ROLAND, FOGEL, KoBLENz^^gMDcaoNE., LLP ATTORNE^Sftl^i^s-ALBANY ALBANY, NEW YORK 12207 KEITH J. ROLAND EDMUND A. KOBLENZ USHER FOGEL 1908-1972 MARK L. KOBLENZ J_| A. ABBA KOBLENZ EMILIO A.F. PETROCCIONE 1922-1979 KEVIN M. COLWELL TEL: (518)434-8112 GEORGE A. ROLAND* FAX: (518)434-3232 COUNSEL •ALSO ADMITTED TO FLORIDA BAR May 24, 2002 Hand Delivered Hon. Janet H. Deixler, Secretary NYS Public Service Commission Three Empire State Plaza Albany, New York 12223 Re: Case 01-C-1787 - iiNETA/erizon Arbitration - Initial Brief Dear Secretary Deixler: Enclosed please find the original and twenty-four (24) copies of the Initial Brief of Interactive Information Network in this proceeding. The original brief contains the original Affidavit of Edward F. White. This brief is being served electronically upon counsel for Verizon, counsel and Staff for the Commission, and the Administrative Law Judge today, with copies of the White Affidavit being transmitted by facsimile or hand delivery. KJR/mac Enclosures cc: Sandra D. Thorn, Esq. Leigh A. Hyer, Esq. Maureen McCauley, Esq. Hon. William L. Boutellier Gregg Pattenaude Patricia Grille Edward F. White Larry Weiss r RECEIVED PU?UC SERVICE ORIGINAL. COMMISSION STATE OF NEW YORK05£C-FiLES'ALDAHY PUBLIC SERVICE COM^ pH ^ 06 Petition of Interactive Information Network, Inc. For Arbitration of Interconnection Terms and Conditions and Related Case 01-0-1787 Arrangements with Verizon New York, Inc. INITIAL BRIEF 9 INTERACTIVE INFORMATION NETWORK, INC. • -r Keith J. Roland - Roland, Fogel, Koblenz & Petroccione, LLP One Columbia Place Albany, New York 12207 (518)434-8112 Dated: Albany, New York May 24, 2002 STATE OF NEW YORK PUBLIC SERVICE COMMISSION Petition of Interactive Information Network, Inc. For Arbitration of Interconnection Terms and Conditions and Related Case 01-C-1787 Arrangements with Verizon New York, Inc. INITIAL BRIEF INTERACTIVE INFORMATION NETWORK, INC. I. PRELIMINARY STATEMENT This is an arbitration under Sections 251 and 252 of the Telecommunications Act of 1996, in which this Commission is asked to specify the terms of an Interconnection Agreement between Interactive Information Network (iiNET) and Verizon New York Inc. (Verizon). The overriding issue in this arbitration is whether the Commission will make it possible, by specifying the necessary and appropriate terms of an interconnection agreement, for a competitive local exchange carrier to assume the role of hosting pay per call services once Verizon exits the market in March of 2004. If such a competitor is denied the necessary forms of interconnection, including, as described below, appropriate and reasonable billing and collection services, large portions of the information provider industry in New York, particularly those which provide low cost services, such as short pre-recorded 976 messages, will simply disappear. The billing and collection sought by iiNET is for Verizon to bill its own end users when they make calls to iiNET customers. Today, most CLEC interconnection agreements include terms for the delivery of calls from CLEC end users to Verizon pay- per-call services, including billing and collection by CLECs from their own end users, and remittance of monies to Verizon. iiNET simply seeks assurance that calls will flow in the opposite direction, including a requirement for billing and collection. The testimony offered on behalf of iiNET by Larry Weiss, who has been intensely involved in the offering of pay per call services for many years, makes clear that, absent the provisioning of economic billing and collection services, the great majority of these pay per call services will simply be put out of business when Verizon exits the market. iiNET does not believe that was the Commission's intention when it approved Opinion 99-5, and iiNET does not believe that the forced termination of pay- per-call services, used by hundreds of thousands of New York consumers, will be in the public interest. The genesis of iiNET's formation was the determination by the Commission, issued in Opinion 99-5 on March 25, 1999, in Case 98-C-1079, to permit Verizon to discontinue its provisioning of "InfoFone services" after a five year transition, to end in March of 2004. As described in more detail below, InfoFone services are "pay per call" services in which members of the public pay a premium charge, via their telephone bill, to obtain recorded information or otherwise interact with specific persons or programs. One of the reasons for forming iiNET was to have available, for the information providers in New York, a vehicle to provide the equivalent of Verizon's 2 InfoFone services after Verizon exits the market in March of 2004. (TR 326). This arbitration has been anticipated since 1999. At that time, it was understood by all IPs that if pay-per-ca!l services in New York were to continue, a CLEC would have to step forward to replace Verizon as the host for these services. Indeed, it was Verizon itself which suggested that IPs form, or find, a CLEC which would take over Verizon's role. (TR 413). But to enable such a CLEC to fulfill the expectations of the Commission and the IPs, and to offer a mechanism for continuation of pay-per-call services, that CLEC would need appropriate forms of interconnection with Verizon. How the Commission resolves this arbitration will determine whether the expectations underlying Opinion 99-5 - that pay-per-call services used by hundreds of thousands of New York customers will be allowed to survive - will be realized. The history of negotiations between iiNET and Verizon over this interconnection agreement is contentious. Verizon has known, since March of 1999, that it would be necessary for a CLEC, such as iiNET, to step forward to host the information providers who would otherwise be thrown out of business by Verizon's decision to discontinue InfoFone services in March of 2004. Yet Verizon apparently engaged in no planning, and appears to have given no consideration, for three years, as to how it would interface with, and transition over to, such a CLEC. (TR 138). Verizon personnel assigned to negotiate this interconnection agreement - which iiNET had emphasized at the outset would involve pay-per-call services - had only the most rudimentary understanding of this subject matter. (TR 409-410). In fact, all of iiNET's efforts to negotiate an interconnection agreement in good faith were met, for nearly two 3 years, "with nothing but avoidance, dodges and run arounds". (TR 410-411). Indeed, even in this arbitration proceeding, the majority of Verizon's filings, testimony and responses have been in the form of procedural gaming, rather than a good faith attempt to achieve a workable agreement. During this proceeding, Verizon objected to significant portions of iiNET's testimony on the ground it addressed subjects "that fall outside the scope of Sections 251 and 252 of the Act", specifically identifying non-bottleneck billing and collection for pay-per-call services, and ultimate disposition and use of information service NXX codes. Verizon also objected to consideration of certain matters which Verizon asserted were not correctly raised by iiNET for consideration by the Commission. See Verizon "Motion to Strike Portions of Pre-Filed Testimony of Larry Weiss", April 25, 2002. The most critical ruling by the ALJ was to determine that, under the Telecom Act, billing and collection "are matters which do not go to issues that can be covered in an interconnection agreement pursuant to the federal statute". (TR 245).1 iiNET respectfully disagrees with that conclusion, and includes in this Brief an appeal of that ruling. As discussed below, billing and collections for a CLECs pay-per-call services can, have been, and, in the circumstances of this case, should be included by 1 The ALJ also determined that while number portability was clearly raised as an issue in the pleadings, the testimony of Mr. Weiss indicated there were no outstanding issues on this subject because Verizon had indicated it would port all InfoFone numbers until it discontinues information services in March of 2004. (TR 244). Verizon has since clarified it would not port 976-1212 and 976-1616, the time and weather operated by iiNET under contract with Verizon. Accordingly, iiNET will be requesting that the Commission initiate action with respect to the status of the InfoFone NXX codes, after March of 2004, in a separate proceeding. the Commission in an interconnection agreement. In this regard, iiNET will show that B&C terms have in fact been arbitrated by Commissions - including this very Commission - and that the statutory framework of the Telecom Act does not restrict the Commission's authority as Verizon claims. In fact, in an earlier arbitration before this Commission, New York Telephone specifically argued the Commission had full authority to, and should, mandate B&C for pay-per-call services. Finally, a number of other factors, including language in the existing Verizon/Sprint and other interconnection agreements; the non-discriminatory obligations of the Telecom Act, the Communications Act, and the Public Service Law; and the fact Verizon currently provides billing and collection services to itself, and unrelated local exchange companies and CLECs, warrant the Commission's inclusion of mandatory billing and collection provisions for information services. With respect to the other issues which Verizon argued should not be considered by the Commission in this proceeding, the ALJ properly ruled they were before the Commission. Those disputed issues are addressed below. iiNET's approach to an interconnection agreement has always been clear. Its request was to create a new agreement consisting of an adoption of all the "voice" provisions of the existing interconnection agreement between Verizon and Sprint,2 2 See Agreement between New York Telephone Company d/b/a Bell Atlantic- New York and Sprint Communications Company L.P.