BEFORE THE PUBLIC UTILITIES
COMMISSION
OF THE STATE OF COLORADO
RUBY
RANCH INTERNET COOPERATIVE )
ASSOCIATION, )
)
PETITIONER, )
) ARBITRATION
v.
) DOCKET NO. 01B-493T
)
QWEST CORPORATION, )
)
RESPONDENT. )
The Ruby Ranch Internet Cooperative Association (“Coop”) respectfully requests the Commission to enter an order in limine precluding Qwest Corporation (“Qwest”) from introducing at the hearing any evidence concerning its costs to install a subloop and to prepare a quote preparation fee for the Coop, and any evidence or argument concerning alleged past breaches of a non-disclosure agreement.[1] This action is necessary to prevent fundamental unfairness given that the hearing is scheduled for January 31, 2001 and that Qwest’s production of data at the 11th hour would prejudice the Coop by inhibiting its ability to prepare meaningfully for the hearing. This action is also necessary to penalize Qwest for flagrantly violating its duty to have produced this data long ago.
The Communications Act requires Qwest to provide subloops to the Coop on prices that are “based on the cost . . . of providing the . . . network element.”[2] The Federal Communications Commission (“FCC”), in implementing the Act, has ruled that an incumbent LEC is required to submit cost data in support of its unbundled network element (“UNE”) prices and that an incumbent LEC engages in bad faith in not producing such data upon request:
We agree with incumbent LECs and new entrants that contend that the
parties should be required to provide information necessary to reach agreement.
. . . It would be reasonable, for
example, for a requesting carrier to seek and obtain cost data relevant to the
negotiation . . . We conclude that an
incumbent LEC may not deny a requesting carrier’s reasonable request for cost
data during the negotiation process, because we conclude that such information
is necessary for the requesting carrier to determine whether the rates offered
by the incumbent LEC are reasonable. We
find that this is consistent with Congress's intention for parties to use the
voluntary negotiation process, if possible, to reach agreements.[3]
The FCC further ruled that “incumbent LECs must prove to the state commission, or in some instances the [FCC] or a court, that delay is not a motive in their conduct."[4]
The prices that Qwest had consistently quoted to the Coop — a quote preparation fee of $1,707.09 and a subloop activation fee of $126.49 — are not reasonable on their face given the small amount of work Qwest must perform to provision subloops for the Coop. The Coop repeatedly asked Qwest to provide supporting cost justification for these prices.[5] Qwest, in contravention of clear FCC directives, refused to furnish the cost data that the Coop sought.[6] (Had Qwest produced its supporting cost data, the pricing issues would have likely been resolved months ago.)
The Coop thereafter addressed this important matter in its discovery requests, hoping that Qwest would at least recognize its obligations to respond truthfully and fully to discovery promulgated pursuant to Commission rules. However, Qwest still refused to produce information identifying its costs of provisioning subloops to the Coop. Qwest’s response to Coop Interrogatory No. 9 is illustrative of the position Qwest took in response to the Coop’s discovery:
State Qwest’s basis for its $1707 Quote Preparation Fee.
Qwest’s Response:
Qwest objects to this interrogatory as not reasonably calculated to lead to the discovery of admissible evidence. Notwithstanding and without waiving the objection, Qwest responds to this interrogatory by referring to the PUC’s findings in Docket No. 99A-577T, Commission Order, Adopted Dated: November 13, 2001, produced with Qwest’s response to Ruby Ranch’s Production Requests.
In the referenced Order, the Commission established certain prices related to Qwest’s SGAT — prices that are different than the prices Qwest had been quoting to the Coop. However, the Coop’s requests did not ask for prices, but rather the costs that Qwest relied upon in substantiating the prices that Qwest had been quoting to the Coop.[7]
The Coop first asked for supporting cost justification on August 1, 2001.[8] After the passage of over five and one-half months, Qwest still has refused to produce evidence that is directly relevant to the parties’ negotiations and now, to this arbitration proceeding. The hearing is now less than two weeks away. Fundamental fairness dictates that having stonewalled the Coop for many months, Qwest should now be precluded from introducing at the hearing any evidence concerning its costs to activate a subloop and to prepare a quote preparation fee for the Coop.
The Coop further requests that Qwest be precluded at the hearing from mentioning or insinuating any allegation of breach of this or any other non-disclosure agreement, unless Qwest presents such an allegation in a form that permits cross-examination, such as a live witness detailing the alleged breach. Although the Coop thought that the ALJ disposed of this issue at the December 12, 2001 Prehearing Conference, Qwest has chosen to raise the issue again.
Qwest, in its response to the Coop’s arbitration petition, alleged that the Coop “breached this [non-disclosure] agreement by posting confidential information subject to the agreement on its web site without Qwest’s consent.”[9] The Coop demonstrated in its reply that this allegation was baseless:
· It is unclear whether a non-disclosure agreement even exists, because Qwest never provided to the Coop a copy of an agreement that it executed;
· Even if there was an agreement, the material about which Qwest complained was not “Confidential” as that term was defined in the document the Coop executed; and
· In any event, the document the Coop signed specified that only those documents marked as “confidential” would be treated as confidential, but Qwest had never marked any of its documents accordingly.[10]
At the December 12, 2001 hearing, the ALJ determined (at least as the Coop recalls) that this dispute was not relevant to the arbitration proceeding.
However, only one week later Qwest repeated its allegation that the Coop supposedly breached a non-disclosure agreement. In its December 19, 2001 objections to the Coop’s discovery, Qwest complained that certain Coop document requests seek “highly confidential technical information ‘substantiating’ rates that are part of Commission-approved cost dockets or pending cost dockets”:
Ruby Ranch signed a nondisclosure agreement during the negotiations herein, but has posted confidential information obtained from Qwest on Ruby Ranch’s web site. Thus, in addition to Qwest’s objection that this information is not relevant to Ruby Ranch’s claims, Qwest objects to providing this data to Ruby Ranch without adequate assurance that Ruby Ranch will preserve the confidentiality of this data.[11]
The Coop, in discovery served on Qwest before the December 12 Prehearing Conference, asked Qwest to produce a copy of the non-disclosure agreement that it had asserted the Coop had “breached.” Qwest responded on January 3, 2002 that it “will provide the nondisclosure agreement.”[12] Only yesterday did Qwest for the first time provide a copy of the non-disclosure agreement. It differs from what the Coop sent to Qwest in that it appears to have been signed by a Qwest employee. Stated differently, yesterday, for the first time, the Coop has a copy of the non-disclosure agreement actually signed by Qwest.
The Coop agrees with the ALJ that any dispute over a non-disclosure agreement is not relevant to the legal issues in this arbitration proceeding. However, Qwest should not be permitted to continue to allege that the Coop “breached” this agreement unless it is prepared to subsantiate its allegation in a form that permits cross-examination. Accordingly, the Coop requests that the Commission preclude Qwest mentioning or insinuating any allegation of breach of this or any other non-disclosure agreement, unless Qwest presents such an allegation in a form that permits cross-examination, such as a live witness detailing the alleged breach.
III. CONCLUSION
For all the foregoing reasons, the Coop respectfully requests the Commission to enter an order in limine precluding Qwest from introducing at the hearing any evidence or argument concerning: (a) its costs to install a subloop and to prepare a quote preparation fee for the Coop, and (b) any alleged past breaches of any non-disclosure agreement between the parties.
Dated this 17th
day of January 2002.
Respectfully
submitted,
ASSOCIATION
_______________________________
Carl Oppedahl, Director
c/o Oppedahl & Larson
LLP
P.O. Box 5088
Dillon, CO 80435-5088
970-468-6600
carl@rric.net
Arbitration Docket No.
01B-493T
I, Carl Oppedahl, state as
follows:
1. I am a member of the board of directors of
the Ruby Ranch Internet Cooperative Association (“Coop”), I attended all
discussions with Qwest Corporation (“Qwest”) concerning the Coop’s request to
lease Qwest subloops on Ruby Ranch, and I have personal knowledge of the
matters discussed below.
2. Until recently, Qwest has consistently demanded that the Coop pay
it $1,707.09 as a quote preparation fee, stating that it would not activate the
subloops the Coop needs until the Coop paid this sum. Qwest recently reduced this demand by $600, to $1,107.09. Neither of these figures can possibly be
correct. Qwest needs to install a screw
terminal block in its cross-connection box in Ruby Ranch so the Coop’s cable
can be connected to Qwest’s subloops. I
suspect the cost of such a block would approximate $100 or $200. The block should take no more than one hour
to install. In addition, a capable
Qwest engineer should have to spend no more than 15 to 30 minutes to develop a
quote telling the Coop that the cost of acquiring and installing the screw
terminal block will be several hundred dollars. On its face, then, the quote preparation fee that Qwest is
demanding the Coop pay — whether $1,707 or “only” $1,107 —appears to constitute
price gouging.
3. Until recently, Qwest has consistently demanded that the Coop pay
it $126.49 to activate each subloop that the Coop requires. (Although Qwest calls this an installation
fee, the subloops are already buried in Ruby Ranch roads; an activation fee
would therefore appear to be a more accurate description.) Qwest recently reduced this demand to
$120.67/ Neither of these figures can
possibly be correct. Qwest charges $54
to activate an ordinary business POTS line, and it is thus demanding that the
Coop pay an activation fee that is more than twice as much. Yet, the actual work the Qwest personnel
must perform to activate a subloop for the Coop would involve half the work
that they must perform to activate a POTS line. On its face, then, the subloop activation fee that Qwest is
demanding the Coop pay appears to constitute price gouging.
4. In my discussions with Qwest, including as early as August 2,
2001, I repeatedly asked Qwest to justify these to fees. Qwest has never produced to the Coop any
cost studies or other documents demonstrating its costs to activate a subloop
for the Coop or to prepare a quote for the installation of a screw terminal.
5. The Coop addressed this omission in its discovery requests to
Qwest. Qwest’s response to Coop
Admission Request No. 76 is typical of Qwest’s responses:
Admit that during the August [1], 2001 conference call, Qwest failed to
provide support for the $1707 price.
Qwest Response:
Qwest denies that it did not provide support for the $1707 price.
6. This Qwest denial is false. While Qwest stated that its prices were based on the Total Element Long-Run Incremental Cost (“TELRIC”) methodology, Qwest never explained to the Coop how its prices of $1,707.09 and $126.49 were based on Qwest’s costs of provisioning subloops to the Coop, nor did Qwest ever produce any cost studies or other documents demonstrating how its proposed prices were even remotely related to the work that Qwest would have to perform.
7. Some time ago and at Qwest’s request, I executed a non-disclosure agreement (although I changed some of the terms that Qwest had initially proposed). I sent my executed copy to Qwest, but Qwest has never (until yesterday) sent to me a copy of the non-disclosure agreement that it executed — including after January 3, 2002, when Qwest stated in its discovery responses that it would produce this agreement. Only yesterday did Qwest for the first time provide a copy of the non-disclosure agreement. It differs from what I sent to Qwest in that it appears to have been signed by a Qwest employee. Yesterday, for the first time, the Coop has a copy of the non-disclosure agreement actually signed by Qwest.
I certify under penalty of
perjury that the foregoing statements are true and correct.
Dated this 17th
day of January, 2002.
______________________________
Carl Oppedahl
CERTIFICATE OF
SERVICE
The undersigned certified that on
this 17th day of January, 2002, a true and correct copy of the foregoing PETITIONER’S MOTION IN LIMINE was sent
to the following persons via facsimile and email:
Timothy M. Tymkovich
fax 303-592-8710
and
will be served via first-class mail prepaid on January 17, 2002:
Timothy M. Tymkovich
Hale Hackstaff Tymkovich & ErkenBrack LLP
1675 Broadway, Suite 2000
Denver, CO
80202
Kris A. Ciccolo
Qwest Services Corporation
1005 17th Street, Suite 200
Denver, CO
80202
______________________________
Carl Oppedahl
[1] The Commission has entered such orders in the past, although the specific facts in prior orders obviously differed considerably from the unique facts in this case. See, e.g., Request for Temporary Waiver of 4 CCR 723-27-20.1 Filed by Delta County Tele-Comm, Ind., with Advice Letter No. 90, Docket No. 00K-068T, Decision No. R00-884-1 (Aug. 11, 2000)(ALJ, Kirkpatrick).
[2] 47 U.S.C. § 252(d)(1)(A)(i).
[3] First Local Competition Order, 11 FCC Rcd 15499, 15577-78 ¶ 155 (1996).
[4] Id.
[5] Qwest admits that the Coop repeatedly asked for supporting cost data from it. See Qwest Responses to Coop Admission Request Nos. 83, 84, 85, 86, 88, 89 and 90.
[6] See Declaration of Carl Oppedahl attached.
[7] Although Qwest did not produce to the Coop the relevant cost studies that it submitted in the SGAT docket, those cost studies would have been only marginally relevant since they were based on Qwest’s averaged costs of serving all CLECs, not the costs of provisioning subloops to the Coop. Besides, the Commission, by often setting lower SGAT prices than what Qwest proposed, obviously found flaws in the cost studies that Qwest submitted. See, e.g., Docket 99A-577T Order at § V.D.2 (Qwest’s model has certain “’black box’ components, or aspects of the model that are not open to analysis. The underlying assumptions for the respective models also fall short in different respects.”).
[8] See Qwest Responses to Coop Admission Request Nos. 83 and 84.
[9] Qwest’s Response at 5 (Nov. 19, 2001).
[10] See Coop Reply in Support of Its Petition for Arbitration at 11-12 (Nov. 27, 2001).
[11] Qwest’s Objections to Petitioner’s Discovery at 2-3 (Dec. 19, 2001).
[12] Qwest Response to Coop Document Request No. 1.