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Colorado Public Utility Commission Workshop: Overview of Liberty’s Analysis

Colorado Public Utility Commission Workshop: Overview of Liberty’s Analysis. November 10, 2009 Denver, Colorado. Liberty’s PAP Experience. 271 Testing PID audit for ROC test Members of current Liberty team participated in other aspects of ROC test and in numerous non-Qwest tests PAP Audits

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Colorado Public Utility Commission Workshop: Overview of Liberty’s Analysis

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  1. Colorado Public Utility Commission Workshop: Overview of Liberty’s Analysis November 10, 2009 Denver, Colorado

  2. Liberty’s PAP Experience • 271 Testing • PID audit for ROC test • Members of current Liberty team participated in other aspects of ROC test and in numerous non-Qwest tests • PAP Audits • PAP/PID audits for the ROC • Numerous audits of other RBOCs’ PAPs • PAP Reviews/Evaluations • Advice/support at the time of the 271 application process • Recent proposed Verizon PAP changes in MD

  3. ROC PAP Review Process • Liberty was engaged by Colorado and 10 other commissions • Industry Participation • Qwest agreed only to provide data and answer questions about the data; did not provide information on PAP experience or proposals for PAP modifications • 14 CLECs responded to Liberty questions about PAP experience, generally supporting continuance and the PAPs with minimal changes, and provided a few proposals for minor modifications • Liberty analyzed Qwest data, other publicly available data, and CLEC input • Liberty provided draft report for staff review and to Qwest and CLECs for accuracy review

  4. Liberty Data Analysis • Obtained historical data from Qwest: January 2004 through October 2008 • Payment history • PID measure results • Concentrated on recent history (beginning January 2007) • Later obtained payment data from November 2008 through March 2009 to test conclusions • Analyzed trends • Payments • Volumes • Performance

  5. Total Tier 1 and Tier 2 PaymentsAll 14 States

  6. Total Tier 1 and 2 Payments Colorado

  7. Total Tier 1 Payments by PID DomainAll 14 States

  8. Total Tier 1 Payments by PID Domain Colorado

  9. Total Tier 2 Payments by PID Domain All 14 States

  10. Total Tier 2 Payments by PID Domain Colorado

  11. Ordering Volumes: All States

  12. Ordering Volumes: Colorado

  13. Lines in Service: All States

  14. Lines in Service: Colorado

  15. General Observations About Trends • Payments • Generally decreasing since 2004 • Principal reasons: volumes, improved Qwest performance, reduced number of CLECs • Faster reduction in Tier 2 payments (large drop-off in CO after 2006) • MR payments are now generally the largest • Volumes • Disappearance of TRO/TRRO-related products (UNE-P and Line Sharing) • Gradual reduction in resale • Stand-alone LNP now dominant • “Other,” primarily unbundled loops, still significant • Qwest performance • General reduction in measure failures • Payments significantly affected by low transaction volumes

  16. Low Volume Effects • Analysis of 2004 through 2008 payments shows that, per unit of volume, payments are higher but failure rates are lower. • These effects are apparently not due to lower performance, but due to statistical errors. • Type I error, which favors CLECs, occurs when a process is in parity or above benchmark on average, but falls below in a month (and requires payments) due to low volume rules or statistical variation. • Type II error, which favors Qwest, occurs when a process is out of parity or sub-benchmark, but in which payments do not occur because of low volume rules or statistical variation. • Low volumes increase the two types of statistical error; original design of tests envisioned sample size around 140, where these error rates would be balanced. • Special low-volume rules were added to PAPs to address cases where the sample size is very small, but don’t fully correct errors.

  17. Analysis Conclusions • PAPs are still valuable • CLEC transaction volumes have decreased and changed in composition, but still significant • Payments still significant, particularly for Tier 1 MR measures • Although competitors have entered the market that depend less on Qwest’s wholesale products and services, many CLECs still depend crucially on these products and services • Despite past changes (e.g., CPAP Three-Year Review), additional changes are warranted • Remove additional PIDs; make some additional PID changes • Remove additional low-volume products • PAP structure changes to correct for low-volume effects • Liberty took conservative approach – if the PAPs are working, don’t make major structural changes; most proposed PID structure changes suggested by industry

  18. Recommendations • Recommendation #1: Aggregate low-volume transactions. • Proposed scheme to aggregate over CLECs and months depending on transaction volumes • Should reduce Type I and II errors • CLEC aggregation already used in special situations in Qwest PAPs • Recommendation #2: Add PO-9, PO-19, PO-20, and Collocation measures to Reinstatement/Removal list. • PIDs included based on multiple criteria • Liberty considered payment history, volumes, and importance of measured process to carriers • Recommendation #3: Make other PAP-affecting PID changes. • Use OP-5T instead of OP-5A and OP-5B in PAP • Replace ISDN-BRI as a retail analog

  19. Recommendations (cont.) • Recommendation #4: Eliminate additional low-volume products for OP and MR PIDs • DS-3 loops • UDIT above DS-1 • 4-Wire Non-Loaded loops • Loops with Conditioning (OP only) • ISDN-capable Loops (OP only) • Recommendation #5: Made additional PID changes (diagnostic only, no immediate PAP impact). • Limit MR-4 to service-affecting troubles • OP-4 sub-measure to track expedited orders • MR-7 sub-measure to track chronic troubles • OP-3 sub-measure to track coordinated appointments met

  20. Recommendations (cont.) • Recommendation #6: Add provisions to fund PAP administration if Special Fund insufficient. • Could use language similar to that for Independent Monitor in CPAP Section 10.5: “When there are insufficient funds in the Special Fund for this purpose, Qwest shall advance the necessary funds.” • Recommendation #8: Restore Tier 1B, Tier 1C, and Tier 2 to the CPAP. • Tier 1A is largely restricted to OP and MR performance measures for unbundled loops and interconnection. • Including Tier 1B restores performance measures for other products (e.g., Resale, Interoffice Transport, some aspects of LNP). • Including Tier 1C restores BI performance measures. • Including Tier 2 restores gateway and call center performance measures (e.g., GA, PO-1, OP-2, MR-2) and Work Completion Notification Timeliness (PO-6).

  21. Recommendations (cont.) • Recommendation #9: Make other CPAP-specific changes. • Restore ADSL-capable loops as product; removed after Three-Year Review when volumes were very low – volumes are now substantial. • Remove UNE-P products; no longer relevant after Triennial Review. • Recommendations #7 and 10 not applicable to Colorado.

  22. Qwest CPAP-2 Proposal: Liberty Comments November 10, 2009 Denver, Colorado

  23. CPAP -2 General Structure • No self-executing penalties • A monitoring mechanism with “triggers,” based on CLEC aggregate results, for Qwest to take action to resolve problems • Lowest level of action is not triggered until after 3 months of missing a performance standard • Highest level of action is not triggered until after 7 months and mainly provides escalation of Qwest management involvement • In contrast to CPAP-2, Qwest’s commercial agreements appear to provide for some level of bill credits for missing performance targets • Standard is considered met if z-score can’t be calculated – the practical result is that Qwest will pass many low volume measures no matter how poor the performance • Uses only 6 performance measures • Loosely related to existing PIDs but with significant changes • Monthly results but only reported quarterly • Excludes important products (e.g., xDSL capable loops, ADSL loops, LIS trunks, residential resale)

  24. CPAP- 2 Performance Measures • FOC – Firm Order Confirmation Timeliness • Related to current PO-5 • Excludes ASR orders • Excludes orders that flow through Qwest’s systems • Primarily restricted to manually processed FOCs when orders received electronically • Restricted product set (basic 2-wire loops and DS1 loops and EELs) • Loosened standard for manually processed FOCs: 72 hours instead of 24-48 hours • ICOM – Installation Commitments Met • Related to current OP-3 • Eliminates MSA/Zone and dispatch/non-dispatch categories • Restricted product set (basic 2-wire loops and DS1 loops and EELs) • Loosened standard: benchmark of 80%; currently 90% for most of these products, parity for DS1 loop

  25. CPAP -2 Performance Measures (cont.) • INST – Order Installation Interval • Related to current OP-4 • Excludes ICB orders • Eliminates MSA/Zone categories • Restricted product set (basic 2-wire loops and DS1 loops and EELs) • Loosened standards: from benchmarks to parity with retail products with low volumes (ISDN-BRI, DS1 private line) and hence unlikely to allow statistical tests • TR – Trouble Rate • Related to current MR-8 • Excludes NTF and TOK troubles • Excludes installation and repeat troubles • Restricted product set (basic 2-wire loops and DS1 loops and EELs) • Loosened standard: benchmark of 5% instead of parity

  26. CPAP -2 Performance Measures (cont.) • TREI – Troubles Restored within Estimated Intervals • Related to current MR-3 and MR-5 • OOS troubles reported separately only for loops less than DS1 level • Eliminates MSA/Zone categories • Restricts to troubles reported during normal business hours • Excludes NTF and TOK troubles • Restricted product set (basic 2-wire loops and DS1 loops and EELs) • Loosened standards: benchmarks instead of parity • MTTR – Mean Time to Restore • Related to current MR-6 • Eliminates MSA/Zone categories • Restricts to troubles reported during normal business hours • Restricted product set (basic 2-wire loops and DS1 loops and EELs)

  27. Key Missing Performance Measures • Provisioning • Hot cut performance (OP-13) • Delay days (OP-6) • Number porting timeliness (OP-8) • Work completion notice timeliness (PO-6) • Maintenance and Repair • Installation troubles (OP-5A) • Repeat troubles (MR-7) • Billing • Timeliness (BI-1) • Accuracy (BI-3) • System Interfaces and Call Centers • Gateway availability for pre-ordering/ordering (GA-1and GA-8) and repair (GA-6) • Pre-order responsiveness (PO-1) • Provisioning (OP-2) and repair (MR-2) call center responsiveness

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