Common use of STAFF’S POSITION Clause in Contracts

STAFF’S POSITION. Staff explains that a remedy plan is intended to provide incentives to incumbent carriers like Ameritech to provide a sufficient level of service to the public. In a remedy plan, that level of service is ensured through the potential liability at risk (i.e. potential payments it would make under a remedy plan for providing service in breach of a performance measure standard). Staff states that the public interest is protected by the potential liability inherent in a remedy plan,6 not the actual performance Ameritech provides under the current remedy plans. Just because Ameritech may be meeting more than 90% of its performance measure standards does not, according to Staff, mean that the remedy plans are providing sufficient incentive. Staff notes that Ameritech is currently making changes to its OSS to improve its wholesale service performance so as to gain long distance approval in all five Ameritech states. This approval requires Ameritech to demonstrate to the state commission that its wholesale service is adequate, which Staff states is directly linked to the improvements shown in Table 1 in ▇▇. ▇▇▇’▇ testimony. Staff, however, finds Table 1 misleading because it is the continued future performance that a remedy plan is intended to ensure, and not the current performance that is reflected in the table. Future performance, Staff points out, is motivated by potential liability. Common sense dictates, Staff opines, that if the potential liability increases, the motivation increases for Ameritech to make changes to continue to comply with the performance measures in the future. If a remedy plan places at risk a potential liability that is less than what the Commission had ordered in the Illinois Remedy Plan, then Staff argues that the pressure to provide sufficient wholesale service in the future is less than what the Commission ordered. Therefore, Staff maintains that a reduction in potential liability is against the public interest, since the public has an interest in the potential liability at risk approved by the Commission to ensure sufficient future wholesale service. Staff maintains that the Remedy Plan Order clearly indicates the Commission’s strong view that the Texas Remedy Plan, as implemented in Illinois, is insufficient in inducing Ameritech to provide a level of service the Commission finds is appropriate. (Remedy Plan Order at 12-53) In evaluating the Texas Remedy Plan, Staff reports that the Commission stated that “Ameritech, does not appear to suffer any meaningful consequence as a result of delivering [substandard] service[.]” (Id. at 41; see also Id. at 36 (“[T]he current amounts are not sufficient to provide any meaningful incentive for Ameritech to provide the CLECs with service that is not substandard.”)) Staff relates that the Commission undertook to fix this problem by setting as its goal in that proceeding the creation of “a Remedy Plan that adequately compensates the CLECs for Ameritech’s failure to meet the approved performance standards and sufficiently 6 Application by Bell Atlantic New York for Authorization Under Section 271 of the Communications Act to Provide In-Region, InterLATA Service in the State of New York, CC Docket 99-295, FCC 99-404, para. 433 (rel. December 22, 1999) motivates Ameritech to end any discriminatory conduct that impedes the development of competition in Illinois[.]” (Id. at 11) Indeed, Staff adds, the Commission abolished the annual cap upon payments under the Illinois Remedy Plan. (Id. at 41) From its review of the Remedy Plan Order, Staff concludes that it is clear that any remedy plan entered into between Ameritech and a CLEC that reduces Ameritech’s potential liability at risk for inadequate service is not in the public interest. Regrettably, Staff opines, this is precisely what the 11-State Plan does. Staff states that the 11-State Plan Tier 1 per occurrence payment amounts (Section 6.4) appear to be comparable to what was approved in the Illinois Remedy Plan, although in application it will result in a lower potential liability due to other material variations between the two plans, such as variations in Sections 3.1.2.1, 6.2, 6.3, 7, 8, 12.1 and 13.1 of the 11-State Plan. Staff observes that Sections 3.1.2.1 and 13.1 incorporate the performance measures of the FCC.7 The FCC only approved 20 performance measures (39 disaggregated measures), whereas the Commission has approved 150 performance measures, of which more than 80 are non-diagnostic measures (measures that Ameritech pays the Tier 1 and Tier 2 remedies for failure to meet the standard). Staff contends that common sense dictates that the amount of money Ameritech would pay on 39 measures will be less than what it pays on 80+ performance measures, considering the 39 measures are a subset of the 80. If the potential liability under the 11-State Plan is less than what the Commission ordered in the Illinois Remedy Plan, Staff argues that the incentive to Ameritech to provide sufficient wholesale service to CLECs is less than what was ordered by the Commission. The ultimate result, according to Staff, being that the public will not receive the level of wholesale service and competition that the Commission sought to ensure through its approval of the Illinois Remedy Plan. Staff further states that Sections 6.2 and 8 provide for a table of critical values to be used, as opposed to one critical value (as approved in the Illinois Remedy Plan) to determine the number of occurrences that Ameritech will be have to pay remedies upon. In Docket No. 01-0120, Staff proposed that a single value of 1.645 be used for the critical Z factor. (Id. at 23) The Commission stated the following in support of using a single critical value:

STAFF’S POSITION. Staff explains that a remedy plan is intended to provide incentives to incumbent carriers like Ameritech to provide a sufficient level of service to the public. In a remedy plan, that level of service is ensured through the potential liability at risk (i.e. potential payments it would make under a remedy plan for providing service in breach of a performance measure standard). Staff states that the public interest is protected by the potential liability inherent in a remedy plan,6 not the actual performance Ameritech provides under the current remedy plans. Just because Ameritech may be meeting more than 90% of its performance measure standards does not, according to Staff, mean that the remedy plans are providing sufficient incentive. Staff notes that Ameritech is currently making changes to its OSS to improve its wholesale service performance so as to gain long distance approval in all five Ameritech states. This approval requires Ameritech to demonstrate to the state commission that its wholesale service is adequate, which Staff states is directly linked to the improvements shown in Table 1 in ▇▇. ▇▇▇’▇ testimony. Staff, however, finds Table 1 misleading because it is the continued future performance that a remedy plan is intended to ensure, and not the current performance that is reflected in the table. Future performance, Staff points out, is motivated by potential liability. Common sense dictates, Staff opines, that if the potential liability increases, the motivation increases for Ameritech to make changes to continue to comply with the performance measures in the future. If a remedy plan places at risk a potential liability that is less than what the Commission had ordered in the Illinois Remedy Plan, then Staff argues that the pressure to provide sufficient wholesale service in the future is less 5 Ameritech’s responses to Staff’s data requests have been placed in the record through Staff’s Motion to Compel. 6 Application by Bell Atlantic New York for Authorization Under Section 271 of the Communications Act to Provide In-Region, InterLATA Service in the State of New York, CC Docket 99-295, FCC 99-404, para. 433 (rel. December 22, 1999) than what the Commission ordered. Therefore, Staff maintains that a reduction in potential liability is against the public interest, since the public has an interest in the potential liability at risk approved by the Commission to ensure sufficient future wholesale service. Staff maintains that the Remedy Plan Order clearly indicates the Commission’s strong view that the Texas Remedy Plan, as implemented in Illinois, is insufficient in inducing Ameritech to provide a level of service the Commission finds is appropriate. (Remedy Plan Order at 12-53) In evaluating the Texas Remedy Plan, Staff reports that the Commission stated that “Ameritech, does not appear to suffer any meaningful consequence as a result of delivering [substandard] service[.]” (Id. at 41; see also Id. at 36 (“[T]he current amounts are not sufficient to provide any meaningful incentive for Ameritech to provide the CLECs with service that is not substandard.”)) Staff relates that the Commission undertook to fix this problem by setting as its goal in that proceeding the creation of “a Remedy Plan that adequately compensates the CLECs for Ameritech’s failure to meet the approved performance standards and sufficiently 6 Application by Bell Atlantic New York for Authorization Under Section 271 of the Communications Act to Provide In-Region, InterLATA Service in the State of New York, CC Docket 99-295, FCC 99-404, para. 433 (rel. December 22, 1999) motivates Ameritech to end any discriminatory conduct that impedes the development of competition in Illinois[.]” (Id. at 11) Indeed, Staff adds, the Commission abolished the annual cap upon payments under the Illinois Remedy Plan. (Id. at 41) From its review of the Remedy Plan Order, Staff concludes that it is clear that any remedy plan entered into between Ameritech and a CLEC that reduces Ameritech’s potential liability at risk for inadequate service is not in the public interest. Regrettably, Staff opines, this is precisely what the 11-State Plan does. Staff states that the 11-State Plan Tier 1 per occurrence payment amounts (Section 6.4) appear to be comparable to what was approved in the Illinois Remedy Plan, although in application it will result in a lower potential liability due to other material variations between the two plans, such as variations in Sections 3.1.2.1, 6.2, 6.3, 7, 8, 12.1 and 13.1 of the 11-State Plan. Staff observes that Sections 3.1.2.1 and 13.1 incorporate the performance measures of the FCC.7 The FCC only approved 20 performance measures (39 disaggregated measures), whereas the Commission has approved 150 performance measures, of which more than 80 are non-diagnostic measures (measures that Ameritech pays the Tier 1 and Tier 2 remedies for failure to meet the standard). Staff contends that common sense dictates that the amount of money Ameritech would pay on 39 measures will be less than what it pays on 80+ performance measures, considering the 39 measures are a subset of the 80. If the potential liability under the 11-State Plan is less than what the Commission ordered in the Illinois Remedy Plan, Staff argues that the incentive to Ameritech to provide sufficient wholesale service to CLECs is less than what was ordered by the Commission. The ultimate result, according to Staff, being that the public will not receive the level of wholesale service 7 In Re Applications of Ameritech Corp. and SBC Communications Inc, For Consent to Transfer Control of Corporations Holding Commission Licenses and Lines Pursuant to Sections 214 and 310(d) of the Communications Act and Part 5, 22, 24, 25, 63, 90, 95 and 101 of the Commission’s Rules, FCC Docket 99-279, CC Docket 98-141, Conditions 23 and 24 (rel. Oct. 8, 1999). and competition that the Commission sought to ensure through its approval of the Illinois Remedy Plan. Staff further states that Sections 6.2 and 8 provide for a table of critical values to be used, as opposed to one critical value (as approved in the Illinois Remedy Plan) to determine the number of occurrences that Ameritech will be have to pay remedies upon. In Docket No. 01-0120, Staff proposed that a single value of 1.645 be used for the critical Z factor. (Id. at 23) The Commission stated the following in support of using a single critical value: