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  All Copyright (1996) retained by the Texas Telecommunications Journal.
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  EXCERPTS from: Texas Telecommunications Journal, 14 June, 1996


        PUC Docket #15042 - GTE application for ISDN tariff revision

  Quite a strange tale, too long for TTJ. But the Thumbnail Version is:


                     A (VERY) WRONG NUMBER FOR GTE


  "We Got Killed!" was the reported reaction as GTE officials read AL Judge
  Susan Thomas Morton's ruling in PUC Docket #15042.  The new statewide
  $41.38 ISDN basic rate recommended in her PFD (Proposal for Decision) is
  less than half what GTE requested, lower in fact even than new SWB rates!

  This just-released PFD also makes no distinction between residential and
  business ISDN rates - a policy similar to traditional SWBT pricing),

  SO, contrary to early predictions, this tariff (if PUC approves) will set
  GTE ISDN roughly $5 below the recently negotiated statewide rate for SWB,
  far below the amounts GTE was hoping to be granted in this tariff filing.

  Using Irving, TX as an example...  GTE asked $98.40 monthly residential
  ISDN rates and $144.45 business rates for typical, measured GTE service.
  [Note GTE numbers include $7 and $19 EAS fees not counted in ALJ rate.]

  While this PFD is merely a recommendation, PUC approval is very likely
  at their June 26 meeting - law requires a rate must be set by July 1st.
  The ALJ proposal is almost certain to be adopted as an interim rate with
  some issues remanded for further study, to be considered in early 1997.

  One interesting clause in the ruling: if a future permanent ISDN rate is
  lower, GTE customers get rebates; if higher, long term contracts will be
  honored at the lower rate: so (post-approval) contracts seem a good bet.


  IT GETS WORSE
  Adding personal insult to fiscal injury, the judge delivered even more
  bad news for GTE.  She recommended a hearing be scheduled to consider
  sanctions against the company for allegedly not following rules, acting
  in bad faith, and purposely avoiding obligations required by Texas law.

  Much of the criticism comes from GTE delays of more than a year before
  any move toward compliance with requirements to meet national standards.
  Whether the Commission agrees or not, a most unwelcome prospect for GTE.


  WHA' HAPPENED?
  Decisions and practices at GTE often seem to mystify us outsiders.  And
  we may not always agree with their pricing and service policies.  But as
  a dominant Texas telco, GTE does consistently bring quality service to
  hundreds of areas statewide, particularly including many rural Texans.

  So how did things go so wrong this time?  (My view isn't unbiased; I was
  one of the intervenors opposing GTE rates.)  Many observers expressed a
  puzzlement over their actions in this docket. While some GTE execs urged
  the company to negotiate for possible settlement, a few key regulatory
  reps seemed ready to gamble the PUC would eventually accept their figures
  for computing LRIC, a risky (and ultimately costly) defense strategy.

  According to Judge Morton (and others) GTE  "did not meet the burden of
  proof" in their arguments during hearings.  An observing attorney claims
  GTE essentially forced docket intervenors to develop a fully supported
  tariff counter-proposal, a tactic which left the judge only one choice:
  that's why opponents' recommendations seem certain to become GTE tariffs.

  And curiouser yet, GTE omitted a few tariff elements that even opponents
  say could justify higher rates.  Now if they want to recover these costs,
  they must file TSLRIC cost studies within 60 days for future hearing.

  Only GTE knows its thinking, but some GTE leaders allegedly cautioned the
  PUC is tougher these days, more inclined to consider market growth and
  consumer interests as well as the profits needed for a healthy industry.
  Some say GTE was arrogant; others say misguided.  Whatever the reasons,
  Docket #15042 is shaping up as a potentially expensive disappointment.


  BOILERPLATE & BOTTOM LINE
  This ruling is good news for GTE customers and overall ISDN development.
  It marked a clear victory for the Office of Public Utility Counsel and
  the General Counsel of the PUC, two increasingly powerful advocates of
  public interest in Texas utility and telecommunications regulation.

  Yet not all news was good. Crippling FX charges remain in effect for the
  non-urban 51% of GTE customers.  A $41.38 monthly rate loses appeal with
  an added $72.19 facilities fee and $1.75 per mile extension charge.  But
  Link Extension may be facing legal challenge under sect. 254, US Tcom96.

  FYI - How the basic docket tariff elements (tot. $41.38) are computed...

  5 components of ISDN rate:       loop charge (both res & bus)    16.20
         B-channel        2.22     access (unlimited) "  "  "      22.96
         usage            - 0 -    line extension (repeaters)      - 0 -



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