIAL***

 5   Q.    IN WHAT WAY DOES THIS METHOD DISCRIMINATE AGAINST CLECS?

 6   A.    It is important to first understand that the FCC Advanced Services Order requires that

 7         SBC-Michigan not impose a security requirement on CLECs for collocation that is any

 8         more stringent that what SBC-Michigan imposes on its own employees are authorized

 9         contractors working on SBC-Michigan’s equipment.29 It is my understanding, based on

10         information provided by SBC in California, that in central offices where key card

11         systems exist today, they are used by SBC’s authorized contractors that have a need to

12         enter critical areas of SBC’s central offices. Moreover, where other forms of secured

13         entrances exist (e.g., keyed door or combination lock access), these are maintained for

14         use of securing access to space for the authorized contractors. There is no reason to

15         believe that SBC-Michigan does things any differently in Michigan. However, in

16         proposing an additional security input for collocators to be included in the costs for

17         collocation, SBC-Michigan has assumed that it must have expensive new card readers,

18         new doors, lengthy “dog-runs,” cameras, and other security mechanisms that the

19         collocator must pay for exclusively. It is precisely this type of discriminatory security

20         treatment that the FCC was trying to avoid in the Advanced Services Order with its


     28    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.1.Caged.S&S”
           Worksheet.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                   Page 96 of 153

1          prohibition on treating CLECs differently than authorized contractors. Moreover, SBC-

2          Michigan’s proposed security costs and arrangements are an outward and completely

3          inappropriate attempt to revise the terms and conditions for security approved and

4          established by this Commission. SBC-Michigan’s proposed security arrangements (or

5          the assumptions used by SBC-Michigan in preparing its proposed costs) are the exact

6          form of security arrangements and assessment of costs that that this Commission

7          eliminated by the specific and restrictive conditions upon which SBC-Michigan could

8          impose security costs. Section 6.1.2 of the Michigan Physical Collocation Tariff

9          provides explicit limitations on SBC-Michigan’s use of security arrangements other than

10         card readers (e.g., use of partitions) to limit SBC-Michigan’s ability to impose

11         unnecessary costs on the CLEC, as well as restrict SBC-Michigan’s ability to use such

12         security arrangements as a means to eliminate collocation space. Additionally, in that

13         same provision, the Commission established that SBC-Michigan could only recover the

14         lower of the security costs, rather than impose the cost of partitions and other security

15         arrangements on all collocators. SBC-Michigan’s proposed security costs should be

16         rejected because they do not comply with the nondiscrimination requirement of the

17         Advanced Services Order and the requirements of the Michigan tariff.

18   Q.    WHAT IS THE SECOND PROBLEM WITH SBC-MICHIGAN’S SAFETY AND
19         SECURITY COSTS?

20   A.    As mentioned already, it appears from the cost support provided by SBC-Michigan that

21         the security plan is to construct a “dog-run” so that CLECs can access the collocation



     29    FCC Advanced Services Order ¶ 47.
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 97 of 153

 1         space within SBC-Michigan’s central offices. In other words, SBC-Michigan

 2         incorporates preparation of separate partitions to control CLEC access to only CLEC

 3         collocation areas. Again, this approach is inconsistent with the requirements of the

 4         Tariff, which provides that in the event SBC-Michigan chooses to erect partitions to

 5         protect its equipment, then SBC-Michigan must bear that costs.30 In short, these separate

 6         partitioning costs in the Safety and Security rate element should not be borne by the

 7         CLECs in that they are discriminatory costs. The only partitioning that is permitted are

 8         the partitions used for the actual collocation arrangements which are recovered in the

 9         Cage Preparation element.

10   Q.    IN ADDITION TO THE BASIC UNDERLYING PROBLEM IN INCLUDING A
11         “DOG RUN” FOR SECURED ACCESS TO COLLOCATION SPACE, WHAT
12         ARE YOUR ADDITIONAL CONCERNS REGARDING THIS ADDITIONAL
13         COST?

14   A.    In this element, SBC-Michigan asserts that it needs between ***CONFIDENTIAL

15              END CONFIDENTIAL*** linear feet of partitioning material to cage in the

16         collocator before reaching its equipment.31 The Commission should not accept dog-runs

17         as a security method. Dog-runs are not required for SBC-Michigan’s authorized

18         contractors to reach their workspace within SBC-Michigan’s central offices. Dog-runs

19         should also not be used for CLECs to reach their workspace (the collocation

20         arrangement) within SBC-Michigan’s central offices.




     30    Michigan Physical Collocation Tariff, § 6.1.2(D).
     31    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.1.Caged.S&S”
           Worksheet, Cells C15 to I15.
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                    Page 98 of 153

 1   Q.    IS IT NOT TRUE THAT THE COST FOR A FULL KEY-CARD SECURITY
 2         SYSTEM IS ALREADY INCLUDED IN THE AT&T/MCI COLLOCATION
 3         COST MODEL?

 4   A.    Yes. The backup documentation provided in Exhibit SET-COLLO-4 shows that the

 5         AT&T/MCI Collocation Cost Model includes the investment for a full key-card security

 6         system in the building investment.32 This investment flows through into the rental rate

 7         that is paid for space within the central office. It is extremely important to note that the

 8         manner in which this investment is treated by the AT&T/MCI Collocation Cost Model is

 9         expressly consistent with the Advanced Services Order in that the security cost is

10         distributed across the entire central office and recovered by those that use the space. In

11         other words, the AT&T/MCI Collocation Cost Model has assumed in its development of

12         cost that the same forward-looking security cost that applies to the central office as a

13         whole should also apply to the CLEC on a pro rata basis determined by the amount of

14         space utilized by the CLEC.

15   Q.    PLEASE SUMMARIZE YOUR POSITION AND RECOMMENDATION ON SBC-
16         MICHIGAN’S SECURITY COST.

17   A.    SBC-Michigan’s Safety and Security cost is entirely inconsistent with the requirements

18         of the Advanced Services Order and with the approved terms and conditions in the

19         existing tariff. SBC-Michigan’s Safety and Security cost is also discriminatory in that

20         SBC-Michigan does not apply this cost or treatment to its authorized contractors or

21         employees that work with SBC-Michigan’s equipment. SBC-Michigan’s Security cost

22         also represents a clear double-count of costs for security that are typically included in the


     32    Exhibit SET-COLLO-4, AT&T/MCI-WorldCom Collocation Cost Model Backup
           Documentation.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                  Page 99 of 153

1          Land and Building element such as in the AT&T/MCI Collocation Cost Model. In short,

2          this Commission should reject SBC-Michigan’s security investment outright and utilize

3          the security investment that is already included in the AT&T/MCI Collocation Cost

4          Model.

5          B.       CAGE PREPARATION

 6   Q.    WHAT COST ELEMENTS HAS SBC-MICHIGAN INCLUDED IN ITS CAGE
 7         PREPARATION RATE ELEMENT?

 8   A.    SBC-Michigan has included cost for Cage Preparation General Contracting, Cage

 9         Preparation Design, Cage Fencing, Cage Door and Lock, Overhead Lighting, Light

10         Switch/Motion Detector, and AC Electrical Outlets.

11   Q.    HAS SBC-MICHIGAN USED THE SAME “DETAILED” APPROACH FOR
12         THESE INPUTS AS IT EMPLOYED FOR THE SITE PREPARATION
13         ELEMENT?

14   A.    Yes. SBC-Michigan has developed literally hundreds of elements and inputs associated

15         with these components for Cage Preparation. Further, as with the Site Preparation

16         element discussed earlier, the cost for these elements can be taken from R.S. Means

17         which much more reliability and independent validity than the approach used by SBC-

18         Michigan. In this regard, the level of detail that SBC-Michigan has incorporated into the

19         cost study does not make it more accurate. Instead, it simply makes SBC-Michigan’s

20         cost study unwieldy (and hence more difficult to review). Further, without repeating all

21         of the earlier discussion regarding duplicated tasks and obviously overstated times, SBC-

22         Michigan’s “detailed” analysis here is similarly riddled with these problems.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                 Page 100 of 153

 1   Q.    COULD YOU STEP THROUGH SOME OF THE KEY ELEMENTS INCLUDED
 2         IN THE CAGE PREPARATION ELEMENT AND OUTLINE THE PROBLEMS
 3         WITH SBC-MICHIGAN’S COSTS?

 4   A.    Yes. I will start with the Cage Fencing element. There are many problems with SBC-

 5         Michigan’s cost development for Cage Fencing. First, SBC-Michigan has included

 6         ***CONFIDENTIAL                 END CONFIDENTIAL*** linear feet of partitioning

 7         material in the development of its costs for a 50 square foot collocation cage. This can be

 8         seen in that SBC-Michigan has included on average ***CONFIDENTIAL                    END

 9         CONFIDENTIAL*** four-by-eight foot panels and ***CONFIDENTIAL                        END

10         CONFIDENTIAL*** one-by-eight foot panel.33 These panels are normally installed

11         with the eight foot portion vertical. As such, the four foot and one foot lengths represent

12         the linear feet for the partitioning. Given these quantities of panels, on average, SBC-

13         Michigan installs ***CONFIDENTIAL              END CONFIDENTIAL*** linear feet of

14         partitioning. The problem is that when SBC-Michigan develops the per unit cost for the

15         material and installation of these ***CONFIDENTIAL           END CONFIDENTIAL***

16         linear feet of partitioning, SBC-Michigan only divides the cost by ***CONFIDENTIAL

17              END CONFIDENTIAL*** linear feet.34             By installing ***CONFIDENTIAL

18         END CONFIDENTIAL*** linear feet of partitioning and SBC-Michigan only dividing

19         this cost by ***CONFIDENTIAL              END CONFIDENTIAL*** linear feet, SBC-

20         Michigan has systematically overstated the linear foot investment for partitioning by 32


     33    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.1.Caged.CagePrep”
           Worksheet, Cells G20-G21.
     34    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.1.Caged.CagePrep”
           Worksheet, Cell I33.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                 Page 101 of 153

 1         percent.   This is before even accounting for the fundamental overstatements in the

 2         material and installation costs associated with these components.

 3   Q.    IS IT POSSIBLE THAT SBC-MICHIGAN PURCHASES MORE MATERIAL
 4         THAN IT ACTUALLY USES BECAUSE THE PANELS COME IN STANDARD
 5         SIZES?

 6   A.    Actually while this may sound quite reasonable, it is not at all what happens with the type

 7         of partitioning that SBC uses in its collocation arrangements. I have been in multiple

 8         collocation arrangements with SBC in California, Oklahoma, and Texas. In all of these

 9         offices, the type of partitioning that SBC uses is pre-fabricated wire mesh panels that

10         typically come in five-foot linear widths – not the four-foot and one-foot widths that

11         SBC-Michigan has referenced here. These panels are normally sold as part of a “kit”

12         from companies that will actually provide you with information on the specific parts that

13         are required depending on the configuration of cage that you require. With the standard

14         five-foot width of panel, two of these can be placed side-by-side to easily create the 10-

15         foot length that is typical in a 100 square foot cage. As such, with these pre-fabricated

16         panels, there is no cutting of the material. This makes some of the steps in SBC-

17         Michigan’s “detailed” cost development completely unnecessary such as the “Cut

18         fencing outside equipment area” task for ***CONFIDENTIAL                             END

19         CONFIDENTIAL*** hours that is included in the cost study.35 In reality, the panels

20         that I have seen used in SBC’s collocation arrangements would actually be damaged if

21         they were cut.



     35    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.0.Caged.CagePrep”
           Worksheet, Row 44.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                 Page 102 of 153

 1   Q.    DO YOU HAVE ANY IDEA WHERE SBC-MICHIGAN ACTUALLY GOT ITS
 2         VALUE FOR THE LINEAR FEET PER 50-FOOT CAGE?

 3   A.    Yes. If you take the square root of 50 and multiply this value by three, you arrive at

 4         21.21 square feet – the exact value that SBC-Michigan has assumed as the average linear

 5         feet of partitioning per 50 square foot collocation arrangement. The multiplication by

 6         three likely assumes that one of the walls of the cage borders on a wall within the central

 7         office, or shares a wall with a collocation arrangement that is already in place. However,

 8         there is fundamental problem with this calculation – it assumes that a 50 square foot

 9         collocation arrangement would be square.

10                Specifically, SBC would have to assume that each wall in the collocation

11         arrangement would be 7.07 linear feet long. The typical length of the panels sold for

12         these collocation arrangements are normally four or five feet in width. They do no come

13         in 7.07-foot widths. As such, if SBC wanted to construct a 50 square foot collocation

14         arrangement out of typical parts that are available from wire mesh companies, it would

15         purchase a 10-foot side (out of two five-foot widths), a five-foot panel in the back, and a

16         five-foot panel with a door opening in the front. This would be 20 feet of partitioning.

17         This does not agree with the 21.21 feet that SBC-Michigan has assumed. But worse yet,

18         SBC-Michigan actually included ***CONFIDENTIAL               END CONFIDENTIAL***

19         linear feet of partitioning material in its cost development when it is clear with SBC-

20         Michigan’s three-side assumption that only 20 feet would be required. The bottom line is

21         that the approach and material assumptions that SBC-Michigan has made simply do not

22         fit together. To coin a line from Johnny Cochran: “If the cage don’t fit, it’s not legit.”
          (PUBLIC VERSION)                   Initial Testimony of Steven E. Turner (Collocation)
                                                                       MPSC Case No. U-13531
                                                                                Page 103 of 153

 1         SBC-Michigan’s Cage Preparation investments should be rejected in lieu of the cost

 2         development performed in the AT&T/MCI Collocation Cost Model.

 3   Q.    ARE THESE THE ONLY PROBLEMS WITH SBC-MICHIGAN’S
 4         DEVELOPMENT OF THE CAGE FENCING INVESTMENT?

 5   A.    No. All of these problems are on top of the completely overstated investment that SBC-

 6         Michigan has derived from its “detailed” costs. Of course, once again the “detailed”

 7         costs are riddled with problems of duplicated tasks and outrageous time estimates. For

 8         example, as I indicated above, partitioning comes in pre-fabricated panels with a door

 9         opening already prepared in the material. This door can also be purchased from the same

10         vendor selling the wire mesh panels so that everything matches. This is typically what I

11         have observed in SBC collocation arrangements. In short, all of the material for the

12         partitioning and doors can be purchased at one time from one vendor.

13                That said, it makes absolutely no sense that SBC-Michigan would separately

14         include time to unload materials both for the cage fencing (***CONFIDENTIAL

15         END CONFIDENTIAL*** hours) separate from the doors (***CONFIDENTIAL

16         END CONFIDENTIAL*** hour).36 Equally unrealistic is that equipment protection

17         would not be set up twice – once for the partitioning (***CONFIDENTIAL            END

18         CONFIDENTIAL*** hours) and another time for the door (***CONFIDENTIAL                   .

19            END CONFIDENTIAL*** hours).37 This is not to mention that with wire mesh

20         partitioning dust protection is not required at all. I could go on with example after


     36    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.0.Caged.CagePrep”
           Worksheet, Rows 40 and 81.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                 Page 104 of 153

1          example like this. The problem is that SBC-Michigan has created this enormous detail in

2          its cost study to make it completely unwieldy to use and to incorporate as much

3          inappropriate cost as possible. There is simply no basis to use the cost estimation

4          provided by SBC-Michigan.

5    Q.    CAN YOU COMPARE THESE ELEMENTS TO R.S. MEANS TO GIVE THE
6          COMMISSION SOME SENSE OF HOW OVERSTATED THE COSTS
7          ULTIMATELY ARE?

8    A.    Yes. SBC-Michigan ultimately concludes that the installed cost for a linear foot of

 9         partitioning is ***CONFIDENTIAL $                           END CONFIDENTIAL***

10         notwithstanding all of the methodological errors identified above.38 I have provided in

11         Exhibit SET-COLLO-4 a detailed explanation for how I derived the investments for

12         partitioning from R.S. Means. My analysis there includes for the cost for the partitioning

13         as well as the five doors that would be included in the 550 square foot collocation

14         arrangement. However, to make this apple-to-apples, I have removed the doors so that

15         only the cost of installing the partitioning material can be compared to the cost that SBC-

16         Michigan has developed. According to R.S. Means, the Michigan-specific cost per linear

17         foot for partitioning would be $31.48 installed including the Overhead and Profit for the

18         contractor.   In short, SBC-Michigan through its “detailed” cost development has

19         managed to overstate the cost for this component by ***CONFIDENTIAL                  END

20         CONFIDENTIAL*** percent.


     37    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.0.Caged.CagePrep”
           Worksheet, Rows 42 and 85.
     38    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 6.2.Caged.CagePrep”
           Worksheet, Cell G15.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                 Page 105 of 153

 1   Q.    DOES THE COST FOR THE CAGE DOOR ALSO SUFFER FROM THE SAME
 2         PROBLEMS?

 3   A.    Yes. SBC-Michigan has made exactly the same types of errors with its “detailed”

 4         approach to costing this element. R.S. Means readily identifies the costs for these

 5         elements, but SBC-Michigan has created an unwieldy process to again overstate the cost

 6         for the door inappropriately. SBC-Michigan has identified the cost for the door to be

 7         ***CONFIDENTIAL                END CONFIDENTIAL***.39 I have already alluded to

 8         some of the outrageous duplication of tasks that SBC-Michigan has included to inflate

 9         the costs for the door (and partitioning discussed earlier). I could give many more

10         examples, but will not for the sake of brevity. Yet, once again, a wire mesh door is

11         readily available from the R.S. Means documentation that SBC-Michigan could utilize to

12         establish its costs in an equitable manner, but chose not to. Based on the information that

13         I have provided in Exhibit SET-COLLO-4, the Michigan-specific cost according to R.S.

14         Means would be $344.76 installed including the Overhead and Profit for the contractor.

15         In short, SBC-Michigan through its “detailed” cost development has managed to

16         overstate the cost for this component by ***CONFIDENTIAL                             END

17         CONFIDENTIAL*** percent.

18   Q.    WOULD YOUR DISCUSSION FOR LIGHTING, ELECTRICAL OUTLETS, AND
19         SWITCHES BE SUBSTANTIALLY THE SAME AS FOR PARTITIONING AND
20         DOORS?

21   A.    Yes.   Fundamentally, my concerns would be the same.          SBC-Michigan has simply

22         manipulated the many details that it has incorporated into the cost study in such a manner


     39    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 6.2.Caged.CagePrep”
           Worksheet, Cell G19.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                  Page 106 of 153

 1         to overstate costs for elements that can easily be extracted from R.S. Means – a

 2         construction costing guide that has no agenda in this cost proceeding other than to

 3         provide accurate costing information for use in the construction industry. In short, my

 4         presentation of the AT&T/MCI Collocation Cost Model has used R.S. Means wherever

 5         possible for the development of these construction related elements. There is simply no

 6         basis to use the inputs provided by SBC-Michigan in this proceeding.

 7         C.     LAND AND BUILDING

 8   Q.    COULD YOU PLEASE EXPLAIN THE PROBLEMS YOU HAVE FOUND WITH
 9         SBC-MICHIGAN’S INPUTS RELATED TO LAND AND BUILDING
10         INVESTMENT IN ITS COLLOCATION COST FILING?

11   A.    Yes.   There are two main problems with the investments that SBC-Michigan has

12         proposed. First, the building investment that SBC-Michigan has proposed is based

13         exclusively on building additions and in many cases very small additions. Specifically,

14         SBC-Michigan used ***CONFIDENTIAL                  END CONFIDENTIAL*** augments

15         to its existing central offices in 2001 and 2002 as the basis for its building investment.40

16         These projects ranged from an addition of only ***CONFIDENTIAL                        END

17         CONFIDENTIAL*** square feet to a maximum additional of ***CONFIDENTIAL

18                END CONFIDENTIAL*** square feet.41




     40    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.1.Caged.FloorSpace”
           Worksheet, Row 16-41.
     41    Id.
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                   Page 107 of 153

1    Q.    WHY IS IT A PROBLEM THAT SBC-MICHIGAN ONLY USED AUGMENT
2          PROJECTS TO DEVELOP THE COST FOR ITS BUILDING INVESTMENT?

 3   A.    TELRIC requires that cost be developed from a total demand perspective and not from an

 4         augment perspective. The “T” in TELRIC represents that the “total” element cost must

 5         be identified. This is necessary so that the cost for the element includes all of the

 6         appropriate scale economies. When SBC-Michigan only develops the cost for its central

 7         office space for augments, SBC-Michigan only includes the cost for a more expensive

 8         form of construction (adding on to an existing building) in small increments of space.

 9         The alternative, which is consistent with TELRIC, accounts for the complete construction

10         of a central office from scratch thereby giving the CLEC the scale economies that the

11         incumbent also receives. In short, the investment that SBC-Michigan has developed is

12         systematically overstated and inconsistent with efficient, forward-looking costs.

13   Q.    HOW DID YOU DEVELOP THE COST FOR CENTRAL OFFICE SPACE?

14   A.    As discussed earlier in this testimony, I used R.S. Means, which provides the investment

15         to build a telecommunications central office from scratch. This investment is consistent

16         with TELRIC and is appropriate to use in that it is based on actual construction projects

17         for central office space that was then reported to R.S. Means.

18   Q.    WHAT IS YOUR SECOND PROBLEM                               WITH       SBC-MICHIGAN’S
19         DEVELOPMENT OF COLLOCATION SPACE?

20   A.    SBC-Michigan has fundamentally misunderstood the concept of the “Assignable Space

21         Factor.”     SBC-Michigan      has    proposed   an   “Assignable    Space    Factor”   of

22         ***CONFIDENTIAL                   END CONFIDENTIAL*** percent whereas I have

23         proposed a factor of 80.00 percent. It is first important to even understand what an

24         “Assignable Space Factor” is an why it is used in a space cost study. Whenever one
     (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                     MPSC Case No. U-13531
                                                                              Page 108 of 153

 1    evaluates the space within a central office, there is space that is clearly available (or

 2    “assignable”) for use for telecommunications equipment – the intended purpose for

 3    constructing the central office in the first place – and there is space that is not available

 4    for telecommunications equipment, but is still necessary. For example, space that is not

 5    available for telecommunications equipment, but still necessary would include hallways

 6    around the telecommunications area, bathrooms, break rooms, and limited administrative

 7    areas.

 8             Central offices are generally constructed for the purpose of housing

 9    telecommunications equipment. When you walk into the central office, you may find

10    virtually no “unassignable” space because the building was never constructed with the

11    intention   of   housing   general    personnel,   but   simply   to   provide   space    for

12    telecommunications equipment. On the other hand, I have also been in central offices

13    where large portions of the office are used for other purposes. For example, I worked in

14    a central office where entire floors were set aside for operations centers that monitored

15    the signaling network across the United States for AT&T. I worked in another central

16    office where an entire floor was set aside for an operator services center. In other words,

17    these central offices were essentially dual purpose buildings both housing

18    telecommunications equipment and personnel.

19             The reason that an “Assignable Space Factor” is developed in the first place is

20    that if the CLEC (or SBC for its own space cost) only recovered the cost for the space

21    that was contained within the telecommunications area without adjustment, this would

22    fail to account for the hallways, bathrooms, break room, and limited administrative areas
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                 Page 109 of 153

 1         that are also necessary to provide for a functioning central office. However, if the

 2         building is being used for multiple purposes such that a large percentage of the space is

 3         being occupied by personnel (or could be as will be discussed below), then the

 4         telecommunications space should not bear all of this additional space cost through the

 5         application of an artificially low “Assignable Space Factor.” Instead, the cost for this

 6         personnel space should be borne by the work groups occupying that space (effectively

 7         through a rent that would be paid by that group).

 8   Q.    DO YOU BELIEVE THIS IS WHAT IS HAPPENING TO CAUSE SOME OF THE
 9         VERY LOW ASSIGNABLE SPACE FACTORS IN SBC-MICHIGAN’S COST
10         STUDY?

11   A.    Yes. When you have a central office such as the 421 William Street (RYLOMIMN)

12         central office that has ***CONFIDENTIAL              END CONFIDENTIAL*** square

13         feet of space, but only ***CONFIDENTIAL                     END CONFIDENTIAL***

14         percent of that space (***CONFIDENTIAL                      END CONFIDENTIAL***

15         square feet) is available for telecommunications equipment, then one must conclude

16         either of two possibilities:    (1) the majority (***CONFIDENTIAL                   END

17         CONFIDENTIAL*** percent) of this building space is being used for other purposes

18         that should not then be borne through the space investment calculated for the building; or

19         (2) the building was constructed at a time when analog equipment occupied much larger

20         spaces and this space is no longer needed – in other words, the building is not consistent

21         with efficient, forward-looking design standards. In either case, a ***CONFIDENTIAL

22              END CONFIDENTIAL*** percent Assignable Space Factor for this building
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                  Page 110 of 153

 1         should not be used in developing the cost for the central office space used for

 2         telecommunications equipment.

 3   Q.    HOW SHOULD THE ASSIGNABLE SPACE FACTOR BE DEVELOPED?

 4   A.    The Assignable Space Factor should not be developed using embedded building sizes and

 5         embedded use of those buildings which may not be representative of a building largely

 6         constructed for telecommunications equipment. Instead, the Assignable Space Factor

 7         should be based on an efficiently constructed central office that is building for it primary

 8         purpose – housing telecommunications equipment. If SBC-Michigan wants to construct

 9         or use multi-purpose central offices, that is SBC-Michigan’s prerogative. However,

10         SBC-Michigan cannot penalize CLECs in the cost development by not giving CLECs the

11         cost benefit of sharing the building with personnel to a large degree.

12         D.     CABLE RACKING/CAGE COMMON SYSTEMS

13   Q.    WHAT ARE THE MAJOR CONCERNS THAT YOU HAVE WITH THE CABLE
14         RACKING AND CAGE COMMON SYSTEMS COST DEVELOPMENT THAT
15         SBC-MICHIGAN HAS PERFORMED?

16   A.    Once again, as with the elements that I have discussed previously, SBC-Michigan’s cost

17         development is riddled with outrageous costs for various cost elements. However, the

18         more fundamental problem with SBC-Michigan’s Cable Racking and Cage Common

19         Systems costs is methodological. For this collocation, I will focus on these problems to

20         demonstrate how SBC-Michigan’s collocation cost study does not fit together in a

21         coherent way thereby failing to provide cost-based rates for collocation.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                 Page 111 of 153

 1   Q.    HOW SPECIFICALLY HAS SBC-MICHIGAN’S                              COLLOCATION COST
 2         FILING FAILED METHODOLOGICALLY?

 3   A.    As was described in detail for the AT&T/MCI Collocation Cost Model, the distances of

 4         cable racking that are included in the cost development for collocation should be based

 5         on the efficient layout of a central office.              Further, the distances should be

 6         nondiscriminatory meaning that cable distances and the associated racking should not be

 7         based on placing collocators as far from key interconnection points as possible. I have

 8         been on collocation tours where I have observed SBC place collocators on completely

 9         separate floors from the main distribution frame or “MDF” (one of the most important

10         interconnection points in the central office) while allowing SBC’s DSL affiliate to

11         collocate almost immediately adjacent to the main distribution frame. It is virtually

12         impossible for a Commission to eliminate this type of discriminatory treatment in every

13         central office in Michigan. However, the costs for collocation at a minimum should not

14         be based on this type of discriminatory approach.

15                That said, the distances in the collocation cost model are based on a cabling

16         distance for most interconnection cabling of 175 feet. The justification for this distance

17         is provided in detail above. SBC-Michigan has instead assumed ***CONFIDENTIAL

18              END      CONFIDENTIAL***             feet      for      voice   grade   arrangements,

19         ***CONFIDENTIAL               END CONFIDENTIAL*** feet for DS1 arrangements,

20         ***CONFIDENTIAL             END CONFIDENTIAL*** feet for DS3 arrangements, and

21         ***CONFIDENTIAL             END CONFIDENTIAL*** feet for optical arrangements.42


     42    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.1.Caged.ILEC-
           CLEC” Worksheet, Cells H13, E15, K15, and N17.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                  Page 112 of 153

 1         These distances are not supported in the cost study. Moreover, based on my experience

 2         with SBC collocation cost filings in other states, these distances are likely based on the

 3         embedded placement of collocation arrangements, which as I have discussed before, can

 4         be discriminatory towards CLECs. The distance that I have proposed which is based on

 5         an efficient central office design with equitable placement of equipment (including

 6         collocation arrangements) should be used instead.

 7   Q.    HOW DO THESE CABLE DISTANCES RELATE TO THE CABLE RACKING
 8         AND COMMON SYSTEMS METHODOLOGICAL PROBLEM?

 9   A.    Fundamentally, the cable distance drives the amount of racking that will be required. If

10         SBC-Michigan has overstated the cable distances, then the racking cost will be similarly

11         overstated. However, as I will demonstrate below, SBC-Michigan’s overstatement for

12         cable racking is actually greater than its overstatement for cable distance.

13                For the ***CONFIDENTIAL               END CONFIDENTIAL*** feet of cable for

14         voice grade arrangements, SBC-Michigan has included ***CONFIDENTIAL                 END

15         CONFIDENTIAL*** feet of existing cable rack.43 This would be cable rack that SBC-

16         Michigan would anticipate that it would share with the collocator. Of course, this leaves

17         a great deal of cabling distance remaining for which SBC-Michigan has assumed that the

18         collocators alone must pay for this cabling distance. Specifically, SBC-Michigan has

19         assumed that there is an additional ***CONFIDENTIAL                                 END




     43    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.1.Caged.ILEC-
           CLEC” Worksheet, Cells H29.
          (PUBLIC VERSION)                        Initial Testimony of Steven E. Turner (Collocation)
                                                                            MPSC Case No. U-13531
                                                                                     Page 113 of 153

1          CONFIDENTIAL*** feet of cable rack to complete the support of the voice grade

 2         interconnection cabling.44

 3   Q.    THIS CABLE RACKING DISTANCE SEEMS TO BE OBVIOUSLY WRONG.
 4         COULD YOU EXPLAIN HOW THIS COULD HAPPEN?

 5   A.    Yes. The sum of the two cable racking distances – ***CONFIDENTIAL                            END

 6         CONFIDENTIAL*** feet is outrageously wrong, but not just because it is

 7         ***CONFIDENTIAL                END CONFIDENTIAL*** feet longer than the cable that it

 8         is supporting (or ***CONFIDENTIAL                    END CONFIDENTIAL*** feet longer

 9         than the racking that is needed).45 There are several problems with this cable racking

10         distance.

11                 There are effectively three sections of cable racking that must be provided to

12         extend from the SBC-Michigan interconnection point (the MDF in this cable type) to the

13         collocation arrangement: shared racking within the SBC-Michigan equipment area,

14         racking within the common area of the collocation arrangement, and racking to extend

15         into the cage. There must be cable rack available within the central office that extends

16         from the MDF out towards the equipment that must connect with it. This cable rack is

17         routinely considered to be shared with SBC-Michigan in that SBC-Michigan must also

18         connect with the MDF and therefore the collocator’s cables can simply go in the same


     44    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 8.0.Caged.ComSys”
           Worksheet, Cells C311.
     45    Racking is not required for every foot of cable that is provided. Typically, each end of the cable
           will have 7.5 feet of slack so that the cable can be extended from the overhead rack down to the
           equipment. As such, there will generally be 30 feet less of cable racking required than the
           distance of cabling that is installed. This will adjustment will be used during the rest of this
           discussion.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                  Page 114 of 153

 1         racks   as    SBC-Michigan.         Given    that    SBC-Michigan      has     assumed     only

 2         ***CONFIDENTIAL             END CONFIDENTIAL*** feet of existing cable rack, then

 3         the remaining ***CONFIDENTIAL                  END CONFIDENTIAL*** feet of cable

 4         racking would have to be within the collocation arrangement.46

 5   Q.    WHY MUST THIS REMAINING CABLE RACKING DISTANCE BE WITHIN
 6         THE COLLOCATION ARRANGEMENT?

 7   A.    SBC-Michigan has said that it is. Specifically, SBC-Michigan notes that the cable

 8         racking other than the ***CONFIDENTIAL                  END CONFIDENTIAL*** feet of

 9         existing cable rack is “Inside Collocation Area.”47

10   Q.    IS IT EVEN POSSIBLE THAT SBC-MICHIGAN’S DISTANCE ASSUMPTION
11         FOR RACKING WITHIN THE COLLOCATION ARRANGEMENT IS
12         CORRECT?

13   A.    SBC-Michigan      has   indicated     that   its    typical   collocation    arrangement     is

14         ***CONFIDENTIAL               END CONFIDENTIAL*** square feet.48 If I assume an

15         arrangement similar to what I described for the AT&T/MCI Collocation Cost Model,

16         then    the   dimensions   of   the    collocation     arrangement     would     be   roughly

17         ***CONFIDENTIAL                                     END CONFIDENTIAL***. With these

18         dimensions, the longest distance that would be required to extend racking throughout the


     46    The ***CONFIDENTIAL           END CONFIDENTIAL*** feet is calculated as follows: SBC-
           Michigan has assumed a total cable distance of ***CONFIDENTIAL       END
           CONFIDENTIAL*** feet. From this distance, the 30 feet of slack discussed earlier must be
           removed as well as the ***CONFIDENTIAL           END CONFIDENTIAL*** feet of “existing”
           cable rack.
     47    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 8.0.Caged.ComSys”
           Worksheet, Cell B307.
     48    SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 7.0.Caged.CSM”
           Worksheet, Cell J16.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                 Page 115 of 153

 1         common area of the collocation arrangement would be ***CONFIDENTIAL                 END

 2         CONFIDENTIAL*** feet. In addition, only five feet of racking would be required to

 3         extend into each of the eight cages maximum that would be possible within this

 4         arrangement.    As such, taking SBC-Michigan’s shared cable racking distance of

 5         ***CONFIDENTIAL             END CONFIDENTIAL*** feet to get to the outside of the

 6         collocation arrangement as a given, and the ***CONFIDENTIAL                         END

 7         CONFIDENTIAL*** feet of cable racking distance within the collocation arrangement

 8         common area, and the maximum of 40 feet to extend into each of the cages, the

 9         maximum amount of cable racking that would be required is ***CONFIDENTIAL

10         END CONFIDENTIAL*** feet of which ***CONFIDENTIAL                                   END

11         CONFIDENTIAL*** feet would be within the collocation arrangement.                In other

12         words, SBC-Michigan’s assumption of ***CONFIDENTIAL                                 END

13         CONFIDENTIAL*** feet of cable racking within the collocation arrangement is more

14         than ***CONFIDENTIAL             END CONFIDENTIAL*** times higher than could be

15         possible.

16   Q.    IS THERE ANY POSSIBLE EXPLANATION FOR THIS OUTRAGEOUSLY
17         OVERSTATED CABLE RACKING DISTANCE IN THE COLLOCATION
18         ARRANGEMENT?

19   A.    Not really. It is possible that SBC-Michigan will claim that it must cable rack within the

20         collocation arrangements themselves. However, SBC-Michigan does not know how the

21         CLEC will even lay out its equipment within the collocation arrangement. As such, the

22         typical situation is that the CLECs provide their own cable racking within the cages

23         through the use of floor mounted stanchions that support the cables once they are
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                 Page 116 of 153

 1         delivered into the collocation arrangement. As such, the distances that I have identified

 2         for the SBC telecommunications area (***CONFIDENTIAL                                END

 3         CONFIDENTIAL*** feet), common area (***CONFIDENTIAL                                 END

 4         CONFIDENTIAL***) and length to extend into a maximum of eight cages (40 feet)

 5         would be the maximum racking distance that is even possible. SBC-Michigan’s cable

 6         racking distance is simply unsupportable.

 7   Q.    ARE THE OTHER RACKING DISTANCES SIMILARLY OVERSTATED?

 8   A.    Yes. I will not review all of these rack distances as above. However, the racking

 9         distances for fiber, copper, and power are al similarly overstated. Once again, the

10         Commission should simply reject SBC-Michigan’s collocation filing in lieu of continuing

11         its use of the AT&T/MCI Collocation Cost Model which contains racking distances and

12         associated investments that are reasonable and integrated across the types of racking that

13         would be reasonably deployed to support collocation.

14         E.     DC POWER CONSUMPTION

15   Q.    IS THERE SUFFICIENT INFORMATION IN THE SBC-MICHIGAN FILING
16         FOR YOU TO ADEQUATELY EVALUATE ITS DC POWER CONSUMPTION
17         RATE PROPOSAL?

18   A.    No. SBC-Michigan provided virtually no information in its filing that would allow the

19         Commission to trace the inputs used in developing the DC Power Consumption

20         investment. Thus, SBC-Michigan has left the Commission and the parties in the position

21         of simply having to trust SBC-Michigan for the validity of their input. In light of the

22         significant increase in DC Power investment SBC-Michigan is requesting, I cannot agree

23         to rely on SBC-Michigan’s calculations. Instead, I would urge the Commission to rely

24         on the inputs that I have proposed based on vendor quotes for the materials, engineering,
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                   Page 117 of 153

 1         and installation cost associated with a DC Power installation project. SBC-Michigan

 2         should have come forward with a comprehensive set of documentation to justify the

 3         increase in cost that it seeks. As a result, the Commission should reject SBC-Michigan’s

 4         recommended DC Power Consumption investment, and instead should use the value filed

 5         by AT&T.

 6   Q.    CAN YOU PROVIDE THE COMMISSION WITH A SENSE OF HOW SBC-
 7         MICHIGAN’S PROPOSED RATE FOR DC POWER CONSUMPTION
 8         COMPARES WITH OTHER STATES ACROSS THE COUNTRY?

 9   A.    Yes. SBC-Michigan’s recurring cost for DC power is significantly out of line with the

10         costs of other incumbent carriers across the country. This is yet another reason why

11         SBC-Michigan should be required to provide thorough documentation to explain why it

12         believes its significantly higher costs are appropriate.

13                SBC-Michigan has proposed a rate for DC Power of $20.70 per amp. By way of

14         contrast, the following table provides the DC Power Consumption rates in 16 other states

15         plus the current rate in Michigan and the corresponding percentage of inflation SBC-

16         Michigan’s proposed rate for New York represents.
         (PUBLIC VERSION)                       Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                   Page 118 of 153

                                                                        SBC-Michigan Rate
                                       DC Power Consumption
              State                                                       Overstatement
                                               Rate
                                                                           Percentage
              Alabama                            $11.75                        76%
              California                          $8.74                       137%
              Florida                           $10.8749                      90%
              Georgia                             $7.17                       189%
              Kansas                             $10.61                       95%
              Kentucky                           $13.16                       57%
              Louisiana                          $12.48                        66%
              Michigan-Current                    $9.65                       115%
              Mississippi                        $11.00                       88%
              Missouri                           $10.61                       95%
              Nevada                             $10.61                        95%
              North Carolina                     $11.48                        80%
              Oklahoma                           $10.61                        95%
              South Carolina                     $13.79                       50%
              Tennessee                          $13.31                       56%
              Texas                               $9.50                       118%
              Wisconsin                          $10.61                       95%
1

2         The point the Commission should take away from the comparison the table affords is that

3         SBC-Michigan has proposed a rate for DC Power Consumption in Michigan that is

4         anywhere from 50 to 189 percent greater than the rates that other states have found to be

5         cost-based. SBC-Michigan should not be allowed to have an exceedingly high DC power

6         rate in Michigan in the absence of clear and overwhelming evidence of unique or special

7         circumstances justifying that much higher rate. Moreover, I would point out that in five

8         of these state comparisons (Kansas, Missouri, Nevada, Oklahoma, and Wisconsin), SBC

9         actually settled on the rates that are found there. And yet, SBC-Michigan now seeks an


    49    This is the rate BellSouth has proposed in Florida in a pending cost case. The CLECs have
          proposed a lower rate. Nonetheless, it is telling that the proposed rate for BellSouth would still
          be so much lower than what SBC believes it needs in Michigan for power plants that are virtually
          identical.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                  Page 119 of 153

 1         increase of 95 percent for DC Power Consumption over what it agreed to in Wisconsin

 2         just 15 months ago. There is simply no support for this increase in cost. Further, in

 3         Florida, the rate that I have shown in the table is actually what BellSouth has sponsored.

 4         In other words, this is the rate that BellSouth believes to be cost-based before a

 5         Commission has heard testimony from other sides to make its final determination. DC

 6         Power Plants in BellSouth central offices are no different that DC Power Plants in SBC

 7         central offices. There is simply no justification for the rate that SBC-Michigan has

 8         proposed.

 9         F.     VOICE GRADE ARRANGEMENTS

10   Q.    WHAT ARE YOU MAJOR CONCERNS WITH THE COST THAT SBC-
11         MICHIGAN HAS DEVELOPED FOR VOICE GRADE ARRANGEMENTS?

12   A.    I have already addressed one of the problems related to the cable racking cost that SBC-

13         Michigan has incorporated into its interconnection arrangements as well as in the

14         Common Systems cost. I will not address that again here. However, there is another

15         significant problem that SBC-Michigan has incorporated into its Voice Grade

16         Arrangements cost calculation that this Commission should be aware of and reject in

17         developing cost-based rates for collocation. Again, this is not the only problem with this

18         cost study, but it is indicative of why the cost study as a whole should be rejected.

19   Q.    WHAT IS THE SPECIFIC PROBLEM                                WITH       VOICE       GRADE
20         ARRANGEMENTS THAT YOU RAISE HERE?

21   A.    The fundamental problem that I address here is SBC-Michigan’s inclusion of

22         Intermediate Distribution Frame (“IDF”) investment in the Voice Grade Arrangement

23         cost development. As I also explained in my Nonrecurring Charge testimony filed

24         concurrently with this testimony, SBC Michigan has included the costs for providing
           (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                           MPSC Case No. U-13531
                                                                                    Page 120 of 153

 1           interconnection arrangements assuming the use of both main MDFs and IDFs in its Voice

 2           Grade Arrangements cost development. Further, SBC-Michigan has actually assumed

 3           that IDFs are used 100 percent of the time.50

 4   Q.      WHAT IS THE PROBLEM WITH USING IDFS?

 5   A.      IDFs are not appropriate in TELRIC-compliant forward-looking central offices. IDFs

 6           introduce back-to-back manual cross-connects (with the required MDF cross-connects)

 7           and are unnecessary, introduce additional points of failure in the circuit, and introduce

 8           additional costs that serve no effective function or purpose. The only times that I have

 9           ever seen the use of IDFs have been in central offices that are extremely old. These

10           central offices were built in an environment where analog equipment was placed in the

11           office and took up large amounts of space, sometimes requiring the use of multiple

12           floors. In this environment, IDFs were used to cable long distances between floors.

13           However, in a forward-looking central office (and, practically speaking, in virtually all of

14           SBC Michigan’s central offices), there is no need for IDFs.51 They would only be

15           present in inefficiently engineered central offices that are holdovers from an older vintage

16           of equipment.52 The bottom line is that these intermediate frames should not be included

17           in the cost calculation for the Voice Grade Arrangements.


     50      SBC-Michigan Cost Study, “MI Physical Caged Costs” Workbook, “Tab 6.2.Caged.ILEC-
             CLEC” Worksheet, Rows 8-18.
     51      SBC Michigan Response to ATT Request No. ATTSBC 445 (ST-25) shows that
             ***CONFIDENTIAL             END CONFIDENTIAL*** percent of SBC Michigan’s central
             offices currently have an IDF and MDF.
     52      The Commission’s TSLRIC Principles require that the technology used in a long run incremental
             cost study “assume … complete replacement of existing facilities with the overall least-cost
             technology. The least cost technology should reflect a known and proven technology that is
     (continued)
          (PUBLIC VERSION)                       Initial Testimony of Steven E. Turner (Collocation)
                                                                           MPSC Case No. U-13531
                                                                                    Page 121 of 153

 1   Q.    WHAT PERCENTAGE OF TIME DOES SBC MICHIGAN ASSUME THE
 2         PRESENCE OF AN IDF IN THE CENTRAL OFFICE?

 3   A.    As noted above, SBC-Michigan has assumed the use of IDFs 100 percent of the time.

 4         This is consistent with this same improper assumption that SBC-Michigan includes in its

 5         loop and entrance facility nonrecurring cost calculation described in my NRC testimony.

 6         However, according to its discovery responses, SBC Michigan’s actual experience, even

 7         if an embedded approach was used for this input, significantly contradicts the use of a

 8         100 percent assumption for IDFs.            Specifically, SBC Michigan notes that only

 9         ***CONFIDENTIAL               END CONFIDENTIAL*** percent of its central offices at

10         most actually contain both an MDF and an IDF.53 Even if the Commission were not to

11         accept my TELRIC-based recommendation of 0.00 percent IDF presence in SBC

12         Michigan     central    offices,    the    percentage     of    IDF     should    not    exceed

13         ***CONFIDENTIAL                    END CONFIDENTIAL*** percent.                  This would be

14         implemented in SBC-Michigan’s cost study by weighting the investment in IDF included

15         in the Voice Grade Arrangements cost development with an ***CONFIDENTIAL

16         END CONFIDENTIAL*** percent weighting factor.                     Nonetheless, my primarily

17         recommendation and one that is consistent with TELRIC principles would be to not

18         include the use of IDFs in interconnection arrangement cost development at all.




           clearly identified and is in use, at least partially today.” Opinion and Order, Case No. U-10620,
           Exhibit A, p. 5 (Sept. 8, 1994). Moreover, as I noted previously, the Commission’s TSLRIC
           Principles also require that a forward-looking cost study “account for only most efficient and
           cost-effective means of providing the output.” Id., p. 7. SBC Michigan’s inclusion of out-of-date
           technology, such as IDFs, clearly violates these rules.
     53    SBC Michigan Response to ATT Request No. ATTSBC 445(ST-25).
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                 Page 122 of 153

 1   XIV. METERING OF DC POWER

 2   Q.    WHAT IS THE PURPOSE OF THIS SECTION OF YOUR TESTIMONY?

 3   A.    In this section I will introduce DC Power Metering as a cost-based and efficient

 4         alternative to requiring CLECs to pay just for the DC power delivery ordered – an

 5         requirement that is not included in the current Michigan Collocation Tariff, but which

 6         SBC-Michigan has implemented through its ordering process. With regard to DC power

 7         metering, my testimony also will address the following: (1) metering proposals; (2)

 8         possible alternatives to metering that the Commission should consider; (3) rate structure

 9         and rate design proposals; and (4) the technical feasibility and the practicability of

10         implementing any proposal presented in this proceeding.

11   Q.    WOULD YOU PLEASE                  SUMMARIZE         YOUR       CONCLUSIONS          AND
12         RECOMMENDATIONS?

13   A.    My testimony will demonstrate that SBC-Michigan should bill for DC Power in a manner

14         that corresponds more closely to its costs; CLECs should be billed for DC power based

15         on the amount of power they use, and not on any other basis; and that metering is the

16         optimal, fairest way of enabling CLECs to pay for power on a usage basis.             The

17         testimony also includes recommendations on how to pursue metering and an alternative

18         solution that, while not as accurate as metering, would facilitate the ability of CLECs to

19         engineer their collocation arrangements in a reasonable, safe and cost-effective manner

20         and to adjust their power orders so that it more closely mirrors the amount of power they

21         actually use.
          (PUBLIC VERSION)                   Initial Testimony of Steven E. Turner (Collocation)
                                                                       MPSC Case No. U-13531
                                                                                Page 123 of 153

 1   Q.    HOW IS DC POWER INFRASTRUCTURE ENGINEERED AND USED?

 2   A.    Yes. It is first important to review how DC power infrastructure is engineered so as to

 3         form the basis for how DC power should be charged.                I will then turn to

 4         recommendations for how collocators should be appropriately billed for the DC Power

 5         that they consume in SBC-Michigan’s DC Power Plant.

 6         A.     DISCUSSION OF THE BILLING APPROACH FOR DC POWER COST

 7                1.     The Components of DC Power

 8   Q.    WHAT ARE THE MAIN ELEMENTS OF DC POWER?

 9   A.    The ability to provide DC Power within a central office is essentially comprised of three

10         main elements: DC Power Delivery, the DC Power Plant, and the AC Power that is

11         passed through that plant that is ultimately converted into DC Power.        DC Power

12         Delivery is power infrastructure that provides for the DC power cabling that is extended

13         from SBC-Michigan’s Battery Distribution Fuse Bay (“BDFB”) to the collocation

14         arrangements. This DC power cabling consists of pairs of copper cables in protective

15         sheaths that complete a power circuit from the BDFB to the collocation arrangement.

16         One part of each pair represents the “battery” or delivery of power and the other part of

17         each pair represents the “ground” or return of the power. Moreover, each pair normally

18         comes in matching pairs for redundancy, with one pair referred to as the “A-side” power

19         feed and the redundant pair referred to as the “B-side” power feed. In this way, if one

20         side fails, power will not be completely cut off to the telecommunications equipment.

21         Finally, the BDFB is simply a large fuse bay or junction point where a large feed of DC

22         power coming from the power plant via large power cables is broken down into smaller

23         increments of power.    This piece of equipment is necessary because it allows the
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                  Page 124 of 153

 1         numerous cables from the BDFB to collocators’ telecommunications equipment, as well

 2         as SBC-Michigan’s equipment, to be smaller and thus less expensive than the larger, less

 3         numerous power cables extending from the power plant to the BDFB.

 4                The DC Power Plant is necessary because virtually all telecommunications

 5         equipment operates on DC power (or direct current power), whereas the power that can

 6         be purchased from the electric utility is AC power (or alternating current power). Several

 7         pieces of equipment must be installed by SBC-Michigan to convert this AC power to DC

 8         power and to provide for its redundancy. That equipment consists of: (1) rectifiers,

 9         which actually convert the AC power to DC power; (2) batteries, which stabilize the DC

10         power and provide for short-term backup in the event of an AC power failure; (3)

11         controllers and power distribution service cabinets, which manage the DC power

12         elements and distribute the power throughout the central office; and (4) the emergency

13         engine, which provides long-term backup in the event of a lengthy AC power failure.

14                The final component of providing DC Power to telecommunications equipment is

15         that actual AC Power that is purchased from the electric utility that is then converted into

16         DC Power.

17                2.      Sizing the DC Power Delivery Infrastructure

18   Q.    PLEASE BRIEFLY DESCRIBE                   HOW      THE     DC     POWER       DELIVERY
19         INFRASTRUCTURE IS SIZED.

20   A.    The DC Power Delivery infrastructure, i.e., the cabling between the BDFB and the

21         telecommunications equipment as described above, is typically sized using a standard

22         formula that is related to the amount of voltage drop that will be permitted across the

23         cables. In layman’s terms, the power cables installed between the DC Power Plant and
          (PUBLIC VERSION)                       Initial Testimony of Steven E. Turner (Collocation)
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 1         the telecommunications equipment actually have a measurable resistance across them.

 2         This resistance causes a voltage drop that occurs between the DC Power Plant and the

 3         telecommunications equipment.         The telecommunications equipment requires that it

 4         receive a specific voltage – typically 48 volts.

 5                 There are three main variables in the voltage drop formula that lead to the

 6         necessary sizing of the cables. First, the amount of current (measured in amps) that must

 7         be placed through the cable is the primary variable. As an engineer increases the amount

 8         of power needed to run across the cable, the larger the required cable diameter that must

 9         be installed to carry the current. Second, the longer the DC power cable, the greater the

10         voltage drop that will occur, all other factors held equal. In other words, the greater the

11         distance DC current has to travel through a cable, the greater the potential for resistance,

12         thereby causing a greater degree of voltage drop. Third, the larger the diameter of the

13         DC power cable, the lower the voltage drop that will occur, all other factors held equal.

14         Basically, if the current has more room to move around as it passes through the cable,

15         there is less potential for resistance, thereby causing a lesser degree of voltage drop.

16                 When sizing the cables, the engineer simply has to identify the allowable voltage

17         drop between the DC Power Plant (or BDFB) and the telecommunications equipment so

18         that the thinnest diameter cable is used based on the distance that must be traversed for a

19         given amperage of cable.54 The thinnest cable is chosen in part because a cable increases



     54    The voltage drop between the power plant and the telecommunications equipment is a fixed value
           – normally around 1.75 volts. The engineer will attempt to use all of this voltage drop so that the
           cable diameter can be minimized corresponding to the length of cable and amperage that must be
           carried across the cable.
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
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 1         in cost dramatically as the diameter of the cable increases. The specific formula is

 2         provided below.

                                                             11.1 x AMPS x FEET
                              ALLOWABLE VOLTAGE DROP     =
                                                                CM OF WIRE


 3                Typically, the cables are sized using what is known as the List 2 Drain for the

 4         equipment being served. The List 2 Drain is the current that the equipment will draw

 5         when the power plant is in distress, meaning that the power plant’s batteries are nearing

 6         the point of complete failure. When a power plant is in distress, the voltage on the

 7         batteries begins to decrease. For the telecommunications equipment to continue to draw

 8         the same amount of power, the current has to increase proportionately. This adjustment

 9         in the current and voltage all occurs automatically in that the telecommunications

10         equipment, to continue operating properly, will draw the same amount of power by

11         increasing the current drawn as the voltage drops.55 However, the cable diameters must

12         be sized for this worst case situation.

13   Q.    ARE THERE ANY OTHER FACTORS TAKEN INTO CONSIDERATION IN
14         SIZING THE DC POWER DELIVERY INFRASTRUCTURE?

15   A.    Yes. Importantly, it is common engineering practice to design the DC Power Delivery

16         infrastructure for the ultimate demand of the equipment to which the power cables are

17         being installed. This practice is reasonable primarily because: (1) the installation of DC

18         power cables is costly; (2) the DC power cables take up a significant amount of space in

19         overhead racking; and (3) the rearrangement of DC power cables poses operation risks


     55    Power equals current times voltage (P = V * I). As the voltage drops, the current will
           automatically increase to compensate so that the same power amount can be drawn. This will
           occur until a minimum threshold of voltage is exceeded on the telecommunications equipment, at
           which point it will no longer work properly at all.
          (PUBLIC VERSION)                   Initial Testimony of Steven E. Turner (Collocation)
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 1         for the equipment that can easily be avoided by sizing the DC power cables for their

 2         ultimate demand initially, as opposed to changing them repeatedly over time. It is not

 3         reasonable to constantly adjust the diameters of the cable and reinstall them as the DC

 4         power needs of the telecommunications equipment increase. Accordingly, the sizing of

 5         these cables is based off of the List 2 Drain of the telecommunications equipment being

 6         served at its ultimate demand.

 7   Q.    PLEASE EXPLAIN THE IMPLICATIONS OF THIS ENGINEERING
 8         APPROACH TO SIZING THE DC POWER DELIVERY INFRASTRUCTURE.

 9   A.    First, when a collocator orders a DC Power Delivery arrangement, the CLEC is most

10         likely not ordering the DC power that the CLEC needs immediately, but rather the DC

11         power that the CLEC will ultimately require in the collocation arrangement. Again, as

12         discussed above, this is reasonable because the CLEC does not want to be in the position

13         of routinely having to modify the DC Power Delivery arrangements coming into the

14         collocation arrangement or constantly having to perform DC power augments. However,

15         it is also true that the CLEC’s requirements for the size of the DC Power Delivery

16         arrangement, in terms of its ultimate current carrying capacity, has no bearing on the

17         amount of DC Power that the CLEC needs currently or should be required to pay for.

18                Second, any reasonable ordering process for DC Power needs to recognize the

19         distinction between the ordering of the DC Power Delivery arrangement, which sizes the

20         cables extended into the collocation arrangement, separately from the request for DC

21         Power itself. In other words, the CLEC’s need for DC power capacity on the cables

22         extended into the collocation arrangement will not match the usage of DC power except

23         when the collocation arrangement is fully built out and operating under peak conditions.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
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1          Because of this, any connection between the sizing of the DC Power Delivery

2          arrangement and the usage of DC Power is inappropriate and not cost-based.

3                 3.      Sizing the DC Power Plant Infrastructure

4    Q.    PLEASE BRIEFLY            DESCRIBE        HOW      THE     DC    POWER        PLANT      IS
5          ENGINEERED.

 6   A.    The previous engineering discussion concerned the cables extending from the DC Power

 7         Plant to the collocation arrangement or telecommunications equipment generally. In

 8         sum, with DC Power Delivery arrangements, it is fairly clear that the engineering

 9         approach used sizes the cables for ultimate demand in a situation where the DC Power

10         Plant is operating in distress. By comparison, the engineering of the DC Power Plant is

11         done quite differently. The DC Power Plant consists of a collection of components that

12         are all designed to provide uninterruptible DC Power sufficient for the peak usage of the

13         telecommunications equipment within the central office. Each component (batteries,

14         rectifiers, backup generator, controllers, and power distribution service cabinets) is rated

15         or evaluated based on the number of DC amps of power that the component can provide.

16         The DC power engineer is responsible for monitoring the use of the DC Power Plant,

17         noting the peak DC power usage that occurs on the power plant. Typically, this peak

18         usage occurs during what is known as the “busy hour” for the central office. Generally,

19         the busy hour is the hour during the year when the load on the central office

20         telecommunications equipment is at its greatest, thereby creating the highest load on the

21         power plant as well. Normally, this day is typically on the Monday after a long holiday

22         (such as Thanksgiving) and occurs at around 10:00 AM in the morning. This is not the

23         case in all central offices. Central offices that exclusively serve a residential community
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
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 1         may have a different busy hour that may occur in the evening. In any event, there will be

 2         a point during the year where the DC Power Plant is used at its maximum level. It is the

 3         responsibility of the DC power engineer to ensure that there is sufficient power capacity

 4         (through the batteries, rectifiers, and backup generator) to meet this peak demand on the

 5         power plant.

 6   Q.    WHEN SIZING THE POWER PLANT TO ENSURE SUFFICIENT POWER
 7         CAPACITY EXISTS TO MEET PEAK DEMAND, DOES THE DC POWER
 8         ENGINEER CONSIDER ANY OTHER FACTORS?

 9   A.    Based on my experience both in working with DC power engineers as well as in

10         reviewing DC Power cost studies across the country, there is normally a fill factor

11         applied to the sizing of the DC Power Plant as well, such that the peak demand on the

12         power plant may only be approximately 80 percent of the actual capacity available within

13         the power plant.

14   Q.    DOES THE DC POWER ENGINEER MODIFY THE DC POWER PLANT
15         INFRASTRUCTURE BASED ON AN ORDER FOR NEW EQUIPMENT PLACED
16         BY A CLEC OR EVEN BY A SBC-MICHIGAN EQUIPMENT ENGINEER?

17   A.    Typically, the answer would be no. The DC Power Engineer simply monitors the use of

18         the DC Power Plant so that if the engineer observes peak usage increasing to a point that

19         is too great for the capacity in the power plant (accounting for fill), the engineer will then

20         grow the capacity of the DC Power Plant by adding additional rectifiers and batteries to

21         the power plant. However, the addition of a piece of equipment in the central office is
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
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 1         not the driving factor causing the DC power engineer to modify the plant. Rather, the

 2         driving factor is the peak use of all of the equipment within the central office.56

 3   Q.    DOES THE DC POWER ENGINEER MODIFY THE DC POWER PLANT
 4         INFRASTRUCTURE BASED ON AN ORDERED AMOUNT OF POWER ON A
 5         COLLOCATION ORDER FORM?

 6   A.    Again, the answer would be no. The driving factor for sizing the DC Power Plant

 7         infrastructure is not individual collocation power orders, but the total peak usage of the

 8         central office equipment as a whole.         The CLEC equipment, to the extent that it

 9         contributes to part of that peak demand during the busy hour, should bear its pro rata

10         share of that usage measured in amps. However, the CLEC should not be required to pay

11         more for DC power simply because of an order placed by the CLEC for power, which has

12         nothing to with SBC-Michigan’s sizing of the capacity for the DC Power Plant.

13   Q.    HOW WOULD YOU RECOMMEND THAT THE PRO RATA SHARE OF THE
14         DC POWER PLANT COST BE APPORTIONED TO THE VARIOUS USERS?

15   A.    This could be a very complex problem. In a perfect world, all of the various users of the

16         DC power plant (SBC-Michigan, collocators, etc.) would have their power consumption

17         metered at the point when the power plant as a whole experienced its peak demand. This

18         peak demand would then drive the investment that would be necessary to satisfy the

19         demand on a forward-looking basis, consistent with efficient, forward-looking costing


     56    Please note that there is an exception to this general rule that the DC power engineer does not
           respond to individual equipment orders. If SBC-Michigan knows that it is installing an entire
           switch within the central office or some other very large scale equipment order, then the DC
           power engineer would have to coordinate the growth of the power plant to meet the delivery of
           the large increment of power that equipment would require. The discussion in this paragraph,
           however, deals more with the general growth in usage of the plant that typically occurs within a
           central office – not special situations where huge increments of capacity are being added to the
           central office.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
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 1         principles. Then, each of the users of the DC power plant would pay on a monthly basis

 2         for its pro rata share of the total investment that was driven by its peak usage. This

 3         would be reasonable, as it is only the peak usage that drives the investment in the

 4         infrastructure for the DC Power Plant. Usage that is off-peak does not actually cause the

 5         addition of incremental battery or rectifier capacity (the use of AC power will be

 6         discussed later). However, because the DC Power Plant infrastructure must be in place

 7         throughout the year, the users of the power plant would all need to bear their respective

 8         portions of the overall investment in the power plant for the duration of their use of the

 9         power plant.

10   Q.    WHY IS IT DIFFICULT TO IMPLEMENT THE “PERFECT WORLD”
11         SCENARIO DESCRIBED ABOVE?

12   A.    Quite simply, I believe it would be possible to meter the DC power usage of each user of

13         the power plant and to identify the cumulative demand on the power plant at the peak

14         busy hour across all of the users of the power plant. That said, it seems impractical to

15         then identify, for each of these power plants, the percentage of cost for the overall power

16         plant that should be allocated to each user. Instead, it would be more practical and

17         appropriate to develop the cost for an amp of DC power by assuming that the plant was

18         being used at its busy hour capacity (including fill), and have each user of the power

19         plant then bear its cost by multiplying this rate per amp by the number of amps metered

20         for an individual user, such as a collocator. In other words, the cost study would identify

21         the rate per used amp for any given user of the power plant and this rate would then be

22         applied to metered amps.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
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1    Q.    WHY IS IT IMPORTANT TO METER THESE AMPS AT ALL?

 2   A.    It is vital to meter the amps because this is the only way to ensure that the CLEC pays for

 3         the DC Power that it actually causes SBC-Michigan to provide. The amount of DC

 4         Power that the CLEC orders would not be appropriate in that SBC-Michigan does not

 5         build the power plant to specific orders. The manufacturer specifications for the typical

 6         usage of the equipment (often referred to as the List 1 Drain) would also overstate this

 7         usage in that the manufacturer is defining the usage if everything were operating in its

 8         equipment at the same time. Again, this would be inappropriate in that the only usage

 9         that matters is the actual usage during the busy hour for the DC Power Plant. Metering is

10         the only means to ensure that the CLEC (and each other user of the DC power plant) only

11         pays for its approximate pro rata share of that cost.

12   Q.    HAVE OTHER STATE COMMISSIONS DETERMINED THAT METERING IS
13         APPROPRIATE FOR DC POWER?

14   A.    Yes. The Illinois Commerce Commission ordered that DC Power would be billed on a

15         metered basis and, to my knowledge, Illinois was the first state to implement such an

16         arrangement.57 Other states have made similar determinations. The Georgia Public

17         Service Commission made the following determination in a recent UNE cost proceeding:

18                The Commission agrees with AT&T/WorldCom and NewSouth
19                that usage-based pricing is consistent with TELRIC principles.
20                BellSouth should only charge CLECs for the DC power they
21                actually consume. Although the order in Docket No. 11901-U
22                authorized fused-based pricing for DC power, that holding was

     57    State of Illinois, Illinois Commerce Commission, Second Interim Order, Docket Nos. 96-0486
           and 96-0569, Illinois Commerce Commission On Its Own Motion – Investigation into Forward
           Looking Cost Studies and Rates of Ameritech Illinois for Interconnection, Network Elements,
           Transport and Termination of Traffic – Illinois Bell Telephone Company – Proposed Rates,
           Terms and Conditions for Unbundled Network Elements, February 17, 1998, pp. 98-100.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
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 1                based on the evidence before the Commission in that proceeding
 2                and on a finding that installing and reading meters would impose
 3                an undue burden on BellSouth. The evidence presented in this
 4                docket, however, establishes that BellSouth does have the ability
 5                to install and read meters. In addition, the Commission notes that
 6                after it issued its decision in Docket No. 11901-U, the Authority
 7                voted to install meters in Tennessee.

 8                The most sensible solution is to order usage-based pricing, while
 9                recognizing the costs BellSouth may incur to install and read
10                meters.58

11         As noted above, the Tennessee Regulatory Authority made a similar determination that

12         the only appropriate manner to bill for DC power is on a usage basis.

13                BellSouth has indicated its willingness to engage in a cooperative
14                effort to develop a method and procedure for monitoring power
15                consumption levels in order to generate a bill. Further, under
16                cross-examination, BellSouth’s witness, Mr. Keith Milner,
17                admitted that it is inappropriate for BellSouth to charge WorldCom
18                for amperes not used or requested by WorldCom. Accordingly, the
19                Arbitrators voted unanimously that the per ampere rate for the
20                provision of DC power to WorldCom’s collocation space should
21                apply to amperes used and not to fused capacity.59

22         My point in referring to these decisions is simply to demonstrate that multiple

23         commissions are finding that it is appropriate to charge CLECs based on the amount of

24         DC power that they actually use. Further, in each of their territories, SBC-Illinois and




     58    Georgia Public Service Commission, Order, Docket No. 14631-U, Review of Cost Studies,
           Methodologies, Pricing Policies, and Cost Based Rates for Interconnection and Unbundling of
           BellSouth Telecommunications, Inc.’s Services, March 18, 2003, p. 41.
     59    Before the Tennessee Regulatory Authority, Interim Order of Arbitration Award, Docket No. 00-
           00309, In Re: Petition of MCIMetro Access Transmission Services, LLC and Brooks Fiber
           Communications of Tennessee, Inc. for Arbitration of Certain Terms and Conditions of Proposed
           Agreement with BellSouth Telecommunications, Inc. Concerning Interconnection and Resale
           Under the Telecommunications Act of 1996, April 3, 2002, p. 43.
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
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 1         BellSouth have figured out how to implement metering to comply with these commission

 2         orders.

 3         B.        RECOMMENDATIONS FOR METERING POWER AND FOR
 4                   ALTERNATIVE COST AND ORDERING EFFICIENCIES

 5   Q.    IF THIS COMMISSION WERE TO DETERMINE THAT METERING WERE
 6         APPROPRIATE, HOW WOULD YOU RECOMMEND THAT IT BE DONE?

 7   A.    There are really two main alternatives that the Commission could explore to implement

 8         metering. First, a fixed metering option could be implemented. With a fixed metering

 9         option, a device would need to be placed around each DC power cable providing current

10         into the collocation arrangement.60 This device is known as a split-core transducer. A

11         split-core transducer looks like a metal donut that has been sawed in half so that each of

12         the two halves can be placed around the DC power cable being metered without having to

13         disconnect the DC power cable.         The split-core transducer provides the measuring

14         capability that can then be connected to a DC ampere meter to identify the current

15         running through the cable. Depending on the precision of metering required, this meter

16         could either be read manually near the busy hour to identify the approximate maximum

17         usage of the collocation arrangement, or more precision could be added by metering

18         multiple times a day and collecting the information automatically.               If this latter,

19         automated option were pursued, more precise metering could be provided that would

20         actually further lower the CLECs’ costs for power. This will be discussed in more detail



     60    As mentioned earlier in my testimony, DC power cables are placed in pairs. One of the cables
           provides the battery or power feed to the collocation arrangement. The other cable provides the
           ground or return of the power feed back to the distribution point. Only one of these cables (the
           battery cable) would need to be metered.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
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1          later in my testimony. It is my understanding that some variation of the fixed metering

2          option has been implemented by SBC in Illinois.

3                 Second, a handheld metering option could also be implemented. This option

4          should not be dismissed “out-of-hand” as being too labor intensive. After all, this is the

5          option that BellSouth is intending to use in Georgia and Tennessee.         Furthermore,

6          handheld meters offer sufficient accuracy for the metering of DC power in collocation

7          arrangements. The handheld meter that I have used to meter DC power in collocation

 8         arrangements has an accuracy of two percent.61 If a CLEC is consuming 20 amps across

 9         a DC power feed, an error of two percent translates into a maximum difference of 0.4

10         amps. This level of error is not sufficient to cause a CLEC any meaningful harm from a

11         cost standpoint. Further, there is no bias to the error. Therefore, SBC-Michigan and the

12         CLECs will average out to actual metered value over time.

13   Q.    WILL THERE BE ANY OPERATIONAL DIFFICULTIES TO USING A
14         HANDHELD METER?

15   A.    Not particularly. SBC-Michigan will likely assert that the DC power cables are tightly

16         sewn into the frame such that it is not safe to work the handheld meter around the DC

17         power cable. However, this could be easily mitigated by removing one or two of the ties

18         so that some slack could be worked into the cable, enabling the end of the handheld meter

19         to be safely clamped around the cable. To the extent that SBC-Michigan may claim that

20         removal of a couple of ties would be problematic on a permanent basis, a heat resistant

21         spacer could be placed between the metered cables and the frame so that the space could


     61    FLUKE 336 True RMS Clamp Meter Specifications. DC Amperage metering in the range of 0.0-
           600.0 Amps have an accuracy of two percent when five counts are used.
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 1         be maintained for metering, but the cable could then be tied down to the frame once

 2         again. In this way, the cable would be as secure as it previously was, but the cable would

 3         also be available for metering. The space that would be needed to clamp onto the cable

 4         would be approximately ¾ of an inch.

 5   Q.    YOU MENTIONED THAT IF THE FIXED METERING OPTION WAS
 6         AUTOMATED, A MORE PRECISE FORM OF METERING COULD BE
 7         PROVIDED. PLEASE EXPLAIN WHAT YOU MEANT BY THIS.

 8   A.    As I indicated earlier, there are actually three components to DC Power – DC Power

 9         Delivery, the DC Power Plant, and AC Power purchased from the electric utility that is

10         actually converted into DC Power. The DC Power Delivery element is essentially a fixed

11         cost based on voltage drops, distances, and the ultimate amount of DC Power that the

12         collocator needs delivered to the collocation arrangement. The DC Power Plant is a

13         variable cost, but it is sized based on the maximum demand placed on the power plant by

14         all of the users of telecommunications equipment within the central office during the

15         busy hour. As such, the only metering that really has to occur for this equipment is the

16         metering of the busy hour usage by the collocator. However, if multiple meter readings

17         are taken during the course of a day, as would be available with a fixed metering option

18         that was automated, the precision that would be available with this metering would allow

19         one to actually meter the amount of AC Power that was being used by the equipment.

20         The reason for this is that while the DC Power infrastructure must be sized for the

21         maximum amount of DC power that will be provided to the telecommunications

22         equipment, the AC Power varies based on how much current the telecommunications

23         equipment is drawing at any point in time. The diagram drawn below may help to

24         illustrate the point that I am describing.
     (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                   MPSC Case No. U-13531
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                                DC Power Variability




          1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24
                                  Hour
 1

 2    The peak usage that is shown at approximately 10:00 AM is the illustrative usage that

 3    would define the peak usage from which the DC Power Plant cost would be allocated.

 4    However, this peak usage does not occur throughout the day. If a precise form of

 5    metering that metered throughout the day were implemented by SBC-Michigan, the

 6    lower amounts of power that are consumed in the non-peak hours would lead to a lower

 7    billing for the AC component of the DC power. This is because the AC component of

 8    DC power is only used when the equipment actually consumes power from the DC power

 9    plant. As such, the AC Power should actually be billed at a lower average consumption

10    than that which would be applied to the DC Power Plant.           This lower average

11    consumption is illustrated by the dashed line above.
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
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 1   Q.    YOU SEEM TO BE SUGGESTING THAT TWO ELEMENTS OF DC POWER
 2         WOULD BE METERED – THE POWER PLANT AND AC USAGE. IS THIS
 3         CORRECT?

 4   A.    Yes. If an automated fixed metering solution were implemented by SBC-Michigan, then

 5         the highest usage by a CLEC in a month could be used to establish the metering for the

 6         DC Power Plant, and the average usage by a CLEC in a month could be used to establish

 7         the metering for the AC Power. This approach would most closely approximate the cost

 8         that is actually caused by the CLEC with the collocation arrangement.

 9   Q.    ARE THERE ANY DOWNSIDES TO THIS PRECISE FORM OF METERING?

10   A.    Possibly. The precise form of metering will require the installation of the split-core

11         transducers on each of the DC Power Delivery arrangements, as well as feeding these

12         transducers back to a power monitoring system. These components are readily available

13         to SBC-Michigan from vendors today. The power monitoring systems in the various

14         central offices would then have to be connected back to a central data collection point so

15         that the automated analysis of the data and the incorporation of this data into a bill would

16         be facilitated. While this must be done, the downside is that I do not know whether the

17         cost for this more precise form of metering would be justified when compared to the

18         incremental precision in metering that would only really apply to the AC component of

19         DC Power.

20   Q.    COULD THE LOSS OF PRECISION BE ACCOUNTED FOR WITH THE
21         HANDHELD METERING ALTERNATIVE?

22   A.    Yes. I believe that it could. A study could be conducted on several cages to identify the

23         ratio of the average usage of DC power within the collocation arrangement to its peak

24         usage. This ratio could then be used to adjust the DC Power rate so that while the
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
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1          collocator may pay for the DC Power Plant component based on the handheld metering

2          done during the busy hour for the central office, the AC component of DC Power would

3          be adjusted downward based on the ratio. In other words, if the average usage in a

4          typical collocation arrangement was 15 amps while the peak usage was 20 amps, then the

5          metering for that collocation arrangement would be based on a peak measure of 20 amps

6          during the busy hour. However, the AC component of the DC Power rate would be

7          adjusted downward by 25 percent so as to ensure that the AC component of the DC

 8         Power rate would not be overcharged.62

 9   Q.    HOW OFTEN WOULD YOU RECOMMEND THAT THE METERING BE
10         PERFORMED FOR THIS PEAK USAGE WITHIN THE COLLOCATION
11         ARRANGEMENT?

12   A.    With the handheld metering alternative, I would recommend that the metering only be

13         done every three months. SBC-Michigan could identify what it believes to be the busy

14         hour for the central offices.     The CLECs could then be responsible for having an

15         authorized vendor come to their collocation arrangements and meter the DC Power

16         during that busy hour period to identify the peak DC Power usage at that time. This

17         information could then be reported to SBC-Michigan as the billing amount to use for the

18         collocation arrangement for the next three-month period. It appears that this is the

19         approach (metering every three months) that BellSouth is using. However, I do not

20         believe that BellSouth is even being that precise about when the metering has to occur.




     62    The 25 percent adjustment is calculation as the 20 amps of peak usage minus the 15 amps of
           average usage divided by the 20 amps of peak usage.
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                                                                          MPSC Case No. U-13531
                                                                                   Page 140 of 153

 1         In the approach described here, it would be most accurate to meter close to when the

 2         collocation cage would be near its maximum usage.

 3   Q.    WHICH METERING OPTION WOULD YOU RECOMMEND?

 4   A.    Ultimately, I believe the most important decision this Commission should make in this

 5         proceeding is that collocators should only pay for the DC power that they use – not what

 6         they order (except for the DC Power Delivery arrangement as discussed earlier). Such a

 7         decision would not only be fair, but would also confirm that the DC Power charge that

 8         the CLEC bears should be consistent with the cost that the CLEC has placed on SBC-

 9         Michigan for the DC Power Plant.

10                Once this decision is made, I believe SBC-Michigan and the CLECs could make

11         an informed recommendation regarding whether the fixed metering option should be

12         implemented or a handheld metering option should be implemented. To that end, I

13         would encourage the Commission to require SBC-Michigan to conduct the following two

14         cost studies:

15                1.       SBC-Michigan would need to identify the cost of the fixed metering

16                         option including the costs associated with collecting this data and

17                         incorporating it into a bill for the collocator. This would include the

18                         nonrecurring cost of installing the split-core transducers onto the DC

19                         Power Delivery arrangements, along with the recurring cost of the

20                         infrastructure to bring these metered readings back to a centralized

21                         location and incorporating them into a bill for the CLEC. This cost study

22                         should not be that difficult to develop in that SBC already has this

23                         arrangement in place in Illinois.
           (PUBLIC VERSION)                   Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                 Page 141 of 153

 1                 2.     The alternative cost of simply having the CLEC meter its power at its

 2                        expense with an authorized vendor using a handheld device – and SBC-

 3                        Michigan’s related cost of incorporating this billing information into a bill

 4                        for the collocator every three months – should also be identified. The only

 5                        cost that SBC-Michigan would have to identify in this study is the

 6                        nonrecurring cost for it to update its billing records based on the

 7                        information coming from the CLEC as to its handheld metered power for

 8                        that three month period. Of course, it is possible that SBC-Michigan will

 9                        object to allowing the CLEC to obtain its own authorized vendor to

10                        perform the handheld metering. If this is the case, then SBC-Michigan

11                        could also identify the nonrecurring cost of having its own vendor perform

12                        the handheld metering on the CLEC’s behalf.

13          While these two studies would form the basis for an informed, well-reasoned

14          recommendation to the Commission on the metering option that should be implemented,

15          before going down that road, the Commission first needs to establish that metering will

16          be the approach used for DC Power so that collocators do not continue to pay for DC

17          Power costs that they are not causing in SBC-Michigan’s central offices.

18   XV.    REDUNDANT POWER ISSUE

19   Q.     HOW DO YOU BELIEVE THAT SBC-MICHIGAN HAS MISINTERPRETED
20          THE CURRENT COLLOCATIONT TARIFF?

21   A.     I carefully reviewed in the previous section the difference between the engineering of DC

22          Power Delivery Arrangements which establish the cabling between SBC-Michigan’s DC

23          Power infrastructure and the collocation arrangement, and DC Power Consumption,
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                   Page 142 of 153

 1         which is the use of power across that cabling arrangement. SBC-Michigan misinterprets

 2         the tariff in that it “ties” the DC Power Delivery sizing to the amount of DC Power

 3         Consumption that the CLEC must order. Specifically, SBC-Michigan believes that the

 4         terms of the current tariff require collocating CLECs to pay for every amp of DC Power

 5         made available via both the “A” and “B” feeds. SBC-Michigan’s interpretation of the

 6         Tariff is, at best, strained. Indeed, this controversy did not exist for the many years that

 7         the language contained within this tariff was in place. This controversy has arisen

 8         because SBC has recently begun doubling the recurring rates it charges collocators for

 9         DC Power Consumption under Sections 20.5 and 21.5 of the Collocation Tariff.

10                 SBC-Michigan’s misinterpretation relies on sections of the current tariff

11         pertaining to DC Power Delivery Arrangements. At the bottom of SBC-Michigan’s

12         interpretation is the assertion that DC power can only be distributed in three specific

13         amounts under the current tariff. Specifically, SBC-Michigan contends that Sections

14         20.10 and 21.10 of the Tariff, both of which relate to DC Power Delivery Arrangements,

15         provide that power can only be distributed in amounts of 40 amps, 100 amps and 200

16         amps.

17                 DC Power Consumption, however, is addressed in separate sections of the

18         Tariff.63 DC Power Consumption consists of the “use of the DC power plant system,”

19         and is clearly a “Per AMP” charge.64 The rates for DC Power Consumption are not

20         expressed in increments of 40 amps, 100 amps, and 200 amps, as one would expect under


     63    SBC-Michigan Physical Collocation Tariff, § 20.5 and § 21.5.
     64    Id.
     (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                   MPSC Case No. U-13531
                                                                            Page 143 of 153

 1    SBC-Michigan’s interpretation, but instead are expressed on a monthly per amp basis and

 2    should be based on “usage” as Section 20.5 notes.

 3           Two separate power elements are involved in collocation: power delivery and

 4    power consumption. The two separate elements cost out completely different aspects of

 5    the costs involved in provisioning power. Power delivery is a non-recurring charge, and

 6    is the one time cost to extend a power arrangement to the collocation arrangement.

 7    Power consumption is a monthly recurring charge, and recovers the costs associated with

 8    the BDFB back towards the batteries, the rectifiers, and the backup generator. A simple

 9    analogy is that power delivery is akin to the amount that would be paid to an electrician

10    to wire a new house, while power consumption is similar to the monthly amounts you

11    pay the electric company.

12           SBC-Michigan’s interpretation nullifies the ability of a collocator to use power on

13    a per amp basis, and instead assumes that every collocator uses DC Power in an amount

14    equal to twice the amperage of the cable feeds provisioned in the DC Power Delivery

15    Arrangement. Thus, under SBC-Michigan’s interpretation, a collocator can only use DC

16    Power in increments of 40, 100, or 200 amps, despite the clear language of the Tariff that

17    provides that DC Power is provided on a per amp basis. SBC-Michigan’s interpretation,

18    by focusing on language regarding DC Power Delivery Arrangements in Section 20.10

19    and 21.10 to the exclusion of language relating to DC Power Consumption in Sections

20    20.5 and 21.5, establishes, in effect, a presumption regarding the amount of DC Power

21    consumed by a collocator.
          (PUBLIC VERSION)                         Initial Testimony of Steven E. Turner (Collocation)
                                                                             MPSC Case No. U-13531
                                                                                      Page 144 of 153

 1   Q.    WHEN YOU WERE DEVELOPING THE TARIFF IN TEXAS (WHICH IS THE
 2         FOUNDATION OF THE CURRENT TARIFF IN MICHIGAN) DID SBC
 3         PROPOSE THIS TYING ARRANGEMENT YOU HAVE DESCRIBED?

 4   A.    Yes. And it was rejected. It is important for the Commission to note that SBC proposed

 5         precisely such a scheme during the tariff discussions that followed the Commission’s

 6         collocation rate decisions in Docket No. 21333. However, it was clear at the time of

 7         these tariff discussions that the Commission had ordered that DC power be priced on a

 8         per amp basis and therefore the CLECs rejected SBC’s proposed tariff structure. The

 9         resulting structure found in the tariff for sections 20.5 and 21.5 reflect SBC and the

10         CLECs implementation in tariff language of the result of the Commission’s cost decision.

11         This same structure has been incorporated into the Michigan Physical and Virtual

12         Collocation Tariffs.

13                 Given that the current tariff clearly provides that collocators can order power on a

14         per amp basis, and that the DC Power Consumption element is defined in terms of the

15         power actually used by a collocator, SBC-Michigan’s interpretation cannot stand. A

16         reasonable starting point in attempting to determine the correct method of applying the

17         DC Power Consumption rate would and should be the language of the current tariff itself

18         relating to the rate element. SBC conveniently ignores this actual language, relying

19         instead on the Power Delivery element. The Power Delivery rate is not in dispute,

20         however, and provides little guidance as to the correct method of applying the Power

21         Consumption rate. The only function it serves in this proceeding is to demonstrate the

22         lengths to which SBC-Michigan has gone to attempt to justify its extortionate

23         interpretation of the current tariff.
          (PUBLIC VERSION)                    Initial Testimony of Steven E. Turner (Collocation)
                                                                        MPSC Case No. U-13531
                                                                                 Page 145 of 153

 1   Q.    HOW DOES METERING MAKE THIS ENTIRE ISSUE MOOT?

 2   A.    SBC’s position regarding redundant power is, at bottom, nothing more than an attempt to

 3         require CLECs to pay “money for nothing.” SBC-Michigan’s position is that it must be

 4         permitted to charge for power available via both the “A” and “B” feeds because SBC-

 5         Michigan incurs the cost in making the power available to collocating CLECs who may

 6         use power from both feeds. Such a claim, however, is overly simplistic and misses the

 7         crux of the case. As discussed above, the fact that CLECs may use power from both

 8         feeds does not establish that CLECs use the maximum amount of power capable of being

 9         provisioned over both feeds. In fact, in my experience it would be poor engineering

10         judgment to design the power usage in the collocation arrangement to ever use more than

11         half of the power available over either arrangement so that in the event of failure on one

12         side, the power can be drawn in full from the other.

13                Without establishing that CLECs do in fact use power from both feeds in the

14         maximum amount, SBC-Michigan’s position regarding the DC Power Delivery

15         arrangements setting the level of DC Power Consumption to charge for is nothing more

16         than an attempt to extort additional monies from CLECs for services not actually

17         provided. SBC-Michigan has never asserted to my knowledge that collocators have

18         changed the manner in which their equipment draws power. However, despite the fact

19         that collocators continue to utilize power in the manner in which they have always

20         utilized power, SBC-Michigan has changed its policies to double the DC Power

21         Consumption charges assessed on collocators.

22                There is no provision in the current tariff (which is the one that I wrote for this

23         Commission based on work done in Texas) that authorizes SBC-Michigan to charge for
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                   Page 146 of 153

1          anything other than DC power actually consumed by collocators. Section 20.5 defines

2          the DC Power Consumption rate element, and Section 21.5 contains the DC Power

3          Consumption recurring charges on a per amp basis for each form of collocation. Neither

4          of these sections contains any provision which allows SBC-T to charge for both power

5          consumed and redundant power. Indeed, it is clear from both the title and description of

6          the DC Power Consumption rate element that charging for redundant power is not

7          appropriate; the rate element is specifically called “DC Power Consumption” – not

8          simply “DC Power,” and the rate element is described as the “use of the DC power

 9         system.”65

10                Accordingly, the Commission should not only reject SBC-Michigan’s

11         interpretation of the tariff, but clarify in this case that under the clear terms of the current

12         tariff itself, SBC-Michigan is only permitted to charge for DC Power actually used or

13         consumed by collocators, regardless of the power delivery arrangements ordered by a

14         collocator. Thus, under the tariff, if a collocator ordered a 200 amp power delivery

15         arrangement (consisting of two 100 amp feeds), but the telecommunications equipment in

16         the collocation arrangement only drew a total of 38 amps of DC Power, under the express

17         terms of the tariff, SBC-Michigan should only be allowed to charge the collocator for 38

18         amps of DC Power, not 200 amps, as under SBC-Michigan’s interpretation of the tariff.

19         CLECs could well have in place power delivery arrangements that far exceed their



     65    There is a reference in § 20.5 to “redundant DC power” and the increments of feeder that can be
           acquired from SBC-Michigan. However, the issue of redundancy here is related to having both
           AC input and AC backup (through the use of a backup generator) and the language in this section
           still focuses on the “use of the DC power system” not established increments of consumption.
          (PUBLIC VERSION)                   Initial Testimony of Steven E. Turner (Collocation)
                                                                       MPSC Case No. U-13531
                                                                                Page 147 of 153

 1         current DC power requirements, either because they have counted on future growth or

 2         because they have decommissioned some equipment. Just as SBC-Michigan should not

 3         be allowed to assume that a CLEC is always using the maximum amount of power over a

 4         power delivery arrangement (which it labels “redundant power”), neither should it be

 5         allowed to assume that a CLEC is even using the full amperage of one of the feeds over a

 6         power delivery arrangement. The long and short of it is that SBC-Michigan should be

 7         required to comply with the tariff:     SBC-Michigan should not be allowed to bill

 8         collocators for hypothetical amounts of power not actually used by a CLEC, whether in

 9         the form of redundant power or power not actually consumed by the CLEC’s equipment.

10         It is in this regard that if the Commission explicitly acknowledges SBC-Michigan’s

11         requirement that it meter DC Power Consumption, this issue of redundant power would

12         be rendered moot in that the CLECs would explicitly pay for the power that they

13         consume.

14   Q.    HAS THIS ISSUE BEEN ADDRESSED BY ANY COMMISSIONS?

15   A.    Yes. The Texas Public Utilities Commission (Texas PUC) decided this precise issue in

16         2003. The Texas PUC ultimately determined that SBC was only authorized to charge for

17         the power consumed by the collocator. Specifically, the arbitrators noted: “Consistent

18         with the tariff’s clear language, the Arbitrators find that it is inappropriate to charge

19         collocators for the DC consumption based on the total current carrying capacity of the A

20         and B feeds rather than the actual usage, either retroactively or on a going forward
          (PUBLIC VERSION)                     Initial Testimony of Steven E. Turner (Collocation)
                                                                         MPSC Case No. U-13531
                                                                                  Page 148 of 153

 1         basis.”66 The Arbitrators further recognized that metering arrangements were not in

 2         place in Texas, but found that SBC in Texas must nonetheless develop a process for

 3         charging CLECs that is consistent with the tariff. The Arbitrators agreed with AT&T’s

 4         position that the collocation application, which requires CLECs to list the equipment

 5         contained in the collocation arrangement and the total power draw, could be used to

 6         determine the DC Power Consumption in the absence of metering. Thus, the Arbitrators

 7         suggested that SBC in Texas may base its monthly recurring charge for the DC Power

 8         Consumption element on a per-amp basis as specified in Section 21.6 of the tariff using

 9         one of the following options:

10                  1.     Total DC power consumption in terms of ampere draw of
11                         all equipment collocated by the CLEC based on the
12                         information obtained from the CLEC through its
13                         collocation application form; or

14                  2.     The maximum current carrying capacity of either A or B
15                         feed; or

16                  3.     Based on the establishment of a mutually-agreeable
17                         metering arrangement.67

18         In short, the Arbitrators for the Texas PUC clearly understood the language of the tariff

19         that forms the basis for our tariff in Michigan as requiring that DC Power Consumption

20         only be paid for at the level of usage that the CLEC consumes. The only issue is how

21         that consumption is identified. This Commission should make the same recommendation


     66    Texas Public Utilities Commission, Arbitration Award, Complaint of Birch Telecom of Texas
           Ltd., L.L.P., AT&T Communications of Texas L.P., TCG Dallas, Teleport Communications of
           Houston, Inc. Against Southwestern Bell Telephone Company, LP for Post-Interconnection
           Dispute Regarding Overcharges for Power Under SBC-Texas’ Physical Collocation Tariff,
           Docket No. 27559, September 15, 2003, p. 10.
     67    Id. at p. 11.
          (PUBLIC VERSION)                      Initial Testimony of Steven E. Turner (Collocation)
                                                                          MPSC Case No. U-13531
                                                                                   Page 149 of 153

 1         to take this clear double-count (and often more) of DC Power Consumption away from

 2         SBC-Michigan.

 3   Q.    HAS THIS ISSUE BEEN ADDRESSED ANYWHERE ELSE?

 4   A.    Yes. SBC seems to recognize that its position regarding charging for the full capacity on

 5         both the A- and B-Feeds of the DC Power Delivery arrangement is inappropriate. SBC

 6         as part of its 271 efforts made an offer to only charge CLECs for half of the maximum

 7         amount of each feed effectively recognizing that the remaining capacity can be used by

 8         the CLEC in the event that the one of the feeds fails.68 In other words, SBC offered to

 9         give up its “recent” interpretation of the tariff regarding redundant power as long as the

10         collocator acknowledged that it would not use more than this amount.

11   Q.    IS THIS SUFFICIENT IN YOUR OPINION?

12   A.    Effectively, this does not address the larger issue that CLECs will still be paying for DC

13         Power Consumption under this arrangement that the CLEC does not use. SBC explicitly

14         requires the CLEC to agree to pay for power that it will not use as follows: “Specifically,

15         the amendments would provide (among other things) that, if a CLEC in Indiana or Ohio

16         warrants that it will at no time draw more than fifty percent of the combined ordered

17         capacity of the leads that are fused for a collocation arrangement, Indiana Bell or Ohio

18         Bell (as appropriate) will bill that CLEC for DC collocation power at a monthly recurring

19         rate of $9.68 per ampere (“AMP”) applied to fifty percent of the combined ordered




     68    SBC Ex Parte Presentation, Application by SBC Communications, Inc. et al. for Provision of In-
           Region, InterLATA Services in Illinois, Indiana, Ohio, and Wisconsin, WC Docket No. 03-167,
           September 29, 2003.
          (PUBLIC VERSION)                   Initial Testimony of Steven E. Turner (Collocation)
                                                                       MPSC Case No. U-13531
                                                                                Page 150 of 153

 1         capacity of the leads that are fused.”69 Given that CLECs would not even design their

 2         collocation arrangement to ever use more than 50 percent of the combined ordered

 3         capacity of the leads, this results in the CLEC essentially agreeing to pay for the

 4         maximum usage of the DC Power Consumption regardless of whether the CLEC uses

 5         that amount of power or not. In most instances they would not. As such, this agreement

 6         only returns the tariff interpretation back to where it was prior to SBC’s extortion

 7         attempt. This offer does not resolve the bigger problem of CLECs paying for DC Power

 8         Consumption that they do not use even though the tariff is clear that DC power should be

 9         charged for usage on a per DC amp basis. This problem can only be resolved through the

10         implementation of a metering arrangement (or equivalent) in Michigan.

11   Q.    DOES THIS CONCLUDE YOUR INITIAL TESTIMONY?

12   A.    Yes, it does.




     69    Id. at p. 1.
                                       Exhibit SET-COLLO-3
                                         MPSC Case U-13531
           Initial Testimony of Steven E. Turner (Collocation)

COLLOCATION COST MODEL



       VERSION 3.0



      WHITE PAPER



    AT&T Corporation
           &
MCI WorldCom, Incorporated




     January 16, 2004
                                                                                                Exhibit SET-COLLO-3
                                                                                                  MPSC Case U-13531
                                                                    Initial Testimony of Steven E. Turner (Collocation)

                                                      Table of Contents

Introduction .................................................................................................................................5

           1.         Overview of White Paper.....................................................................................5
           2.         Collocation Options Included in the Collocation Cost Model ...............................6
           3.         Structure of the White Paper ...............................................................................6
           4.         Inter-Relationship of the Six Forms of Collocation ..............................................7

Section 1 – Physical Collocation...............................................................................................10

           1.         Introduction........................................................................................................10

                      1.1        Purpose of Study ...................................................................................10
                      1.2        Overview of Physical Collocation...........................................................10

           2.         Collocation Costs Can Easily Be Overstated by an ILEC..................................15

           3.         Central Office Planning .....................................................................................17

                      3.1        Previous Planning Practices ..................................................................17
                      3.2        Best Practice Planning Strategies .........................................................21

           4.         Overview of Assumptions Used in the Collocation Model .................................22

                      4.1        Forward-Looking Central Office Model Layout ......................................22
                      4.2        Central Office Collocation Area Model...................................................28
                      4.3        Common Interface Equipment ...............................................................30
                      4.4        Overhead Common Systems Infrastructure ..........................................31

           5.         DC Power and Grounding Elements .................................................................35

                      5.1        Overview................................................................................................35
                      5.2        Power Distribution Components ............................................................42
                      5.3        Power Consumption Components .........................................................44
                      5.4        Equipment Grounding Components ......................................................46

           6.         Access (Entrance Fiber) Components...............................................................48

                      6.1        Overview................................................................................................48
                      6.2        Fiber Entrance Components..................................................................48

           7.         Copper and Optical Connectivity Components..................................................50

                      7.1        Overview of Connectivity Models...........................................................50
                      7.2        Voice Grade Model Requirements.........................................................52
                      7.3        DS-1 Model Requirements Using a Manual DSX ..................................53
                      7.4        DS-1 Model Requirements Using an Electronic DCS............................54
                      7.5        DS-3 Model Requirements Using a Manual DSX ..................................55



                                                                                                                                                  2
                                                                                            Exhibit SET-COLLO-3
                                                                                              MPSC Case U-13531
                                                                Initial Testimony of Steven E. Turner (Collocation)

                    7.6       DS-3 Model Requirements Using an Electronic DCS............................56
                    7.7       Optical Model Requirements .................................................................57

          8.        Land and Building Elements..............................................................................57

                    8.1       Overview................................................................................................57
                    8.2       Placement and Security Issues .............................................................59
                    8.3       Collocation Construction Components ..................................................60
                    8.4       Cost of Floor Space ...............................................................................67
                    8.5       Real Estate Resources ..........................................................................68

          9.0       Process Issues ..................................................................................................69

                    9.1       ILEC Manpower Requirements..............................................................69
                    9.2       Implementation Intervals........................................................................71

Section 2 – Virtual Collocation ..................................................................................................73

          1.        Introduction........................................................................................................73

                    1.1       Purpose .................................................................................................73
                    1.2       Overview of Virtual Collocation..............................................................73

          2.        Cost of Building and Relay Racks .....................................................................75

          3.        Connectivity .......................................................................................................77

                    3.1       Overview of Connectivity Length Assumptions......................................77
                    3.2       Overhead Common Systems Infrastructure Components .....................79

          4.        Copper and Optical Connectivity Components..................................................81

                    4.1       Overview of Connectivity Models...........................................................81
                    4.2       Virtual Voice Grade Model Requirements .............................................83
                    4.3       Virtual DS-1 Model Requirements Using a Manual DSX.......................84
                    4.4       Virtual DS-1 Model Requirements Using Electronic DCS......................85
                    4.5       Virtual DS-3 Model Requirements Using a Manual DSX.......................86
                    4.6       Virtual DS-3 Model Requirements Using Electronic DCS......................87
                    4.7       Virtual Optical Model Requirements Using Fiber Frame .......................88
                    4.8       Intra-CLEC Virtual Copper and Optical Model Requirements ...............89

          5.        DC Power and Grounding Elements .................................................................89

                    5.1       Overview................................................................................................89
                    5.2       Power Distribution Components ............................................................92
                    5.3       Power Consumption Components .........................................................93
                    5.4       Equipment Grounding............................................................................93




                                                                                                                                             3
                                                                                          Exhibit SET-COLLO-3
                                                                                            MPSC Case U-13531
                                                              Initial Testimony of Steven E. Turner (Collocation)

         6.        Access (Entrance Fiber) Components...............................................................94

                   6.1       Overview................................................................................................94
                   6.2       Fiber Entrance Components..................................................................94

         7.        Process Issues ..................................................................................................96

                   7.1       ILEC Manpower Requirements and Implementation Intervals ..............96

         8.        Operational Issues ............................................................................................97

                   8.1       Maintenance Activity..............................................................................97
                   8.2       Security Escorts.....................................................................................98
                   8.3       Response Times and Charging Increments ..........................................98
                   8.4       Circuit Packs..........................................................................................99
                   8.5       Training of ILEC Technicians.................................................................99

Section 3 – Alternative Forms of Collocation ..........................................................................100

         1.        Cageless Collocation.......................................................................................100

                   1.1       Definition and Need for Collocation Form............................................100
                   1.2       Unique Attributes .................................................................................101

         2.        Common Collocation .......................................................................................102

                   2.1       Definition and Need for Collocation Form............................................102
                   2.2       Unique Attributes .................................................................................103

         3.        Adjacent Physical Collocation – On-Site .........................................................106

                   3.1       Definition and Need for Collocation Form............................................106
                   3.2       Unique Attributes .................................................................................108

         4.        Adjacent Physical Collocation – On-Site .........................................................114

                   4.1       Definition and Need for Collocation Form............................................114
                   4.2       Unique Attributes .................................................................................116




                                                                                                                                          4
                                                                       Exhibit SET-COLLO-3
                                                                         MPSC Case U-13531
                                           Initial Testimony of Steven E. Turner (Collocation)

                                      Introduction

1.   OVERVIEW OF WHITE PAPER

     AT&T and MCI, in an effort to develop the forward-looking costs associated with various

     forms of collocation, put together a team of experts knowledgeable in the different

     aspects of collocation.     Specifically, the team was comprised of individuals with

     extensive background in central office space planning, cable engineering, power

     engineering, outside plant design, and other areas pertinent to collocation.

            The following White Paper details the engineering and modeling assumptions

     utilized by this team of experts in developing the underlying inputs in the AT&T/MCI

     Collocation Cost Model. In general, this White Paper will outline the critical engineering

     judgements made by the team of experts in developing the key cost drivers behind the

     various forms of collocation.

            By design, this White Paper goes into significant detail regarding the

     assumptions surrounding the development of costs for Physical Collocation.           This

     section of the White Paper (see Section 1) describes the construct of the Model Central

     Office. This portion of the White Paper is critical towards understanding the engineering

     judgements for all subsequent sections of the White Paper in that the Model Central

     Office defines the spatial relationships between different network components with the

     Incumbent Local Exchange Carrier (ILEC) central office. Specifically, it is the Model

     Central Office that defines why the distance calculations between any two points within

     the central office are the specific numbers documented within the model and its

     associated back-up documentation. Moreover, the layout of the Model Central Office

     establishes the many of the realty costs, as well. Subsequent sections of the White

     Paper refer back to this portion of the White Paper, but it is important for the reader to

     understand this section before moving forward into other areas.


                                                                                             5
                                                                       Exhibit SET-COLLO-3
                                                                         MPSC Case U-13531
                                           Initial Testimony of Steven E. Turner (Collocation)

2.   COLLOCATION OPTIONS INCLUDED IN THE COLLOCATION COST MODEL

     Collocation, in essence, is the means by which a Competitive Local Exchange Carrier

     (CLEC) places telecommunications equipment in a space such that the CLEC may

     acquire access to ILEC unbundled elements and interconnection to the ILEC network.

     Note that space is generically used in this definition. The space may be within the ILEC

     central office within a cage area, or within the existing telecommunications equipment

     line-ups of the ILEC, or it may be outside of the ILEC central office altogether. It is the

     location and use of this space that has led the team of experts towards defining six

     variations of collocation:

               1.   Physical Collocation
               2.   Virtual Collocation
               3.   Common Collocation
               4.   Cageless Collocation
               5.   Adjacent Physical Collocation – On-Site
               6.   Adjacent Physical Collocation – Off-Site

     The AT&T/MCI Collocation Cost Model develops the forward-looking cost for each of

     these variations of collocation.   The purpose of this White Paper is to describe the

     engineering and costing assumptions behind each of these forms of collocation as the

     assumptions pertain to the development of the forward-looking cost of each collocation

     option.



3.   STRUCTURE OF THE WHITE PAPER

     Historically, the team of experts who constructed the AT&T/MCI Collocation Cost Model

     began by developing the engineering and cost assumptions for Physical Collocation.

     The details of this development are set out in Section 1 of this White Paper. As alluded

     to above, much of this development work involved defining a Model Central Office that

     would form the basis for many of the key engineering decisions within the model.

     Subsequent to this work, the same team of experts began work on a cost model for



                                                                                              6
                                                                         Exhibit SET-COLLO-3
                                                                           MPSC Case U-13531
                                             Initial Testimony of Steven E. Turner (Collocation)

     Virtual Collocation. The same forward-looking Model Central Office that was used for

     Physical Collocation became the underlying structure for Virtual Collocation. As such,

     Section 2 of this White Paper, which details the engineering and costing assumptions

     behind Virtual Collocation, does not repeat the derivation of the Model Central Office.

     Moreover, the development of the Virtual Collocation Cost Model is largely based on the

     model development for Physical Collocation.

            Thereafter, Common Collocation, Cageless Collocation, and the two forms of

     Adjacent Physical Collocation were added to the model. As with Virtual Collocation,

     these additional forms of collocation rely heavily on the forward-looking Model Central

     Office developed initially to model the costs for Physical Collocation. Further, there are

     many assumptions within the Virtual Collocation Cost Model that were relied upon in the

     development of the costs for Cageless Collocation. In short these four final forms of

     collocation depend heavily on the Physical Collocation and Virtual sections of the White

     Paper. As such, Section 3 of the White Paper, which will detail the unique assumptions

     behind these additional four flavors of collocation, will not reiterate material previously

     described in Section 1 and Section 2.



4.   INTER-RELATIONSHIP OF THE SIX FORMS OF COLLOCATION

     Rather than thinking of these six forms of collocation as six different models, it is more

     helpful to understand that the latter forms of collocation are really variations on the first

     two: Physical Collocation and Virtual Collocation. In viewing the six forms of collocation

     in this way, it may make it easier to understand how the AT&T/MCI Collocation Cost

     Model “fits together.”

            The following diagram illustrates how these six flavors of collocation are derived

     from one another.




                                                                                                7
                                                                            Exhibit SET-COLLO-3
                                                                              MPSC Case U-13531
                                                Initial Testimony of Steven E. Turner (Collocation)

                RELATIONSHIP OF SIX FORMS OF COLLOCATION

                               Physical                   Virtual
                              Collocation               Collocation
                          • CLEC equipment           • CLEC equipment
     Common                 placed in individual       placed in ILEC           Cageless
    Collocation             cages                      equipment rows          Collocation
                          • CLEC performs its        • ILEC performs
• CLEC equipment            own maintenance            maintenance at       • CLEC equipment
  placed in 550 sq.       • Space provided in          CLEC direction         placed in ILEC
  ft. cage with other       wire center in 100       • Space provided in      equipment rows
  CLECs                     sq. ft. increments         ILEC relay rack in   • CLEC performs its
• CLEC performs its       • All forms of               ¼ rack increments      own maintenance
  own maintenance           connectivity             • ILEC owns            • Space provided in
• Space provided in                                    equipment              ILEC relay rack in
  linear feet of lineup                                                       ¼ rack increments
  area within cage                                                          • CLEC owns
• All forms of                                                                equipment
  connectivity                                                              • All forms of
                                                                              connectivity
                               Adjacent                   Adjacent
                               On-Site                    Off-Site
                          • CLEC equipment           • CLEC equipment
                            placed in trailer          placed in off-site
                            outside but                location
                            adjacent to ILEC         • CLEC performs its
                            building                   own maintenance
                          • CLEC performs its        • Fiber and copper
                            own maintenance            (VG and DS1)
                          • Interior space not         connectivity
                            required, but trailer      through entrance
                            rental space               cables
                            required                 • DC power self-
                          • All forms of               provided
                            connectivity
                            through entrance
                            cables
                          • DC power provided
                            by ILEC plant


 This diagram illustrates several key points. First, Common Collocation is not an entirely

 new cost model, but rather, it is a derivation of the Physical Collocation Cost Model.

 Section 3 of this White Paper will go into greater detail as to the specifics of Common

 Collocation, but the bullet points above indicate that the principle difference between it

 and Physical Collocation is that CLECs placed in a Common Collocation Arrangement

 will not have their own cage. Second, Cageless Collocation is virtually entirely based on

 the costs associated with Virtual Collocation. Effectively, the difference between these



                                                                                                   8
                                                                   Exhibit SET-COLLO-3
                                                                     MPSC Case U-13531
                                       Initial Testimony of Steven E. Turner (Collocation)

two options resides in who owns and maintains the equipment. Finally, the two forms of

Adjacent Collocation are variations on the costs associated with Physical Collocation

with one major difference: The collocation trailer (instead of a cage) is located outside of

the ILEC central office.

       There are many more details that will be outlined in Section 3 related to Common

Collocation, Cageless Collocation, Adjacent Physical Collocation – On-Site, and

Adjacent Physical Collocation – Off-Site. However, from an approach standpoint, these

additional four forms of collocation were largely modeled on the approach developed for

Physical Collocation and Virtual Collocation. In other words, one the reader understands

the approach used in these first two forms of collocation, the additional four only require

understanding their unique attributes. They are not entirely new cost models.




                                                                                          9
                                                                            Exhibit SET-COLLO-3
                                                                              MPSC Case U-13531
                                                Initial Testimony of Steven E. Turner (Collocation)

                          Section 1: Physical Collocation

1.   INTRODUCTION

     1.1     PURPOSE OF STUDY

     The purpose of this section of the White Paper is to present a technical model of the

     physical collocation of competitive local exchange carrier (CLEC) equipment in

     incumbent local exchange carrier (ILEC) central office buildings.1 This White Paper

     presents a bottoms-up approach to implementing physical collocation by creating a

     forward-looking collocation model layout based upon the use of best practice central

     office planning strategies, least cost suppliers, and competitive processes. This will

     provide a clear and concise explanation of the physical requirements for efficient

     collocation of CLEC equipment at an ILEC central office. In addition, the White Paper

     provides the technical basis for determining the costs to meet these requirements and

     identifies the investments necessary for an efficient ILEC to provide physical collocation

     to CLECs.



     1.2     OVERVIEW OF PHYSICAL COLLOCATION

     The physical collocation of a CLEC’s equipment is necessary for the efficient

     interconnection of networks, especially when the CLEC is using the ILEC’s unbundled

     loops. Without collocation, there would be no way to concentrate local customer traffic

     and to efficiently transport the traffic to the CLEC’s offices.




1
     Physical collocation also can occur at other places in an ILEC network, such as in the “telco
     closet” in a large office or residential building. Virtual collocation is addressed in Section 2 of the
     White Paper.



                                                                                                         10
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)

           Physical collocation is nothing more than an arrangement that allows a CLEC to

    locate its own telecommunications relay rack equipment in a segregated portion of the

    central office. The CLEC then pays the ILEC for the use of that space within the central

    office and is provided with the ability to enter the central office to install, repair, and

    maintain its collocated equipment. Figure 1A displays the limited number of elements

    required to establish CLEC collocation areas in an ILEC building. As shown, the only

    requirements are for fiber connectivity between the first manhole outside the central

    office and the CLEC’s terminal equipment in the collocation area; -48V DC power

    connectivity between the CLEC equipment and a battery distribution fuse bay (BDFB);

    optical connectivity between the collocation space and the fiber cross-connect; and

    copper connectivity (Voice Grade, DS-1, DS-3) between the collocation area and an

    appropriate ILEC cross-connect. Each of these is discussed in greater detail below.

    The physical demarcation point between the ILEC and CLEC for all copper connections

    is at a point of termination (POT) bay, normally placed in close proximity to CLEC

    equipment.2




2
    While the long-term direction with regard to ILEC/CLEC interconnection may be to eliminate POT
    bays by moving this “physical demarcation” to the ILEC cross-connect, in the near term it is
    advantageous to ensure an easily identifiable line of demarcation in close proximity to the CLEC
    equipment for ease of trouble shooting. Furthermore, the inclusion of a POT bay in the
    collocation area provides CLEC maintenance staff with uninhibited access for testing and repair
    without the requirement for a security escort, which might be required if the demarcation were
    moved to the ILEC cross-connect.




                                                                                                 11
                                                                                 Exhibit SET-COLLO-3
                                                                                   MPSC Case U-13531
                                                     Initial Testimony of Steven E. Turner (Collocation)


                                                                       BDFB

                                          ILEC -48V
        Manhole                         POWER PLANT
                                                                                       Collocation Area

                                                                                POT
                                                                                BAYS
                  Loop                                     VG
                                                                                        Access Transport   Fiber
                  Loop
                              ILEC                                       DS-1
         ILEC
                              MDF                                                      DS-3
        CABLE
        VAULT



                                     DS-1


                                               ILEC
                                     DS-1     DIGITAL
                                              CROSS
                                     DS-1
                                             CONNECT
                           ILEC      DS-3    SYSTEMS
                         NETWORK




                                            FIBER RISER CABLE - CLEC SUPPLIED




                                             Figure 1A

       Collocation is a low technology aspect of a high technology industry. It simply

requires the placement and connection of CLEC equipment in an ILEC central office.

The equipment located in telecommunications central offices typically is placed in metal

relay racks, sometimes called bays. As shown in Figure 1B, these relay racks are

roughly 2’-0” wide, 12” deep, and 7’-0” high. Typically, telecommunications relay racks

are fabricated with pre-drilled ironwork uprights to permit the installation of equipment

shelves on an “as required” basis. Unlike previous vintages of telecommunications

equipment, relay racks currently installed in central offices are generally 7’-0” high,

avoiding any need for complex overhead ironwork arrangements for support. Instead,

they are supported directly on the floor slab using anchors appropriately sized for the

specific seismic zone in which the equipment is installed.                                      Relay racks are placed

adjacent to each other in rows (called “lineups”) to simplify cabling arrangements and

day-to-day maintenance operations.




                                                                                                                   12
                                                    Exhibit SET-COLLO-3
                                                      MPSC Case U-13531
                        Initial Testimony of Steven E. Turner (Collocation)


         Fuse panel



          Equipment
            Shelf




          Equipment             Pre-drilled ironwork uprights
            Shelf



7’-0”
          Equipment
            Shelf
                                               Sheet metal



          Equipment
            Shelf



          Equipment
            Shelf

          Anchors
                                       Floor
                                                                    12”
            2’-0”



        Front View                                              Side View


                      CENTRAL OFFICE RELAY RACK
                      (iron uprights and sheet metal base)




                      Figure 1B




                                                                            13
                                                                            Exhibit SET-COLLO-3
                                                                              MPSC Case U-13531
                                                Initial Testimony of Steven E. Turner (Collocation)



                 BDFB                         EQUIPMENT RACKS




                                                                                     2’-6” to 3’-0”
                                 LINE-UPS



                                            EQUIPMENT RACKS




                                                                                     2’-6” to 3’-0”
                                              EQUIPMENT RACKS




                                                                                     2’-6” to 3’-0”
                        REMOTE -48V BATTERY
                        DISTRIBUTION FUSE BAY


                BDFB                          EQUIPMENT RACKS



                                    5 - 20 EQUIPMENT RELAY RACKS (10’-0-40’-0”)




                              TYPICAL CENTRAL OFFICE RELAY RACK LAYOUT



                                                 Figure 1C
       As shown in Figure 1C, telecommunications equipment line-ups typically can be

as short as ten or as long as forty feet, depending on physical constraints such as the

availability of space and the length of power feeders. Telecommunications equipment

floor layouts typically include both front and rear aisles for maintenance purposes. In

addition, floor layouts incorporate battery power distribution fuse bays -- located every

third or fourth line-up -- to provide -48 Volt power delivery in the most cost-efficient

manner.    It is not uncommon to find 1,000 or more equipment relay racks already

located in a large urban ILEC central office. The installation of a few additional relay

racks of equipment to provide competitive collocation should not be a difficult task,

particularly since ILECs commonly install additional relay racks to provide service to their

own customers on an ongoing basis.




                                                                                                      14
                                                                       Exhibit SET-COLLO-3
                                                                         MPSC Case U-13531
                                           Initial Testimony of Steven E. Turner (Collocation)

2.   COLLOCATION COSTS CAN EASILY BE OVERSTATED BY AN ILEC

     An ILEC has the ability to artificially raise CLEC costs for physical collocation in

     numerous ways, including:

           ⇒ Arbitrary sizing and placement of the collocation area within the central
                office. ILECs have the incentive to place the collocation space far away from
                the ILEC cross-connects. Locating collocation space distant from the cross-
                connects increases CLEC costs because copper connectivity charges (Voice
                Grade, DS-1, DS-3) are length-sensitive. Similarly, the fiber riser charge is
                typically length-sensitive, and power delivery charges increase with
                complexity and distance relative to the shared BDFB and -48V DC power
                plant.


                One common way that ILECs seek to accomplish this is to insist that the
                collocation spaces for all CLECs be located together in the central office,
                thus creating a requirement for a very large space that may not be available
                close to the cross-connects. The efficient approach is to size collocation
                spaces to fit into readily-available, conveniently located space on a first
                come first served basis, in much the same manner as the ILEC would do for
                itself when it requires additional equipment space. Indeed, with the
                deployment of digital equipment -- both in the local access network and to
                replace existing, less space-efficient analog switches in the central office --
                there are many convenient spaces currently available for collocation space
                in ILEC central offices.

           ⇒    Imposing all the costs of government-mandated building code upgrades on
                the CLEC.        ILECs often are required to upgrade buildings to meet
                requirements such as the Americans with Disabilities Act or to incorporate
                the latest building code revisions (e.g., asbestos removal, electrical systems
                upgrades, sprinkler installations).    These costs are not attributable to
                collocators but rather are part of the generic costs of central office space
                which should be borne by all users of the central office.

           ⇒    Using non-competitive "contract prices" with "preferred suppliers" for the
                procurement and resale of interface equipment to CLECs. ILECs have the



                                                                                            15
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

            incentive to employ these practices to artificially raise CLEC costs. This can
            be avoided by basing rates on least cost suppliers, competitive quotes, and
            best practice provisioning principles -- and most effectively by allowing the
            CLEC to purchase its own equipment wherever possible.

       ⇒    Requiring CLECs to absorb excessive and inefficient manpower costs for in-
            house ILEC manpower and the use of non-competitive “preferred”
            consultants.

       ⇒ Inclusion of Time and Material (T&M) or Individual Case Basis (ICB)
            charges.    Charges based on existing inefficient processes and over-
            engineering practices, especially since these charges are “undefined,” can
            become extremely costly to the CLEC since costs are only quantified on a
            case by case basis upon implementation of a collocation request. When a
            CLEC has the business need for a specific collocation space, it is in a
            vulnerable negotiating position. ILECs can use this leverage to artificially
            increase CLECs’ costs by forcing CLECs to delay their business plans while
            challenging specific charges.      Furthermore, any charge that simply
            reimburses ILECs for their time and materials on an individual cost basis
            provides the ILECs with no incentive to pursue efficiencies and improved
            competitive processes.


       The collocation model that is described in this White Paper is based on best

practice central office planning strategies and input prices that reflect those charged by

competitive suppliers. As a result, both ILEC customers and CLEC customers benefit

from the most efficient use of the central office. In addition, the collocation model that

has been developed is extremely flexible, providing costs for elements that a CLEC may

require in a collocation area.   Specifically, there are no hidden sub-charges.      This

enables the collocation cost model outputs to be used to construct a flexible tariff that

can meet the requirements of an individual collocator at a specific ILEC central office,

with an easily defined single end-to-end charge for each element.




                                                                                       16
                                                                         Exhibit SET-COLLO-3
                                                                           MPSC Case U-13531
                                             Initial Testimony of Steven E. Turner (Collocation)

3.   CENTRAL OFFICE PLANNING

     3.1    PREVIOUS PLANNING PRACTICES

     Many central offices were originally designed and built to accommodate very different

     technological requirements for equipment space, connectivity, air cooling requirements,

     etc. Modern switching and transmission equipment present different requirements. As a

     result, most ILEC central offices, and in particular large urban and suburban central

     offices, currently have the following characteristics.3

            ⇒ Large multi-floor buildings with floors dedicated and reserved for specific
                 equipment
            ⇒ Various sized “pockets” of space scattered throughout the central office,

                 created by the replacement of analog equipment with more space efficient

                 digital technologies

            ⇒ These “pockets ” currently may be vacant, used by administrative staff, or

                 still have unused analog equipment retired-in-place

            ⇒ Lengthy and indirect cable routes caused by congestion in the overhead

                 cable racks as a result of removing previous equipment without removing

                 cables

            ⇒ Multiple voice grade cross-connects using a Main Distribution Frame and

                 various Intermediate Distribution Frames with complex inter-DF tie cable

                 systems resulting in excessive cable lengths and additional points of failure

     Most of the above characteristics are the result of ILEC planning strategies that are no

     longer efficient.    For example, when faced with new technologies or modernization

     requirements in its already large urban central offices, ILECs traditionally have

     responded by either adding floors to the building or extending the building horizontally




                                                                                             17
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)

    (rather than with forward-looking planning strategies that minimize the overall, long-term

    requirement for building space). As a result, central offices throughout the country tend

    to be larger than necessary. The worst case scenarios, in terms of efficient utilization of

    equipment space, are usually the large urban, multiple-floor central offices, which

    normally have significant amounts of space previously utilized for equipment now utilized

    by administrative or support personnel.

           The situation is further exacerbated by the fact that many existing central offices

    have congested overhead cable racking and/or blocked inter-floor cable holes, caused

    by removing equipment without also removing the unused cables that once connected

    this equipment from overhead racks. These conditions often make direct routing of

    cable difficult if not impossible -- particularly when cables are routed between floors

    and/or over existing equipment areas. At times, new cables must be routed around

    congestion or additional cable racking must be installed to alleviate congestion areas.

    The result is much longer than necessary cabling lengths.              Costs can easily be

    manipulated according to the placement of a collocation area by the ILEC.

           Figure 3A provides an illustrative example of the overhead cable congestion that

    currently exists in most large urban central office buildings and the resultant excessive

    fiber, power, and copper cross-connect connectivity lengths created as a result of this

    embedded ILEC practice.




3
    As discussed below in Section 4.1, although the collocation model reflected in this White Paper
    was developed assuming that the collocation space would be located in a large, urban ILEC
    central office, the collocation model is also applicable in non-urban central offices.



                                                                                                18
                                                                         Exhibit SET-COLLO-3
                                                                           MPSC Case U-13531
                                             Initial Testimony of Steven E. Turner (Collocation)



                                                                    COLLOCATION
                                                                        AREA
               COMPUTER                        MISCELLANEOUS           (E/W CAGES)
                                   ADMIN         EQUIPMENT
                 ROOM              SPACE                          CLEC
                                                                  EQPT.
     FLOOR 5

                                   INDIRECT CABLE ROUTES
                 DMS                 DUE TO CONGESTION
                POWER
                PLANT              SWITCHING FLOOR (2)

     FLOOR 4




                                    TRANSMISSION FLOOR                 ADMIN
                 DSX /                                                 SPACE
                 DCC                     ILEC
                                       TERMINAL
                                         EQPT.
     FLOOR 3




                ADMIN
                SPACE         SWITCHING FLOOR (1)



     FLOOR 2

                    TIE CABLES


                                                               ADMIN
                  MDF




                             IDF




                                                               SPACE


     FLOOR 1

                                                             ORIGINAL
                                                           POWER PLANT
                                                                             CABLE
                           CABLE VAULT                                     ENTRANCE
    BASEMENT



                        EXISTING CO SPACE PLANNING DESIGN


                                       Figure 3A

The deployment of digital switching and transmission technologies that are far more

space-efficient than their analog predecessors, and the advent of distributed remote

switching modules in the local access network, have resulted in a requirement for less

equipment space in the central office and have reduced cross-connect complexity for

voice grade connections. Thus, central offices built in the past five years have been and

going forward can be designed according to a more “forward looking” space planning



                                                                                             19
                                                                               Exhibit SET-COLLO-3
                                                                                 MPSC Case U-13531
                                                   Initial Testimony of Steven E. Turner (Collocation)

scenario that results in smaller buildings, fewer floors, less overall square footage, and

shorter and more direct cable routing. Figure 3B provides an illustrative example.




                      MULTI-MEDIA / DATA / COMPUTER EQPT.           COLLOCATION
                                                                        AREA
                                                                     E/W CAGES


         FLOOR 3
                    DCC     DSX
                                      SHORT / DIRECT CABLE ROUTES


                                                                       POWER
                                  TRANSMISSION / TOLL EQUIPMENT        PLANTS
                            FDF


         FLOOR 2

                          MDF




                                      MDF / SWITCHING EQUIPMENT
         FLOOR 1



                                                CABLE VAULT
                                                                                    CABLE
                                                                                  ENTRANCE

        BASEMENT



                     FORWARD-LOOKING C.O. SPACE PLANNING DESIGN



                                           Figure 3B

As depicted in Figure 3B, an urban central office built today or in recent years requires

only three equipment floors and, unlike many existing urban ILEC central offices, has the

following connectivity characteristics:

                   ⇒ Shorter and more direct cable routes

                   ⇒ Less cable congestion

                   ⇒ A single Main Distribution Frame for voice grade connections

Thus, even in an urban environment, an efficient, forward-looking collocation area would

not be more than two floors from the cross-connects.




                                                                                                   20
                                                                   Exhibit SET-COLLO-3
                                                                     MPSC Case U-13531
                                       Initial Testimony of Steven E. Turner (Collocation)



3.2    BEST PRACTICE PLANNING STRATEGIES

The methodology used in this model is to use an efficient, forward-looking central office

model layout (such as the one displayed in Figure 3B) and current best practice central

office planning strategies to calculate average connectivity lengths.     These average

connectivity lengths will be calculated for the fiber riser between the cable vault and the

collocation area, the power distribution cabling between collocation equipment and the

BDFB, and the optical and copper connections between the collocation area and

appropriate ILEC cross-connect. These connectivity lengths are used in subsequent

stages of the Collocation Model to establish investment levels required for efficient

collocation.

       The use of forward-looking average connectivity lengths developed from the

central office model layout is appropriate because many existing urban central office

conditions are simply not reflective of an efficient approach to central office space

planning.      If collocation charges were based on existing central office conditions,

unnecessary and discriminatory cost penalties would be imposed on CLECs. These

collocation charges would reflect costs that the ILEC would not incur to provide for its

own customers because it can place its own equipment in a manner that minimizes the

deleterious effect of central office congestion. Furthermore, a forward-looking approach

to determining average connectivity length ensures that both parties have the incentive

to work toward the realization of a best practice and least cost space planning scenario

on a case-by-case basis.

       Examples of how a forward-looking central office model layout and average

connectivity lengths can be employed to promote best planning practices within existing

central office environments include:




                                                                                        21
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)

            a) Using more than one vacant pocket of space to create multiple collocation
               areas on a first come first served basis;
            b) Relocating existing administrative staff currently located in prime equipment
               space to make that space available for collocation; and
            c) Removing retired-in-place equipment currently located in prime equipment
               space to make that space available for collocation.
     In short, calculating average connectivity lengths based on a forward-looking central

     office model layout ensures that an ILEC will apply the same type of best practice space

     planning strategies for collocating CLECs as the ILEC will use for placement of its own

     equipment within the central office.          It minimizes the potential that large, costly

     collocation areas would be created in remote areas of the central office, and forces both

     parties to work together, improving the likelihood that both the ILEC and CLEC are

     treated equally.



4.   OVERVIEW OF ASSUMPTIONS USED IN THE COLLOCATION MODEL

     4.1    FORWARD-LOOKING CENTRAL OFFICE MODEL LAYOUT

     As noted above, the Collocation Model relies upon a forward-looking central office model

     layout to establish efficient collocation requirements. This central office model layout

     assumes a new urban central office designed for up to 150,000 lines, together with

     associated transport, power, multi-media, and miscellaneous equipment space. Such an

     office would need approximately 36,000 square feet of equipment space -- or three

     equipment floors of about 12,000 square feet (100 feet x 120 feet) each -- plus a below-

     ground cable vault. (See Figures 4A and 4B.) The central office model layout also

     assumes an additional 3,000 square feet on each floor and the entire basement (except

     for the cable vault area). This area provides a generous allowance for building support

     services such as main corridors, elevators, washrooms, lunch rooms, conference

     facilities, administrative areas, electrical rooms, and mechanical rooms. This results in

     an overall footprint of 15,000 square feet.


                                                                                             22
                                                                    Exhibit SET-COLLO-3
                                                                      MPSC Case U-13531
                                        Initial Testimony of Steven E. Turner (Collocation)

       The best practice central office planning strategy -- shown in Figure 4B --

provides adequate space for the long-term requirements associated with a forward-

looking, urban central office and is representative of central office layouts that would

have been constructed in recent years to accommodate growth in a downtown urban

environment. New central offices designed for areas outside of urban centers would

likely consist of only one or two floors above the cable vault, requiring shorter cable

connectivity lengths. Hence, the forward-looking physical central office model layout

incorporates    conservative    assumptions      in   terms    of   recent    central   office

telecommunications building deployment and is likely to be significantly larger than the

average central office across the ILEC territory.

       The forward-looking central office model layout being relied upon can also be

used for central offices located outside the downtown core or for situations where the

ILEC’s primary central office is not expected to grow to three floors due to

demographics. The impact would be minimal, because even a single switch central

office in a one-floor building is likely to utilize a footprint of approximately 15,000 square

feet with all equipment placed on the same floor.         Thus, the use of this model for

suburban central offices and for ILECs that may not have multi-floor central offices in the

downtown core, would mean that the average connectivity lengths for fiber, copper and

power would be over-stated by about 20-40 feet (i.e. the distance between floors). The

only other area that would be affected is the land and building calculation. However,

because the land and building calculation is based on assignable space, the impact on

floor space rental is likely minimal. The land cost used in the cost model is a default

value and can be adjusted to suit local conditions.




                                                                                           23
                                                     Exhibit SET-COLLO-3
                                                       MPSC Case U-13531
                         Initial Testimony of Steven E. Turner (Collocation)



                              100’-0”




            EQUIPMENT SPACE             = 12,000 SQ. FT.
                                           (PER FLOOR)
  120’-0”




            TOTAL BUILDING SPACE = 15,000 SQ. FT.
                                   (PER FLOOR)




            ADDITIONAL BUILDING SUPPORT SPACE (APPROX. 25%)




                          SUMMARY
 EQUIPMENT SPACE PER FLOOR                  = 12,000 SQ. FT.
 TOTAL FOOTPRINT PER FLOOR                  = 15,000 SQ. FT.
 NUMBER OF FLOORS                           =        3
 TOTAL EQUIPMENT SPACE                      =   36,000 SQ. FT.
 TOTAL ABOVE GROUND FLOOR SPACE             =   45,000 SQ. FT.

CABLE VAULT AND BUILDING SERVICES           = BELOW GROUND



FORWARD LOOKING URBAN CENTRAL OFFICE

                         Figure 4A




                                                                         24
                                                                       Exhibit SET-COLLO-3
                                                                         MPSC Case U-13531
                                           Initial Testimony of Steven E. Turner (Collocation)




                    MULTI-MEDIA & DATA     SUPPORT COMPUTER          TANDEM            COLLO
                       EQUIPMENT               SYSTEMS              SWITCHING           AREA
                         5000 S. F.            3400 S. F.            2500 S. F.       1100 S. F.

    FLOOR 3



                  HIGHER
                   LEVEL          TRANSPORT             MISC.           -48V POWER      COLLO
               X-CONNECTS         EQUIPMENT          EQUIPMENT      (DIGITAL & COMMON)  AREA
                 2000 S. F.        4450 S. F.         2000 S. F.          3000 S. F.   550 S. F.


    FLOOR 2




                                                                                      COLLO
                                                DIGITAL SWITCHING
               MDF COMPLEX                                                             AREA
                                                   2 x 75 k LINES
                 2400 S. F.                                                          1100 S. F.
                                                     8500 S. F.


    FLOOR 1


               DUAL ENTRANCE                BUILDING SERVICES / LUNCHROOMS /
                      &                    CONFERENCE FACILITIES / ADMIN. AREAS
                CABLE VAULT                             9600 S. F.
                  2400 S. F.
    BASEMENT


                        BEST PRACTICE SPACE PLANNING MODEL


                                          Figure 4B
       To ensure efficient connectivity arrangements, similar to those incurred by the

ILEC in deploying its equipment, the model establishes collocation areas using pockets

of existing vacant or administrative space in the central office. To be conservative, the

model calculates the average connectivity lengths based on a minimum and maximum

scenario. For the maximum cable length, the model uses a worst case scenario with the

collocation area located on the top floor (Floor 3) of the central office layout, the cross-

connects located on Floor 1, and the collocation area at the extreme opposite corner of

the building from where the cross connects are located. Based on this premise, there

would be a two-floor distance between the collocation area and the ILEC cross-




                                                                                                   25
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)

    connects. For the minimum cable length, the model uses a best case scenario and

    assumes that the collocation area is located on the same floor and in close proximity to

    the ILEC cross-connects. However, since physical collocation requires the construction

    of cages, it is unlikely that a new collocation area could be built directly adjacent to ILEC

    cross-connects. Therefore, the best case scenario includes a 40-foot minimum length

    between the collocation area and the ILEC cross-connects. Both scenarios include a

    15-foot cable drop (i.e., 7’6” on each end). Hence, the forward looking best practice

    central office model layout used in the model generates minimum and maximum

    copper connectivity lengths of 55 and 275 feet.4 The model therefore uses an average

    connectivity length of 165 feet for Voice Grade, DS-1, or DS-3 cabling between the

    CLEC collocation area and the appropriate ILEC cross-connect. The optical connectivity

    length is 190 feet to account for the fact that optical connections will not use a POT bay

    in the common area.

           These average connectivity lengths of 165 feet and 190 feet are appropriate

    forward-looking assumptions. This is principally because central offices built today and

    in the future would not have the inherent cost penalties associated with cable

    congestion, blocked cable holes, multiple MDFs, inter-DF tie cable systems and other

    limitations which can easily be manipulated to increase the cost of entry for CLECs. As

    shown in Figure 4C, when ILECs install the same type of multiplexing and fiber terminal

    equipment for themselves as for the CLECs, the average cable distance tends to be in

    the 100 to 125 foot range. This is because the equipment would be placed on the same

    floor and as close as possible to ILEC cross-connects. Thus, the model conservatively




4
    These extremes were determined as follows: equipment area width = 100 feet; equipment area
    length = 120 feet; distance between floors = 20 feet; cable drop to equipment at both ends = 15
    feet. So the maximum two-floor distance would be 100’ + 120’ + 20’ + 20’ + 15’ = 275’, and the
    minimum same-floor distance would be 20’ + 20’ + 15’ = 55’.



                                                                                                26
                                                                                                  Exhibit SET-COLLO-3
                                                                                                    MPSC Case U-13531
                                                                      Initial Testimony of Steven E. Turner (Collocation)

    sets connectivity lengths for CLECs that are significantly longer than the equivalent costs

    for the ILEC.


                                                      C L E C M O D E L I N T E R C O N N E C T IO N

                                                                                                                     C O L L O C A T IO N A R E A

                                                                                                         COMMON AREA                    CAGE

                                                                                                                                             ID L C


                                                                   E L E C T R IC A L
                                                                                                                 POT
                                                                                                            IN T E R F A C E             T E R M IN A L

                                                                        165 FEET

                                                                                                                                        F IB E R P A T C H
                                                                                                                                             PANEL
               ILEC NETWORK




                                 DSX /
                               D IG IT A L
                               CROSS
                              CONNECT

                                                        T Y P I C A L IL E C                IN T E R C O N N E C T IO N




                                                                                                                                              FIBER ENTRANCE
                                             E L E C T R IC A L                                    FDF
                                                                                        F IB E R
                                                                      T E R M IN A L                       F IB E R E N T R A N C E
                                              1 0 0 -1 2 5 F T .     E Q U IP M E N T




                                                                                IL E C                                 CABLE VAULT
                                                                     T R A N S M I S S IO N A R E A




                 C O M P A R IS O N O F IL E C & C L E C C O N N E C T IV IT Y D IS T A N C E S



                                                                   Figure 4C

           Using the same forward-looking, three-floor central office model layout and the

    best practice planning assumptions discussed above, average lengths for all collocation-

    related cabling and connectivity components have been developed. A summary of all

    average connectivity lengths used is set forth in Chart 1 below.5




5
    Calculations for all average cable lengths are included in backup documentation for the
    Collocation Model Layout.



                                                                                                                                                               27
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)



                                CHART 1
                           COLLOCATION MODEL
             CONNECTIVITY COMPONENTS AND AVERAGE DISTANCES
          TYPE OF CONNECTION     CABLE   CABLE RACK     CABLE
                                LENGTH     LENGTH     HOLES AND
                                                       SLEEVES
      FIBER ENTRANCE CABLE (BY CLEC)        125’-0”          N/A                --
      FIBER RISER CABLE (BY CLEC)           175’-0”         160’-0”             3
      COPPER (DS-0/DS-1/DS-3)               165’-0”         150’-0”             2
      FIBER BREAKOUT CABLES                 190’-0”         175’-0”             2
      -48V DC POWER PLANT TO BDFB           165’-0”         150’-0”             2
      BDFB TO DC PANELS IN CAGE              35’-0”          5’-0”              --
      FLOOR GROUND BAR TO COMMON            100’-0”      IN CONDUIT             --
      AREA GROUND BAR
      COMMON AREA GROUND BAR TO             30’-0”    CABLE BRACKETS            --
      EQUIPMENT GROUND BAR                            ON COPPER RACK



4.2    CENTRAL OFFICE COLLOCATION AREA MODEL

The Collocation Model assumes a best practice planning strategy that permits more than

one collocation area to be assigned in a central office based on available space in close

proximity to ILEC cross-connects.      This is in contrast to an arbitrary assumption

(sometimes made by the ILECs) that the first collocation area in a central office must be

sized to accommodate all potential future CLECs, even when that decision results in

placement of the collocation area in a remote location far from the cross-connects.

       As shown in Figure 4D, the model assumes a collocation area model layout of

550 square feet to take advantage of smaller areas that would be in relatively close

proximity to ILEC cross-connects. These pockets of space include those made available

by prior replacements of older technologies with more space efficient digital equipment,

vacant area, space occupied by administrative staff, or locations occupied by redundant

equipment that an efficient ILEC would have removed long ago.           This assumption

reflects an expectation by the model developers that, in terms of placement, the ILEC

would employ the same best planning process that it would use when planning efficient

equipment space allocations for its own equipment.


                                                                                      28
                                                                              Exhibit SET-COLLO-3
                                                                                MPSC Case U-13531
                                                  Initial Testimony of Steven E. Turner (Collocation)

                                                        27’-6”

                                       10’-0”            7’-6”            10’-0”




                                                          POT BAYS
                       10’-0”
              20’-0”
                                        CLEC EQPT.                   CLEC EQPT.




                                                          BDFB
                                        CLEC EQPT.                   CLEC EQPT.




                                                          POT BAYS
                       10’-0”




                                                     SUMMARY
                                OVERALL SPACE REQUIREMENT                =    550 SQ. FT.

                                NUMBER OF 100 SQ. FT. ALLOCATIONS        =         4

                                CLEC CAGE SPACE                          =    100 SQ. FT.

                                SHARED COMMON SPACE                      =    150 SQ. FT.

                                CLEC CONTRIBUTION FOR EACH 100 SQ. FT.   =   137.5 SQ. FT.
                                POT BAYS + TERMINATION PANELS            =     BY CLEC

                                DC POWER PANELS IN CAGE (IF REQUIRED)    =     BY CLEC

                                BDFB (INCLUDED IN POWER CONSUMPTION)     =     BY ILEC


           FORWARD-LOOKING BEST PLANNING COLLOCATION MODEL




                                                  Figure 4D
        The 550 square feet included in the collocation model layout provides sufficient

space to accommodate interface equipment such as point of termination (POT) bays and

remote power distribution BDFB equipment, while avoiding the economic disadvantages

of exceptionally large collocation areas. For those central offices where more than 550

square feet of collocation space is required, a second collocation area would be selected

when necessary. Proceeding in this manner is consistent with the FCC Amended Order

Part 51.323 (f)(1) (and Paragraph 585), which supports the concept of CLECs obtaining

reasonable amounts of space in an ILEC’s premises on a first-come, first-served basis.




                                                                                                  29
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)

           Within the 550 square foot collocation area, the collocation area model layout

    assumes the construction of four 100 square foot equipment areas and a common area

    of 150 square feet (to accommodate ILEC and CLEC point of termination interface

    equipment bays and a BDFB). The model anticipates that the cost of the entire common

    area would be shared by all CLECs (with no contribution from the ILEC) and that CLECs

    would request collocation space in increments of 100 square feet, without any guarantee

    of expanding into an adjacent space. If a CLEC requires additional space for expansion,

    it would have to take the next closest available space in much the same way as an ILEC

    would. For this type of situation, cage-to-cage cabling for cages occupied by the same

    CLEC should be permitted.



    4.3    COMMON INTERFACE EQUIPMENT

    With the exception of the shared BDFB, which is included in the Power Consumption

    elements discussed in Section 5, the model assumes that all interface equipment

    located in the common area will be purchased and installed by the CLEC. This includes

    POT bays, and all required voice grade, DS-1, and DS-3 interconnection shelves to be

    placed on the POT bays.6 Proceeding in this manner permits CLECs to achieve the

    benefits of a competitive best practice and least cost approach to the provisioning of

    interface equipment, instead of forcing them to absorb the cost of potentially less-

    competitive contract prices currently in place between the ILEC and its suppliers.




6
    All CLEC-provided POT bays and interconnection panels should conform to appropriate
    standards and be acceptable for use in telecommunications COs. Because this would be passive
    cross-connect equipment located completely within the secure collocation area, it would pose no
    potential threat to the ILECs’ network security or integrity.



                                                                                                30
                                                                                          Exhibit SET-COLLO-3
                                                                                            MPSC Case U-13531
                                                              Initial Testimony of Steven E. Turner (Collocation)

4.4    OVERHEAD COMMON SYSTEMS INFRASTRUCTURE

Cables are typically routed within the central office environment on overhead cable racks

supported from the ceiling. (See Figure 4E.)


                   Ceiling or Framing Support Bar




             Threaded Rod




                                                                                             Cable Pile-up
                                                   Stringer
                                                                   Cross Member



                                                              Side View


                                                                                  Tie-wrap
                               Variable
                    5” - 36”




                                                                                               Cable
                                             Stringer             Cross Member



                                                              Top View



                                          Central Office Channel Type Ladder Cable Rack



                                                              Figure 4E
       Central office cable racking is readily available in widths between five and thirty

inches. Usually, different types of cabling (e.g., fiber, power, copper) are routed on

separate cable racks. The bulk of the cabling in a central office is copper, which is

typically placed on wider cable racks (15”, 20”, 25”, 30”). Specialty cables, such as fiber

and power, are usually placed on narrower 12” or 15” cable racks. Although the ILEC

has the responsibility to supply copper, fiber, and power accessibility to the new




                                                                                                              31
                                                                          Exhibit SET-COLLO-3
                                                                            MPSC Case U-13531
                                              Initial Testimony of Steven E. Turner (Collocation)

    collocation area in the most cost efficient manner, Figure 4F provides the preferred

    configuration for routing fiber, copper and power cables to each collocation area.7



                                          ILEC EQUIPMENT AREA

                            TO             COPPER (VG, DS-1, DS-3)
                      MDF, DSX 1/3/DCS




                                                                                      20” CABLE RACK
                           TO                  -48V POWER
                       POWER PLANT




                                                                     15” CABLE RACK
                                         FIBER ENTRANCE
                           TO




                                                          12” RACK
                       CABLE VAULT

                         TO FIBER        FIBER BREAKOUT
                      CROSS-CONNECT




                                         COLLO                                                         COLLO
                                         CAGE                                                          CAGE


                                                                     BDFB




                                         COLLO                                                         COLLO
                                         CAGE                                                          CAGE




             BEST PLANNING COLLOCATION CONNECTIVITY ARRANGEMENT




                                            Figure 4F
            As shown, an efficient connectivity arrangement provides for pre-placed cable

    routes installed by the ILEC at the time that the initial collocation area is constructed.

    The following connectivity routes will be required by the CLECs and should be

    incorporated into the planning process for a new initial collocation area.



7
    The model assumes that if necessary the ILEC must place the racks between the collocation area
    and the cross-connects. Portions of the Cable Racks may already be in place. In either case, the
    CLECs pay space rental to the ILEC for their occupancy.



                                                                                                               32
                                                                   Exhibit SET-COLLO-3
                                                                     MPSC Case U-13531
                                       Initial Testimony of Steven E. Turner (Collocation)

       ⇒ Copper cable route for Voice Grade, DS-1, DS3 cables to ILEC cross-
            connects
       ⇒ Fiber cable route for Fiber Riser between the cable vault and the collocation
            cage
       ⇒ Fiber cable route for fiber breakout cables between the CLEC cage and
            ILEC fiber cross-connect
       ⇒ Power cable route for cabling between the -48V Power Plant and Collocation
            BDFB

As previously noted, it is the responsibility of the ILEC to provide overhead cable racking

to transport cables between various areas of the central office. With the exception of

small amounts of cable located within the common area, the vast majority of cabling

associated with collocation connectivity will be routed on shared cable racks within the

ILEC central office. To account for this, a cable rack occupancy cost (based on the

amount of space utilized on a particular shared cable rack) has been incorporated into

the model. (For similar reasons, an occupancy cost for the use of ILEC inter-floor cable

holes also is incorporated into the model.)

       Because cables are many different sizes, the model develops individual cable

rack occupancy costs for the various types of telecommunications cable used in ILEC

central offices, which are reflected in Chart 2. The top portion of the chart, entitled Cable

Rack Capacities, outlines commonly used cable rack sizes, together with the estimated

number of cables that can be placed on each at various cable pile-up levels (i.e. build-up

on the rack). The lower portion of Chart 2 sorts the various types of cabling commonly

used for telecommunications equipment according to size, and develops a cable

equivalency factor. As shown, DS-1, DS-3, and 12 fiber optical breakout cables are the

benchmark, with an equivalency of one cable.            A 100-pair voice grade cable is




                                                                                          33
                                                                              Exhibit SET-COLLO-3
                                                                                MPSC Case U-13531
                                                  Initial Testimony of Steven E. Turner (Collocation)

        equivalent to two benchmark cables; a fiber riser cable is equivalent to three benchmark

        cables; and a large 750 MCM power cable is equivalent to four benchmark cables.8

                                CHART 2
                COLLOCATION MODEL - CABLE RACK CAPACITIES
      CABLE RACK WIDTH                  CABLE PILE-UP
     ACTUAL    CABLE    1” 2” 3” 4” 5” 6” 7” 8” 9” 10”                                            11”    12
       SIZE    SPACE                                                                                      ”
        10”              8.5”        26     51    77    102   128   154   179   204   230
        12”             10.5”        32     63    94    126   158   189   221   252   283   315
        15”             13.5”        41     81    122   162   203   243   284   324   365   405   446    486
        20”             18.5”        56     111   167   222   278   333   389   444   500   555   611    666
        25”             23.5”        71     141   212   282   353   423   494   564   635   705   776    846
        30”             28.5”        86     171   257   342   428   513   599   684   770   855
      CABLE       EQUIVALEN            OCCUPANCY FACTOR FOR CABLE RACK & CABLE
      TYPE           CY                              HOLE USAGE
                   FACTOR
       Fiber          3                    Fiber Riser cables assume 7” Pile-up on 12” Racks *
       Riser                                           Capacity = 74 Cables (221/3)
     Breakout            1                Fiber Breakout cables assume 7” Pile-up on 12” Racks*
      Cable                                               Capacity = 221 Cables
        (12
      Fibers)
       750               4       Power Distribution Cables assume 5” Pile-up on 15” Racks *
       MCM                                      Capacity = 51 Cables (203/4)
     100 Pair         2           Copper DS-0 Voice Grade Cables assume 10” Pile-up on
     VG/DS-0                                              20” Racks
                                                Capacity = 278 Cables (555/2)
       28 Pair        1             Copper DS-1 Cables assume 10” Pile-up on 20” Racks
        DS-1                                       Capacity = 555 Cables **
        Coax          1                  Coax DS-3 assume 10” Pile-up on 20” Racks
        DS-3                                       Capacity = 555 Cables **
    * Reduced capacity due to rigidity & bending radius **DS-1 & DS-3 requires 2 cables

        per circuit

        The Occupancy Factors are a function of both pile-up on the rack and the widths of the

        racks. It is possible to find large 25” and 30” cable racks being utilized in some areas of

        certain central offices. However, the occupancy factors used in the Collocation Model

        have been conservatively calculated assuming that copper connectivity uses 20” cable


8
        Equivalencies based on an approximation of cable size.


                                                                                                    34
                                                                       Exhibit SET-COLLO-3
                                                                         MPSC Case U-13531
                                           Initial Testimony of Steven E. Turner (Collocation)

     racks, power cables use 15” cable racks, and fiber riser and breakout cables use 12”

     cable racks. Again, in some central offices, existing cable build-up in overhead cable

     racks may be in excess of 1.5 feet in some areas of the central office (e.g., above cross-

     connects). However, the central office model layout develops cable rack occupancy

     factors using a conservative assumption of only 10” pile-up for copper cabling (voice

     grade, DS-1, DS-3), 7” pile-up for fiber cables, and 5” pile-up for the more rigid power

     cabling. Cable rack fills have therefore been accounted for by using conservative cable

     rack sizes with best practice cable pile-up assumptions (i.e., 25” and 30” cable racks and

     1.5 foot cable build-up situations have not been considered).

            Previously, average connectivity lengths were determined to be 165 feet for

     copper, 190 feet for optical connectivity, and 175 feet for fiber riser cables. Based on

     these cable lengths, the length component to be used for the cable rack occupancy

     component on shared cable racks shared by the ILEC and CLECs has been determined

     to be 150 feet for copper and optical connectivity and 160 feet for the riser connection.

     The 15-foot difference between the average cable lengths of 165 and 175 feet and cable

     rack occupancy of 150 and 160 feet is accounted for by the cable drops to equipment at

     each end (7’ 6”), where no cable rack is being used.



5.   DC POWER AND GROUNDING ELEMENTS

     5.1    OVERVIEW

     The standard and most cost effective method of delivering -48V DC between the power

     plant and telecommunications equipment in a central office environment is to use a

     remote power distribution bay, such as a BDFB. This is particularly true in a multi-floor

     installation or in circumstances in which long cable runs are required to reach the power

     plant. The cost implications of excessive power cable runs back to the power plant

     could be used as a deterrent to CLEC collocation, because in many cases the cost of


                                                                                            35
                                                                      Exhibit SET-COLLO-3
                                                                        MPSC Case U-13531
                                          Initial Testimony of Steven E. Turner (Collocation)

power cable increases much faster than the associated increase in distance. The major

reason for this disproportionate increase in power cable cost in comparison to distance

is that power cable must be sized to provide the correct voltage at the equipment.

Therefore, as the length of power cable increases, the voltage loss also increases,

creating the need for larger distribution cables, often costing several times more per foot.

       For this reason, the accepted best practice for power planning is to install a

BDFB in close proximity to the equipment it will serve, thus permitting the use of smaller,

less-costly cables for power distribution. This also ensures that the -48V power plant will

not become exhausted due to the requirement for many small fuses. Figure 5A provides

a schematic depicting the relationship between the -48V power plant, the BDFB, and the

end equipment.


                                1-2 750MCM BATTERY RETURN




                                1-2 750MCM BATTERY RETURN




                       BUS #1
              BUS #2                                        BATTERY RETURN BAR
                                  1-2 750MCM BATTERY

                                                               FUSE PANELS                            EQUIPMENT




                                 1-2 750MCM BATTERY
                                                                                 SMALL POWER CABLES




          -48V POWER PLANT



                                    LARGE POWER CABLES




                                                                 BDFB

                                         Figure 5A


                                                                                                                  36
                                                                 Exhibit SET-COLLO-3
                                                                   MPSC Case U-13531
                                     Initial Testimony of Steven E. Turner (Collocation)

       In summary, the use of a remote BDFB located in close proximity to the

equipment it will serve has become the norm for providing -48V DC power to

telecommunications equipment. This is because it postpones the exhaust of the -48V

power plant and is more cost-effective than running many large (and costly) power

distribution cables all the way back to the power plant for equipment fusing. An overview

of the accepted best practice method for delivering -48V DC power in a

telecommunications environment is shown in Figure 5B.




             BDFB                                 BDFB
                            MISCELLANEOUS
                             EQUIPMENT




              BDFB           TRANSMISSION AREA

                                                            -48V DC      -48V DC
                                                             POWER        POWER
                                                             PLANT        PLANT
                                                           (COMMON)     (DIGITAL)




                                       DIGITAL SWITCHING AREA
                          PDCs




                                                                        CABLE
                                                                      ENTRANCE
                                 CABLE VAULT




       OPTIMUM -48V DC POWER DELIVERY USING BDFBs & PDCs


                                    Figure 5B




                                                                                      37
                                                                   Exhibit SET-COLLO-3
                                                                     MPSC Case U-13531
                                       Initial Testimony of Steven E. Turner (Collocation)

Figure 5B illustrates the best practice method for delivering power. This configuration

minimizes power distribution costs and provides optimum operations flexibility by placing

fusing in close proximity to equipment. ILECs regularly utilize a BDFB or some other

type of distribution bay (in the Nortel DMS switch, the BDFB is referred to as a power

distribution center) placed close to the equipment it will serve. Normally, these BDFBs

are strategically located according to the expected fuse requirements of the equipment.

In a transmission environment, a BDFB is located in the first bay position of each third or

fourth equipment line-up, depending on line-up length and expected demand for fuses.

This standard approach permits short power feeders to equipment and ensures a least-

cost approach to power distribution.

          Figure 5B also reflects the use of an intermediate fuse bay, such as a BDFB, to

distribute power. This has proven to be more cost-effective than running numerous

cables to the power plant and has become the norm for distributing power to all types of

telecommunications equipment, particularly in large urban central offices with multiple

floors.

          The use of an intermediate distribution bay is the least-cost and best-practice

method for delivering -48V DC power to telecommunications equipment. In a collocation

environment however, the delivery of -48V power is typically divided into two separate

charges:

             1) A monthly power consumption charge for shared use elements such as
                 the power plant, diesel generator, and distribution as far as the BDFB;
                 and
             2) A non-recurring power distribution charge to provide power feeders
                 between the equipment and the closest BDFB.

          Unless the line of demarcation between power consumption and power

distribution is clearly defined, the opportunity for double recovery could be built into a

model. Avoidance of this potential problem requires two basic steps. First, any NRCs


                                                                                        38
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

related to common systems infrastructure (cable racking and power cables) for the

delivery of -48V power should be based solely on the distance between the collocation

equipment and a BDFB serving the collocation area, and not between the collocation

area and the -48V DC power plant. This is necessary because the investments required

to deliver power between the -48V power plant and the BDFB are included in modeling

the power consumption charge.

       Second, an average length is used in the calculation of the investment for DC

power distribution between the CLEC equipment and a collocation BDFB. This ensures

that the ILEC uses the same best practice planning strategies as it would for its own

installations by placing the BDFB in close proximity to collocation equipment.

       Figure 5C below superimposes a collocation scenario on the previously

presented Figure 5B depicting an optimum telecommunications power delivery

arrangement to demonstrate the requirement for a clear line of demarcation between

power consumption and power distribution for collocation.




                                                                                      39
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)




                             MISCELLANEOUS EQUIPMENT                  COLLOCATION AREA
                                                                                      CLEC
              BDFB       - 48V   DC POWER DISTRIBUTION NRC                           DC PANEL
                             (BETWEEN COLLOCATION CAGES & BDFB)
                                                                             COLLO
                                                                              BDFB




                                  TRANSMISSION AREA

               BDFB         - 48V POWER CONSUMPTION RC
                           (BETWEEN POWER PLANT & COLLOCATION BDFB)

                                                                       -48V DC      -48V DC
                                                                        POWER        POWER
                                                                        PLANT        PLANT
                                                                      (COMMON)     (DIGITAL)




                                                DIGITAL SWITCHING AREA

                           PDCs




                                                                                   CABLE
                                                                                 ENTRANCE
                                     CABLE VAULT




        OPTIMUM -48V DC POWER DELIVERY FOR COLLOCATION


                                          Figure 5C
       Proceeding in this manner ensures that -48V DC power will be delivered to

CLECs in the most cost-effective manner by using best practice power planning

principles (i.e., using BDFBs) and incorporating adequate checks and balances to

ensure that no double-recovery could arise by calculating length sensitive power

distribution NRCs in a way that would include portions of the investments already

included in the power consumption recurring charge -- a situation that would be very

difficult to detect on a case by case basis.




                                                                                                40
                                                                      Exhibit SET-COLLO-3
                                                                        MPSC Case U-13531
                                          Initial Testimony of Steven E. Turner (Collocation)

       Because BDFBs are normally located within a few line-ups of the equipment to

be fused, the best-practice planning scenario for the collocation BDFB is to place it as

close as possible to the collocation area cages. Preferably, this placement would be in

the collocation common area provided in the collocation area model layout, depicted in

Figure 5D. Because this BDFB is simply a remote fuse bay connected to the shared

-48V power plant, any ILEC equipment located near the collocation area also can use it.


                                                27’-6”
                       550 SQ. FT. COLLOCATION AREA - E/W 4 CAGES



                                               COMMON
                         100 SQ. FT. CAGE       AREA      100 SQ. FT. CAGE
                           ALLOCATION                       ALLOCATION




                       -48V DISTRIBUTION NRC   COLLO
                                               BDFB
              20’-0”




                                                         -48V DISTRIBUTION NRC


                        100 SQ. FT. CAGE                  100 SQ. FT. CAGE
                          ALLOCATION                        ALLOCATION




             INCLUDED IN RECURRING CHARGE
              FOR - 48V POWER CONSUMPTION                   FROM -48V POWER PLANT




          COLLOCATION MODEL -48V DC POWER DISTRIBUTION


                                         Figure 5D
       Based on the assumption that the collocation BDFB is strategically located in the

collocation common area as per the same best practice planning scenario used by the

ILEC for the delivery of -48V DC power to its own equipment, it is unlikely that -48V DC



                                                                                          41
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

power distribution cables for fusing collocation equipment would be longer than about 35

feet. Therefore, the Collocation Model assumes an average length of 35 feet for -48V

DC power distribution between the collocation BDFB and the CLEC provided DC power

panels placed inside each cage. The 35 feet assumes 15 feet in the common area and

a 20 foot drop provided in the cage to allow the CLEC to connect to its DC power panels.



5.2    POWER DISTRIBUTION COMPONENTS

The model includes the delivery of -48V DC power between the shared -48V DC power

plant and the collocation BDFB in the cost that is developed for the power consumption

element. The charge for power distribution between the BDFB and the CLEC-provided

DC panels is limited to the previously mentioned 35 feet of power cable. The selection

of ILEC-provided power cables will depend on the amount of bulk DC power requested

by the CLEC. Similarly, CLEC-provided DC power panels located in the CLEC cage for

fusing depend on individual CLEC fusing requirements and the amount of DC power the

CLEC is willing to purchase.

       In addition, the model assumes that the CLEC reimburses the ILEC for the

installation of a five-foot length of 12” cable rack to connect between the CLEC cage and

the power rack installed over the shared BDFB. Because this rack is only required on

the initial installation, it is included as part of the collocation cage investments in the

model. A schematic setting forth the components that are included in the central office

model layout as part of the non-recurring cost for -48V DC Power Distribution is

displayed below.




                                                                                        42
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

            COLLOCATION MODEL - -48V DC POWER DELIVERY

Co-location Area

     DC Panel                           BDFB                 Cable              -48V DC
                                                             Hole                Power
                             Cable                           Cable                Plant
                              B                               A


                         Cable Rack



             Power Distribution                             Power Consumption




                        Power Delivery Elements (-48V DC Option)
  Element           Description      Prov. by     Quantity                Remarks
                                   CLEC/ILEC
-48V DC         Located in Cage       CLEC           --         CLEC installs -48V DC
Power Panel                                                     panels in cage and
                                                                terminates ILEC provided
                                                                feed
Cable ‘B’       4 x #2 Cable          ILEC         35’-0”       One time charge for 2x20
                between Cage &                                  Amp A & B feeds + return
                Collo BDFB                                      as requested by CLEC -
                                                                Includes 20’-0” drop in
                                                                cage
Cable ‘B’       4 x 2/0 Cable         ILEC         35’-0”       One time charge for 2x50
                between Cage &                                  Amps A & B feeds + return
                Collo BDFB                                      as requested by CLEC -
                                                                Includes 20’-0” drop in
                                                                cage
Cable ‘B’       4 x 4/0 Cable         ILEC         35’-0”       One time charge for 2x100
                between Cage &                                  Amps A & B feeds + return
                Collo BDFB                                      as requested by CLEC -
                                                                Includes 20’-0” drop in
                                                                cage
Cable Rack      15” CLEC              ILEC          5’-0”       Included in cage
                specific                                        investment
BDFB            Located close to      ILEC           --         Included in -48V DC Power
                Collocation                                     Consumption Charge
                Cages




                                                                                      43
                                                                     Exhibit SET-COLLO-3
                                                                       MPSC Case U-13531
                                         Initial Testimony of Steven E. Turner (Collocation)


Cable Rack       Shared support          ILEC            --      Included in -48V DC Power
Occupancy        for Cable ‘A’                                   Consumption Charge
                 below
Cable ‘A’        Cable between –         ILEC            --      Included in -48V DC Power
                 48V Power Plant                                 Consumption Charge
                 & BDFB
-48V DC          Shared use              ILEC            --      Included in -48V DC Power
Power Plant      between CLEC’s                                  Consumption Charge
                 & ILEC
Auto-start       Required for            ILEC            --      Included in -48V DC Power
Diesel Fuel      Battery Back-up                                 Consumption Charge
Tanks, & AC
Switchboard
AC Energy        Required for AC         ILEC            --      Included in -48V DC Power
                 Energy used                                     Consumption Charge


   5.3      POWER CONSUMPTION COMPONENTS

   The -48V DC power consumption components that are modeled to develop the power

   consumption recurring charge include all ILEC investments necessary to engineer,

   furnish, and install (EF&I) a shared -48V power plant, including the mandatory battery

   and diesel generator back-up. The model also includes amounts for fuel tanks, AC

   entrance, and switchboard equipment. Based on the previously discussed best power

   practice planning strategy, a BDFB and associated cabling components also are

   included to ensure the most cost-efficient method of delivering -48V DC power to the

   collocation area.

            To maximize its flexibility, the model develops investments associated with two

   different power plant installations: a 2500 amp DC power plant and a 4000 amp DC

   power plant. These two sizes were selected to provide a reasonable range of ILEC

   investments in medium and large sized central offices, respectively.

            The following components are included in the model to develop a proposed




                                                                                         44
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)

     charge for CLEC -48V power consumption.9

            •    High capacity shared 1200 amp BDFB (A/B feed) with all shelves and fuses.
            •    Power cabling between the BDFB and ILEC –48V Power Plant.
            •    Batteries to provide up to four hours of reserve DC power.
            •    Battery Control Board (Power Distribution Center).
            •    Rectifiers (N+1) to carry load plus one for maintenance.
            •    Engineering and Installation costs.
            •    Cable rack and cable hole cost occupancy charges.
            •    Standby diesel generator to ensure continuous supply of AC power.
            •    Fuel tanks, AC entrance, switchboard equipment.
            •    AC Electric Energy component.
     With a shared -48V DC power plant, it is impossible to separately meter (and separately

     charge for) CLEC AC electric energy usage.            Therefore, an AC electric energy

     component is included in the model to account for the shared -48V DC power plant. As

     shown on Chart 3, the AC energy component is developed by restating the cost per AC

     kilowatt-hour usage charge as an AC energy rate per DC amp used.10                The rate

     determined as a result of the above energy calculation is added to the costs per amp for

     DC power to create the all-inclusive monthly power consumption charge.

                                          Chart 3
                       Calculation of AC Electric Energy Component
                Quantity of DC Amps                                             1
                Quantity of Watts per DC Amp                                  52.07
                Hours Usage per Day                                             24
                Days Usage per Month                                          30.43
                Total Monthly DC Watts                                        38026
                AC Equivalent Watts at 90% Rectifier Efficiency               42251
                Total AC Kilowatt Hours                                       42.25
                Cost per Kilowatt Hour                                  $           0.045
                AC Energy Rate per DC Amp                                $          1.88


9
     Details regarding -48V power plant investments and the resultant charge are included in the
     Collocation Cost Model.
10
     The example uses a rate of $0.045 per Kilowatt hour for electric power. The model allows the
     actual rate per Kilowatt hour used in the cost calculations to be state-specific.



                                                                                              45
                                                                 Exhibit SET-COLLO-3
                                                                   MPSC Case U-13531
                                     Initial Testimony of Steven E. Turner (Collocation)




5.4    EQUIPMENT GROUNDING COMPONENTS

As shown in the following schematic, the collocation area model layout assumes that

each CLEC will furnish and install a cable rack mounted equipment ground bar within its

cage. The CLEC also will install a suitable ground cable to connect to the ILEC provided

ground bar that should be placed in the collocation common area for use by all CLECs.

The following schematic outlines the grounding components assumed in the collocation

area model layout (the shaded areas in the chart indicate elements provided by the ILEC

for which the Collocation Model develops costs).




                                                                                     46
                                                                 Exhibit SET-COLLO-3
                                                                   MPSC Case U-13531
                                     Initial Testimony of Steven E. Turner (Collocation)



                COLLOCATION MODEL - EQUIPMENT GROUNDING



                                              Common
                                               Area

             Grnd         Cable                Ground            Cable              Floor Ground
             Bar
                    L L LBL L L                 Bar               A                      Bar

                                                             Conduit

                                   Cable Brackets




                                Grounding Elements
  Element           Description        Provided by Quantity                   Remarks
                                       CLEC/ILEC
Equipment    Attached to CLEC                  CLEC         --           CLEC will provide
Ground Bar   Cable Rack in Cage                                          ground bar and
                                                                         connect to ILEC
                                                                         Ground Bar in
                                                                         Common Area
Cable ‘B’    No. 4/0 cable between             CLEC      30’-0”          CLEC installs
             CLEC Ground Bar and                                         ground cable to
             Common Area Bar                                             connect to ILEC
                                                                         Common Area
                                                                         Ground Bar using
                                                                         cable brackets
                                                                         attached to ILEC
                                                                         cable racking
New          Extension of ILEC                  ILEC        --           ILEC to extend
Common       Building Principal Floor                                    suitable ground to
Area         Ground                                                      Common Area and
Ground Bar                                                               place ground bar for
                                                                         all CLECs
Cable ‘A’    No. 4/0 cable in conduit           ILEC     100’-0”         ILEC extends
             between existing                                            suitable ground to
             central office Floor                                        Common Area for all
             Ground Bar and new                                          CLECs
             Common Area Bar




                                                                                           47
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)

6.   ACCESS (ENTRANCE FIBER) COMPONENTS

     6.1        OVERVIEW

     The collocation of competitive equipment in ILEC central office buildings includes fiber

     connectivity between the first manhole and the CLEC collocation area, using CLEC-

     provided, fire-retardant cable for routing cables through the central office. Ideally, the

     pulling and splicing of fiber cable between the manhole and the cable vault, and the

     subsequent routing of fiber riser cable between the cable vault and collocation area,

     would be performed by the CLEC. In the event that this is not permitted, however, the

     central office model layout incorporates assumptions (which are outlined below) to

     calculate the costs that an efficient ILEC would incur to perform these functions in a

     competitive environment.



     6.2        FIBER ENTRANCE COMPONENTS

     The major elements required to route fiber cable between the first manhole and the

     collocation cage using fire retardant cable include:

                    ⇒ Pulling and splicing of cable in the cable vault
                    ⇒ A splice case to change from external to internal fiber cable
                    ⇒ Fire retardant riser cable between the vault splice and collocation
                        area
                    ⇒ Cable rack and cable hole (with occupancy charges based on usage)

     The following schematic outlines the elements that have been used in the central office

     model layout to determine the cost of access connectivity (assuming that it would not be

     possible for the CLEC to perform the required pulling and splicing in the ILEC central

     office).




                                                                                            48
                                                                            Exhibit SET-COLLO-3
                                                                              MPSC Case U-13531
                                                Initial Testimony of Steven E. Turner (Collocation)

                               COLLOCATION MODEL - ENTRANCE FIBER (Fire Retardant Cable)

            Collocation Area                                       Cable Vault                       Manhole

                                    Cable
                                    Hole
                    Fiber                       Cable B                                Cable A
                    Patch                                                Splice

                    Panel


                                                          Cable
                                                          Rack




         Access Elements (Cable Pulling & Splicing) - With Fire Retardant Provided
   Element        Description      Provided by Quantity Hours                Remarks
                                    CLEC/ILEC
Fiber Patch         Located in cage              CLEC               --            --      Termination to Cage
Panel                                                                                     Fiber Patch Panel
                                                                                          by CLEC
Cable ‘B’           Between cage &               CLEC             175’-0”         --      Fire retardant Fiber
                    vault splice                                                          cable provided by
                                                                                          CLEC
Installation of     Placed on shared              ILEC            175’-0”         14      One time charge -
Cable ‘B’           cable rack (ILEC +                                                    Includes opening /
                    CLECs)                                                                closing of 3 cable
                                                                                          holes
Cable Rack          12” Rack shared by            ILEC            135’-0”                 Cost per cable
Occupancy           ILEC + CLECs
Cable Rack          12” Rack shared by            ILEC            20’-0”
                                                                Included in cage  --
                    all CLECs                                   cost modeling
Cable Rack          12” CLEC specific  ILEC        5’-0”     -- Included in cage
                    Rack                                        cost modeling
Cable Hole          Cable holes shared ILEC          3       -- For use of ILEC
Occupancy           by CLEC’s & ILEC                            cable holes
Splice Case         External to fire  CLEC           1       -- Approved vault
                    retardant cable                             splice case provided
                                                                by CLEC
Cable ‘A’      Between vault          CLEC           --      -- Fiber cable provided
               splice & manhole                                 by CLEC
Structure      Between manhole         Tariff     125’-0”    -- Per existing
Charge         & cable vault splice    Item                     structures tariff
Cable Pulling Manhole to cable         ILEC       125’-0”   4.0 Includes set-up &
               vault splice                                     take-down
Splicing       External cable to       ILEC         --      3.0 Set-up & take-down
Activity       fire retardant cable                             in vault
Splice Fibers In Cable Vault           ILEC         --      2.0 For up to 24 Fibers
     Note: Access Design Charges included in ILEC Manpower Summary - Section 9



                                                                                                     49
                                                                      Exhibit SET-COLLO-3
                                                                        MPSC Case U-13531
                                          Initial Testimony of Steven E. Turner (Collocation)


7.   COPPER AND OPTICAL CONNECTIVITY COMPONENTS

     7.1    OVERVIEW OF CONNECTIVITY MODELS

     This aspect of the collocation area model layout addresses the need to provide both

     copper and optical connectivity between the collocation area and the ILEC cross-

     connects. The model assumes that copper connectivity between the CLEC and ILEC

     can be provided at three different transmission bandwidths.

            1. Voice Grade (VG) is the transmission level of connection used to access the
                ILEC outside plant loops at a voice grade level. The CLEC will interconnect
                with voice grade circuits at the ILEC Main Distribution Frame (MDF).
            2. Digital Stream 1 (DS-1) is the transmission level of connection containing 24
                voice grade circuits at 1.544 Mb/s. This type of connection will be used
                primarily to provide connectivity between the collocation area and the ILEC
                access network to interconnect to unbundled DS-1 loops.
            3. Digital Stream 3 (DS-3) is the transmission level of connection containing 28
                DS-1 Systems or 672 equivalent voice grade circuits. DS-3 connections will
                be used primarily to provide connectivity from the CLEC switch site to the
                collocation area over leased facilities or to interconnect to high bandwidth
                DS-3 unbundled loops.

            In most ILEC central offices, the majority of copper DS-1 and DS-3 circuits to

     which CLECs will want to interconnect are currently located on DSX panels. However,

     in some ILEC central offices those higher bandwidth circuits may have already been

     relocated to an electronic Digital Cross-connect System (DCS). The Collocation Model

     addresses both situations by including all components necessary for end to end

     connectivity in each case.    The model also addresses the requirement for optical

     connectivity to permit CLECs to interconnect with fiber loops or to access the ILEC

     network.

            Depicted in schematic form on the following pages are the best practice and

     least-cost connectivity arrangements that have been adopted in the Collocation Model


                                                                                          50
                                                                 Exhibit SET-COLLO-3
                                                                   MPSC Case U-13531
                                     Initial Testimony of Steven E. Turner (Collocation)

for all interconnection between the collocation area and various ILEC central office

cross-connects. These include the following:

       ⇒ Distance from the collocation area to the ILEC equipment is 165 feet for
           copper connections
       ⇒ Distance from the CLEC patch panel to the ILEC equipment is 190 feet for
           optical connections
       ⇒ Cable Rack 1A is dedicated to an individual CLEC and included in the cage
           cost modeling
       ⇒ Cable Rack 2A is shared by all CLECs and also included in the cage cost
           modeling
       ⇒ Cable Rack B and all cable holes are shared between the ILEC and CLECs
           and reimbursed by a cable rack occupancy charge




                                                                                     51
                                                                                          Exhibit SET-COLLO-3
                                                                                            MPSC Case U-13531
                                                              Initial Testimony of Steven E. Turner (Collocation)

        7.2      VOICE GRADE MODEL REQUIREMENTS

                         Copper Connectivity at Voice Grade Level

  Co-location Area

                                                                           Cable
                                                        POT                                           MDF
                                                                           Hole
     CLEC                      Cable                   TS               Cable                               TS       Access
   Equipment                                                             B
                                                                                               TS H
                                A                       A                                                    V       Cable


                                                                                      MDF X-
                                                                                       Conn
                     Cable Rack 1A     Cable Rack 2A                   Cable Rack B




         CONNECTIVITY ELEMENTS FOR VOICE GRADE SERVICE
 ELEMENT      DESCRIPTION       PROVIDED SIZE/CAPACITY                                                       LENGTH
                                   BY
CLEC                 Voice Grade Equipment                           CLEC
Equipment
Cable A              Cable from Line Cards to                        CLEC                                        <25 feet
                     POT Bay
Cable Rack           20” Ladder Rack - CLEC                           ILEC                                        5 feet
1A                   specific - in cage cost model
Cable Rack           20” Ladder Rack - Shared by                      ILEC                                       20 feet
2A                   CLECs - in cage cost model
POT Bay              Frame to hold Terminal Block                    CLEC             7’-0” high x 23”
                     for Demarcation Point.                                           wide x 12 “ deep
TS A                 66 Type Terminal Block                          CLEC
Cable B              Cable from Pot Bay Terminal                     ILEC                 100 Pair               165 feet
                     Blocks to HMDF
Cable Hole           2 Cable Holes shared by                          ILEC
Occupancy            ILEC + CLECs
Cable Rack B         20” Ladder Rack - Shared by                      ILEC                                       150 feet
Occupancy            ILEC + CLECs
MDF-H                Horizontal Terminal Block for                    ILEC                100 pair
                     X-Conn to Access side of DF
MDF                  MDF Terminal Strip Space                         ILEC             1 block space
MDF                  Jumper from horizontal to                        ILEC
X-Connect            vertical ~ Included in
                     Unbundled Loop
MDF-V                Vertical side terminal strip ~                   ILEC
                     Included in Unbundled Loop




                                                                                                                       52
                                                                            Exhibit SET-COLLO-3
                                                                              MPSC Case U-13531
                                                Initial Testimony of Steven E. Turner (Collocation)

7.3     DS-1 MODEL REQUIREMENTS USING A MANUAL DSX

                   Copper Connectivity at DS-1 Level (DSX )

  Co-location Area

                                                        POT                Cable                     DSX
                                                    D         D            Hole                  D         D
         CLEC
                               Cable                S         S            Cable
                                                                                                 S         S
       Equipment
                                A                   X         X             B                    X         X
                                                    1         1                                  1         1
                                                    A         B                                  C         D
                                       Cable Rack         Pot X-
                      Cable Rack 1A                                      Cable Rack B
                                       2A                 Conn




            CONNECTIVITY ELEMENTS FOR DS-1 SERVICE ( DSX OPTION)
      ELEMENT       DESCRIPTION      PROVIDED    SIZE/CAPACITY LENGTH
                                        BY
CLEC Equipment       DS-1Multiplexer                              CLEC          28 DS1
Cable A              2x 30 Pair ABAM                              CLEC          28 DS1           <25 feet
Cable Rack 1A        20” Ladder Rack - CLEC                       ILEC                            5 feet
                     specific ~ included in cage
                     cost model
Cable Rack 2A        20” Ladder Rack -Shared                      ILEC        555 ABAM           20 feet
                     by CLECs ~ included in
                     cage cost model
POT                  Demarcation Point                            CLEC   7’-0” high x 23” wide
                                                                              x 12 “ deep
DSX-1A               Passive X-Connect Panel                      CLEC          56 DS1
POT X-conn           22 Gauge jumper wire                         CLEC           4 feet
DSX-1B               Passive X-Connect Panel                      CLEC          56 DS1
Cable B              2x 30 Pair ABAM                              ILEC          28 DS1           165 feet
Cable Rack B         20” Ladder Rack - Shared                     ILEC        555 ABAM           150 feet
Occupancy            by ILEC + CLECs
Cable Hole           2 Cable Holes - Shared by                    ILEC   555 ABAM per hole
Occupancy            ILEC + CLECs
DSX-1C               Passive X-Connect Panel                      ILEC         56 DS1
DSX                  Digital X-Connect Frame                      ILEC         560 DS1
                     shared by ILEC + CLECs




                                                                                                     53
                                                                                   Exhibit SET-COLLO-3
                                                                                     MPSC Case U-13531
                                                       Initial Testimony of Steven E. Turner (Collocation)

      7.4    DS-1 MODEL REQUIREMENTS USING AN ELECTRONIC DCS

                    Copper Connectivity at DS-1 Level (DCS )

 Co-location Area

        CLEC                                           POT                 Cable                          DCS
      Equipment                                    D         D             Hole
                                                   S         S                                      I/O          I/O
                              Cable                                        Cable
                                                   X         X                                     Card         Card
                               A                                            B
                                                                                                     A            B
                                                   1         1
                                                   A         B
                                      Cable Rack         Pot X-
                     Cable Rack 1A                                       Cable Rack B
                                      2A                 Conn




       CONNECTIVITY ELEMENTS FOR DS-1 SERVICE ( DCS OPTION)
  ELEMENT      DESCRIPTION      PROVIDED    SIZE/CAPACITY LENGTH
                                    BY
CLEC Equipment       DS-1Multiplexer                              CLEC                   28 DS1
Cable A              2x 30 Pair ABAM                              CLEC                   28 DS1            <25 feet
Cable Rack 1A        20” Ladder Rack - CLEC                       ILEC                                      5 feet
                     specific ~ included in cage
                     cost model
Cable Rack 2A        20” Ladder Rack -Shared                      ILEC                  555 ABAM           20 feet
                     by CLECs ~ included in
                     cage cost model
POT                  Demarcation Point                            CLEC          7’-0” high x 23” wide
                                                                                     x 12 “ deep
DSX-1A               Passive X-Connect Panel                      CLEC                 56 DS1
POT X-conn           22 Gauge jumper wire                         CLEC                  4 feet
DSX-1B               Passive X-Connect Panel                      CLEC                 56 DS1
Cable B              2x 30 Pair ABAM                              ILEC                 28 DS1              165 feet
Cable Rack B         20” Ladder Rack - Shared                     ILEC               555 ABAM              150 feet
Occupancy            by ILEC + CLECs
Cable Hole           2 Cable Holes - Shared by                    ILEC          555 ABAM per hole
Occupancy            ILEC + CLECs
DCS                  Digital X-Connect System                     ILEC                  7168 DS1
                     shared by ILEC + CLECs




                                                                                                             54
                                                                             Exhibit SET-COLLO-3
                                                                               MPSC Case U-13531
                                                 Initial Testimony of Steven E. Turner (Collocation)

      7.5   DS-3 MODEL REQUIREMENTS USING A MANUAL DSX

                  Copper Connectivity at DS-3 Level (DSX)


Co-location Area

                                                                              Cable
                                                       POT                                        DSX
                                                                              Hole
        CLEC                                       X         X                                X            X
      Equipment                Cable               C         C            Cable               C            C
                                A                  -         -             B                  -            -
                                                   A         B                                C            D

                                                                 Pot X-
                    Cable Rack 1A      Cable Rack 2A
                                                                 Conn         Cable Rack B




       CONNECTIVITY ELEMENTS FOR DS-3 SERVICE ( DSX OPTION)
 ELEMENT        DESCRIPTION        PROVIDED        SIZE     LENGTH
                                       BY
CLEC              DS-3 Terminal/Multiplexer                      CLEC
Equipment
Cable A           734 Shielded                                   CLEC                         <25 feet
Cable Rack 1A     20” Ladder Rack - CLEC specific                ILEC                          5 feet
                  ~ included in cage cost model
Cable Rack 2A     20” Ladder Rack - Shared by all                ILEC       555-734 type      20 feet
                  CLECs
POT               Demarcation Point                              CLEC      7’-0” high x 23”
                                                                             wide x 12 “
                                                                                 deep
XC-A              Passive X-Connect Panel                        CLEC          16 DS3
POT X-Conn        Shielded X-Connect Wire                        CLEC         2 per DS3           3 feet
XC-B              Passive X-Connect Panel                        CLEC          16 DS3
Cable B           734 Shielded (2 cables)                        ILEC         2 per DS3       165 feet
Cable Rack B      20” Ladder cable rack - Shared                           555 734 Type       150 feet
Occupancy         ILEC + CLECs
Cable Hole        2 Cable holes between floors ~                 ILEC       555 734 Type
Occupancy         Shared ILEC + CLECs
XC-C              Passive X-Connect Panel                        ILEC         16 DS3
DSX               Digital X-Connect Frame shared                 ILEC         112 DS3
                  by ILEC + CLECs




                                                                                                    55
                                                                                    Exhibit SET-COLLO-3
                                                                                      MPSC Case U-13531
                                                        Initial Testimony of Steven E. Turner (Collocation)

      7.6    DS-3 MODEL REQUIREMENTS USING AN ELECTRONIC DCS

                    Copper Connectivity at DS-3 Level (DCS )


 Co-location Area

                                                                                Cable
                                                        POT                                              DCS
                                                                                Hole
      CLEC                                          X         X
                                                                                                   I/O          I/O
    Equipment                   Cable               C         C             Cable
                                                                                                  Card         Card
                                 A                  -         -              B
                                                                                                    A            B
                                                    A         B

                                                                   Pot X-
                     Cable Rack 1A      Cable Rack 2A
                                                                   Conn         Cable Rack B




        CONNECTIVITY ELEMENTS FOR DS-3 SERVICE ( DCS OPTION)
   ELEMENT         DESCRIPTION       PROVIDED       SIZE     LENGTH
                                         BY
CLEC Equipment       DS-3 Terminal/Multiplexer                         CLEC
Cable A              734 Shielded                                      CLEC                               <25 feet
Cable Rack 1A        20” Ladder Rack - CLEC specific                   ILEC                                5 feet
                     ~ included in cage cost model
Cable Rack 2A        20” Ladder Rack - Shared by all                    ILEC         555-734 type         20 feet
                     CLECs
POT                  Demarcation Point                                 CLEC          7’-0” high x
                                                                                     23” wide x
                                                                                      12 “ deep
XC-A                 Passive X-Connect Panel                           CLEC            16 DS3
POT X-Conn           Shielded X-Connect Wire                           CLEC          2 per DS3             3 feet
XC-B                 Passive X-Connect Panel                           CLEC            16 DS3
Cable B              734 Shielded (2 cables)                           ILEC          2 per DS3            165 feet
Cable Rack B         20” Ladder cable rack – Shared                                 555 734 Type          150 feet
Occupancy            ILEC + CLECs
Cable Hole           2 Cable holes between floors ~                     ILEC        555 734 Type
Occupancy            Shared ILEC + CLECs
Digital X-Connect    DS-3 Digital Cross-Connect                         ILEC            512 DS3
System               shared by ILEC + CLECs




                                                                                                               56
                                                                                      Exhibit SET-COLLO-3
                                                                                        MPSC Case U-13531
                                                          Initial Testimony of Steven E. Turner (Collocation)

         7.7    OPTICAL MODEL REQUIREMENTS

                                        Fiber Connectivity
     Co-location Area
                                  Common
                                 Collocation                                       Cable            FDF
           Fiber
                                    Area                                           Hole
           Patch
                                                              Cable A
           Panel



                        Cable Rack 1A     Cable Rack 2A                            Cable Rack B




                        CONNECTIVITY ELEMENTS FOR OPTICAL SERVICE
      ELEMENT               DESCRIPTION     PROVIDED    SIZE/CAPACITY                                  LENGTH
                                                BY
 CLEC Equipment         Fiber patch panel in cage                  CLEC                     --              --
 Cable Rack 1A          12 ” ladder rack - already                 ILEC                     --            5 feet
                        included in cage cost
                        model for entrance fiber
 Cable Rack 2A          20” ladder rack - already                   ILEC                    --          20 feet
                        included in cage cost
                        model for entrance fiber
 Cable A                Breakout cable between                      ILEC               12 fibers        190 feet
                        cage and fiber x-connect
 Cable Rack B           12” Ladder Rack - shared                    ILEC             221 cables         150 feet
 (Occupancy)            by ILEC + CLECs
 Cable Hole             2 cable holes - shared by                   ILEC        221 cables per hole
 Occupancy              ILEC + CLECs
 Fiber Distribution     Fiber X-connect system                      ILEC              768 fibers
 Frame                  shared by ILEC + CLECs



8.       LAND AND BUILDING ELEMENTS

         8.1    OVERVIEW

         The largest charges that ILECs have proposed for CLEC collocation have been

         associated with the costs of building modifications -- costs that allegedly are directly

         related to collocation placement in the central office. Decisions regarding placement of

         the collocation area are typically made by the ILEC with no input from CLECs.



                                                                                                           57
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

Consequently, if the CLEC must pay for all alleged building modification costs, the ILEC

-- unless constrained -- has the ability to select a location in the central office that is

either difficult to access or requires extensive new construction. ILECs can impose site

preparation charges that include costs for demolishing existing walls, removing doors,

electrical and mechanical components, etc., even before new construction begins. It is

not uncommon for the ILEC to require CLECs to pay for new corridors, hallways, doors,

and sometimes even a costly new external entrance to the building, allegedly to provide

a “secure environment.” (The issue of security as it relates to this model is addressed in

Section 8.2.)

       Building renovation charges imposed on CLECs can be prohibitive if the ILEC is

allowed to recover from the CLEC all expenses associated with mandated changes in

local building codes.     These include items such as asbestos removal, building

modifications to meet the Americans with Disabilities Act requirements, new sprinklers,

fire alarm systems etc. It is unreasonable to expect CLECs to assume the responsibility

for upgrading central officess that do not meet current standards. The costs attributable

to meeting environmental and other regulations should be borne by the primary user of

the central office. The appropriate share of these exceptional building costs will then be

recovered in the per square foot land and building charge to the CLECs.

       ILECs can inflate building rearrangement charges by claiming that major building

services (e.g., emergency diesel power, air conditioning, electrical service) are currently

at full capacity and that a CLEC collocation request that precipitates additional capacity

needs should bear the full costs associated with that additional capacity in up-front

nonrecurring charges. Upgrades to major building systems are not the responsibility of

the CLEC; rather, CLECs should pay their share of the major building systems costs

through the rates for collocation elements that include these building systems.




                                                                                        58
                                                                   Exhibit SET-COLLO-3
                                                                     MPSC Case U-13531
                                       Initial Testimony of Steven E. Turner (Collocation)

Therefore, any additional charge for building rearrangements or upgrades would result in

double recovery.

       The ILEC, as the primary user of the central office, must be responsible for the

long- term maintenance and upgrading of its central office buildings. The responsibility

for expenditures associated with building codes revisions or upgrades to major building

systems cannot be transferred to a particular CLEC simply because the timing of a

particular major building component upgrade coincides with a CLEC collocation request.

The CLEC’s share of these costs are included in the monthly per square foot charge for

rent and the cost of investments associated with the various collocation elements.




8.2    PLACEMENT AND SECURITY ISSUES

As noted in subsection 3, the primary consideration in the establishment of a collocation

area is that it be constructed relatively close to the ILEC cross-connects to minimize

ongoing recurring charges for connectivity.    From a physical perspective, however, the

collocation space should be situated in an area of the central office that provides

unrestricted access to the CLEC with the least disruption possible to the ILEC. This

could be accomplished by locating the collocation area on an exterior wall or on a

corridor. Since existing ILEC equipment rooms within the central office are typically

secure and cannot be entered without a door code or card reader, placement along a

corridor allows for uninhibited access by CLECs while at the same time providing

security for the ILEC.

       The central office model layout incorporates building investments that are directly

attributable to the creation and rental of a collocation space by the ILEC. Included in this

building investment is an explicit investment associated with the installation of an

electronic card-reader security system.       While the ILEC is entitled to ensure its




                                                                                         59
                                                                   Exhibit SET-COLLO-3
                                                                     MPSC Case U-13531
                                       Initial Testimony of Steven E. Turner (Collocation)

equipment areas are secure, the CLEC should not have to bear the burden of excessive

costs of providing extensive building renovations for the alleged purpose of ensuring

ILEC security. Central offices utilize electronic security card systems to monitor access

and egress. Each doorway has an electronic card reader that will admit only the holders

of pre-screened cards.     Because the investment in the security system has been

included in developing the total investment in the central office building, these costs are

included in the basic per square foot cost of a central office building. Thus, the model

assumes the cost of the security system is recovered in the per square foot charge for

rent. The costs of purchasing individual cards and associated system maintenance, on

the other hand, are assumed to be costs each CLEC should bear separately.



8.3    COLLOCATION CONSTRUCTION COMPONENTS

The components and magnitude of the construction project associated with physical

collocation are relatively minor and can be implemented by most smaller contractors at

competitive rates. There is no requirement for ILECs to use only large construction

companies for collocation related building rearrangements.     That sort of requirement is

akin to requiring the use of a Big Eight accounting firm to handle a simple income tax

return or using a major law firm in small claims court.

       The central office model layout assumes that the ILEC arranges and obtains all

quotations based on a competitive bidding process. Subsequent to the receipt of the

competitive tenders, the bids are analyzed as to content to ensure that all of the work

has been included. The succeeding contractor is then permitted to complete the work in

the most efficient and expeditious manner.         Figure 8A shows the space-efficient

collocation area incorporated in the model. That collocation area is used throughout this

section to outline various construction components, quantities, and associated costs.




                                                                                        60
                                                                      Exhibit SET-COLLO-3
                                                                        MPSC Case U-13531
                                          Initial Testimony of Steven E. Turner (Collocation)

                                           27’-6”

                           10’-0”          7’-6”             10’-0”




                                             POT BAYS
            10’-0”
   20’-0”




                            CLEC EQPT.                  CLEC EQPT.




                                             BDFB
                            CLEC EQPT.                  CLEC EQPT.




                                             POT BAYS
            10’-0”




FORWARD-LOOKING BEST PLANNING COLLOCATION MODEL



                                     Figure 8A
            Chart 4 includes a list of the common elements required for the construction of a

typical collocation area in an ILEC central office. The rationale for including each

construction element in the development of this collocation model follows.




                                                                                           61
                                                                   Exhibit SET-COLLO-3
                                                                     MPSC Case U-13531
                                       Initial Testimony of Steven E. Turner (Collocation)


                                CHART 4
         COLLOCATION MODEL – SUMMARY OF CONSTRUCTION ELEMENTS
               ITEM            QUANTITY UNIT                 REMARKS
PARTITIONING (INCL. PANELS,      155    Lin. Ft. Wire Woven Partitions – channel
GATES & INSTALLATION)                            frame, 1-1/2” diamond mesh, 10
                                                 ga. wire painted, 5x8 panels
FLOOR TILE                       550    Sq. Ft. 1/8” x 12 x 12 vinyl composite
                                                 conductive tile
ELECTRONIC CARDS                   5     Each Card reader system in central
                                                 office
PADLOCKS FOR CAGES                 4     Each Provided by CLEC
PLYWOOD                            1    Sheet 4’ x 8’ x ¾” sheet
HVAC                              7.7    Tons Maintain temperature 68-80F
LIGHTING                          22     Each Standard 1’x4’ fluorescent fixtures
SWITCHING (MOTION DETECTION        5     Each 1 per cage and 1 for Common
TYPE)                                            Area
ELECTRICAL PANEL                   1     Each 225 amp, 42 circuit , 120/240volts
ELECTRICAL RECEPTACLES            12     Each 20 amp duplex electrical outlets
GROUNDING                          1     Each Pre drilled copper ground bar
4/0 GROUNDING CABLE              140    Lin. Ft. Unsheathed braided copper cable
MESH GROUNDING                    10    Lin. Ft. Safety and EMI compliant
                                                 grounding


 PARTITIONING

 To segregate the CLEC space from the ILEC portion of the central office requires some

 type of partitioning. The types of partitions typically found in central offices include

 drywall partitioning and masonry, as well as chain link fencing used to secure storage

 areas.

          Cages to house collocators can be constructed of either drywall or chain link

 fencing. There are inherent advantages and disadvantages to both types of partitioning.

 Drywall partitioning is constructed of vertical metal studs covered with a layer of paper

 enclosed gypsum plaster. The butt joints of the boards are then covered with a plaster

 paste that is sanded smooth after it dries. This type of partitioning offers good security

 and privacy for the occupants. However, this method of construction creates a great

 deal of dust that is detrimental to the telecommunications equipment. It also prohibits



                                                                                        62
                                                                    Exhibit SET-COLLO-3
                                                                      MPSC Case U-13531
                                        Initial Testimony of Steven E. Turner (Collocation)

air-flow, which increases the cost of air conditioning.

        The collocation area model layout assumes the use of woven wire mesh

partitioning, using painted 10-gauge metal fabric that is stretched across frames that are

easily assembled, and that affords adequate security from intrusion.              The cage is

accessed by way of a swinging door of similar construction to the partition walls. Many

of the collocation installations to date have used this method of partitioning.

        The collocation area model layout assumes the use of an eight-foot high woven

wire mesh partitions because of the ease of construction, economy, and relatively clean

installation. Other advantages of an eight-foot high woven wire mesh partitions include

easier provision of air conditioning since the requirement for mechanical work is

reduced. Cable racking can be installed more easily and fencing provides increased

visibility, resulting in better security, from the ILEC perspective.



FLOOR TILE

Floor covering should be sufficient to support equipment and be easy to maintain. Also

it must be free of static electricity that adversely affects the operation of the

telecommunications equipment. Therefore, the collocation area model layout requires

concrete floors covered with vinyl composite conductive tiles.

        A concrete floor slab with a live load of 150 to 300 pounds per square foot live

load capacity is adequate to support commonly used telecommunications equipment.

Further, the use of concrete permits the installation of expansion shields, allowing the

best method of securing the equipment frames to the floor.

        Occasionally equipment has been installed on concrete floors that have been

painted, but there are drawbacks. First, there is an increased maintenance cycle of

repainting. Second, the paint flaking that often occurs can be drawn into the equipment




                                                                                          63
                                                                   Exhibit SET-COLLO-3
                                                                     MPSC Case U-13531
                                       Initial Testimony of Steven E. Turner (Collocation)

and cause malfunctioning. Thus, a concrete floor slab covered with vinyl composition

tile is considered to be the norm for telecommunications buildings.



ELECTRONIC CARDS, PADLOCKS

The model assumes an electronic card reader system is used throughout the central

office as the least cost method of providing security. There is no greater danger of

sabotage from a collocator’s employees and contractors than from the ILEC’s

employees and contractors. Thus, providing (and charging) CLECs for cards permits

security to be maintained in the collocation area.

       It is assumed that each Collocation Cage is provided with a padlock. However,

the model assumes that the CLEC will purchase and install its own padlock. A key or

the combination would be provided to the ILEC for emergency situations.



PLYWOOD

Plywood backboards will be used to mount the electrical distribution panel and any other

components that cannot readily be attached to the metal cage.



HEATING, VENTILATING, AND AIR CONDITIONING (HVAC)

Telecommunications equipment will operate at relatively high and low temperatures.

However, sudden fluctuations in temperature can contribute to card failures. Therefore,

the model assumes a requirement for air conditioning in order to maintain room

temperature between 65 and 80 degrees Fahrenheit.

       Air conditioning (heating is not required) investment for the collocated equipment

should be based solely on the amount of heat that must be dissipated as a result of

collocated equipment installed, rather than on the capital costs to replace an entire

HVAC system. The electrical power used by telecommunications equipment is used as


                                                                                       64
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

the indicator of the additional amount of heat that must be dissipated.      The model

develops the investment for HVAC based on the amount of electrical power used by a

collocator, so the greater a collocator’s power demand, the larger the investment

required.   Basing HVAC investment on power demand ensures that the ILEC is

compensated for the additional HVAC demands collocators’ equipment imposes on the

ILEC. In addition, charging all collocators for HVAC based on their respective per-amp

power demand avoids penalizing a particular collocator with an ICB charge, simply

because that collocator’s request happens to coincide with the exhaust of the ILEC’s

HVAC system. More important, all collocators will know in advance the cost of HVAC

rather than the uncertainty of an undefined ICB.



ELECTRICAL

As shown in Figure 8B, the collocation area model layout assumes fluorescent lighting in

the cages and the common area. Each 100 square foot allocation requires four 4’-0”

units hung by chains from the slab above. To ensure adequate illumination, each fixture

should be equipped with two 40-watt lamps. In addition, the model assumes six identical

light fixtures used to illuminate the common area (for the POT bays and BDFB).




                                                                                      65
                                                                    Exhibit SET-COLLO-3
                                                                      MPSC Case U-13531
                                        Initial Testimony of Steven E. Turner (Collocation)


                                                       ELECTRICAL PANEL
             TYPICAL COLLOCATION CAGE




                                                QUANTITY            QUANTITY IN
                ELEMENT            SYMBOL
                                                PER CAGE           COMMON AREA
             4’-0” FLOUR. LIGHTS                   4                      6

             20 amp AC OUTLETS                     2                      4
             MOTION SWITCHES                       1                      1




              COLLOCATION MODEL - ELECTRICAL COMPONENTS



                                      Figure 8B
       The collocation area model layout also incorporates motion detector light

switching that is activated when a technician enters the collocation area.        Similarly,

entering the cages within the collocation area activates the individual cage lighting. The

lights will shut off when the technician leaves the area, thus conserving power and

reducing costs. Furthermore, standard duplex electrical receptacles are included in the

cages and the common area within the collocation area for operating test equipment and

general convenience purposes. Finally, the collocation area model layout includes an




                                                                                         66
                                                                                             Exhibit SET-COLLO-3
                                                                                               MPSC Case U-13531
                                                                 Initial Testimony of Steven E. Turner (Collocation)

AC electric distribution service panel to feed lighting, switching and outlets.



GROUNDING

As shown in Figure 8C, to ensure optimum grounding, the collocation area model layout

incorporates the installation of a new common ground bar located in the common area

by the ILEC. This ground bar, together with approximately 100 feet of 4/0 ground cable

placed in conduit, will be connected to the existing floor ground bar by the ILEC. Each

CLEC can then provide its own equipment ground and ground cable to connect to the

common area ground as explained in Subsection 4.




                                                                                         E Q U IP M E N T
                                                                                           GROUND




                                                                              BY CLEC




                                                 COMMON
                                                GROUND BAR                  B Y IL E C
      FLO O R G R O U N D BAR
            ( E X I S T IN G )
                                    4 /0 G R O U N D C A B L E




                           C O L L O C A T IO N M O D E L - G R O U N D IN G L A Y O U T



                                                     Figure 8C



8.4        COST OF FLOOR SPACE

The collocation area model layout recognizes that the ILEC should receive

compensation for floor space used by the CLEC and therefore incorporates a cost per

square foot land and building component. Although actual rates per square foot for land



                                                                                                                 67
                                                                    Exhibit SET-COLLO-3
                                                                      MPSC Case U-13531
                                        Initial Testimony of Steven E. Turner (Collocation)

and building can be state-specific, the overall basis for calculating monthly rental

charges for floor space remains constant. As shown in Chart 5, calculations are based

on the forward-looking central office model layout, and assume an 80% factor for

assignable space and a land to building ratio of two-to-one based on the building

footprint.

                                   CHART 5
                   LAND & BUILDING COST CALCULATION TABLE
             EQUIPMENT SPACE CALCULATION
             Equipment Space Requirement                                12,000
             Ancillary Requirement                                        25%
             Total Footprint per Floor                                  15,000
             Number of Floors (incl. Basement)                               4
             Gross Building Space
                                                                        60,000
             Assignable Space Factor                                      80%
             Assignable Space
                                                                        48,000
             LAND CALCULATION
             Building Footprint                                          15000
             Building to Land Ratio                                          2
             Land Area Requirement
                                                                        30,000
             BUILDING CALCULATION
             Gross Building Space
                                                                        60,000



8.5     REAL ESTATE RESOURCES

The following ILEC resources are required to implement the central office model layout:

        1. Project Manager: Reviews requirements of the collocator and coordinates
             the activities of engineering consultants to produce working drawings.
             Ascertains that funding is in place to proceed with project. Reports to the
             CLEC on progress and reviews the project with the ILEC subsequent to the
             completion of the collocation area.
        2. Architect:     Produces architectural quality drawings depicting the exact
             location, dimensions, physical obstructions, and other pertinent information
             regarding the proposed collocation space. Requests tenders and reviews


                                                                                        68
                                                                       Exhibit SET-COLLO-3
                                                                         MPSC Case U-13531
                                           Initial Testimony of Steven E. Turner (Collocation)

                submissions for accuracy and completeness prior to the issuance of a
                contract by the Project Manager. In some instances, the Architect may also
                be the Project Manager.
            3. Construction Manager: Coordinates and reviews contractors’ activities in
                the collocation space. Resolves on site interference with existing services.
                Monitors the progress and prepares construction activity reports.

     The specific time allocations for each resource and associated project intervals are

     outlined in Section 9.



9.   PROCESS ISSUES

     9.1    ILEC MANPOWER REQUIREMENTS

     The planning and implementation of a collocation area in an ILEC central office requires

     manpower effort on the part of the ILEC. To ensure fair and reasonable compensation

     for ILEC manpower, the central office model layout incorporates a planning component

     outlining the expected ILEC manpower requirements to implement a CLEC collocation

     request using best practice processes in a competitive environment. As shown in Chart

     6, the ILEC resource requirements have been separated into manpower required to

     establish the initial collocation area and manpower requirements to implement each

     CLEC request. The first CLEC request includes both requirements.




                                                                                           69
                                                                       Exhibit SET-COLLO-3
                                                                         MPSC Case U-13531
                                           Initial Testimony of Steven E. Turner (Collocation)


                                         CHART 6
                                            HOURS TO PLAN           HOURS PER
              FUNCTION                           INITIAL            EACH CLEC        NOTES
                                             COLLOCATION             REQUEST
                                                  AREA
OUTSIDE PLANT ACCESS DESIGN                           0                   6
BUILDING PLANNING                                     10                  4
MDF PLANNING                                          0                   4
REAL ESTATE PROJECT MANAGER                            6                  2
REAL ESTATE CONSTRUCTION                              8                   4
MANAGER
ARCHITECT                                             22                  2             1
POWER ENGINEER                                        6                   4             2
EQUIPMENT ENGINEER                                    6                   4             3
EQUIPMENT INSTALLATION                                 6                  8             4
PROJECT MGR.
OPERATIONS GROUP                                      2                   4
APPLICATION FEE                                       0                  10             5
              TOTAL ILEC MANPOWER                     66                  52            6


                                              NOTES
  1. ASSUMES IN HOUSE ARCHITECT WITH NO EXTERNAL CHARGES FOR ARCHITECTS.
  2. DISTRIBUTION ONLY (BDFB TO DC PANEL): -48V DC POWER ASSESSMENTS ARE DEMAND
     FUNCTIONS COVERED UNDER POWER CONSUMPTION CHARGE.
  3. ONLY 5’0” CLEC-SPECIFIC RACK TO CAGE; OTHER CABLE AND CABLE RACKING IS DEMAND ACTIVITY
      COVERED UNDER RECURRING CHARGE.
  4. SHOULD NOT INCLUDE COORDINATION OF DEMAND PROJECTS.
  5. APPLICATION FEE TO COVER ACTIVITIES OF VARIOUS ILEC ADMINISTRATIVE AND BILLING GROUPS.
  6. ASSUMES FIRST CLEC REQUEST COINCIDES WITH PLANNING OF INITIAL COLLOCATION AREA..



     The proposed manpower requirements shown in the preceding chart have been

     developed assuming the following minimum requirements:

                ⇒ Fully trained and competent staff
                ⇒ Best practice processes for building modifications
                ⇒ Best practice processes for central office Equipment and Power
                    rearrangements
                ⇒ Up-to-date and accurate records (e.g., power consumption, equipment
                    drawings, wiring lists, etc.)
                ⇒ Efficient suppliers/construction interfaces with least cost competitive
                    intervals



                                                                                            70
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)


       The central office model layout also assumes that the ILEC will only be

reimbursed for time spent implementing functions associated with collocation elements

covered by a non-recurring charge. Time expended assessing equipment for which the

ILEC is reimbursed via a recurring charge (e.g., -48V power plant, shared cable racking,

etc.) is an ongoing ILEC planning requirement. These work functions are no different

than the assessments the ILEC must undertake prior to implementing other demand

projects and should therefore not be charged to CLECs. ILEC manpower spent due to

existing inefficiencies such as the revisions to inaccurate drawing records, etc., should

not be included in ILEC project management time to implement a CLEC collocation

request.

       The manpower requirements shown in Chart 6 provide an accurate assessment

of the planning time required to efficiently implement a CLEC collocation request in a

best practice competitive environment. These times are included in the Collocation

Model as a specific component for the planning of a CLEC collocation request rather

than permitting the ILEC to arbitrarily establish undefined charges using an ICB for Time

and Materials, which can easily be manipulated on a case by case basis.



9.2    IMPLEMENTATION INTERVALS

An assessment of the functions and intervals required to implement the first CLEC

collocation request in a particular ILEC central office, assuming optimum efficiency, best

practice processes, and a competitive environment, indicates that the maximum interval

should be 68 working/business days. This includes the time from when a CLEC applies

to collocate in an ILEC central office until the collocation area is ready for equipment to

be delivered by the CLEC.

       The interval for subsequent collocation requests in the same central office is less



                                                                                        71
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

since some of the planning activities and building modifications would already be

completed in response to the initial request.     A reasonable interval for subsequent

requests is calculated at 56 working/business days.

    Rather than permitting the ILEC to establish arbitrary intervals on a case by case

basis, the central office model layout adopts the following standard intervals for planning

and implementing a CLEC collocation request in an ILEC central office:

   ⇒ Initial Collocation request in a particular ILEC Central Office = 14 Calendar
   Weeks
   ⇒ Subsequent Collocation requests in the same Central Office. =            11 Calendar
   Weeks




                                                                                        72
                                                                       Exhibit SET-COLLO-3
                                                                         MPSC Case U-13531
                                           Initial Testimony of Steven E. Turner (Collocation)

                         Section 2: Virtual Collocation

1.   INTRODUCTION

     1.1    PURPOSE

     The purpose of this section of the White Paper is to present a technical model for the

     virtual collocation of CLEC equipment in ILEC central office buildings (the Virtual

     Collocation Model). As with the technical model for physical collocation, the Virtual

     Collocation Model uses a bottoms-up approach to implementing virtual collocation based

     on the forward-looking central office and collocation model layouts, and the use of best

     practice central office planning strategies, least cost suppliers, and competitive

     processes. This section identifies the requirements for efficient virtual collocation of

     CLEC equipment at an ILEC central office and provides the technical basis for

     determining the costs to meet these requirements, and, based on these, identifies the

     investments necessary for an efficient ILEC to provide virtual collocation to CLECs.



     1.2    OVERVIEW OF VIRTUAL COLLOCATION

     Virtual collocation is nothing more than an arrangement that allows a CLEC to place its

     own telecommunications equipment in an area of the central office currently used by the

     ILEC for its own equipment. A CLEC may wish to use virtual collocation if it lacks

     sufficient customer demand to justify a physical collocation arrangement, or because

     physical collocation cage construction costs render that method of collocation too costly.

     In addition, Section 251c(6) of the Telecommunications Act of 1996 requires that virtual

     collocation be provided when physical collocation is not practical for technical reasons or

     because of space limitations.     Virtual collocation arrangements usually operate as

     follows: The CLEC purchases the necessary equipment and sells it to the ILEC for a

     nominal sum ($1.00), and then the equipment is installed, at the CLEC's expense, in


                                                                                             73
                                                                      Exhibit SET-COLLO-3
                                                                        MPSC Case U-13531
                                          Initial Testimony of Steven E. Turner (Collocation)

vacant space in the ILEC's equipment (relay) racks in the central office along with ILEC

equipment.     The ILEC handles day-to-day maintenance activities, for which it is

reimbursed by the CLEC. The CLEC is provided the ability to enter the central office on

request but requires a security escort.

       The elements required to establish physical collocation in an ILEC central office

are depicted in Figure 1A in Section 1 of this White Paper. The requirements for virtual

collocation are quite similar, except:

       •   There is no separate cage. Instead, the CLEC's equipment is not segregated

           from the ILEC's equipment, but rather is placed in the same relay racks that

           house the ILEC's equipment.

       •   There is no need for a point of termination (POT) bay to be used as a

           demarcation point between the ILEC and CLEC.

       •   There is no requirement to locate POT bays close to virtually collocated

           equipment because the ILEC is responsible for end-to-end maintenance.

       A schematic of the components associated with a typical virtual collocation

arrangement in an ILEC central office appears below.




                                                                                          74
                                                                                   Exhibit SET-COLLO-3
                                                                                     MPSC Case U-13531
                                                       Initial Testimony of Steven E. Turner (Collocation)



                               TYPICAL VIRTUAL COLLOCATION ARRANGEMENT


                                                                      CENTRAL OFFICE EQUIPMENT LINEUPS

         Manhole                                ILEC -48V                     BDFB             BDFB

                                              POWER PLANT




                      Loop                                      VG

                    (Copper)

                      Loop          ILEC
          ILEC      (Copper)
         CABLE                       MDF
         VAULT
                    Loop
                                       DS-1
                   (Fiber)
                                                      ILEC     DS-3
                                                    DIGITAL
                                           DS-1
                                                    CROSS
                                                               DS-1
                                           DS-1    CONNECT
                               ILEC                SYSTEMS
                                           DS-3
                             NETWORK

                                           FIBER
                                                              FIBER
                                           FIBER
                                                     ILEC
                                                     FDF
             FIBER ENTRANCE CABLE - CLEC




            The following cost components of virtual collocation are described and modeled:

     building space, space on the equipment racks, connectivity, power, access (entrance

     fiber), and operational costs such as maintenance activities, security escorts, and the

     training of ILEC technicians.



2.   COST OF BUILDING AND RELAY RACKS

     Since virtual collocation provides for CLEC equipment to be located within existing ILEC

     equipment areas, there will be costs associated with the building space taken up by the

     collocated equipment. In order to use the equipment area, and hence the floor space,

     efficiently in ILEC central offices, the Virtual Collocation Model develops investments for

     building space based on units of ¼ relay rack. ILEC equipment space is comprised of

     rows (called “lineups”) of relay racks that, when installed, resemble empty metal


                                                                                                         75
                                                                                Exhibit SET-COLLO-3
                                                                                  MPSC Case U-13531
                                                    Initial Testimony of Steven E. Turner (Collocation)

     bookcases without shelves. (See Figure 1B in Section 1 of this White Paper.) Relay

     racks are fabricated to permit the installation of equipment shelves on an "as required"

     basis. The telecommunications equipment that CLECs may install comes in various

     sizes (heights), and thus requires varying amounts of "shelf space" on a relay rack.

     While this conceivably permits relay racks – and the building space they take up – to be

     administered by the "rack inch," for administrative simplicity the Virtual Collocation Model

     develops the investments for both building space and the relay rack based on units of ¼

     relay rack. Using units of ¼ relay rack ensures that ILEC equipment space is used

     efficiently and allows CLECs to pay only for the space used. In many instances, relay

     racks with empty space will be available. In some cases, however, a new relay rack

     may need to be installed for a CLEC to place its equipment. In either situation, it is

     appropriate to include – and the model includes – investment for a relay rack.

              Relay racks are roughly 2’-0” wide, 12” deep, and 7’-0” high and placed in lineups

     to simplify cabling and day-to-day maintenance operations.                       Equipment lineups are

     typically located with 2’-6” to 3’-0” front and rear aisles for maintenance purposes. For

     the purpose of this White Paper, it will be assumed that each relay rack utilizes nine (9)

     square feet of floor space.11 (Using increments of ¼ relay racks is the equivalent of 2.25

     square feet of space.)

              The overall method of calculating monthly rental charges remains the same as

     for physical collocation. As shown in Chart 5 (see Section 1 of this White Paper), the

     monthly rental calculations are based on the three floor forward-looking central office

     layout model developed in Section 1 of this White Paper. Also as before, the monthly

     rental calculations assume generous factors of 80% assignable space and a two-to-one

     land to building ratio based on the building footprint.


11
     Includes the relay rack footprint plus 50% of front and rear aisles. The 9 square feet is sufficiently generous
     to incorporate end guards and 15” deep frames.


                                                                                                                76
                                                                       Exhibit SET-COLLO-3
                                                                         MPSC Case U-13531
                                           Initial Testimony of Steven E. Turner (Collocation)

3.   CONNECTIVITY

     3.1    OVERVIEW OF CONNECTIVITY LENGTH ASSUMPTIONS

     As explained in subsection 4 of Section 1, best practice planning strategies dictate that

     ILEC equipment is placed as close as possible to the appropriate cross-connect to

     minimize cable lengths. Figure 4C (see Section 1 of the White Paper) provides an

     illustrative example of the average cable lengths for ILEC equipment. As shown, the

     average connectivity lengths between existing ILEC equipment areas and ILEC cross-

     connects are between 100-125 feet.

            Since virtual CLEC equipment is placed in the same equipment areas that the

     ILEC uses for its own equipment (and is not segregated from the ILEC equipment), it is

     likely that connectivity investments for virtual collocation will be in the 100-125 foot

     range. This length would be less than that required for physical collocation. Thus, using

     the same connectivity lengths for virtual collocation as those used for physical

     collocation provides a conservative estimate.      That is, while it is likely that CLEC

     equipment will be placed in the 100-125 foot range from cross-connects (since the

     equipment is in the same lineups used by the ILEC), the model uses the same 165-foot

     connectivity length developed for physical collocation.

            There are two connectivity lengths required for virtual collocation that are not

     required for physical collocation, that are developed using the same worse case/best

     case method described above in subsection 4 of the physical collocation model. First, a

     different power cabling length is required to connect CLEC virtual equipment to the ILEC

     BDFB. Assuming relay rack lineups of 40 feet, with a BDFB located in the first relay rack

     of every other line-up, results in a connectivity length of 40 feet. Second, connecting two

     pieces of CLEC virtual equipment (“virtual-to-virtual” connectivity), assuming that the




                                                                                             77
                                                                               Exhibit SET-COLLO-3
                                                                                 MPSC Case U-13531
                                                   Initial Testimony of Steven E. Turner (Collocation)

     equipment will be within 12 lineups, results in a connectivity length of 65 feet.12

             Power and grounding cabling is an integral part of most telecommunications

     installations, necessary to complete continuity testing prior to acceptance.             Testing

     continuity from the equipment to the CLEC switch is necessary to ensure the equipment

     is operational, functional and ready to accept connectivity cabling. Thus, power and

     grounding cables are installed at the time the CLEC’s equipment is installed. Because

     the CLEC is responsible to the installer for the invoice associated with installing

     equipment, power and grounding cables, the ILEC will not incur initial cabling costs for

     power or grounding.

             In an ideal scenario the CLEC would similarly be responsible to an installer for

     the total invoice associated with equipment and all cabling installation, and the ILEC

     would incur no initial cabling costs. However, the ILEC would have the incentive and

     ability to impose unnecessary cabling costs on CLECs. If an ILEC knew that the CLEC

     would have to pay an installer cabling costs no matter where the collocated equipment

     was placed, the ILEC would have the incentive to require the installer to place CLEC

     equipment in a remote area of the central office, far from cross connects. To overcome

     the ILEC’s incentive to impose unnecessary costs by virtue of its ability to dictate

     placement of virtually collocated equipment, the model includes ILEC investments for

     initial connectivity cabling based on cable lengths shown below.                 By basing the

     connectivity installation on established cable lengths, the incentive for the ILEC to

     impose excess cabling costs on the CLECs is removed.

             A summary of the average connectivity lengths to be used for virtual installations

     is set forth in Chart 7.




12
     Calculations for all cable lengths are included in the backup documentation.



                                                                                                   78
                                                                    Exhibit SET-COLLO-3
                                                                      MPSC Case U-13531
                                        Initial Testimony of Steven E. Turner (Collocation)


                                 CHART 7
                       VIRTUAL COLLOCATION MODEL
             CONNECTIVITY COMPONENTS AND AVERAGE DISTANCES
          TYPE OF CONNECTION       CABLE   CABLE RACK    CABLE
                                  LENGTH     LENGTH    HOLES AND
                                                        SLEEVES
      FIBER ENTRANCE CABLE (BY CLEC)         125’-0”           N/A               --
      FIBER RISER CABLE (BY CLEC)            175’-0”         160’-0”             3
      COPPER (DS-0/DS-1/DS-3)                165’-0”         150’-0”             2
      OPTICAL (FIBER BREAKOUT CABLES)        165’-0”         150’-0”             2
      -48V DC POWER PLANT TO BDFB            165’-0”         150’-0”             2
      BDFB TO FUSE PANEL ON VIRTUAL           40’-0”          25’-0”             --
      EQUIPMENT
      CONNECTIONS BETWEEN CLEC                   65’-0”       50’-0”             --
      VIRTUAL EQUIPMENT
      TIMING LEADS FOR CLEC VIRTUAL          135’-0”         120’-0”             --
      EQUIPMENT



3.2      OVERHEAD COMMON SYSTEMS INFRASTRUCTURE COMPONENTS

As explained in paragraph 4.4 of Section 1, cables are routed within the central office

environment on overhead cable racks hung from the ceiling. The following cable routes

will be required for CLEC virtual collocation.

           ⇒    copper and optical cable routes between virtual equipment and ILEC

                cross-connects

           ⇒    fiber cable route for riser cable between the cable vault and Fiber

                Distribution Frame

           ⇒    a power cable route to the closest BDFB

           ⇒    copper and fiber cable routes between virtual CLEC equipment

         The model does not distinguish between situations in which cable racks between

the virtual collocation equipment and cross-connects already exist and situations where

they do not exist. In either situation, the CLEC would pay a space rental fee to the ILEC

for its cable rack occupancy. Of course, that space rental fee would be based on the

costs associated with providing the cable rack.

         Conservative occupancy factors that incorporate cable rack fills using best


                                                                                        79
                                                                             Exhibit SET-COLLO-3
                                                                               MPSC Case U-13531
                                                 Initial Testimony of Steven E. Turner (Collocation)

     practice cable pileup assumptions are used to develop investments for the use of ILEC

     cable racks and inter-floor cable holes.13 Because cables are many different sizes, the

     model develops individual cable rack occupancy costs for the various types of

     telecommunications cable used in ILEC central offices, which are reflected in Chart 8.

     The top portion of the chart, entitled Cable Rack Capacities, outlines the commonly-used

     cable rack sizes, together with the estimated number of cables that can be placed on

     each at various cable pile-up levels (e.g. build-up on the rack). The lower portion of

     Chart 8 sorts the various types of cabling commonly used for telecommunications

     equipment according to size, and develops a cable equivalency factor.                      As shown,

     copper DS-1 cables and 12 Fiber Optical Breakout cables are the benchmark, with an

     equivalency of one cable. All cables smaller than the benchmark, such as DS-3 cables

     and smaller power distribution cables have also been assigned a one-cable equivalency.

     A 100-pair voice grade cable is equivalent to two benchmark cables; a fiber riser cable is

     equivalent to three benchmark cables; and a large 750 MCM power cable is equivalent

     to four benchmark cables.




13
     Supporting data for cable rack occupancy calculations and an explanation of cable rack capacity table can
     be found in Paragraph 4.4 of Section 1.



                                                                                                           80
                                                                           Exhibit SET-COLLO-3
                                                                             MPSC Case U-13531
                                               Initial Testimony of Steven E. Turner (Collocation)



                                CHART 8
                COLLOCATION MODEL - CABLE RACK CAPACITIES
      CABLE RACK WIDTH                  CABLE PILE-UP
     ACTUAL    CABLE    1” 2” 3” 4” 5” 6” 7” 8” 9” 10”                                         11”    12
       SIZE    SPACE                                                                                   ”
        10”            8.5”       26     51    77    102   128   154   179   204   230
        12”           10.5”       32     63    94    126   158   189   221   252   283   315
        15”           13.5”       41     81    122   162   203   243   284   324   365   405   446    486
        20”           18.5”       56     111   167   222   278   333   389   444   500   555   611    666
        25”           23.5”       71     141   212   282   353   423   494   564   635   705   776    846
        30”           28.5”       86     171   257   342   428   513   599   684   770   855
      CABLE        EQUIVALENCY   OCCUPANCY FACTOR FOR CABLE RACK & CABLE HOLE USAGE
      TYPE           FACTOR
       Fiber           3                Fiber Riser cables assume 7” Pile-up on 12” Racks *
       Riser                                        Capacity = 74 Cables (221/3)
     Breakout          1               Fiber Breakout cables assume 7” Pile-up on 12” Racks*
      Cable                                            Capacity = 221 Cables
        (12
      Fibers)
       750             4         Power Delivery Cables assume 5” Pile-up on 15” Racks *
       MCM                                      Capacity = 51 Cables (203/4)
     100 Pair        2           Copper DS-0 Voice Grade Cables assume 10” Pile-up on
     VG/DS-0                                              20” Racks
                                                Capacity = 278 Cables (555/2)
      28 Pair        1             Copper DS-1 Cables assume 10” Pile-up on 20” Racks
       DS-1                                        Capacity = 555 Cables **
       Coax          1                   Coax DS-3 assume 10” Pile-up on 20” Racks
       DS-3                                        Capacity = 555 Cables **
      Power          1          Power Distribution for fusing CLEC Virtual Equipment to the
     Distributi                             BDFB assume 7” Pile-up on 15” Racks
     on Cable                                       Capacity = 284 Cables
        * Reduced capacity due to rigidity & bending radius
        **DS-1 & DS-3 requires 2 cables per circuit


4.     COPPER AND OPTICAL CONNECTIVITY COMPONENTS

       4.1      OVERVIEW OF CONNECTIVITY MODELS

       Virtual collocation requires connectivity between the CLEC’s equipment and the ILEC

       cross-connects in the same way that an ILEC’s equipment requires connectivity to cross-

       connects.    The Virtual Collocation Model develops the investments associated with


                                                                                                 81
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

occupancy of ILEC cable racks for cabling between virtually located equipment. The

model assumes that connectivity between the CLEC and ILEC can be provided at

different transmission bandwidths: voice grade, DS-1, DS-3 and OC-x (optical

connections used to connect to “dark fiber” in the access network).

       In most ILEC central offices, the majority of DS-1 and DS-3 circuits to which

CLECs will want to interconnect are currently located on DSX panels. However, in some

ILEC central offices those higher bandwidth circuits may have already been relocated to

an electronic digital cross-connect system (DCS) or may appear at a Fiber Distribution

Frame (FDF). The Collocation Model includes all components necessary for end to end

connectivity in all cases.

       Depicted in schematic form on the following pages are the best practice and

least-cost connectivity arrangements that have been adopted in the Virtual Collocation

Model for all interconnection between CLEC virtual equipment and to the various ILEC

central office cross-connects.




                                                                                      82
                                                                         Exhibit SET-COLLO-3
                                                                           MPSC Case U-13531
                                             Initial Testimony of Steven E. Turner (Collocation)

        4.2    VIRTUAL VOICE GRADE MODEL REQUIREMENTS

                  Copper Connectivity at Voice Grade Level



                           Cable
                           Hole
    Virtual                                            MDF
   Equipment                                                                       T
                         Cable A                                 TS H              S    Access Cable
                                                                                   V

                         Cable Rack A




                CONNECTIVITY ELEMENTS FOR VOICE GRADE SERVICE
 ELEMENT            DESCRIPTION       PROVIDED SIZE/CAPACITY                            LENGTH
                                         BY
Virtual CLEC    Voice Grade Equipment               CLEC
Equipment
Cable A         Cable from Line Cards to             ILEC          100 pair cable        165 feet
                Horizontal side of MDF
Cable Hole      2 Cable Holes shared by              ILEC
Occupancy       ILEC + CLECs
Cable Rack A    20” Ladder Rack - Shared by          ILEC           555 cables           150 feet
Occupancy       ILEC + CLECs
MDF-H           Horizontal Terminal Block for        ILEC               100 pair
                X-Conn to Access side of DF
MDF             MDF Terminal Strip Space             ILEC          1 block space
MDF             Jumper from horizontal to            ILEC
X-Connect       vertical ~ Included in
                Unbundled Loop
MDF-V           Vertical side terminal strip ~       ILEC
                Included in Unbundled Loop




                                                                                             83
                                                                     Exhibit SET-COLLO-3
                                                                       MPSC Case U-13531
                                         Initial Testimony of Steven E. Turner (Collocation)

4.3     VIRTUAL DS-1 MODEL REQUIREMENTS USING A MANUAL DSX

                  Copper Connectivity at DS-1 Level (DSX )



                                               Cable
       Virtual                                 Hole                              DSX
                                                                         D                D
      Equipment                                                          S                S
                      Cable A
                                                                         X                X
                                                                         1                1
                                                                         A                B
                                     Cable Rack A




            CONNECTIVITY ELEMENTS FOR DS-1 SERVICE ( DSX OPTION)
      ELEMENT      DESCRIPTION      PROVIDED    SIZE/CAPACITY    LENGTH
                                       BY
Virtual CLEC       DS-1Multiplexer                  CLEC             28 DS1
Equipment
Cable A            2x 30 Pair ABAM                  ILEC             28 DS1             165 feet
Cable Rack A       20” Ladder Rack - Shared         ILEC            555 cables          150 feet
Occupancy          by ILEC + CLECs
Cable Hole         2 Cable Holes - Shared by        ILEC            555 cables
Occupancy          ILEC + CLECs
DSX-1C             Passive X-Connect Panel          ILEC             56 DS1
DSX                Digital X-Connect Frame          ILEC             560 DS1
                   shared by ILEC + CLECs




                                                                                         84
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

     4.4   VIRTUAL DS-1 MODEL REQUIREMENTS USING ELECTRONIC DCS

               Copper Connectivity at DS-1 Level (DCS )



                                            Cable
   Virtual                                  Hole                                  DCS
  Equipment
                                  Cable A                                   I/O             I/O
                                                                             A               A


                             Cable Rack A




         CONNECTIVITY ELEMENTS FOR DS-1 SERVICE ( DCS OPTION)
  ELEMENT      DESCRIPTION       PROVIDED    SIZE/CAPACITY    LENGTH
                                    BY
CLEC Virtual    DS-1Multiplexer                CLEC               28 DS1
Equipment
Cable A         2x 30 Pair ABAM                 ILEC              28 DS1              165 feet
Cable Rack A    20” Ladder Rack - Shared        ILEC             555 cables           150 feet
Occupancy       by ILEC + CLECs
Cable Hole      2 Cable Holes - Shared by       ILEC             555 cables
Occupancy       ILEC + CLECs
DCS             Digital X-Connect System        ILEC             7168 DS1
                shared by ILEC + CLECs




                                                                                      85
                                                                      Exhibit SET-COLLO-3
                                                                        MPSC Case U-13531
                                          Initial Testimony of Steven E. Turner (Collocation)

4.5     VIRTUAL DS-3 MODEL REQUIREMENTS USING A MANUAL DSX

                  Copper Connectivity at DS-3 Level (DSX)



                                              Cable
       Virtual                                Hole                               DSX
                                                                          D                D
      Equipment                                                           S                S
                       Cable A
                                                                          X                X
                                                                          1                1
                                                                          A                B
                                      Cable Rack A




            CONNECTIVITY ELEMENTS FOR DS-3 SERVICE ( DSX OPTION)
      ELEMENT        DESCRIPTION        PROVIDED        SIZE     LENGTH
                                            BY
 CLEC Virtual     DS-3 Terminal/Multiplexer             CLEC
 Equipment
 Cable A          734 Shielded (2 cables)               ILEC          2 per DS3        165 feet
 Cable Rack A     20” Ladder cable rack - Shared                      555 cables       150 feet
 Occupancy        ILEC + CLECs
 Cable Hole       2 Cable holes between floors ~        ILEC          555 cables
 Occupancy        Shared ILEC + CLECs
 XC-C             Passive X-Connect Panel               ILEC            16 DS3
 DSX              Digital X-Connect Frame shared        ILEC           112 DS3
                  by ILEC + CLECs




                                                                                          86
                                                                       Exhibit SET-COLLO-3
                                                                         MPSC Case U-13531
                                           Initial Testimony of Steven E. Turner (Collocation)

      4.6    VIRTUAL DS-3 MODEL REQUIREMENTS USING ELECTRONIC DCS

                    Copper Connectivity at DS-3 Level (DCS )


                                                 Cable
   Virtual                                       Hole                                DCS
  Equipment
                                     Cable A                                   I/O               I/O
                                                                                A                 A


                                  Cable Rack A




         CONNECTIVITY ELEMENTS FOR DS-3 SERVICE ( DCS OPTION)
   ELEMENT         DESCRIPTION       PROVIDED       SIZE      LENGTH
                                         BY
CLEC Virtual         DS-3 Terminal/Multiplexer            CLEC
Equipment
Cable A              734 Shielded (2 cables)              ILEC         2 per DS3         165 feet
Cable Rack A         20” Ladder cable rack – Shared                    555 cables        150 feet
Occupancy            ILEC + CLECs
Cable Hole           2 Cable holes between floors ~       ILEC         555 cables
Occupancy            Shared ILEC + CLECs
Digital X-Connect    DS-3 Digital Cross-Connect           ILEC          512 DS3
System               shared by ILEC + CLECs




                                                                                           87
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

     4.7   VIRTUAL OPTICAL MODEL REQUIREMENTS USING FIBER FRAME

                   Fiber Connectivity at DS-3 Level


       Virtual                                                        FDF
                                    Cable
      Equipment
                                    Hole

                             Cable A


                                  Cable Rack A




               CONNECTIVITY ELEMENTS FOR OPTICAL SERVICE
  ELEMENT           DESCRIPTION        PROVIDED     SIZE                           LENGTH
                                          BY
CLEC Virtual   Optical Terminal                      CLEC
Equipment
Cable A        Fiber breakout cable                  ILEC          12 Fibers        165 feet
Cable Rack A   12” Ladder cable rack – Shared                     221 cables        150 feet
Occupancy      ILEC + CLECs
Cable Hole     2 Cable holes between floors ~        ILEC         221 cables
Occupancy      Shared ILEC + CLECs
FDF            Fiber Distribution Frame              ILEC          768 Fibers




                                                                                      88
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)

       4.8      INTRA-CLEC  VIRTUAL             COPPER        AND       OPTICAL        MODEL
                REQUIREMENTS

             Virtual to Virtual Copper and Optical Connectivity


       Virtual                                                          Virtual
      Equipment                                                        Equipment


                                    Cable A


                                       Cable Rack A




                     CONNECTIVITY ELEMENTS FOR INTRA-CLEC SERVICE
     ELEMENT               DESCRIPTION        PROVIDED      SIZE                          LENGTH
                                                  BY
 CLEC Virtual         Optical and/or multiplexing           CLEC
 Equipment            equipment
 Cable A              Connects two equipment                ILEC             DS1            65 feet
                      virtually located CLEC                                 DS3
                      equipment shelves
 Cable Rack A         12” Ladder cable rack – Shared                     221 cables         50 feet
 Occupancy (for       ILEC + CLECs
 Fiber connection)
 Cable Rack A         20” Ladder cable rack – Shared                     555 cables         50 feet
 Occupancy (for       ILEC + CLECs
 DS1 and DS3
 connections)


5.     DC POWER AND GROUNDING ELEMENTS

       5.1      OVERVIEW

       As explained in detail in subsection 5 of Section 1, the standard and most cost effective

       method of delivering -48V DC between the power plant and telecommunications

       equipment in a central office is to use a remote power distribution bay, such as a BDFB.

       Using a BDFB located close to the equipment it will serve will postpone the exhaust of



                                                                                             89
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

the -48V power plant and is more cost-effective than running many large (and costly)

power distribution cables to the power plant for equipment fusing. An overview of the

accepted   best   practice   method   for   the   delivery   of   -48V   DC   power   in   a

telecommunications environment is shown in Figure 5B in Section 1 of this White Paper.

       The delivery of -48V power to a virtual collocation is divided into two separate

charges in a similar manner as for physical collocation:            (1) A monthly power

consumption charge for shared use elements such as the power plant, diesel generator

and distribution as far as the BDFB (that i, between the power plant and the BDFB); and

(2) A monthly recurring charge for distribution associated with occupancy of the cable

rack between the BDFB and the CLEC’s virtual equipment. A schematic depicting the

components included in the Virtual Collocation Model for -48V DC power appears below.




                                                                                           90
                                                                    Exhibit SET-COLLO-3
                                                                      MPSC Case U-13531
                                        Initial Testimony of Steven E. Turner (Collocation)

        - 48V Power Delivery for Virtual Equipment Installation

                                                              Cable
    Virtual                             BDFB                  Hole            -48V DC
   Equipment           Cable A                                                 Power
                                                                                Plant


                   Cable Rack A

                Power Delivery                         Power Consumption




                                 Power Delivery Elements
    Element          Description     Prov. By      Quantity                Remarks
                                    CLEC/ILEC
CLEC Virtual       Located in ILEC     CLEC            --       CLEC requests direct fusing
Equipment          lineup                                       to virtual equipment from
                                                                BDFB
Cable ‘A’          4 x #10 cable       CLEC          40’-0”     Two A & B cables to feed
(2 feeds of        between virtual                              0-5amps + battery returns.
 0-5amps) *        equipment &
                   BDFB
Cable ‘A’          4 x #6 cable        CLEC          40’-0”     Two A & B cables to feed
(2 feeds of        between virtual                              6-20amps + battery returns.
 6-20amps) *       equipment &
                   BDFB
Cable ‘A’          4 x #4 cable        CLEC          40’-0”     Two A & B cables to feed
(2 feeds of        between virtual                              21-30amps + battery
 21-30amps) *      equipment &                                  returns.
                   BDFB
Cable ‘A’          4 x #2 cable        CLEC          40’-0”     Two A & B cables to feed
(2 feeds of        between virtual                              31-50amps + battery
 31-50amps) *      equipment &                                  returns.
                   BDFB
Cable ‘A’          4 x #1 cable        CLEC          40’-0”     Two A & B cables to feed
(2 feeds of        between virtual                              51-60amps + battery
 51-60amps) *      equipment &                                  returns.
                   BDFB
Cable Rack ‘A’     15” existing        ILEC          25’-0”     Power delivery rack for
                   cable rack                                   ILEC & virtual equipment
BDFB               Located in close    ILEC            --       Included in -48V DC Power
                   proximity to                                 Consumption Charge
                   virtual
                   equipment
Cable Rack         Shared support      ILEC            --       Included in -48V DC Power



                                                                                        91
                                                                               Exhibit SET-COLLO-3
                                                                                 MPSC Case U-13531
                                                   Initial Testimony of Steven E. Turner (Collocation)

Occupancy         for Cable ‘B’                                                 Consumption Charge
                  below
 Cable ‘B’        Cable between –                  ILEC               --        Included in -48V DC Power
                  48V Power Plant                                               Consumption Charge
                  & BDFB
-48V DC Power Shared use                           ILEC               --        Included in -48V DC Power
Plant             between CLEC’s                                                Consumption Charge
                  & ILEC
Auto-start Diesel Required for                     ILEC               --        Included in -48V DC Power
Fuel Tanks, &     Battery Back-up                                               Consumption Charge
AC Switchboard
AC Energy         Required for AC                  ILEC               --        Included in -48V DC Power
                  Energy used                                                   Consumption Charge
      * Supplied as part of the virtual equipment installation and paid for by CLEC
      5.2     POWER DISTRIBUTION COMPONENTS

      Since best planning practices require locating a BDFB close to ILEC equipment, it is

      unlikely that -48V DC power distribution cables required for fusing collocation equipment

      would be longer than about 40 feet. The Virtual Collocation Model therefore assumes a

      cable length of 40 feet for -48V DC power distribution cabling between the collocation

      BDFB and the CLEC provided virtual equipment.14 As noted in subsection 4 above, the

      power cabling will be included in the cost of the equipment installation paid for

      immediately by the CLEC. The investment associated with the 40 feet of power cabling

      ensures remuneration to the ILEC for its cable racks and also ensures that the cost of

      power cable reflects best practice planning principles. As with connectivity, if the ILEC

      requires an installer to place virtual equipment in a location that does not reflect best

      practice planning principles, the ILEC could successfully impose higher than necessary

      costs on the CLEC -- costs the ILEC would likely not face if it were installing equipment

      for itself. This should not be permitted.




14
      The 40 feet includes 25 feet in cable racks and 7’-6” drops at each end. Assumptions are included in
      backup documentation.



                                                                                                       92
                                                                            Exhibit SET-COLLO-3
                                                                              MPSC Case U-13531
                                                Initial Testimony of Steven E. Turner (Collocation)

     5.3     POWER CONSUMPTION COMPONENTS

     Investments for -48V DC power consumption for the Virtual Collocation Model are based

     on the same approach used for physical collocation. All ILEC investments necessary to

     engineer, furnish, and install (EF&I) a shared -48V power plant (using a 2500 amp and a

     4000 amp plant), including the mandatory battery and diesel generator back-up are

     identified. A BDFB and associated cabling components are also included to ensure the

     most cost-efficient method of delivering -48V DC power to the collocation area.

     However, the BDFB investment for virtual collocation is sized at 600 amps to more

     closely reflect BDFB sizes typically used in ILEC equipment areas.

             As with physical collocation, a charge is developed for CLEC AC electric energy

     usage by restating the usage charge per AC kilowatt hour as an AC energy rate per DC

     amp used.      (See Chart 3 in Section 1 of this White Paper.15)               The rate from that

     calculation is added to the costs per amp for DC power to create the all-inclusive

     monthly power consumption charge.



     5.4     EQUIPMENT GROUNDING

     Unlike the physical collocation model outlined in Section 1, the grounding of CLEC

     virtual equipment installations must adhere to the same method of grounding as

     adjacent ILEC equipment to ensure optimum performance of both carriers’ equipment.

     The installer will ensure a grounding arrangement consistent with adjacent ILEC

     equipment when installing the CLEC virtual equipment. Since the CLEC is responsible

     for payment of that installation invoice, grounding investments are not modeled for virtual

     collocation.


15
     The example contained in the physical collocation section of this White Paper uses a rate of $0.05 per
     Kilowatt hour for electric power. The model allows the actual rate per Kilowatt hour used in the cost
     calculations to be state-specific.



                                                                                                        93
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)

6.   ACCESS (ENTRANCE FIBER) COMPONENTS

     6.1        OVERVIEW

     Unlike physical collocation where the CLEC performs day-to-day maintenance

     operations, a virtual scenario requires that the ILEC assume responsibility for ongoing

     maintenance of the entrance fiber.      The best practice arrangement is therefore to

     terminate all CLEC entrance fibers at a centralized ILEC cross-connect, typically called a

     Fiber Distribution Frame (FDF). As with the physical collocation model layout outlined in

     Section 1, the ideal arrangement is for the CLEC to perform the pulling and splicing of

     fiber cable between the manhole and the cable vault, and the subsequent routing of fiber

     riser cable between the cable vault and the FDF. In the event that this is not permitted,

     however, the Virtual Collocation Model incorporates assumptions (outlined below) to

     calculate the costs that an efficient ILEC would incur to perform these functions in a

     competitive environment.



     6.2        FIBER ENTRANCE COMPONENTS

     The major elements required to route fiber cable between the first manhole and the Fiber

     Distribution Frame using fire retardant cable include:

                    ⇒ Pulling and splicing of cable in the cable vault
                    ⇒ A splice case to change from external to internal fiber cable
                    ⇒ Fire retardant riser cable between the vault splice and FDF
                    ⇒ Cable rack and cable hole (with occupancy charges based on usage)

     The following schematic outlines the elements that have been used in the central office

     model layout to determine the cost of access connectivity (assuming that it would not be

     possible for the CLEC to perform the required pulling and splicing in the ILEC central

     office).




                                                                                            94
                                                                             Exhibit SET-COLLO-3
                                                                               MPSC Case U-13531
                                                 Initial Testimony of Steven E. Turner (Collocation)

                            Access Elements – Cable Pulling and Splicing

                                FDF B   Optic    FDF A
                    Cable                                       Cable
                                        Patch                                  Cable Vault                Manhole
   Virtual
  Virtual           Hole                Cord                    Hole
 Equipment
 Equipment
                  Cable C                                      Cable B           Splice
                                                                                               Cable A



             Cable Rack C                                  Cable Rack B

              Optical Service                                      Entrance Fiber


                     Access Elements (Cable Pulling & Splicing) - With Fire Retardant Provided
    Element                Description          Provided by      Quantity    Hours            Remarks
                                                CLEC/ILEC
 Optic Patch        Between Fiber                  ILEC                   6                     1 required per fiber
 Cord               Distribution Frames                                                         pair
 FDF ‘A’            ILEC Fiber                     ILEC          12 Fibers                --    Frame capacity is 768
                    Cross-connect                                                               fibers
 Cable ‘B’          Between FDF & vault           CLEC             175’-0”                --    Fire retardant Fiber
                    splice                                                                      cable provided by
                                                                                                CLEC
 Installation       Placed on shared 12”           ILEC            175’-0”                14    One time charge -
 of Cable ‘B’       cable rack                                                                  Includes opening and
                    (ILEC+CLECs)                                                                closing 3 cable holes
 Cable Rack         12” cable rack shared          ILEC            160’-0”                --    Cost per cable for use
 Occupancy          by ILEC + CLECs                                                             of on ILEC cable
                                                                                                racks
 Cable Hole         Cable holes shared by          ILEC                   3               --    For use of ILEC cable
 Occupancy          CLEC’s & ILEC                                                               holes
 Splice Case        External to fire              CLEC                    1               --    Approved vault splice
                    retardant cable                                                             case provided by
                                                                                                CLEC
 Cable ‘A’          Between vault splice &        CLEC                    --              --    Fiber cable provided
                    manhole                                                                     by CLEC
 Cable              Between vault splice           ILEC             50’-0”                --    Cost Model to use
 Support            and vault wall                                                              same as cable rack
 Charge                                                                                         occupancy for Riser
                                                                                                cable
 Structure          Between manhole &             Tariff            75’-0”                --    Per existing structures
 Charge             cable vault splice             Item                                         tariff
 Cable              Manhole to cable vault        ILEC             125’-0”            4.0       Includes set-up &
 Pulling            splice                                                                      take-down
 Splicing           External cable to fire         ILEC                   --          3.0       Set-up & take-down in
 Activity           retardant cable                                                             vault
 Splice             In Cable Vault                 ILEC                   --          2.0       For up to 24 Fibers
 Fibers
Note: Access Design Charges included in ILEC Manpower Summary in section 7.



                                                                                                             95
                                                                          Exhibit SET-COLLO-3
                                                                            MPSC Case U-13531
                                              Initial Testimony of Steven E. Turner (Collocation)

7.      PROCESS ISSUES

        7.1    ILEC MANPOWER               REQUIREMENTS               AND   IMPLEMENTATION
               INTERVALS

        The planning and implementation of virtual collocation in an ILEC central office requires

        manpower effort on the part of the ILEC. To ensure fair and reasonable compensation

        for ILEC manpower, the Virtual Collocation Model incorporates a planning component for

        two different types of requests: those that involve cabling plus equipment, and those

        that involve cabling only. For each type of request, the model includes investments for

        the ILEC manpower requirements to implement a CLEC collocation request using best

        practice processes in a competitive environment. Chart 9 provides the ILEC resource

        requirements required for each virtual collocation request.

                                          CHART 9
                ILEC MANPOWER REQUIREMENTS
     HOURS TO PLAN AND IMPLEMENT A VIRTUAL COLLOCATION
                          REQUEST
                                              INITIAL         OR            SUBSEQUENT
                  ILEC                              SUBSEQUENT               REQUEST:
                FUNCTION                            REQUEST:                CABLE ONLY
                                               CABLE + EQUIPMENT
OUTSIDE PLANT ACCESS DESIGN                                6                       0
BUILDING PLANNING                                         10                       0
MDF PLANNING                                               4                       2
POWER ENGINEER                                             8                       0
EQUIPMENT ENGINEER                                        12                       6
EQUIPMENT INSTALLATION                                    10                       3
PROJECT MGR
OPERATIONS GROUP                                           6                       1
APPLICATION FEE                                           10                       8
(ADMINISTRATION)
SECURITY ESCORTS                                   AS REQUIRED              AS REQUIRED
     TOTAL ILEC MANPOWER                                66                       20
NOTES:
1)   ILEC ACTIVITIES SHOULD NOT INCLUDE COORDINATION OF DEMAND PROJECTS COVERED UNDER
     RECURRING CHARGE IN COST MODEL (EG. –48V POWER PLANT EXPANSIONS).
2)   APPLICATION FEE TO COVER MARKETING CONTACT GROUP AND VARIOUS ADMINISTRATIVE AND
     BILLING ACTIVITIES.



                                                                                              96
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)


            The proposed manpower requirements assume the same minimum requirements

     as those listed for the physical model layout contained in Section 1. For example, ILEC

     staff is assumed to be fully trained and competent, and the ILEC will only be reimbursed

     for time spent implementing functions associated with virtual collocation elements

     covered by a non-recurring charge.

            The manpower requirements shown in Chart 9 provide an accurate assessment

     of the planning time required to efficiently implement a CLEC virtual collocation request

     in a best practice competitive environment. The intervals are included as a specific

     component to plan and implement a CLEC virtual collocation request so that the ILEC

     cannot arbitrarily establish undefined charges using an “individual case basis” for time

     and materials, which can easily be manipulated on a case by case basis.

            An assessment of internal ILEC functions and intervals required to implement a

     CLEC virtual collocation request, assuming optimum efficiency, best practice processes,

     and a competitive environment, indicates that the maximum interval from the time a

     CLEC applies for virtual collocation in an ILEC central office until the project is ready for

     installation work to commence is 22 working/business days.



8.   OPERATIONAL ISSUES

     8.1    MAINTENANCE ACTIVITY

     The CLEC will be responsible for directing all maintenance activities associated with the

     virtual collocation equipment.    This includes system surveillance, direction of repair

     activity, requests to the ILEC for maintenance activity/assistance.           The ILEC is

     responsible for hardware functions such as circuit pack replacement and changing

     fuses. Work will be performed by the ILEC upon the request of the CLEC, and will be

     reimbursed using the labor rate for the appropriate qualified technician.



                                                                                               97
                                                                         Exhibit SET-COLLO-3
                                                                           MPSC Case U-13531
                                             Initial Testimony of Steven E. Turner (Collocation)

8.2     SECURITY ESCORTS

CLEC personnel will not normally be required to visit the virtually collocated equipment

for day-to-day operations. There may be instances, however, when it is necessary for

CLEC engineering and/or maintenance personnel to visit the ILEC central office.

Because virtual installations will be in existing ILEC equipment areas it is reasonable to

expect that an ILEC escort be in attendance for the entire time.



8.3     RESPONSE TIMES AND CHARGING INCREMENTS

Response time is defined as the total elapsed interval between the time of a CLEC

request for an appropriately qualified technician at a particular central office until the

technician arrives and makes contact with the CLEC. The response times listed in Chart

10 apply to both maintenance and security escort requests.                     Chart 11 depicts the

method proposed to assess CLECs for time charged by ILEC technicians.

                                 CHART 10
                MAINTENANCE AND ESCORT RESPONSE TIMES
             CENTRAL OFFICE TYPE          RESPONSE TIME
      Staffed and Attended                                                 1 hour
      Staffed and Unattended                                               4 hours
      Not staffed and NBD                                                  2 hours
      Not staffed and non-NBD                                              4 hours
      Definitions:
      Staffed-technicians are scheduled to work in the location.
      Attended-hours during which technicians are required to be at the CO.
      NBD (Normal Business Day)-usually Monday to Friday, 0800h to 1700h.


                                CHART 11
              MAINTENANCE AND ESCORT CHARGING INCREMENTS
 CENTRAL OFFICE TYPE       INITIAL CHARGE    SUBSEQUENT CHARGE
Staffed and Attended            ¼ hour              ¼ hour
Staffed and Unattended          4 hours             ¼ hour
Not staffed and NBD             ¼ hour              ¼ hour
Not staffed and non-NBD         4 hours             ¼ hour
NOTE: It is essential that the ILEC provide the CLEC with a detailed explanation as to the actual attended
      hours of any manned CO as part of the collocation agreement.



                                                                                                       98
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

8.4    CIRCUIT PACKS

A flat rate of one hour will be reimbursed to the ILEC for time spent packing and shipping

defective circuit packs or time spent receiving and unpacking repaired circuit packs.



8.5    TRAINING OF ILEC TECHNICIANS

If a CLEC’s virtual equipment is not already deployed in a central office, it is reasonable

to expect the CLEC to train ILEC technicians on the use and maintenance of the CLEC’s

collocated equipment. The CLEC will reimburse the ILEC for costs associated with the

initial training of a maximum of two technicians when the virtually installed equipment

does not already exist in the central office. Rather than a complete product maintenance

course, however, the training provided need only be an introductory course consisting of

a product overview, hardware configurations, and hardware change procedures. The

ILEC technicians being trained are assumed to be familiar with general precautions and

procedures for maintenance of central office equipment. Any subsequent training of

ILEC staff due to staff turnover, transfers, etc. is the responsibility of the ILEC since

otherwise the ILEC would have the incentive to continually change staffing for

collocation space maintenance.




                                                                                        99
                                                                                                              Exhibit SET-COLLO-3
                                                                                                                MPSC Case U-13531
                                                                                  Initial Testimony of Steven E. Turner (Collocation)

                     Section 3: Alternative Forms of Collocation

1.   CAGELESS COLLOCATION

     1.1      DEFINITION AND NEED FOR COLLOCATION FORM

     Much like Virtual Collocation, Cageless Collocation involves the placement of the

     CLEC’s equipment within the ILEC equipment lineups without using a segregated area

     of the central office.                       The only difference between Cageless Collocation and Virtual

     Collocation is that a cageless collocator retains ownership of the collocated equipment.

     Three ramifications result from this change in ownership. First, the CLEC becomes

     responsible for the physical maintenance of the equipment rather than having the ILEC

     technicians perform the work as in the case of Virtual Collocation. Second, because the

     ILEC will not be performing any maintenance on the virtually collocated equipment, there

     will be no need for ILEC personnel to be trained in maintaining the CLEC’s equipment.

     And third, a security escort may be required where electronic card access is not

     available.

              The diagram below, which is precisely the same diagram as used for Virtual

     Collocation, outlines the key components associated with Cageless Collocation.

                                             T Y PIC A L C A G E L E S S C O L L O C A TIO N A R R A N G E M E N T


                                                                                                       C E N T R A L O F F I C E E Q U IP M E N T L IN E U P S

           M a n h o le                                                 IL E C - 4 8 V                                BDFB                          BDFB

                                                                      PO W E R P LA N T




                              Loop                                                             VG
                            (C op p er)

                              Loop                      IL E C
            IL E C          (C op p er)
           C AB LE                                       MDF
           VAU LT
                           Loop
                                                             D S -1
                          ( F ib e r )
                                                                                IL E C       D S -3
                                                                             D IG I T A L
                                                                 D S -1
                                                                              CROSS
                                                                                             D S -1
                                                                 D S -1     CONNEC T
                                            IL E C                          S YS TE M S
                                                                 D S -3
                                          NETW O RK

                                                                 F IB E R
                                                                                            F IB E R
                                                                 F IB E R
                                                                                IL E C
                                                                                FDF

                  F IB E R E N T R A N C E C A B L E - C L E C
                  S U P P L IE D




                                                                                                                                                                 100
                                                                   Exhibit SET-COLLO-3
                                                                     MPSC Case U-13531
                                       Initial Testimony of Steven E. Turner (Collocation)

       Cageless Collocation will be important form of collocation for CLECs requiring

little in the way of telecommunications space or those wanting to introduce new

technology into the marketplace. Specifically, Digital Subscriber Loop (DSL) technology

is one that would be ideally suited to a Cageless Collocation arrangement. First, this

technology does not require much floor space, only requiring approximately two relay

racks for a configuration that can serve a substantial number of customers. And second,

being that this technology is new, the ILEC would most certainly need to be trained on

the equipment. The cost of this training could be formidable in the face of deploying a

new technology.



1.2    UNIQUE ATTRIBUTES

As has already been stated, Cageless Collocation is almost identical to Virtual

Collocation except in three respects. First, ownership of the equipment will remain with

the CLEC. In Virtual Collocation, the equipment is transferred to the ILEC for a nominal

sum (normally $1.00). However, in Cageless Collocation the equipment will remain in

the ownership and control of the CLEC. Second, since the equipment will remain in the

control of the CLEC, there will be no need to train the ILEC personnel in the

maintenance of the equipment. Third, the CLEC will be responsible to perform the on-

site maintenance of the equipment that is place in a Cageless Collocation arrangement.

In this respect, Cageless Collocation is like Physical Collocation – the CLEC is directly

responsible for all on-site maintenance activity.

       From a cost perspective, there is no difference between Cageless Collocation

and Virtual Collocation.    Although there is a separate output sheet for Cageless

Collocation than for Virtual Collocation in the Collocation Cost Model, there are no

differences in the costs that have been developed for the two options. Effectively, the




                                                                                      101
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)

     difference in these two options is one of terms and conditions, not cost. As such, the

     information provided in Section 2 as to the development of costs for Virtual Collocation

     applies for Cageless Collocation with the exceptions as outlined above.



2.   COMMON COLLOCATION

     2.1      DEFINITION AND NEED FOR COLLOCATION FORM

     Common Collocation is similar to Physical Collocation in that a CLEC’s equipment is

     placed in a segregated area of the central office. In this form of collocation, however,

     the equipment of multiple collocators may be placed in the same segregated area. The

     principle difference between this form of collocation and Physical Collocation is that the

     internal cage partitions are eliminated.

              There are many different reasons why Common Collocation is an important

     collocation alternative that should be made available to CLECs. First, like Cageless

     Collocation, many CLECs may have collocation requirements that do not demand much

     space.     Common Collocation, like Cageless Collocation, provides the CLEC an

     opportunity to collocate in the ILEC’s central office without reserving space that the

     CLEC may never need. Second, Common Collocation has a significant advantage over

     Physical Collocation in that it permits a more efficient use of the telecommunications

     space. Specifically, the internal walls within the collocation area that divide it into 100

     square foot areas reduce the number of relay racks that can be installed. The walls

     themselves take up space and break the equipment lineups into short and less efficient

     sections. If an ILEC begins to near the point of space exhaustion within its central office,

     the ILEC may need to explore providing a portion of its central office that is reserved

     specifically for Common Collocation so as not to eliminate collocation within its central

     office from consideration.




                                                                                             102
                                                                          Exhibit SET-COLLO-3
                                                                            MPSC Case U-13531
                                              Initial Testimony of Steven E. Turner (Collocation)



     2.2     UNIQUE ATTRIBUTES

     Common Collocation has three unique attributes making its cost development and

     recovery different from that of Physical Collocation.

             1.      There are no internal cage partitions within the Common Collocation area.

             2.      Rather than recovering the investment associated with the Common

                     Collocation area through a per square foot element, the cost is recovered

                     through per linear foot basis.

             3.      The placement of cabinetized relay racks has been assumed in

                     developing the per linear foot costs for Common Collocation.

     Each of these unique attributes will be discussed in more detail below.

     CAGE PARTIONING

     The dimensions of the Common Collocation Area are precisely the same as that for

     Physical Collocation: 27.5 feet by 20 feet. However, in Physical Collocation 60 feet of

     additional cage partitioning material are required to provide the four separate 100 square

     foot cages that will not be required for Common Collocation. Further, there are five

     gates included in the cage partitioning costs for Physical Collocation.            In Common

     Collocation only one gate is required.16         The net effect of these assumptions for

     Common Collocation is that the Cage Partitioning investment is based on 95 linear feet

     of material (the perimeter of the Common Collocation Cage) rather than 155 linear feet

     for Physical Collocation.     And second, the partitioning investment only includes the

     capital for one gate. This change is reflected in a lower per foot price for the partitioning

     material.



16
     In Physical Collocation there was one gate included for each of the four separate 100 square foot
     collocation areas. In Common Collocation, the four additional gates will not be required.



                                                                                                 103
                                                                  Exhibit SET-COLLO-3
                                                                    MPSC Case U-13531
                                      Initial Testimony of Steven E. Turner (Collocation)

LINEAR FOOT VERSUS SQUARE FOOT COST RECOVERY

In Physical Collocation, the investments associated with Land and Building and the

collocation area are recovered on a square foot basis. This is appropriate in that the

costs can be easily tracked or allocated back to one of the 100 square foot areas that

the collocation area is divided into. However, there are no walls in Common Collocation.

Therefore, there is not straightforward means to utilize area as an appropriate cost

recovery metric. Instead, all of the costs associated with the cage preparation and Land

and Building investment are allocated across the number of linear feet of relay racks that

can be placed within the Common Collocation area. Further, the possibility exists that all

of the relay rack space within the Common Collocation area may not be “rented” from

the ILEC at any given point in time. To account for this possibility, these costs are

increased by an occupancy fill factor to adjust for the potential unused area within the

Common Collocation layout. This fill factor mitigates the risk the ILEC bears from not

having all of the space rented at any given time within the Common Collocation area.

CABINETIZED RELAY RACKS

Telecommunications equipment can be “packaged” in cabinetized relay racks or in

standard relays racks where the telecommunications equipment is exposed. The later

form is the normal application used within central offices. However, since there could be

numerous CLECs within the same Common Collocation area, the costs for Common

Collocation have been derived assuming that cabinetized relay racks are installed in the

collocation area by the CLECs. The impact on the cost study for Common Collocation

comes from the difference in depth between these two types of relay racks. Cabinetized

relay racks have a depth of 24 inches, whereas standard relay racks (exposed) have a

depth of 12 inches. Because of the greater depth of the cabinetized relay rack, four




                                                                                       104
                                                                               Exhibit SET-COLLO-3
                                                                                 MPSC Case U-13531
                                                   Initial Testimony of Steven E. Turner (Collocation)

     rows of cabinetized relay racks (one fewer row of relay racks than if standard relay racks

     were used) can fit within the 27.5 foot by 20 foot Common Collocation area.17

              Once the number of rows was determined, the next step was to determine the

     number of linear feet that could feet within the Common Collocation area.                             Again,

     assuming cabinetized relay racks, the experts used a width for the relay rack of 26.5

     inches. Further, the experts provided four feet of space on one end of the Common

     Collocation area (the side with the gate) and 1’-5” on the other. Given these dimensions,

     10 cabinetized relay racks fit in each of the four rows.

              Finally, one relay rack was removed to allow space for a BDFB. The net result is

     that 39 cabinetized relay racks fit within the Common Collocation area. Using the 26.5-

     inch width noted previously, this yields a total of 86.125 linear feet of relay rack space

     within the Common Collocation area. It is this quantity of linear feet within the Common

     Collocation area, grossed up for an occupancy factor, that is used to derive the costs per

     linear foot of relay rack space ordered by the CLEC.




17
     The following assumptions come into play when determining the number of relay rack rows that can fit
     within the Common Collocation area. First, the rows of relay racks were distributed along the 20-foot side
     of the Common Collocation area. Second, the cabinetized relay rack is two feet in depth. Third, the aisle
     width between front-sides of the relay racks is three feet. Fourth, the aisle width between the back-sides of
     the relay racks is two feet. Effectively, this requires 4.5 feet of depth per each row of relay racks that are
     installed ((2 + 3) / 2 + 2). Dividing 20 feet by 4.5 feet yields that the maximum number of relay rack rows
     that can fit within the Common Collocation area using cabinetized relay racks is four (20 / 4.5 rounded
     down to a whole number). By way of comparison, standard (exposed) relays racks would require 3.5 feet
     ((2 + 3) / 2 + 1) of depth per each row of relay racks. As such, five rows (20 / 3.5 rounded down to a whole
     number) of relays racks would fit along the 20 foot side of the Common Collocation area if this type of
     relay racks were used.



                                                                                                              105
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)

3.   ADJACENT PHYSICAL COLLOCATION – ON-SITE

     3.1    DEFINITION AND NEED FOR COLLOCATION FORM

     The Adjacent Physical Collocation – On-Site alternative assumes that the placement of

     additional telecommunications equipment via collocation will occur through CLECs

     placing telecommunications equipment in a walk-in cabinet (WIC), hut, trailer, or similar

     environmentally protected structure near the ILEC central office. The critical point here

     is that this option is being developed to provide a means to collocate near the CLEC’s

     central office in a form other than using space inside the central office.

            The WIC is placed within four feet of the outside wall of the central office. Two

     holes in the central office are used to route cables to the WIC, one for power and the

     other for fiber and copper, which are carried in separate cable racks. The CLECs draw

     power from the central office. However, fusing is self-provided in the WIC. Thus, in

     contrast to the physical collocation model, the BDFB is replaced by self-provided CLEC

     equipment, and the power distribution element (from the BDFB to the collocator’s

     equipment) is relaced by self-provided cabling.

            The diagram below generally defines the relationship between the Adjacent

     Physical Collocation – On-Site arrangement and the key ILEC connectivity points.




                                                                                           106
                                                                                   Exhibit SET-COLLO-3
                                                                                     MPSC Case U-13531
                                                       Initial Testimony of Steven E. Turner (Collocation)




   CONNECTIVITY FOR ADJACENT ON-SITE COLLOCATION


                                                                           ILEC                               ILEC
                                                                           DSX/                              FIBER
                                                                            DCS
                                                                                              HIGH           FRAME
                                              SHARED -48V DC                               BANDWIDTH
                                               POWER PLANT                                   LOOPS

                                 FLOOR 3

                                                  DS-1/DS-3 SERVICE
                                                                                           OPTICAL SERVICE




CLEC CABINET / TRAILER           FLOOR 2
                                                                                VGSERVICE
                 DC POWER
  FUSE PANELS

                  DS-1/DS-3
    POT              VG
                                                                      ILEC COPPER MDF
                   OPTICAL                              EXISTING COPPER LOOPS
                ENTRANCE FIBER                           ON ILEC PROTECTORS
    FIBER
    PANEL
                                 FLOOR 1


 MANHOLE
                    STRUCTURE
                                  12-24 FIBER CABLE
                                                            FIBER      12-24 FIBER CABLE
                                                           SPLICE

                                 CABLE VAULT

                                        WORSE CASE 3 FLOOR ILEC CENTRAL OFFICE
                                                (SUBURBAN LOCATIONS WILL HAVE FEWER FLOORS)




   TO CLEC
   CENTRAL
    OFFICE




                                                                                                                 107
                                                                   Exhibit SET-COLLO-3
                                                                     MPSC Case U-13531
                                       Initial Testimony of Steven E. Turner (Collocation)

3.2    UNIQUE ATTRIBUTES

Several items in the Physical Collocation Model required modification to implement the

Adjacent Physical Collocation – On-Site alternative.       However, although many input

values changed between these two scenarios, the on-site alternative still heavily relied

on the Model Central Office defined in Section 1 of this White Paper. The following is a

list of the elements that were modified for Adjacent Physical Collocation – On-Site:

       1.      Cabling Distances
       2.      Planning
       3.      Land and Building
       4.      Power Delivery


CABLING DISTANCES

Of the changes necessary to implement Adjacent Physical Collocation – On-Site, the

most substantial was in developing the distances associated with this collocation option.

In determining the cable lengths, the experts had to assume a range of positions in

which the telecommunications trailer outside of the ILEC central office could be placed.

Specifically, the experts determined that the outside wall of the telecommunications

trailer would be within four feet of the outside wall of the ILEC central office. Second, the

experts determined that the telecommunications area within the ILEC central office

would have common walls with the exterior walls of the ILEC central office on two sides

of the building. On the other two sides of the ILEC central office, it was assumed that

there would be “administrative” areas between the exterior wall of the ILEC central office

and the nearest exterior wall of the telecommunications. As such four scenarios for

cable lengths were developed: (1) Adjacent to Telecommunications Space – Best Case;

(2) Adjacent to Telecommunications Space – Worst Case; (3) Adjacent to Administrative

Space – Best Case; and (4) Adjacent to Administrative Space – Worst Case.

       The length calculations for these four scenarios are identified below:




                                                                                         108
                                                        Exhibit SET-COLLO-3
                                                          MPSC Case U-13531
                            Initial Testimony of Steven E. Turner (Collocation)

Adjacent to Telecommunications Space – Best Case
 Cable Section                                Length in Feet
 Length on One Floor                               20
 Width on One Floor                                20
 Vertical Climb Inside First Floor                 10
 Length between Hut and ILEC Central Office         6
 Distance within the Hut                           10
 Drops on Each End                                 15
 Total Cable Length                                81
 Total ILEC Rack Length                            56

Adjacent to Telecommunications Space – Worst Case
 Cable Section                                Length in Feet
 Length on One Floor                               120
 Width on One Floor                                100
 Vertical Climb Inside First Floor                  10
 Vertical Climb to Third Floor                      40
 Length between Hut and ILEC Central Office         6
 Distance within the Hut                            10
 Drops on Each End                                  15
 Total Cable Length                                301
 Total ILEC Rack Length                            276

   Adjacent to Administrative Space – Best Case
 Cable Section                                Length in Feet
 Length on One Floor                               20
 Width on One Floor                                 20
 Distance within Administrative Area               40
 Vertical Climb Inside First Floor                 10
 Length between Hut and ILEC Central Office         6
 Distance within the Hut                           10
 Drops on Each End                                 15
 Total Cable Length                                121
 Total ILEC Premium Rack Length                    50
 Total ILEC Non-Premium Rack Length                46

  Adjacent to Administrative Space – Worst Case
 Cable Section                                Length in Feet
 Length on One Floor                               120
 Width on One Floor                                100
 Distance within Administrative Area                40
 Vertical Climb Inside First Floor                  10
 Vertical Climb to Third Floor                      40
 Length between Hut and ILEC Central Office         6
 Distance within the Hut                            10
 Drops on Each End                                  15
 Total Cable Length                                341
 Total ILEC Premium Rack Length                     50
 Total ILEC Non-Premium Rack Length                266



                                                                           109
                                                                   Exhibit SET-COLLO-3
                                                                     MPSC Case U-13531
                                       Initial Testimony of Steven E. Turner (Collocation)

       The experts next assigned weightings to each of these scenarios. The experts

determined that there was a 50 percent probability of being placed adjacent to the

telecommunications area. Further, within these scenarios, there was an even probability

of being placed anywhere within the best and worst case within the ILEC

telecommunications space. The net effect was that these four scenarios were each

weighted at 25 percent to develop the overall calculations. The net result was that

power, fiber, DS1, and DS3 connectivity had a cabling length of 211 feet, ILEC premium

racking length of 25 feet, and ILEC non-premium racking length of 161 feet. Voice grade

connectivity is 20 feet less than the cabling length for power, fiber, DS1, and DS3

connectivity in that the MDF is always on the first floor. Therefore, the average 20 foot

distance included to traverse floors for the power, fiber, DS1, and DS3 connectivity is not

necessary for the voice grade connectivity.        The net result was the voice grade

connectivity had a cabling length of 191 feet, ILEC premium racking length of 25 feet,

and ILEC non-premium racking length of 141 feet.

       The reference to premium racking in these calculations applies whenever cable

rack is installed within administrative areas. Specifically, the engineering and installation

components of the total investment in premium cable rack are increased by 20 percent

over non-premium cable rack to account for the more difficult environment in which the

rack is being installed.

PLANNING

Similarly to Physical Collocation and Virtual Collocation, planning and implementation of

a collocation area adjacent to the ILEC central office requires manpower effort on the

part of the ILEC. To ensure fair and reasonable compensation for ILEC manpower, the

central office model layout incorporates a planning component outlining the expected

ILEC manpower requirements to implement a CLEC collocation request using best

practice processes in a competitive environment. As shown in the chart below, the ILEC


                                                                                         110
                                                                Exhibit SET-COLLO-3
                                                                  MPSC Case U-13531
                                    Initial Testimony of Steven E. Turner (Collocation)

resource requirements have been separated into manpower required to establish the

initial collocation area and manpower requirements to implement each CLEC request.

The first CLEC request includes both requirements.




                                                                                   111
                                                                        Exhibit SET-COLLO-3
                                                                          MPSC Case U-13531
                                            Initial Testimony of Steven E. Turner (Collocation)


         ADJACENT ON SITE COLLOCATION ILEC MANPOWER REQUIREMENTS
       FUNCTION            Overall Colo Labor Unit Hours to Investment Used Notes
                               Area     Rate          Plan         for  By
                           or Per CLEC              Specified   Element
                           Request (6,             Collocation Per CLEC
                                7)                    Area
Outside Plant Access       Per CLEC     $55.03 per        6         $330.18      1
Design                     Request             Hr                              CLEC
                           Subsequent   $55.03 per        0          $0.00       1
                           Cabling             Hr                              CLEC
Building Planning          Per CLEC     $55.03 per        8         $440.24      1
                           Request             Hr                              CLEC
                           Subsequent   $55.03 per        0          $0.00       1
                           Cabling             Hr                              CLEC
MDF Planning               Per CLEC     $55.03 per        4         $220.12      1
                           Request             Hr                              CLEC
                           Subsequent   $55.03 per        2         $110.06      1
                           Cabling             Hr                              CLEC
Real Estate Project        Per CLEC     $55.03 per        6         $330.18      1
Management                 Request             Hr                              CLEC
                           Subsequent   $55.03 per        0          $0.00       1
                           Cabling             Hr                              CLEC
Real Estate Construction   Per CLEC     $55.03 per       10         $550.30      1
Manager                    Request             Hr                              CLEC
                           Subsequent   $55.03 per        0          $0.00       1
                           Cabling             Hr                              CLEC
Architectural              Per CLEC     $55.03 per       24        $1,320.72     1       1
                           Request             Hr                              CLEC
                           Subsequent   $55.03 per        0          $0.00       1
                           Cabling             Hr                              CLEC
Power Engineer             Per CLEC     $55.03 per        6         $330.18      1       2
                           Request             Hr                              CLEC
                           Subsequent   $55.03 per        0          $0.00       1
                           Cabling             Hr                              CLEC
Equipment Engineer         Per CLEC     $55.03 per        4         $220.12      1       3
                           Request             Hr                              CLEC
                           Subsequent   $55.03 per        3         $165.09      1
                           Cabling             Hr                              CLEC
Equipment Installation     Per CLEC     $55.03 per        8         $440.24      1       4
Project Manager            Request             Hr                              CLEC
                           Subsequent   $55.03 per        4         $220.12      1
                           Cabling             Hr                              CLEC
Operations Group           Per CLEC     $55.03 per        4         $220.12      1
                           Request             Hr                              CLEC
                           Subsequent   $55.03 per        1          $55.03      1
                           Cabling             Hr                              CLEC
Application Fee            Per CLEC     $55.03 per       10         $550.30      1       5
                           Request             Hr                              CLEC
                           Subsequent   $55.03 per        8         $440.24      1
                           Cabling             Hr                              CLEC




                                                                                             112
                                                                          Exhibit SET-COLLO-3
                                                                            MPSC Case U-13531
                                              Initial Testimony of Steven E. Turner (Collocation)

NOTES
1.      Assumes in-house architect with no external charges for architects.
2.      Distribution only. (BDFB to DC Panel); -48V DC Power assessments are demand functions
        covered under power consumption.
3.      Should not include cable and cable racking for demand activity.
4.      Should not include coordination of growth projects.
5.      Application fee to cover activities of various ILEC administrative groups (customer service, billing,
        etc.).
6.      Assumes that the first CLEC coincides with the planning of initial collocation area.
7.      If subsequent cabling job is for additional power – Equipment Engineer allocation is transferred to
        Power Engineer.

LAND AND BUILDING

Given that the telecommunications trailer exists outside of the ILEC central office, there

is no reason to incorporate any building investment in this cost category. However, the

CLEC will utilize space adjacent to the central office to place the telecommunications

trailer. To evaluate the appropriate cost for this space, the experts determined that the

cost of this space could be approximated by identifying a market rate for parking,

determining the area of the parking space, and incorporating this per foot cost into the

model for ILEC land rental. It is possible that the space the CLEC would place its

telecommunications trailer would be unimproved.                    However, to be conservative, an

improved cost (parking space) is included in the model for the development of this cost

element.     The details supporting this calculation can be found in the back-up

documentation for the model.

POWER DELIVERY

Three key components changed in the calculation of Power Delivery for Adjacent

Physical Collocation – On-Site as compared to Physical Collocation: (1) the length of

the cable and (2) the quantity of DC power being requested; and (3) the size of the

cable. The first of these issues has been previously discussed. The principle change

with regards to the quantity of DC power is that power is now being delivered to the

CLEC’s own BDFB so that the CLEC can individually deliver DC power to the equipment

that requires it. BDFBs come in different sizes. However, the approach that the team of

experts took was that the CLEC’s would use BDFBs with DC power requirements of 2-


                                                                                                          113
                                                                       Exhibit SET-COLLO-3
                                                                         MPSC Case U-13531
                                           Initial Testimony of Steven E. Turner (Collocation)

     100 Amp feeds, 2-200 amp feeds, 2-300 amp feeds, or 2-400 amps fees. Finally, once

     the length of cable is determined and the power requirement established, then the

     diameter and quantity of cables can be developed.



4.   ADJACENT PHYSICAL COLLOCATION – OFF-SITE

     4.1    DEFINITION AND NEED FOR COLLOCATION FORM

     The Adjacent Physical Collocation – Off-Site arrangement occurs when the CLEC’s

     telecommunications equipment is not located on the central office property. In this form

     of collocation, the CLEC arranges its own rights-of-way, etc. and provides cabling at the

     nearest manhole to the central office with enough slack to be pulled into the central

     office cable vault. All components except connectivity are self-provided.

            The diagram below generally defines the relationship between the Adjacent

     Physical Collocation – Off-Site arrangement and the key ILEC connectivity points.




                                                                                          114
                                                                         Exhibit SET-COLLO-3
                                                                           MPSC Case U-13531
                                             Initial Testimony of Steven E. Turner (Collocation)



           CONNECTIVITY FOR ADJACENT OFF-SITE
                     COLLOCATION

                                                            ILEC                         ILEC
                                                            DSX/                        FIBER
                                                             DCS
                                                                             HIGH       FRAME
                                                                          BANDWIDTH
                                                                            LOOPS

                       FLOOR 3




                       FLOOR 2




                                                  ILEC COPPER MDF
                                  EXISTING COPPER LOOP
                                   ON ILEC PROTECTORS               JUMPER


                       FLOOR 1                                  9 CLEC PROTECTORS

                                                              9 X 100 PAIR STUBS
 MANHOLE                                        COPPER
                          900 PAIR              SPLICE
           STRUCTURE    COPPER CABLE             BOX


                                                FIBER               12-24 FIBER CABLE
                       12-24 FIBER CABLE        SPLICE

                       CABLE VAULT

                              WORSE CASE 3 FLOOR ILEC CENTRAL OFFICE
                                       (SUBURBAN LOCATIONS WILL HAVE FEWER FLOORS)



TO CLEC
CENTRAL
 OFFICE




                                                                                                115
                                                                     Exhibit SET-COLLO-3
                                                                       MPSC Case U-13531
                                         Initial Testimony of Steven E. Turner (Collocation)

3.2       UNIQUE ATTRIBUTES

Several items in the Physical Collocation Model required modification to implement the

Adjacent Physical Collocation – Off-Site alternative.       The following is a list of the

elements that were modified for Adjacent Physical Collocation – Off-Site:

          1.       Cabling Distances
          2.       Planning


CABLING DISTANCES

In developing the costs for Adjacent Physical Collocation – Off-Site, there is one cost

category for connectivity cabling that does not occur in this alternative that occurred in all

others:        DS3 Cabling.   Effectively, because of the potential distances that can be

involved to model a circuit to an off-site location, and the high costs of providing a DS3

over copper facilities over a long distance, the decision was to remove DS3 connectivity

as a connectivity option.        However, DS3 circuits can still be delivered via fiber

connectivity between the CLEC and ILEC.

          What remains are two types of entrance facilities:         copper and fiber.      In

developing the costs for copper entrance facilities, the experts assumed that a 900 pair

cable would be brought into the vault through the manhole. Further, it was assumed that

the terminations that would available on the MDF would drop down into the cable vault at

the far end of the room. In other words, the calculation for the voice grade connectivity

cost assumes a worst case cost associated with going to the far end of the cable vault.

In developing the costs for fiber facilities, the experts assumed that the fiber cable would

come into the splice point in the cable vault and be able to go up a riser rack at that

point. The splice point inside the vault is assumed to be 50 feet inside the vault wall

(looking towards the manhole). The details for these distance calculation can be found

in the back-up documentation.




                                                                                          116
                                                                         Exhibit SET-COLLO-3
                                                                           MPSC Case U-13531
                                             Initial Testimony of Steven E. Turner (Collocation)

        PLANNING

        Similarly to Physical Collocation and Virtual Collocation, planning and implementation of

        a collocation area adjacent to the ILEC central office requires manpower effort on the

        part of the ILEC. To ensure fair and reasonable compensation for ILEC manpower, the

        central office model layout incorporates a planning component outlining the expected

        ILEC manpower requirements to implement a CLEC collocation request using best

        practice processes in a competitive environment. As shown in the chart below, the ILEC

        resource requirements have been separated into manpower required to establish the

        initial collocation area and manpower requirements to implement each CLEC request.

        The first CLEC request includes both requirements.

       ADJACENT OFF SITE COLLOCATION ILEC MANPOWER REQUIREMENTS
      FUNCTION       Per CLEC Labor Unit Hours to Investment Used Notes
                    Request (4) Rate        Plan         for  By
                                          Specified   Element
                                         Collocation Per CLEC
                                            Area
Outside Plant Access       Per CLEC     $55.03 per           8        $440.24      1
Design                     Request             Hr                                CLEC
Building Planning          Per CLEC     $55.03 per           0         $0.00       1
                           Request             Hr                                CLEC
MDF Planning               Per CLEC     $55.03 per           4        $220.12      1
                           Request             Hr                                CLEC
Real Estate Project        Per CLEC     $55.03 per           0         $0.00       1
Management                 Request             Hr                                CLEC
Real Estate Construction   Per CLEC     $55.03 per           0         $0.00       1
Manager                    Request             Hr                                CLEC
Architectural              Per CLEC     $55.03 per           0         $0.00       1
                           Request             Hr                                CLEC
Power Engineer             Per CLEC     $55.03 per           0         $0.00       1
                           Request             Hr                                CLEC
Equipment Engineer         Per CLEC     $55.03 per           2        $110.06      1       1
                           Request             Hr                                CLEC
Equipment Installation     Per CLEC     $55.03 Per           2        $110.06      1       2
Project Manager            Request             Hr                                CLEC
Operations Group           Per CLEC     $55.03 per           2        $110.06      1
                           Request             Hr                                CLEC
Application Fee            Per CLEC     $55.03 per         10         $550.30      1       3
                           Request             Hr                                CLEC




                                                                                               117
                                                                           Exhibit SET-COLLO-3
                                                                             MPSC Case U-13531
                                               Initial Testimony of Steven E. Turner (Collocation)

NOTES
1.      Should not include cable and cable racking for demand activity.
2.      Should not include coordination of growth projects.
3.      Application fee to cover activities of various administrative groups (customer service, billing, etc.).
4.      Each installation requires the same number of hours.




                                                                                                            118
                            STATE OF MICHIGAN

         BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION


                                    *****

In the matter, on the Commission’s own motion, )
to review the costs of telecommunications      )   Case No. U-13531
services provided by SBC Michigan              )




                        INITIAL TESTIMONY OF

                           STEVEN E. TURNER

                              ON BEHALF OF

          AT&T COMMUNICATIONS OF MICHIGAN, INC.

                                     AND

                               TCG DETROIT



                             (COLLOCATION)




                       EXHIBIT SET-COLLO-4
     IS A CD-ROM ATTACHED TO THE PROPRIETARY
             VERSION OF THIS TESTIMONY.

				
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