<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 20, 1999.
REGISTRATION NO. 333-74793
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SECURITIES AND EXCHANGE COMMISSION
------------------------
AMENDMENT NO. 4
TO
FORM S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
CRL NETWORK SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C> <C>
DELAWARE NO. 4813 68-0312353
(STATE OF INCORPORATION) (PRIMARY STANDARD INDUSTRIAL (IRS EMPLOYER
CLASSIFICATION CODE NUMBER) IDENTIFICATION NUMBER)
</TABLE>
ONE KEARNY STREET, SUITE 1450
SAN FRANCISCO, CALIFORNIA 94108
(415) 837-5300
(ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE, OF
REGISTRANT'S PRINCIPAL EXECUTIVE OFFICES)
JAMES G. COUCH
PRESIDENT AND CHIEF EXECUTIVE OFFICER
ONE KEARNY STREET, SUITE 1450
SAN FRANCISCO, CALIFORNIA 94108
(415) 837-5300
(NAME, ADDRESS, INCLUDING ZIP CODE, AND TELEPHONE NUMBER, INCLUDING AREA CODE,
OF AGENT FOR SERVICE)
COPIES TO:
<TABLE>
<S> <C>
KENNETH R. LAMB, ESQ. NORA L. GIBSON, ESQ.
LISA A. FONTENOT, ESQ. PETER S. BUCKLAND, ESQ.
PATRICK L. WONG, ESQ. TAYLOR L. STEVENS, ESQ.
GIBSON, DUNN & CRUTCHER LLP PATRICK J. O'LOUGHLIN, ESQ.
ONE MONTGOMERY STREET, TELESIS TOWER BROBECK, PHLEGER & HARRISON LLP
SAN FRANCISCO, CALIFORNIA 94104 ONE MARKET, SPEAR STREET TOWER
SAN FRANCISCO, CALIFORNIA 94105
</TABLE>
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the Registration Statement becomes effective.
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement of the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER SHARE(1) PRICE(1) REGISTRATION FEE(2)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $.0001 par
value........................ 6,727,500 $15.00 $100,912,500 $28,054
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</TABLE>
(1) Estimated solely for purposes of calculating the registration fee.
(2) Calculated pursuant to Rule 457(a), $22,240 of this amount has been
previously paid.
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933, OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(a), MAY
DETERMINE.
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<PAGE> 2
SUBJECT TO COMPLETION, DATED MAY 20, 1999
THE INFORMATION CONTAINED IN THIS PRELIMINARY PROSPECTUS IS NOT COMPLETE AND MAY
BE CHANGED. THESE SECURITIES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT
FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PRELIMINARY
PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN
OFFER TO BUY THESE SECURITIES IN ANY STATE JURISDICTION WHERE THE OFFER OR SALE
IS NOT PERMITTED.
PROSPECTUS
LOGO
CRL NETWORK SERVICES, INC.
COMMON STOCK
$ PER SHARE
- --------------------------------------------------------------------------------
This is the initial public offering of CRL Network Services, Inc. We are
offering 5,000,000 shares and a stockholder identified in this prospectus is
offering 850,000 shares. We will not receive any of the proceeds from the sale
of shares of our common stock by the selling stockholder. This is a firm
commitment underwriting.
We expect that the price to the public in the offering will be between $12.00
and $15.00 per share. The market price of the shares after the offering may be
higher or lower than the offering price.
We have applied to have the common stock approved for quotation on the Nasdaq
National Market under the symbol "CRLX."
INVESTING IN THE COMMON STOCK INVOLVES MATERIAL RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 5.
<TABLE>
<CAPTION>
PER SHARE TOTAL
--------- -------
<S> <C> <C>
Price to Public............................................. $ $
Underwriting discounts......................................
Proceeds to CRL Network Services, Inc.......................
Proceeds to the selling stockholder.........................
</TABLE>
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
<TABLE>
<S> <C>
Joint Lead Manager and Bookrunner Joint Lead Manager
CIBC WORLD MARKETS LEHMAN BROTHERS
</TABLE>
The undersigned is facilitating Internet distribution
DLJdirect INC.
The date of this prospectus is , 1999.
<PAGE> 3
[INSIDE FRONT COVER]
[Graphic depicts a map of United States entitled "Networks Built for Business"
with the CRL logo, reflecting CRL's network connecting cities nationwide,
including symbols designating CRL's Regional Hubs, CRL Points of Presence or
Service Areas, Internet Protocol Backbone and Switched Backbone]
<PAGE> 4
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Prospectus Summary.......................................... 1
Risk Factors................................................ 5
How We Intend to Use the Proceeds from the Offering......... 22
Dividend Policy............................................. 22
Capitalization.............................................. 23
Dilution.................................................... 24
Selected Consolidated Financial Data........................ 25
Management's Discussion and Analysis of Results of
Operations and Financial Condition........................ 26
Business.................................................... 35
Management.................................................. 56
Principal and Selling Stockholders.......................... 63
Description of Capital Stock................................ 64
Shares Eligible for Future Sale............................. 67
Underwriting................................................ 69
Legal Matters............................................... 71
Experts..................................................... 71
Where You Can Find More Information......................... 71
Index to Financial Statements............................... F-1
</TABLE>
i
<PAGE> 5
PROSPECTUS SUMMARY
This summary contains basic information about us and this offering. Because it
is a summary, it does not contain all of the information that you should
consider before investing. You should read this entire prospectus carefully,
including the section entitled "Risk Factors" and the financial statements and
the related notes to those statements included in this prospectus. This
prospectus assumes that the underwriters have not exercised the over-allotment
option and gives effect to our reincorporation in Delaware and the associated
exchange of one share of common stock of CRL for every three shares of common
stock of CRL's California predecessor.
CRL NETWORK SERVICES, INC.
CRL Network Services is a Tier 1 Internet service provider offering customized
Internet and network management solutions to small and medium-sized businesses.
As a Tier 1 provider we can be characterized as having a high quality, national
backbone network which can reach every other Internet destination through
agreements to exchange data, known as peering, without paying transit fees to
other network operators. We provide high quality, reliable and scalable Internet
and network connectivity and value-added services designed to meet our
customers' needs. Our services include:
- connectivity to the Internet and secure private networks through our
national backbone network from which our Internet access customers can reach
every other Internet address and our network customers can reach other
destinations within their private network.
- value-added services, which are services delivered over the same circuit as
our connectivity services in addition to those services. Our current
value-added services are remote management of our customers' networks and
systems integration, which includes the resale, installation and
configuration of our customers' computer systems and software.
- hosting, which is the distribution of customers' Internet content from our
facilities.
Our customers outsource the management of their Internet and network needs to
us. We develop and construct our data switched networks and perform all data
routing and transmission for our customers. We lease fiber-optic capacity from
third-party providers over which we transmit data and peer with other
telecommunications providers to exchange data traffic.
We believe we were among the first companies involved in the development of
connectivity solutions and services for the commercial Internet. We have
developed our own high speed network, which enables us to reliably and cost
effectively deliver customized, comprehensive solutions. Our competitive
strengths include our:
- engineering and technical expertise arising from our direct participation in
the evolution of the commercial Internet, which has enabled us to develop
our own sophisticated network infrastructure
- high speed, private switched network, which means it relies on our own
switches which enables us to maximize our quality of service by reducing
delay and data loss as well as increasing the level of security
- status as a Tier 1 provider, which resulted from being one of the first
commercial Internet providers and, which allows us to exchange data directly
with other Tier 1 providers without paying transit fees, reducing the costs
of operating our network
- our proprietary network management process, acquired through our recent
merger with Integral Networking Corporation in December 1998, which enables
us to connect directly to our customer's network and manage our customer's
network from the server to the desktop without the need to be on-site at our
customer's facilities, which we refer to as remote management
1
<PAGE> 6
As of May 14, 1999, we had 30 network equipment centers located in major
metropolitan areas from which we deliver our services. Our network connects to
all of the interexchange points sanctioned by the National Science Foundation
for the transfer of Internet Protocol-based traffic between Internet backbone
networks. Our network is comprised of several elements, including 23 Cascade
switches, 54 Cisco routers, facilities and clear channel fiber-optic bandwidth,
which together provide a fast, secure, high quality network capable of
minimizing outages resulting from hardware or software faults. Our customers
include Internet service and content providers like Internet America, Inc. and
Walnut Creek CDROM, Incorporated; companies engaged in electronic commerce like
Citizen One Software; government agencies like the U.S. Federal Reserve Board
and the U.S. Department of Commerce; and educational institutions like the
Pacific Union College and the Tustin Unified School District.
Our objective is to become the leading nationwide provider of customized
comprehensive Internet and network services to small and medium-sized
businesses. To achieve this objective, we intend to:
- FURTHER CAPITALIZE ON OUR EXISTING NETWORK INFRASTRUCTURE. We intend to
utilize our status as a Tier 1 Internet service provider and competitive
local exchange carrier in California as well as our fast, secure, reliable
and scalable network to cost effectively expand our customer base and
deliver additional services to our customers.
- CROSS SELL VALUE-ADDED SERVICES. We intend to capitalize on our existing
customer base and future customers by aggressively cross selling our current
and future value-added services to address their Internet and other network
management requirements.
- PROVIDE BUNDLED, COMPREHENSIVE NETWORKING SOLUTIONS. By combining our
network infrastructure with our existing and planned array of networking
services, we believe we are well positioned to become one of the premier,
comprehensive providers of bundled networking solutions.
- EXPAND CUSTOMER BASE AND SALES EFFORTS. We believe we will be able to
successfully market and sell our comprehensive networking solutions to a
large national customer base by significantly increasing our direct sales
force and expanding our relationships with potential channel partners.
- DRIVE REVENUE GROWTH BY INCREASING HOSTING SERVICES. We intend to optimize
our physical presence and facilities located at key Internet network access
points, which provide an attractive opportunity for us to market and sell
hosting services to existing and potential customers.
- ACCELERATE GROWTH THROUGH TARGETED ACQUISITIONS. We intend to seek
acquisition candidates that we believe we can integrate with our existing
network to increase our customer base or provide additional value-added
services. In this regard, we recently acquired Integral Networking
Corporation, which enables us to provide our remote management services.
------------------------
Our principal executive offices are located at One Kearny Street, Suite 1450,
San Francisco, California 94108, and our telephone number at that address is
(415) 837-5300.
This prospectus contains product names, trade names and trademarks that belong
to us or to other organizations.
2
<PAGE> 7
THE OFFERING
Common stock offered by us.... 5,000,000 shares
Common stock offered by the
selling stockholder........... 850,000 shares
Common stock to be outstanding
after the offering(1)......... 24,038,832 shares
Use of proceeds by CRL Network
Services.................... We intend to use the net proceeds from the sale
of common stock offered by us to repay
indebtedness totaling $1,088,000 as of March
31, 1999, for working capital and other general
corporate purposes, including expansion of our
sales and marketing activities. We may also use
a portion of the net proceeds for acquisitions.
We will not receive any proceeds from the sale
of the common stock offered by the selling
stockholder. See "How We Intend to Use the
Proceeds from the Offering."
Proposed Nasdaq National
Market symbol................. CRLX
Risk Factors.................. See "Risk Factors" for a discussion of factors
you should carefully consider before deciding
to invest in our common stock.
- -------------------------
(1) Based on 19,038,832 shares outstanding on May 14, 1999, which excludes
946,320 shares issuable upon exercise of currently outstanding options with
a weighted average exercise price of $2.20 per share and 2,000,000 shares
available for the grant of additional options under our 1999 Stock
Incentive Plan. See "Management -- Stock Options."
3
<PAGE> 8
SUMMARY CONSOLIDATED FINANCIAL DATA
The summary consolidated financial data as of December 31, 1998 and for the
years ended December 31, 1996, 1997 and 1998 are calculated from our audited
consolidated statements included in this prospectus. The summary consolidated
financial data for the years ended December 31, 1994 and 1995 and for the three
months ended March 31, 1998 and 1999 are calculated from unaudited consolidated
financial statements not included in this prospectus. The unaudited financial
statements have been prepared by us on a basis consistent with our audited
consolidated financial statements and include, in the opinion of our management,
all adjustments consisting only of normal recurring adjustments necessary for a
fair presentation of our results of operations and financial position for those
years.
You should read the following data with the more detailed information contained
in "Selected Consolidated Financial Data," "Management's Discussion and Analysis
of Financial Condition and Results of Operations" and our consolidated financial
statements and the notes to the consolidated financial statements, each included
in this prospectus.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------------------- -------------------
1994 1995 1996 1997 1998 1998 1999
------- ------- ------- ------- ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS DATA:
Revenues...................... $ 1,961 $ 3,831 $ 6,353 $10,375 $11,692 $ 2,981 $ 3,003
Total costs and expenses...... 1,555 3,184 6,043 8,904 11,726 2,694 3,525
Operating income (loss)....... 406 647 310 1,471 (34) 287 (522)
Net interest income
(expense).................. (1) 1 1 5 (30) (1) (22)
Net income (loss)............. 248 437 161 885 (151) 203 (387)
Net income (loss) per common
share basic and diluted.... $ 0.01 $ 0.02 $ 0.01 $ 0.05 $ (0.01) $ 0.01 $ (0.02)
Weighted average common shares
outstanding:
Basic...................... 18,979 18,979 18,979 18,979 18,979 18,979 18,979
Diluted.................... 18,979 18,979 18,979 19,142 18,979 19,283 18,979
</TABLE>
The following table indicates a summary of our balance sheet at March 31, 1999,
which has been adjusted to reflect the sale of 5,000,000 shares of common stock
offered by us after deducting underwriting discounts and commissions and
estimated offering expenses at an assumed initial public offering price of
$13.50 per share and the repayment of the amounts outstanding under our loan
agreements. See "How We Intend to Use the Proceeds from the Offering."
<TABLE>
<CAPTION>
AT MARCH 31, 1999
---------------------
ACTUAL AS ADJUSTED
------ -----------
<S> <C> <C>
BALANCE SHEET DATA:
Cash and equivalents...................................... $ 354 $60,981
Working capital........................................... 229 61,106
Total assets.............................................. 4,522 64,635
Total liabilities......................................... 2,998 1,426
Long-term obligations, excluding current portion.......... 822 14
Stockholders' equity...................................... 1,524 63,209
</TABLE>
- -------------------------
See notes 1 and 12 of the notes to the consolidated financial statements
included in this prospectus for an explanation of the determination of the
number of shares used in computing per share data.
4
<PAGE> 9
RISK FACTORS
You should carefully consider the risks described below before making an
investment decision. The risks and uncertainties described below are the
material risks currently known to us but not the only risks facing us. These
risk factors are not intended to represent a complete list of the general or
specific risk factors that may affect us as additional risks and uncertainties
not presently known to us or that we currently deem immaterial may also impair
our business operations. If any of the following risks actually occur, our
business, financial condition or results of operations could be materially
adversely affected. If that happens, the trading price of our common stock could
decline, and you may lose all or part of your investment.
THE SUCCESS OF OUR GROWTH STRATEGY DEPENDS ON OUR ABILITY TO MARKET AND SELL OUR
EXISTING AND FUTURE SERVICES.
Historically, our business has focused on selling Internet and other network
connection services. A critical component to the successful implementation of
our growth strategy is our ability to offer and expand our value-added services
and the acceptance of those services by our existing and potential customers.
Our future growth depends, in part, on the acceptance and use of remote
management and systems integration services by small and medium-sized
businesses. Until our December 1998 merger with Integral Networking Corporation,
we had very little experience in either of these markets and to date have
derived insignificant revenues from services in these markets. In particular,
the market for remote management services is new, making it difficult to
determine the size and growth of the market and to predict how this market will
develop. Changes in technology, the availability of qualified information
technology professionals and other factors that make internal network management
more cost effective than remote network management, would negatively impact the
market for our services. Our business may be seriously damaged if this market
fails to grow, grows more slowly than we expect or develops in some way that is
different from our expectations. We are also actively seeking to develop or
acquire a variety of other services we can offer and cross sell. In addition, we
recently began offering digital subscriber line services but have generated no
revenues from these services. For many reasons, including the reasons described
in the risk factors below, we cannot assure you that we will be successful in
developing or acquiring those or any other services or, that if we do, we will
be successful in marketing and selling those services to our existing or
potential customers.
OUR OPERATING RESULTS IN ONE OR MORE FUTURE PERIODS ARE LIKELY TO FLUCTUATE
SIGNIFICANTLY.
We expect to experience significant fluctuations in our future quarterly and
annual results of operations due in part to our growth strategy and the emerging
nature of the data communications industry in our markets. A variety of factors
likely to cause fluctuations in our operating results, some of which are outside
our control, include:
- demand for and market acceptance of our services
- capacity utilization of our facilities
- fluctuations in data communications and telecommunications costs
- reliable continuity of service and network availability
- customer retention
- the timing and success of sales and marketing efforts
- the timely expansion of existing facilities and completion of new facilities
- the ability to increase bandwidth as necessary
- fluctuations in bandwidth used by customers
5
<PAGE> 10
- the timing and magnitude of expenditures for sales and marketing and capital
expenditures
- introductions of new services or enhancements by us and our competitors
- the timing of customer installations and related payments
- the ability to maintain or increase peering relationships
- increased competition including the introduction by third parties of new
Internet and network services
- general growth of Internet use and establishment of Internet operations by
enterprises
- changes in our pricing policies and those of our competitors
- changes in regulatory laws and policies
- the success of our acquisition strategy
- the timing and amount of charges related to acquisitions
- economic conditions specific to the Internet and networking industry
Our expenses, particularly our telecommunications costs, depreciation, real
estate expenditures and personnel costs are expected to increase significantly
as we grow. Of our total costs and expenses, these costs comprise 73% of our
total costs for 1998 and 71% of our total costs for the first quarter of 1999.
We anticipate that such costs will continue to constitute a similar or higher
percentage of our total costs over the next twelve months. As we grow, we may
also incur one-time costs associated with capital expenditures for network and
facilities growth, acquisition expenses and development of our existing and new
service offerings. In addition, we are in the process of hiring new employees.
Consequently, our future results of operations will be particularly sensitive to
fluctuations in revenues. Over the next five years, we will record an expense of
approximately $739,000 related to some of our option grants. For more
information about these charges, see "Management's Discussion and Analysis of
Financial Conditions and Results of Operations."
For the year ended December 31, 1998 and for the three months ended March 31,
1999, we experienced operating losses for the first time in our operating
history due in part to increased sales and marketing and general and
administrative expenses, and the incurrence of stock-based compensation expense.
In addition, our revenue increase from the year ended December 31, 1997 to the
year ended December 31, 1998 was less than we have experienced in previous
years. If our revenues fail to grow at anticipated rates, our operating expenses
increase without a commensurate increase in our revenues or we fail to adjust
operating expense levels accordingly, our business and financial results could
be harmed.
We anticipate that we will continue to incur net losses for the foreseeable
future. The extent of these losses will be contingent, in part, on the amount of
growth in our revenues, particularly from new service offerings. We expect our
operating expenses to increase significantly, especially in the areas of sales
and marketing, and, as a result, we will need to generate increased quarterly
revenues to become profitable.
Due to the factors listed above and the other risk factors described in this
section of the prospectus, we believe that comparisons of our results of
operations are not necessarily meaningful and should not be relied upon as
indications of future performance. As a result, the fluctuation of our results
of operations in future periods could cause the trading price of our common
stock to suffer a significant decrease.
WE MAY NOT SUCCESSFULLY IMPLEMENT OUR ACQUISITION STRATEGY.
As part of our growth strategy, we will seek strategic acquisitions of
additional assets, technologies and businesses complementary to our operations.
We may not be able to locate suitable acquisition targets or be able to acquire
any target companies we locate on acceptable terms. Our recent merger with
Integral
6
<PAGE> 11
Networking Corporation is, and any future acquisitions would be, accompanied by
risks including, among other things:
- loss of customers and key personnel of an acquired company
- inability to achieve cost savings
- acquisition expenses and charges incurred
- difficulties integrating the operations and personnel of acquired companies
- additional financial resources that may be needed to fund the combined
company operations
- the potential disruption of our business
- our management's ability to realize financial and strategic benefits of
incorporating acquired technologies or businesses into our service offerings
- difficulty of maintaining uniform quality control and other standards,
policies and procedures in a larger organization
- impairment of employee relationships due to changes in management or
perceived conflicts
- assumption of unexpected liabilities and incurrence of significant
unexpected expenses in completing acquisitions
Any of the above risks could prevent us from realizing significant benefits from
our acquisitions. In connection with our merger with Integral, we experienced a
loss of Integral personnel, incurred unanticipated costs and required greater
than expected management attention to establish and maintain uniform quality
control, standards and policies. In addition, issuing our common stock in
acquisitions will dilute our stockholders' percentage interests in our company,
while using cash will deplete our cash reserves. Finally, if we are unable to
account for our acquisitions under the "pooling of interests" method of
accounting, we may incur significant, one-time write-offs and amortization
charges for acquisition or debt-related expenses, goodwill and other intangible
assets. These write-offs and charges would decrease our future earnings or
increase our future losses and could hurt the trading price of our common stock.
THE MARKETS FOR OUR SERVICES ARE CHARACTERIZED BY MANY COMPETING TECHNOLOGIES,
AND THE TECHNOLOGIES ON WHICH OUR SERVICES ARE BASED MAY NOT COMPETE
EFFECTIVELY.
The markets for the network connectivity services we provide are extremely
competitive and fragmented. There are no substantial barriers to entry in these
markets, and we expect that competition will intensify in the future. We believe
that our ability to compete successfully depends upon a number of factors,
including:
- the capacity, reliability, low delay and security of our network
infrastructure
- our ability to maintain existing and develop future peering relationships
- our technical expertise and the functionality, performance and quality of
services
- our ability to provide custom solutions for our customers
- the experience and technical expertise of our sales force and engineers
- the ease of access to our services
- our remote management capabilities
- the pricing policies of our competitors and suppliers
- our ability to operate as a competitive local exchange carrier
- our ability to scale our services to meet growing customer demand
7
<PAGE> 12
- the variety of services we offer
- our geographical presence
- the timing of introductions of new services by us and our competitors
- the responsiveness and quality of our customer support
- our financial resources
- our ability to support industry standards
To be competitive, we must respond promptly and effectively to the challenges of
technological change, evolving standards and our competitors' innovations by
continuing to enhance our services, as well as our sales programs and channels.
Any pricing pressures, reduced margins or loss of market share resulting from
increased competition or our failure to compete effectively, could seriously
damage our business and financial results.
THE MARKETS IN WHICH WE COMPETE ARE HIGHLY COMPETITIVE, AND WE MAY NOT BE ABLE
TO COMPETE EFFECTIVELY, ESPECIALLY AGAINST COMPANIES WITH GREATER RESOURCES.
Many of our competitors have greater market presence, engineering and marketing
capabilities and financial, technological and personnel resources than those
available to us. As a result, they may develop, deploy and expand their
communications and network infrastructures more quickly, adapt more swiftly to
new technologies and changes in customer requirements, take advantage of
acquisition and other opportunities more readily and devote greater resources to
the marketing and sale of their services than we can. Additionally, many
organizations have entered into or are forming joint ventures or consortiums to
provide services competitive with ours.
Our competitors generally may be divided into four principal groups:
- telecommunications carriers including regional Bell operating companies
- Internet service providers
- network and system integrators
- online network service providers
We believe the market for network management services will be highly competitive
if it grows as we expect. Competition will probably increase significantly as
new companies enter the market and current competitors expand their services and
product lines. Many potential competitors are likely to enjoy substantial
competitive advantages, including those listed above. As a result, our existing
and potential customers may contract with other competitive communications
providers, decreasing demand for CRL's services. For a list of our principal
competitors, see "Business -- Competition."
OUR BUSINESS MAY BE HARMED IF NEW COMPETITORS ENTER OUR MARKETS.
We believe that new competitors will enter our markets. These new competitors
could include large computer hardware, software, media and other technology and
telecommunications companies. A large number of companies with short operating
histories have entered the markets for the services we offer as these markets,
some of which are in an emerging state, develop. In addition, telecommunications
companies and online services providers currently offer or have announced plans
to offer or expand their network services. These telecommunications companies
and online services providers are able to devote greater resources to developing
and marketing competitive products and services. In addition, they often have
the ability to bundle other services and products with their Internet services,
such as voice and video communications, placing us at a competitive disadvantage
because we do not currently offer some of these services. Other companies are
also exploring the possibility of providing or are currently providing high
speed data services using alternative delivery methods that could be faster or
less expensive, decreasing customer demand for CRL's services. As new
competitors enter our markets, they sometimes offer special
8
<PAGE> 13
promotions to attract customers, such as free Internet access or computers,
which could adversely impact our ability to attract or retain customers.
Increased competition from new competitors could negatively affect our business
and financial results.
WE MAY HAVE TO REDUCE THE COST OF OUR SERVICES TO REMAIN COMPETITIVE.
Increased competition and industry consolidation has in the past and could in
the future result in significant pricing pressure. This pricing pressure could
cause large reductions in the average selling price of our services and has
resulted in a general industry decrease in the prices for the services we
provide. For example, telecommunications companies that compete with us may
provide customers with reduced communications costs for their Internet access or
private network services, reducing the overall cost of their solutions and
significantly increasing pricing pressures on us. Combined Internet services and
access companies can bundle their offerings and remain profitable at lower price
levels while realizing economies of scale. As a result, we have experienced
pricing pressures on our connectivity offerings, including our T-1 and
fractional T-1 services, have lowered prices on a case-by-case basis and have
introduced new lower price products. We may not be able to offset the effects of
any price reductions by increasing the number of our customers, generating
higher revenues from enhanced services, reducing cost, or by obtaining approvals
to operate as a competitive local exchange carrier. We believe that the
businesses of providing network connectivity, value-added network services and
hosting services will likely see increased consolidation in the future.
Consolidation could decrease selling prices and increase competition in these
industries which could erode our market share and could have a material negative
effect on our business and financial results.
WE DEPEND ON OUR NETWORK INFRASTRUCTURE AND OTHER SUPPLIERS TO PROVIDE
AFFORDABLE, RELIABLE, SCALABLE AND SECURE SERVICES.
Our success will depend upon our network infrastructure's capacity, scalability,
reliability and security, including the bandwidth capacity leased from
telecommunications network suppliers. In particular, we rely on Metropolitan
Fiber Systems, IXC Communications, Inc., Qwest Communications Corporation, Cable
& Wireless USA, Inc. and other telecommunications providers for backbone and
local loop capacity. These companies provide our dedicated clear channel
network, the backbone connecting our wide area data switches. These companies
also permit our networks to exchange Internet traffic with other Internet
service providers and distribute our services to our customers. We depend on the
ability of those companies to maintain the operational integrity of our backbone
and interconnections. If one or more of these companies is unable or unwilling
to provide or expand its current levels of service to us in the future, our
operations could be seriously and adversely affected. Most of our agreements
with these companies are for a one-year term with renewal options. These
agreements do not require minimum commitments and are on an as used basis. While
these companies have additional capacity available, they are under no obligation
under these agreements to provide it to us. We estimate that Qwest
Communications Corporation, IXC Communications, Inc. and MCI WorldCom, Inc.
provide approximately three-quarters of our bandwidth. In addition, rapid
changes within the telecommunications industry have led to the merging of many
telecommunications companies. These mergers have and in the future may further
cause the pricing we receive for the services we use and the quality of service
that we receive to vary significantly. The consolidation of companies providing
Internet services and access has and can result in preferential provision of
services to acquired companies and potential targets or business partners and
could cause the length of time it takes to deliver the telecommunications
services that we use to increase significantly.
We are currently in a dispute with Qwest Communications Corporation, one of our
three principal providers, involving fiber cable they own connecting several
cities. Qwest agreed to lease fiber to us to be installed and available to us by
specified dates. Qwest did not complete installation as agreed. Despite their
failure to install the fiber in a timely manner, Qwest alleges that we owe them
approximately $479,000 through March 31, 1999 for use of the fiber cable. We
believe Qwest is obligated to provide us with free service as a result of this
installation delay. We are currently attempting to resolve this dispute by
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negotiation. We cannot assure you that the dispute will be resolved to our
satisfaction or that Qwest will not suspend service, potentially resulting in an
interruption of service.
WE DEPEND ON OUR RELATIONSHIPS WITH TELECOMMUNICATIONS CARRIERS TO PROVIDE OUR
DATA COMMUNICATIONS CAPACITY.
We rely on local telephone companies and other companies to provide data
communications capacity via local telecommunications lines and leased long
distance lines. These arrangements are generally terminable at will or are for a
short term. We are also subject to potential disruptions or capacity constraints
in these telecommunications services and may have no means of replacing these
services on a timely basis or at all if disruption or capacity constraints
occur. In addition, local phone service is sometimes available only from one
local telephone company in a particular market we serve. We compete with those
regional Bell operating companies and other network operators providing Internet
services. Telecommunications carriers may be able to provide both Internet
services and data communications capacity at a lower rate than what we can
offer. Some telecommunications carriers have provided Internet access services
comparable to those provided by CRL at lower rates than CRL's prices. We believe
that the federal Telecommunications Act of 1996 generally will lead to increased
competition in the provision of local telephone service, but we cannot predict
the timing or extent of any such developments or the effect of increased
competition on pricing or supply. Some of our suppliers, including the regional
Bell operating companies and competitive local exchange carriers, are subject to
price constraints, including tariff controls, which in the future may change.
Recent regulatory changes and industry consolidation may increase the prices
that these carriers may charge us. Those increases may have a serious and
negative effect on our business and financial results.
WE DEPEND ON OUR PEERING RELATIONSHIPS AND TIER 1 STATUS TO DELIVER OUR SERVICES
ECONOMICALLY.
The Internet consists of many network providers operating their own networks and
interconnecting them at a number of public and private peering points, through
peering arrangements with one another. Our peering relationships, which allow us
to maintain high network performance levels without paying higher non-peered
transit costs to exchange traffic, are not regulated, are rarely subject to any
written agreement, and are subject to revision in terms, conditions or costs
over time. Network service providers may unilaterally elect at any time not to
maintain peering relationships with us which could increase requirements or
costs to maintain these peering relationships. A loss of any of these
relationships, the failure of our peering partners to increase bandwidth
commensurate to increased data traffic or increased pricing would diminish the
level of connectivity available to our customers or cause us to incur additional
operating expenses by requiring us to identify alternative methods to transmit
our customers' information and to pay for transit. No economical alternatives
may be available if that happens.
Many operators of the private peering interexchanges are also our competitors.
As a result, these competitors may cancel their peering relationships if they
find that the benefits of having a peering relationship with us are outweighed
by competitive conditions in our business.
OUR FAILURE TO PROPERLY MANAGE OUR BUSINESS EXPANSION MAY STRAIN OR EXCEED OUR
RESOURCES OR COULD HARM OUR BUSINESS.
Our company has recently experienced significant business expansion as seen in
the number of new hires, its recent merger with Integral and the expansion of
our service offerings and facilities. Continued growth is necessary to increase
our revenues in the accelerated manner contemplated by our business plan.
In particular, to successfully integrate newly acquired assets and continue to
implement a nationwide growth strategy and network, we must:
- closely monitor service quality
- increase our direct and indirect sales and marketing efforts
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- continue to implement and improve our operational, financial and management
information systems and controls
- hire, train and retain a relatively large number of additional qualified
personnel
- continue to expand and upgrade our network infrastructure
We must continue to enhance and develop our network to maintain our competitive
position and continue to meet the increasing demands for service quality,
availability and competitive pricing. Despite the availability of additional
network capacity from third-party network providers, we intend to maintain the
flexibility to expand or open new points of presence or make other capital
investments as dictated by customer demand or strategic considerations. To open
new points of presence, we must spend significant amounts of money for new
equipment and leased telecommunications facilities. In addition, to expand our
customer base nationwide, we will likely have to spend significant amounts of
money on additional equipment to maintain the high speed and reliability of our
Internet and other network access services.
We intend to begin consolidation of our San Francisco administrative and network
operations in one or more new, larger facilities during the third quarter of
1999 and to complete the consolidation in the fourth quarter of 1999. We are
still negotiating the location of this new site or sites. We also anticipate
completing the expansion of our Sacramento operations center by the end of the
fourth quarter of 1999. We expect management of the transition of our
information systems, personnel and operational equipment to new facilities to
place additional strain on our resources. This transition may not be completed
successfully or on a timely basis and may require a significant amount of
management's attention and could cause interruptions in our operations which
could harm our business.
Our increasing customer base necessitates that our network infrastructure and
technical support resources grow accordingly. We cannot assure you that our
technical support or other resources will be sufficient to facilitate our
growth. We are striving to increase total network utilization and to optimize
this utilization throughout a 24 hour period. There will be additional demands
on our customer support, sales and marketing resources as we pursue this
utilization strategy. If we fail to manage our growth effectively, our business
and financial results will be seriously adversely affected.
OUR SUCCESS WILL DEPEND ON THE INTEGRATION OF OUR NEW MANAGEMENT PERSONNEL.
We recently hired several of our executives, including our Vice President of
Business Development, our Executive Vice President/Chief Financial Officer and
Vice President of Direct Sales. As a result, our management team has worked
together for only a brief time, and may have a limited understanding of our
specific business. Our ability to effectively execute our strategies will depend
in part upon our ability to integrate these and future managers into our
operations. We also plan to hire additional executive management personnel,
including a Vice President of Marketing, Vice President of Operations and Vice
President of Engineering. If our executives do not integrate effectively, our
business could be materially negatively affected.
OUR SUCCESS WILL DEPEND ON THE CONTINUED PERFORMANCE OF OUR KEY PERSONNEL.
Our success depends in significant part upon the continued services of our
senior management and key technical and sales personnel, currently consisting of
our Executive Vice President and Chief Financial Officer, our Vice President of
Direct Sales, our Vice President of Business Development, our Vice President of
Finance, our Vice President of Channel Sales, Integral's President, our
Directors of Marketing and Systems Engineering and our National Sales Director
and particularly our President and Chief Executive Officer, James Couch. We do
not maintain key man insurance on the life of Mr. Couch or any other executive
officers. Any of our officers or employees can terminate his or her relationship
with us at any time. Only Mr. Couch and Robert Ross, the President of our
subsidiary, Integral Networking Corporation, have employment agreements for
specified terms with us. For more information about Messrs. Ross' and Couch's
employment agreements, see "Management -- Employment Agreements." The loss of
key personnel would materially negatively impact our business and financial
results.
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OUR SUCCESS WILL DEPEND ON ATTRACTING AND RETAINING ADDITIONAL PERSONNEL.
Approximately half of our current employees joined CRL within the past 12 months
and our growth strategy necessitates that we more than double the number of our
employees during the next 24 months. Our success depends upon our ability to
attract and retain additional highly qualified management, technical, sales and
marketing and customer support personnel. Locating personnel with the
combination of skills and attributes required to carry out our strategy is often
a lengthy process. Our future growth particularly depends upon our ability to
increase substantially the size of our sales and marketing organization. The
market for highly qualified technical and sales and marketing personnel is
intensely competitive, especially in the San Francisco Bay Area, where a
substantial portion of our operations are located. In the year ended December
31, 1998, we experienced a reduction in our sales force due to a number of
factors including normal attrition and our involvement in negotiations in the
second and third quarters of 1998 relating to potential business combinations
with companies possessing established sales forces. We believe our involvement
in these negotiations caused a higher attrition rate for our sales staff than we
have historically experienced. These negotiations also caused us to postpone our
efforts to hire additional and replace lost sales staff. We may not be
successful in meeting our hiring goals. Our inability to attract additional,
qualified personnel or to retain existing personnel would have a material
adverse effect on our business and financial results.
OUR NETWORK SYSTEM COULD FAIL, AND WE MAY BE UNABLE TO PROVIDE OUR SERVICES.
Network expansion and growth in usage will increase stress upon our network
hardware and traffic management systems. Our network has been designed with
redundant backbone circuits which means that we connect each of our network
switches together through the use of both primary and secondary backbone
circuits. These backbone circuits are generally data circuits purchased from
long distance data carriers. The secondary backbone circuit provides an
alternate method for two switches to reroute data should the primary backbone
circuit between them fail. The secondary backbone circuit permits our network to
respond to an unexpected hardware or software failure without a complete outage.
However, we could experience failures relating to individual network points of
presence or even catastrophic failure of the entire network. Our operations
depend on our ability to protect our network infrastructure against damage from
power loss, telecommunications failures and similar events such as damage from
human error or sabotage, acts of nature, power failures and telecommunications
failures. A significant portion of our computer equipment, including critical
equipment dedicated to our Internet access services and our switches and routers
that serve large areas of the United States, are located at our facilities in
San Francisco, Palo Alto and Los Angeles, California and Vienna, Virginia. Our
network operations center, which manages the entire network, is in San
Francisco, California. At each site, we maintain off-site backups for our
network configurations in case a natural disaster occurs. We do not, however,
have a comprehensive disaster recovery program in place. In the past,
unanticipated problems outside of our control have caused service interruptions.
During a major power outage in the San Francisco Bay Area on December 8, 1998
lasting over six hours, our network continued to operate but prevented some
dial-up customers from logging on to our network and caused an outage in one of
our switches, resulting in a fluctuation in service for a brief period. Also, in
the fourth quarter of 1998, a portion of our network was interrupted for part of
a day as a result of substantial flooding in the state of Texas. A natural
disaster, such as an earthquake, or other unanticipated problem at the network
operations center, at one of our hubs, sites where routers, switches and other
computer equipment that make up the backbone of our network infrastructure are
located, or at a number of our points of presence in the future could cause,
interruptions in our services, including a complete loss of operations. In
addition, our services could be interrupted if our telecommunications providers
fail to provide the data communications capacity in the time frame we require as
a result of a natural disaster or for some other reason. Any damage or failure
that causes interruptions in our operations could have a material adverse effect
on our business and financial results.
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IF OUR NETWORK SYSTEM FAILS, WE COULD BE LIABLE TO OUR CUSTOMERS FOR DAMAGES.
We could incur significant warranty obligations in connection with system
downtime. Our customer contracts for several of our services currently provide a
limited service warranty related to the continuous availability of service on a
24 hour-a-day, seven day-a-week basis, except for scheduled maintenance periods.
This warranty is generally limited to a credit of free service for a specified
limited period of time for disruptions in Internet transmission services. Our
customer contracts provide for our liability for personal injury or equipment
damage in only limited circumstances. Although these customer contracts
typically provide for no recovery with respect to incidental, punitive, indirect
and consequential damages resulting from damages to equipment or disruption of
service, we cannot assure you that we would not be found liable if these damages
occurred or that these damages would be covered by or would not exceed our
liability insurance.
WE FACE THE RISK OF FUNDAMENTAL CHANGES IN THE WAY ELECTRONIC DATA, INCLUDING
INTERNET ACCESS, IS DELIVERED.
Internet services are currently accessed primarily by computers connected by
telephone lines. Several companies have announced the development and sales of
digital subscriber lines, cable television modems, wireless modems and satellite
modems to provide Internet access. We believe that our competitors offering
Internet access using Cable TV can provide access for up to ten megabits per
second, those using satellite, up to two megabits per second and those using
wireless modems, up to 1.544 megabits per second. Our competitors are also
continually developing technology to offer Internet access using alternate
delivery methods at higher speeds. While we are capable of offering similar
speeds through the equipment we currently use, we currently generally do not and
likely will not be able to offer such speeds as cheaply as cable or wireless
modems. For example, wireless modems may reduce the cost of network services as
they are capable of delivering data, including Internet access, without
incurring local loop charges, which are charges by the local telephone companies
for use of their lines. As the Internet becomes more accessible through these
cable television, wireless and satellite modems and by screen based telephones,
televisions or other consumer electronic devices, or customer requirements
change the way Internet access is provided, we will have to develop new
technology or modify our existing technology to accommodate these new
developments. We may also have to modify how we deliver our services. Our
pursuit of these technological advances may require substantial time and
expense, and we may not succeed in adapting our Internet access business to
alternate access devices and conduits.
OUR SUCCESS DEPENDS ON THE CONTINUED GROWTH OF THE INTERNET.
Our success will depend in large part on continued growth in Internet use, which
in turn will depend on a variety of factors including security, reliability,
cost, ease of access, quality of service and necessary increases in bandwidth
availability. Many of our existing and proposed services target Internet users.
Increased Internet use for retrieving, sharing and transferring information
among businesses, consumers, suppliers and partners only recently began to
develop. As is typical in the case of a new and rapidly evolving industry
characterized by rapidly changing technology, evolving industry standards and
frequent new product and service introductions, demand and market acceptance for
recently introduced products and services is highly uncertain. In addition,
critical issues concerning the commercial use of the Internet remain unresolved
and may impact the growth of Internet use, especially in the business market we
target. Despite growing interest in commercial Internet uses, many businesses
have not purchased Internet access and other related services for a number of
reasons, including:
- inconsistent quality of service
- lack of availability of cost effective, high speed options
- a limited number of points of presence for corporate users
- inability to integrate business applications on the Internet
- the need to use multiple and frequently incompatible vendors
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- inadequate protection of the confidentiality of stored data and information
moving across the Internet
- a lack of tools to simplify Internet access and use
- increased risk that third parties may obtain unauthorized access to
confidential information
- concerns arising from the year 2000 problem
Individuals and enterprises historically relying upon alternative means of
commerce and communication must understand and accept a new way of conducting
business and exchanging information to adopt the Internet for their means of
commerce and communication. Enterprises with substantial resources invested in
other means of commerce and exchanging information may be particularly reluctant
or slow to adopt a new strategy that may make their existing personnel and
infrastructure obsolete.
OUR SUCCESS DEPENDS ON THE CONTINUED ACCEPTANCE OF THE INTERNET AS A VIABLE
COMMERCIAL MEDIUM.
Demand for and market acceptance of the Internet are highly uncertain and depend
on a number of factors, including growth in consumer access to and acceptance of
new interactive technologies, the development of technologies facilitating
interactive communication between organizations and targeted audiences, and
increases in user bandwidth. If the Internet as a commercial or business medium
fails to develop or develops more slowly than expected, our business would be
materially adversely affected. The recent growth in Internet use has caused
frequent periods of performance degradation, requiring the upgrade of routers
and switches, telecommunications links and other components forming the
Internet's infrastructure by Internet service providers, operators of
interexchange points and other organizations with links to the Internet. Any
perceived degradation in the Internet's performance could undermine the benefits
of our services. Potentially increased performance provided by our services and
others is ultimately limited by and reliant upon the speed and reliability of
the networks operated by third parties. Consequently, the emergence and growth
of the market for our services depends on improvements being made to the entire
Internet infrastructure to alleviate overloading and congestion.
WE MUST KEEP UP WITH RAPID TECHNOLOGICAL CHANGE AND EVOLVING INDUSTRY STANDARDS
TO COMPETE EFFECTIVELY IN OUR MARKETS.
The markets for our services are characterized by rapidly changing technology,
evolving industry standards, changes in customer needs, rapidly growing
competition and frequent new product and service introductions. Our future
success will depend, in part, on our ability to:
- effectively use and offer leading technologies
- continue to develop our technical expertise
- enhance our current networking services
- develop new products and services that meet changing customer needs
- advertise and market our services
- influence and respond to emerging industry standards and other technological
changes
We must accomplish these tasks in a timely and cost effective manner. New
technologies or industry standards may replace or provide lower cost
alternatives to our existing products and services or could render our existing
products and services obsolete and unmarketable. We also believe that our
ability to compete successfully depends on the continued compatibility and
interoperability of our services with products and architectures offered by
other vendors. Although we intend to support emerging standards in the market
for Internet and other network connectivity, new industry standards could
emerge, and we may not be able to conform to these new standards in a timely
fashion and maintain a competitive position in the market. Our pursuit of
necessary technological advances and maintenance of technological compatibility
may require substantial time and expense.
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WE MAY HAVE PROBLEMS MAINTAINING HIGH QUALITY STANDARDS.
Market acceptance of new or enhanced services could be significantly delayed or
hindered if we introduce services with reliability or compatibility problems.
Despite testing by us or our customers, our services or enhancements may contain
undetected errors or defects when first introduced after commencement of
commercial deployment. Any problems or delays could adversely affect our ability
to attract or retain customers.
In the past we have experienced shortages in bandwidth capacity, both at the
level of particular points of presence affecting only those customers using that
particular point of presence and with system-wide services such as e-mail and
news group services. In early 1999, we neared full capacity for our connections
with MAE West. The primary carriers from whom we purchased bandwidth also filled
capacity at MAE West. As a result, we were required to wait approximately 60
days while our providers acquired additional capacity, which limited our ability
to add more customers on those connections. A similar shortage in bandwidth
occurred at MAE East in 1998 and, as a result, we lost one customer. If we do
not maintain sufficient bandwidth capacity in our network connections, or
insufficient bandwidth is maintained on the networks operated by our peering
partners, our customers will experience a general slowdown of all Internet
services. To protect our customers' service levels, we may sometimes temporarily
delay adding new customers in cities or regions experiencing significant
capacity constraints until we alleviate these constraints. While our objective
is to maintain excess capacity, our failure to expand or enhance our network
infrastructure on a timely basis or to adapt it to an expanding customer base,
changing customer requirements or evolving industry standards could seriously
adversely affect us.
If we do not achieve balanced network utilization over a 24 hour period, our
network could become overburdened at busy periods during the day, which could
diminish our quality of service by increased delay or system failure.
Conversely, due to the high fixed cost nature of our infrastructure, under-
utilization of our network during low use times could hinder our ability to
provide cost efficient services at other times. Any failure to achieve balanced
network utilization could harm our business, financial condition and results of
operations.
WE MAY FACE POTENTIAL LIABILITY FOR INFORMATION DISSEMINATED THROUGH OUR
NETWORK.
As the law relating to liability of Internet service providers for information
carried on or disseminated through their networks is not settled, we may be
subject to such liability. A number of lawsuits have sought to impose liability
for defamatory speech, indecent materials and infringement of copyrighted
materials. The United States Supreme Court has let stand a lower court ruling
that an Internet service provider was protected from liability for material
posted on its system by a provision of the Communications Decency Act. However,
the findings in that case may not apply in other circumstances. Other courts
have held that online service providers and Internet service providers may be
subject to damages for copying or distributing copyrighted materials. Provisions
of the Communications Decency Act that imposed criminal penalties for using an
interactive computer service for transmitting obscene or indecent communications
have been found unconstitutional by the United States Supreme Court. However, on
October 21, 1998, new federal legislation was enacted that requires limits on
access to pornography and other material deemed "harmful to minors." This
legislation has been challenged in court as a violation of the First Amendment
of the United States Constitution. We are unable to predict the outcome of this
case. Potential liability imposed on Internet service providers like us for
material carried on or disseminated through network systems could require us to
implement measures to reduce our exposure to that liability. These measures may
require us to spend substantial resources or discontinue certain service
offerings. Our errors and omissions insurance coverage may not be adequate or
available to compensate us for all liability that may be imposed. The imposition
of liability in excess of, or the unavailability in the future of, such coverage
could have a material adverse effect on our business or financial results.
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WE MAY BECOME SUBJECT TO BURDENSOME AND EXPENSIVE GOVERNMENT REGULATION THAT MAY
HARM OUR BUSINESS.
Consistent with our growth and acquisition strategy, we are now engaged in, or
will soon be engaged in, activities that subject us to varying degrees of
federal, state and local regulation. Currently only a small body of laws and
regulations directly apply to access to or commerce on the Internet. However,
due to the Internet's increasing popularity and use, laws and regulations have
or may be proposed and may be adopted at the international, federal, state and
local levels with respect to the Internet, covering a range of issues. The
nature of any new laws and regulations and the manner in which existing and new
laws and regulations may be interpreted and enforced cannot be fully determined.
The adoption of any future laws might decrease the Internet's growth, decrease
demand for our services, impose taxes or other costly technical requirements or
otherwise increase the cost of doing business or in some other manner have a
material adverse effect on us. In addition, applicability to the Internet of
existing laws governing issues such as property ownership, copyrights and other
intellectual property issues, taxation, libel, obscenity and personal privacy is
uncertain. The application of any of these laws or regulations to our business
could increase our costs of compliance or otherwise affect our ability to
operate in those jurisdictions. In addition, as our services are available over
the Internet in multiple states, and as we facilitate sales by our customers to
end users located in such states, such jurisdictions may claim that we are
required to qualify to do business as a foreign corporation in each such state,
which may subject us to new taxes and costs.
Both the provisioning of Internet access service and the provisioning of
underlying telecommunications services are affected by federal, state and local
regulation. In March 1998, the California Public Utilities Commission approved
our operation as a competitive local exchange carrier in that state.
Subsequently, we negotiated an Interconnection Agreement with Pacific Bell, the
incumbent local exchange carrier in California, which was approved by the
California Public Utilities Commission in December 1998. The agreement provides
for reciprocal compensation payments for the termination of local traffic by
either party onto the other's network. While we believe that Pacific Bell will
send more traffic to our network than we will send to theirs, we cannot assure
you that this will continue, or that Pacific Bell will pay the amounts we
believe are required under the agreement. In the past, Pacific Bell has taken
the position that Internet traffic is considered inherently long distance and
not subject to reciprocal compensation. We do not believe any amounts that we
might receive as reciprocal compensation are material to our business, but we do
intend to defend our position regarding our rights to receive fair compensation
under the agreement. On February 25, 1999, the Federal Communications Commission
ruled that calls to Internet service providers for Internet access were long
distance, not local, calls. However, the ruling upheld existing reciprocal
compensation agreements in some states, including California. Because of our
reciprocal compensation agreement with Pacific Bell, we do not expect this
ruling will have a material effect on our costs in the near future. If incumbent
local exchange carriers charge fees for carrying Internet traffic and Internet
access becomes more expensive in the longer term, this ruling may have an
adverse effect on our potential future revenues as well as increase our costs.
We intend to apply for competitive local exchange carrier status in other
states. As we become a competitive local exchange carrier in additional states,
we will become subject to state requirements applicable to such carriers.
New laws or regulations relating to Internet or network services, or existing
laws found to apply to them, could have a material adverse effect on our
business or financial results. For a detailed discussion of government
regulation impacting our business, see "Business -- Government Regulation."
WE FACE RISKS ASSOCIATED WITH BECOMING YEAR 2000 COMPLIANT.
The year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. As a result, date
sensitive software may recognize a date using "00" as the year 1900 rather than
the year 2000. In addition, the year 2000 is a leap year, and some computer
programs may not properly provide for February 29, 2000. System failures and
miscalculations causing disruptions of normal business activities may occur. We
are currently in the process of reviewing our
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services, as well as our internal management information systems, in order to
identify and modify those services and systems that are not year 2000 compliant.
We do not have and are not developing a contingency plan in the event our
systems fail due to year 2000 related problems. For a detailed discussion of our
year 2000 readiness review, see "Management's Discussion and Analysis of Results
of Operations and Financial Condition -- Year 2000 Compliance Disclosure."
Based on our assessment to date, we believe that our internally developed
systems are year 2000 compliant. However, we utilize software and hardware
developed by third parties both for our network and internal information
systems. Additionally, we are continuing to assess the year 2000 compliance of
our services and systems.
Our services and systems operate in complex network environments and directly
and indirectly interact with a number of other hardware and software systems. We
face risks to the extent that suppliers of products, services and systems
purchased by us and others with whom we transact business, including those which
form significant portions of our network and may be sole or limited source
suppliers, do not have business systems or products that comply with year 2000
requirements. If these networks fail, our business will be significantly
impacted.
We do not currently have any information regarding the year 2000 status of our
customers, many of whom are private companies. As is the case with similarly
situated companies, if our customers experience Year 2000 problems, which result
in business interruptions or otherwise impact their operations, we could
experience a decrease in the demand for our services, which could have a
material adverse impact on our business, results of operations and financial
condition.
Our expectation that we will be able to upgrade our services and systems to
address the year 2000 issue and our expectation regarding the costs associated
with these upgrades are forward-looking statements subject to a number of risks
and uncertainties. Actual results may vary materially as a result of a number of
factors. We cannot assure you that we will be able to timely and successfully
modify our services and systems to comply with year 2000 requirements. Any
failure to do so could have a material adverse effect on our business, results
of operations and financial condition. Furthermore, despite testing by us and
our vendors, our services and systems may contain undetected errors or defects
in the technology associated with year 2000 date functions. In the event any
material errors or defects are not detected and fixed or third parties cannot
timely provide us with products, services or systems that meet the year 2000
requirements, on our business, results of operations and financial condition
could be materially adversely affected. Known or unknown errors or defects that
affect the operation of our services or systems could result in delay or loss of
revenues, interruption of network services, cancellation of customer contracts,
diversion of development resources, damage to our reputation, damages paid to
customers and litigation costs.
WE ARE SUBJECT TO THE RISKS FROM OUR LENGTHY SALES CYCLE.
Our customers and potential customers often take a long time to evaluate our
services. We spend a lot of time educating and providing information to our
prospective customers regarding the benefits of the Internet and our services.
Changes in the growth rate in our customer base, customer renewal rates and the
sales cycle for our services have caused, and are expected in the future to
cause, significant fluctuations in our results of operations from period to
period. In addition, we intend to significantly increase our sales and marketing
expenditures. Due to the lengthy sales cycle for our services, these expenses
will occur prior to customer commitments for our services. As a result, the
increase in our sales and marketing efforts may not result in increased sales of
our services.
OUR NETWORK IS SUBJECT TO SECURITY RISKS.
Our business depends upon the security of our network and, in part, on the
security of the network infrastructures of our third-party providers, which we
do not control. Despite implementing network security measures, the core of our
network infrastructure and our network providers' infrastructures are vulnerable
to denial of service attacks, computer viruses, break-ins and similar disruptive
problems such as
17
<PAGE> 22
the sending of excessive volumes of unsolicited bulk e-mail, commonly referred
to as spamming, caused by our customers or other Internet or network users. In
the past, spamming has caused our mail server to overload which caused us to
delay sending our customers' e-mail until the offending spam was deleted. Denial
of service attacks, computer viruses, break-ins or other problems caused by
third parties could lead to interruptions, delays or cessation in service to our
customers, which could cause losses to us or our customers or deter businesses
from subscribing to our services. Also, the inappropriate network uses by third
parties described above could jeopardize the security of confidential
information stored in our customers' computer systems and cause commercial
transactions to be delayed, not completed or completed with compromised
security.
We may face liability and may lose existing or potential customers as a result.
Although we intend to continue to implement industry-standard security measures,
these measures occasionally have been circumvented in the past, and others may
be able to circumvent our security measures or the security measures of our
third-party network providers in the future. Eliminating computer viruses and
alleviating other security problems may require significant expenditures,
distractions to management, and interruptions, delays or cessation of service to
our customers, all of which could harm us. Further, until more comprehensive
security technologies are developed, the security and privacy concerns of
existing and potential customers may inhibit Internet service industry growth in
general and our customer base and revenues in particular.
WE MAY REQUIRE SUBSTANTIAL FUTURE CAPITAL TO IMPLEMENT OUR BUSINESS PLAN.
We anticipate that our available cash resources, combined with the net proceeds
from this offering, will be sufficient to meet our anticipated working capital
and capital expenditure requirements for the foreseeable future. However, these
resources may not be sufficient for unanticipated working capital and capital
expenditure requirements. We may need to raise additional funds through public
or private debt or equity financings to take advantage of unanticipated
opportunities, including more rapid expansion or acquisitions of complementary
businesses or technologies or to develop new products or services. Any
additional financing we may need may not be available on terms favorable to us,
or at all.
WE DEPEND ON THIRD PARTIES TO SUPPLY US WITH HARDWARE.
We depend on a number of third-party equipment suppliers. We purchase the
components we use to provide our networking services from third parties,
including wide area data switches supplied by Ascend Communications, Inc. and
high performance routers from Cisco Systems, Inc. The expansion of our network
infrastructure and network services places a significant demand on our
suppliers, some of which have limited resources and production capacity. We have
experienced delayed delivery from suppliers of new communications lines,
switches, routers, terminal servers and other equipment. If our suppliers cannot
adjust to meet increasing demand, the higher demand levels may prevent them from
continuing to supply components and products in the quantities, at the quality
levels and at the times we require, or at all. If we are unable to develop
alternative sources of supply, we could experience delays and increased costs in
expanding our network infrastructure.
WE DEPEND ON OUR PROPRIETARY TECHNOLOGY AND TECHNOLOGICAL EXPERTISE.
We believe our success depends more upon our technical expertise than our
proprietary rights. We rely upon a combination of copyright, trademark and trade
secret laws and contractual restrictions to protect our proprietary technology
and rights in our services. We have no patented technology that would preclude
or inhibit competitors from entering our market. We have entered into
confidentiality and invention assignment agreements with all of our employees,
and nondisclosure agreements with some of our major suppliers, distributors and
appropriate customers to control access to and disclosure of our proprietary
information. Despite these precautions, a third-party could potentially copy or
otherwise obtain and use our technology without authorization or to develop
similar technology independently. We cannot assure you that such measures have
been, or will be, adequate to protect our proprietary technology or deter third-
party development of similar technologies. We also rely on technologies that we
license from third parties
18
<PAGE> 23
such as network management software. We do not license any other technology that
is not generally available. These third-party technology licenses may not always
continue to be available to us on commercially reasonable terms. The loss of
such technology could require us to obtain substitute technology of lower
quality or performance standards or at greater cost, which could affect us in a
material adverse manner. To date, we have not been notified that we infringe the
proprietary rights of third parties, but there can be no assurance that third
parties will not claim infringement by us. We expect that participants in our
markets will be increasingly subject to infringement claims as the number of
technologies and competitors in our industry grows. Any such claim, whether
meritorious or not, could be time consuming, result in costly litigation, cause
service delays or require us to enter into royalty or licensing agreements. Such
royalty or licensing agreements might not be available on terms acceptable to us
or at all. As a result, any such claim could have a material adverse effect upon
our business, results of operations and financial condition.
THE INTERESTS OF OUR CONTROLLING STOCKHOLDER, JAMES COUCH, MAY CONFLICT WITH OUR
AND YOUR INTERESTS.
After completion of this offering, James Couch will own approximately 66.8% of
our outstanding common stock, 63.3% if the underwriters' over-allotment option
is exercised in full and sold by Mr. Couch, and will continue to be our
President and Chief Executive Officer and Chairman of our Board of Directors. As
a result of his stock ownership and board representation, Mr. Couch will be in a
position to affect corporate actions that could conflict with your interests and
ours. Mr. Couch will have the ability to control all matters submitted to our
stockholders for approval, including the election and removal of directors and
any merger, consolidation or sale of all or substantially all of our assets, and
to control our management and affairs. This ownership concentration may delay,
defer or prevent a change in corporate control, may impede a merger,
consolidation, takeover or other business combination involving us, or
discourage a potential acquirer from making a tender offer or otherwise
attempting to obtain control of us. These circumstances could cause the price of
our common stock to decline. See "Management" and "Principal and Selling
Stockholders."
MANAGEMENT MAY APPLY THE PROCEEDS OF THIS OFFERING TO USES THAT DO NOT INCREASE
OUR PROFITS OR MARKET VALUE.
Our management will have considerable discretion in the application of the net
proceeds, and you will not have the opportunity, as part of your investment
decision, to assess whether the proceeds are being used appropriately. The net
proceeds may be used for corporate purposes that do not increase our
profitability or our market value. Pending application of the proceeds, they may
be placed in investments that do not produce income or that lose value.
ANTITAKEOVER PROVISIONS COULD NEGATIVELY IMPACT OUR STOCKHOLDERS.
Provisions of our certificate of incorporation, bylaws and the Delaware General
Corporation Law could make it more difficult for a third party to acquire us,
even if a change of ownership would benefit our stockholders. Specifically, our
charter documents:
- - limit the ability to call a special meeting of our stockholders to our Board
of Directors, the chairman of our Board and our president
- - prohibit any action to be taken by stockholders without a meeting
- - require advanced notice to be given for any business or director nominee
brought forward at any stockholder meeting by any of our stockholders
- - require cause and 80% stockholder approval to remove a director
- - provide that our Board of Directors will be divided into three classes of
directors, who will serve for staggered three-year terms.
In addition, Section 203 of the Delaware General Corporation Law generally
prohibits a 15% stockholder from engaging in any business combination with us,
including a merger or a sale of more than 10% of our
19
<PAGE> 24
assets, unless our Board of Directors approves the transaction. For more
information see "Description of Capital Stock."
WE MAY EXPERIENCE SUBSTANTIAL SALES OF OUR COMMON STOCK AFTER THE OFFERING.
Sales of a substantial number of shares of common stock after the offering could
cause the market price of our common stock to decline and could impair our
ability to raise capital through the sale of additional equity securities. Upon
completion of this offering, we will have 24,038,832 shares of common stock
outstanding and 946,320 shares subject to currently outstanding options
exercisable at different times and 24,916,332 shares outstanding if we issue
shares upon exercise of the underwriters over-allotment option. The 5,850,000
shares sold in the offering, or 6,727,500 shares if the underwriters
over-allotment option is fully exercised, will be freely tradable without
restriction or further registration under the federal securities laws unless
purchased by our "affiliates" as that term is defined in Rule 144 under the
Securities Act. The remaining 18,188,832 shares of common stock outstanding on
completion of the offering will be "restricted securities" as that term is
defined in Rule 144.
Our stockholders and stock option holders are generally limited by lock-up
agreements restricting their ability to sell their CRL common stock. These
securityholders cannot sell or otherwise dispose of any shares of our common
stock for a period of at least 180 days after the date of this prospectus
without the prior written consent of CIBC World Markets Corp. When the lock-up
agreements expire, the shares and the shares underlying the options will be
eligible for sale, in some cases only by complying with the volume, manner and
sale notice requirements of Rule 144.
On April 27, 1999, our principal stockholder, James Couch, sold 542,888 shares
of CRL common stock to ZeroDotNet, Inc. at a price equal to $9.21 per share in a
private transaction. Mr. Thor Geir Ramleth, who has agreed to serve as a
director of CRL upon completion of this offering, is the Chief Executive Officer
and a director of ZeroDotNet, Inc. In connection with this sale, CRL granted
registration rights to the buyer, including the right to demand one registration
for at least 50% of the purchased shares at any time during the period beginning
120 days after CRL's initial public offering through the second anniversary of
CRL's initial public offering. The registration rights terminate if all the
purchased shares could be sold in one transaction under Rule 144 without
exceeding the volume limitations of that rule. In addition, if we propose to
register any of our shares of common stock under the Securities Act, the buyer
is entitled to notice of and may include the purchased shares in the
registration. If the registration involves an underwriting, the underwriters may
eliminate shares in the registration and underwriting, and the shares included
in the registration must be allocated first to CRL, then to the buyer. CRL
agreed to provide the registration rights described above in exchange for the
buyer agreeing to enter into the lock-up agreement for a period of 180 days
after the date of this prospectus. The buyer must obtain a waiver of the lock-up
agreement to exercise the registration rights described above during the 180 day
period of the lock-up.
WE EXPECT THE PRICE OF OUR COMMON STOCK TO BE VOLATILE.
The market price of our shares of common stock is likely to be highly volatile
and could be subject to wide fluctuations in response to factors such as, among
others:
- actual or anticipated variations in our results of operations
- announcements of technological innovations
- new services introduced by us or our competitors
- changes in financial estimates by security analysts, conditions and trends
in the Internet and computer industries
- fluctuations in the valuation of companies perceived by investors to be
comparable to us
- any shortfall in reserve or net income or any increase in losses from levels
expected by securities analysts
- general market conditions
20
<PAGE> 25
Furthermore, the stock markets, and in particular Nasdaq, have experienced
extreme price and volume fluctuations that have affected and continue to affect
the market prices of equity securities of many technology companies. These
fluctuations often have been unrelated or disproportionate to the operating
performance of those companies. The trading prices of many technology companies'
stocks are at or near historical highs and reflect price to earnings ratios well
above historical levels. These trading prices and price to earnings ratios may
not be sustained. These broad market factors may cause the market price of our
common stock to decline. These market fluctuations, as well as general economic,
political and market conditions such as political and military conflict,
recessions, interest rate changes or international currency fluctuations, may
negatively impact the market price of our common stock. In the past, following
periods of volatility in the market price of a company's securities, class
action litigation has often been brought against such companies. We may in the
future be the target of similar litigation. Securities litigation could result
in substantial costs and distract management's attention and resources, which
would likely have a material adverse effect on us.
NEW INVESTORS WILL SUFFER IMMEDIATE SUBSTANTIAL DILUTION.
This offering is expected to create a public market for our common stock and
will substantially increase the market value of the initial investments of our
management and other existing stockholders, particularly James Couch, our
President and Chief Executive Officer. As of May 14, 1999, our existing
stockholders held 19,038,832 shares of our common stock. Based on an assumed
initial public offering price of $13.50 per share and the sale by Mr. Couch of
850,000 shares, the value of the shares held by the existing stockholders
following this offering would be approximately $245.5 million, representing an
aggregate increase of approximately $245.4 million over the amount of
consideration paid for those shares by the existing stockholders. In addition,
the initial public offering price is substantially higher than the book value
per share of our outstanding common stock. As a result, investors purchasing
common stock in this offering will incur immediate and substantial dilution of
$10.87 per share in the net tangible book value of the common stock from the
initial public offering price. We also have issued options to acquire common
stock at prices significantly below the initial public offering price. As these
outstanding options are exercised, there will be further dilution. See
"Dilution."
YOU SHOULD NOT RELY ON OUR FORWARD-LOOKING STATEMENTS.
Certain statements under the captions "Summary," "Risk Factors," "How We Intend
to Use the Proceeds from the Offering," "Management's Discussions and Analysis
of Financial Condition and Results of Operations" and "Business," and elsewhere
in this prospectus are forward-looking statements. When used in this prospectus,
the words "anticipate," "believe," "estimate," "will," "may," "should," "plan,"
"future," "intend," "expect" and similar expressions identify some of these
forward-looking statements. These statements may discuss future expectations or
contain projections of results of operations or financial condition or expected
benefits to us resulting from possible acquisitions, transactions or
developments. Although we believe that our plans, intentions and expectations
reflected in these forward-looking statements are reasonable, we can give no
assurance that such plans, intentions or expectations will be achieved. Actual
results, performance or achievements could differ materially from those
contemplated, expressed or implied by the forward-looking statements contained
in this prospectus. Important factors that could cause actual results to differ
materially from our forward-looking statements are contained in this prospectus,
including under the heading "Risk Factors."
21
<PAGE> 26
HOW WE INTEND TO USE THE PROCEEDS FROM THE OFFERING
Our net proceeds from the sale of the 5,000,000 shares of common stock offered
by us are estimated to be approximately $61,685,000, based on an assumed initial
public offering price per share of $13.50, and after deducting estimated
underwriting discounts and commissions and offering expenses payable by us. If
the underwriters exercise the over-allotment option in full, and the
over-allotment shares are sold by us instead of the selling stockholder, our net
proceeds are estimated to be $72,702,000. See "Underwriting." We will not
receive any proceeds from the sale of shares by the selling stockholder. The
principal purposes of this offering are to obtain additional capital, create a
public market for our common stock and facilitate our future access to the
public capital markets.
We intend to use a portion of the net proceeds to repay amounts then outstanding
under our loan agreements with our banks and our capital lease. As of March 31,
1999, approximately $1,088,000 was outstanding under these agreements as
follows:
<TABLE>
<CAPTION>
BALANCE AT INTEREST RATE AT MATURITY
MARCH 31, 1999 MARCH 31, 1999 DATE
-------------- ---------------- --------------
<S> <C> <C> <C>
General Line of Credit........................ $ 46,000 10.25% September 2002
Capital Lease................................. 68,000 12.55% July 2000
Equipment Line of Credit...................... 382,000 9.50% September 2002
Equipment Line of Credit...................... 592,000 9.25% March 2003
</TABLE>
Amounts borrowed under these agreements are secured by substantially all of our
assets. Various portions of these borrowed amounts must be repaid in full
between July 2000 and March 2003. We also expect to use a portion of the net
proceeds for working capital and other general corporate purposes, including
expansion of our sales and marketing activities.
As part of our growth strategy, we intend to aggressively seek suitable
acquisition candidates, such as regional Internet service providers, that have
an existing customer base that we can add to our customer base, and companies
that have products that will enable us to expand the range of our value-added
network and hosting services. We may use a portion of the net proceeds for those
acquisitions. We have no current plans, agreements or commitments with respect
to any acquisitions, and we are not currently engaged in any negotiations with
respect to any acquisitions.
Pending the uses described above, we will invest our net proceeds in high
quality, income-producing securities such as short-term investment grade or
United States Government interest-bearing securities.
DIVIDEND POLICY
We have not paid and do not anticipate paying any cash dividends on our common
stock in the foreseeable future. We intend to retain our earnings, if any, for
use in our growth and ongoing operations.
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<PAGE> 27
CAPITALIZATION
The table below sets forth our capitalization as of March 31, 1999, (i) on an
actual basis and (ii) on an as adjusted basis and to reflect our sale of the
5,000,000 shares of common stock offered by us at an assumed initial public
offering price of $13.50, after deducting the estimated underwriting discounts
and commissions and offering expenses, and the anticipated application of the
net proceeds. See "How We Intend to Use the Proceeds From the Offering." The
capitalization information in the table below is qualified by the more detailed
consolidated financial statements and related notes beginning on page F-1 of
this prospectus. The table should be read in conjunction with those consolidated
financial statements and related notes and the sections of this prospectus
titled "Selected Financial Data" and "Management's Discussion and Analysis of
Financial Condition and Results of Operations."
The number of shares of common stock in the table below for the purposes of
determining stockholders' equity excludes 946,320 shares issuable upon exercise
of currently outstanding options and 2,000,000 shares available for the grant of
additional options under our 1999 Stock Incentive Plan. See "Management -- Stock
Options."
<TABLE>
<CAPTION>
MARCH 31, 1999
------------------
AS
ACTUAL ADJUSTED
------ --------
<S> <C> <C>
Current portion of long-term obligations.................... $ 280 $ --
====== =======
Long-term obligations, less current portion................. $ 822 $ 14
------ -------
Stockholders' equity:
Preferred stock, $.01 par value; 5,000,000 shares
authorized; none issued and outstanding................
Common stock, $.0001 par value; 70,000,000 shares
authorized; 18,978,832 shares outstanding; 23,978,832
shares outstanding as adjusted for this offering....... 6 61,691
Common Stock options........................................ 1,046 1,046
Deferred stock compensation................................. (739) (739)
Retained earnings........................................... 1,211 1,211
------ -------
Total stockholders' equity........................ 1,524 63,209
------ -------
Total capitalization.............................. $2,346 $63,223
====== =======
</TABLE>
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<PAGE> 28
DILUTION
At March 31, 1999, our net tangible book value was approximately $1.5 million,
or $0.08 per share of common stock. Net tangible book value per share represents
the amount of our total tangible assets less total liabilities, divided by the
number of shares of common stock outstanding. Net tangible book value dilution
represents the difference between the amount per share of common stock paid by
new purchasers in this offering and the net tangible book value per share after
this offering. Without taking into account any changes in net tangible book
value after March 31, 1999, other than to give effect to the sale of the
5,000,000 shares of common stock offered by us, assuming an initial public
offering price of $13.50 per share and after deducting the estimated
underwriting discounts and commissions and estimated offering expenses, our
adjusted net tangible book value at March 31, 1999 would have been approximately
$63.2 million, or $2.63 per share of common stock. This amount represents an
immediate increase in net tangible book value of $2.55 per share to the existing
stockholders and an immediate net tangible book value dilution of $10.87 per
share to purchasers of common stock in the offering. The following table
illustrates this per share dilution.
<TABLE>
<S> <C> <C>
Assumed initial public offering price per share............. $13.50
Net tangible book value per share at March 31, 1999....... $0.08
Increase in net tangible book value per share attributable
to new investors....................................... 2.55
Adjusted net tangible book value per share after the
offering.................................................. 2.63
------
Net tangible book value dilution per share to new
investors................................................. $10.87
======
</TABLE>
The table below summarizes, as of March 31, 1999, the difference between the
number of shares of common stock purchased from us, the total cash consideration
paid and the average price per share paid by existing stockholders and to be
paid by new investors purchasing shares in this offering assuming the sale of
5,000,000 shares by us at an assumed initial public offering price of $13.50 per
share.
<TABLE>
<CAPTION>
SHARES PURCHASED TOTAL CONSIDERATION AVERAGE
-------------------- --------------------- PRICE
NUMBER PERCENT AMOUNT PERCENT PER SHARE
---------- ------- ----------- ------- ---------
<S> <C> <C> <C> <C> <C>
Existing stockholders(1)............ 18,978,832 79.1% $ 6,000 0.0001% $0.0003
New investors(1).................... 5,000,000 20.9 67,500,000 99.9999 $ 13.50
---------- ---- ----------- -------
Total..................... 23,978,832 100% $67,506,000 100%
========== ==== =========== =======
</TABLE>
- -------------------------
(1) Sales by the selling stockholder in this offering will reduce the number of
shares held by existing stockholders to 18,128,832, or 75.6% of the total
number of shares of common stock outstanding after the offering and will
increase the number of shares held by new investors to 5,850,000 or 24.4%
of the total number of shares of common stock outstanding after the
offering. If the over-allotment option is exercised in full and sold by the
selling stockholder, sales by the selling stockholder in this offering will
increase the number of shares held by new investors to 6,727,500 or 28.0%
of the total number of shares of common stock outstanding after the
offering.
24
<PAGE> 29
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected financial data should be read with the consolidated
financial statements and related notes beginning on page F-1 of this prospectus
and "Management's Discussion and Analysis of Financial Condition and Results of
Operations" beginning on page 26 of this prospectus. The consolidated statement
of operations data for each of the three years in the period ended December 31,
1998 and consolidated balance sheet data as of December 31, 1997 and 1998 are
calculated from financial statements that have been audited by Deloitte & Touche
LLP, independent auditors, and are included elsewhere in this prospectus. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."
The selected consolidated financial data for the years ended December 31, 1994
and 1995 and for the three months ended March 31, 1998 and 1999 are calculated
from unaudited consolidated financial statements not included in this
prospectus. The unaudited financial statements have been prepared by us on a
basis consistent with our audited consolidated financial statements and include,
in the opinion of our management, all adjustments consisting only of normal
recurring adjustments necessary for a fair presentation of our results of
operations and financial position for those years.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEAR ENDED DECEMBER 31, MARCH 31,
----------------------------------------------- -------------------
1994 1995 1996 1997 1998 1998 1999
------- ------- ------- ------- ------- -------- --------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF OPERATIONS
DATA:
Revenues.................... $ 1,961 $ 3,831 $ 6,353 $10,375 $11,692 $ 2,981 $ 3,003
------- ------- ------- ------- ------- ------- -------
Costs and expenses:
Cost of revenues.......... 965 2,131 3,346 4,640 6,166 1,499 1,798
Selling and marketing..... 93 380 345 522 371 158 41
General and 411
administrative......... 448 1,840 2,997 4,124 847 1,325
Depreciation expense...... 86 225 512 745 909 190 210
Stock-based compensation --
expense................ -- -- -- 156 - 151
Total costs and 1,555
expenses........ 3,184 6,043 8,904 11,726 2,694 3,525
------- ------- ------- ------- ------- ------- -------
Operating income (loss)..... 406 647 310 1,471 (34) 287 (522)
Net interest income (1)
(expense)................. 1 1 5 (30) (1) (22)
------- ------- ------- ------- ------- ------- -------
Income (loss) before income 405
taxes..................... 648 311 1,476 (64) 286 (544)
Income tax provision 157
(benefit)................. 211 150 591 87 83 (157)
------- ------- ------- ------- ------- ------- -------
Net income (loss)........... $ 248 $ 437 $ 161 $ 885 $ (151) $ 203 $ (387)
======= ======= ======= ======= ======= ======= =======
Net income (loss) per common $ 0.01
share basic and diluted... $ 0.02 $ 0.01 $ 0.05 $ (0.01) $ 0.01 $ (0.02)
Weighted average common
shares outstanding:
Basic..................... 18,979 18,979 18,979 18,979 18,979 18,979 18,979
Diluted................... 18,979 18,979 18,979 19,142 18,979 19,283 18,979
</TABLE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------------------- MARCH 31,
1994 1995 1996 1997 1998 1999
---- ------ ------ ------ ------ -----------
(IN THOUSANDS)
(UNAUDITED) (UNAUDITED)
<S> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Cash and equivalents..................... $289 $ 210 $ 235 $1,115 $ 840 $ 354
Working capital.......................... (36) 95 (182) 554 430 229
Total assets............................. 777 1,377 2,339 4,455 4,855 4,522
Long-term obligations, excluding current
portion................................ 0 20 76 402 847 822
Stockholders' equity..................... 284 709 870 1,755 1,760 1,524
</TABLE>
25
<PAGE> 30
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion should be read with the consolidated financial
statements and related notes beginning on page F-1 of this prospectus. The
results shown in this prospectus do not necessarily suggest or predict the
results to be expected in any future periods. This discussion contains
forward-looking statements based on current expectations which involve risks and
uncertainties. Actual results and the timing of events may differ significantly
from those projected in these forward-looking statements due to a number of
factors, including those contained in the section entitled "Risk Factors" and
elsewhere in this prospectus.
OVERVIEW
We are a Tier 1 Internet service provider offering customized Internet and
network management solutions to small and medium-sized businesses. We provide
high quality, reliable and scalable Internet and private network connectivity,
value-added network and hosting services designed to meet our customers' needs.
Our operations are based in San Francisco, California. As a Tier 1 Internet
service provider, we have peering relationships at all of the interexchange
points sanctioned by the National Science Foundation, which also constitute all
of the major domestic network access points at which Internet data is exchanged.
We have private peering relationships with other major Internet service
providers. We are also a national backbone provider with our owned and
controlled private switched network with points of presence in 30 major
metropolitan areas. As a result of our Tier 1 status and network, we are able to
provide high speed and reliable access to the Internet, secure private networks
and hosting services. Our hosting services include colocation services which
allow customers to place their computer equipment inside our facilities for
direct connection to the Internet. Also, our network serves as the platform by
which we are able to deliver value-added services, such as remote management
services, systems and network integration services and network security
services, to our customer base. Historically, we have provided our services to a
variety of customers including businesses of various sizes, other Internet
service providers, government agencies and educational institutions. We intend
to expand our direct and indirect sales force to increase our customer base. We
also intend to cross sell our value-added service offerings to both existing and
future customers in order to provide comprehensive service offerings. We view
being a comprehensive service provider as a key element to our strategy to
increase revenues and reduce customer loss.
Our customers outsource the management of their Internet and network needs to
us. We develop and construct our data switched networks and perform all data
routing and transmission for our customers. Due to the nature of the
telecommunications infrastructure and the fragmented nature of the
telecommunications industry, we lease fiber-optic capacity from third-party
providers over which we transmit data and peer with other telecommunications
providers to exchange data traffic.
In December 1998, we acquired Integral Networking Corporation in a merger
accounted for as a pooling of interests. Integral has a ten-year operating
history in the area of systems integration. Over the past three years, Integral
has developed a proprietary process to manage customer networks from the server
to the desktop while remaining off-site. We are able to capitalize on our
existing network to provide cost effective remote management services to our
customers from a single location operated by CRL. With our remote management
service, customers are able to outsource a portion or all of their information
technology departments as well as add functionality and applications to their
networks. We intend to offer remote management services on a nationwide basis.
Prior to the merger with Integral, we had little experience in, and derived
insignificant revenues from, remote management services and systems integration.
26
<PAGE> 31
Revenues. We derive our revenues from four principal services:
- Internet and secure private network connectivity
- remote management
- hosting services
- systems integration and hardware sales
Revenues from Internet and private network connectivity are typically derived
from monthly fixed prices paid by customers based upon access speed. We offer
dedicated connectivity in a range of access speeds, including fractional T1
(from 64 kilobits per second up to 1.536 megabits per second), T1 (1.536
megabits per second), T3 (45 megabits per second) and OC3 (155 megabits per
second) as well as dial-up access and transit services. We also offer our
customers the ability to upgrade access speeds as their needs increase. We
recently began offering digital subscriber line services but have generated no
revenues from these services. We currently generate Internet and private network
connectivity revenues from a wide range of customers including Internet service
and content providers, businesses, government agencies and educational
institutions. We intend to increase our sales and marketing focus, particularly
on small and medium-sized businesses.
Revenues from our remote management services are typically derived from monthly
fees for a fixed level of service. Pricing for our remote management services is
based on the number of users and a fixed maximum number of calls per month. Our
remote management services are focused on small and medium-sized businesses.
Historically, revenues from value-added services have represented an
insignificant portion of our total revenues and have not been reported
separately in our financial results. With our acquisition of Integral
Networking, we intend to increase our focus on our value-added services, as
evidenced by our recent rollout of remote management services.
Revenues from hosting services are typically derived from renting space to our
customers in which they place their file servers and equipment within our
facilities. The rental fee is based on the size of the space and access speeds.
Our customers can select from a variety of options in terms of access speeds and
space such as rack, half-rack or shelf. Access speeds include switched or
dedicated ethernet service (10 megabits per second), switched or dedicated fast
ethernet service (100 megabits per second) and gigabit fast ethernet services
(1,000 megabits per second). Our customers can purchase additional space and
increase their access speeds as needed. Our current facilities are sufficient to
permit our customers to purchase additional space. However, we will be required
to expand our facilities if future customer demand exceeds our existing
capacity.
Revenues from systems integration services are derived from hardware sales and
consulting fees. Our systems integration services including hardware sales are
currently provided primarily in California. Prior to our merger with Integral
Networking we derived insignificant revenues from hardware sales to customers,
and no revenues from systems integration services.
Cost of Revenues. Cost of revenues from Internet and private network
connectivity consists primarily of backbone costs and monthly access charges by
local exchange carriers to connect our customers to our network and colocation
costs. Backbone costs include all leased fiber-optic capacity to interconnect
our points of presence and to connect to public and private peering points. We
lease our fiber-optic capacity typically under short-term leases and are billed
monthly by our bandwidth providers. Colocation costs consist of monthly fees for
leasing space in facilities in which we colocate with other telecommunications
providers.
Cost of revenues from remote management services consists primarily of personnel
costs to provide customer support and network monitoring services. We believe
our cost of revenues from remote management services and other value-added
services as a percentage of revenues may decline as we increasingly provide
remote management services and other value-added services to existing customers
over the existing connection we provide to the customer.
Cost of revenues from hosting services consists primarily of rent expenses for
colocation space.
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Cost of revenues from systems integration services consists primarily of the
cost of hardware purchased.
Selling and Marketing Expense. Selling and marketing expense consists primarily
of sales commissions, travel and entertainment and sales and marketing programs.
We intend to expand our investment in our sales and marketing personnel to
achieve and properly support the intended expansion in our customer base.
General and Administrative Expense. General and administrative expense consists
primarily of personnel expense, occupancy, general operating costs, professional
fee expenses and bad debt. We expect general and administrative expense to
increase in dollar amount in the future, reflecting anticipated growth in our
operations and the costs associated with being a publicly held company.
Stock-Based Compensation Expense. In connection with the grant of stock options
to employees in 1999 and 1998, we recorded an aggregate deferred compensation
expense of approximately $948,000, representing the difference between the
estimated fair market value of the common stock and the option exercise price at
the date of grant. This amount is presented as a reduction of stockholder's
equity and is amortized over the vesting period of the applicable options. These
valuations resulted in charges to operations of $156,000 in the year ended
December 31, 1998, and $151,000 for the three months ended March 31, 1999, and
will result in charges of the remaining $739,000 over the next five years.
Depreciation. Depreciation expense consists primarily of depreciation of
computer equipment, office furniture and leasehold improvements. On January 1,
1998, we changed the estimated useful lives for our switches and routers from
three to five year lives as a result of our determination, based on historical
experience, that the vast majority of assets in this class have service lives of
approximately five years.
RESULTS OF OPERATIONS
The following table sets forth our statement of operations data for the years
indicated as a percentage of revenues. This information should be read in
conjunction with the financial statements and notes included elsewhere in this
prospectus.
<TABLE>
<CAPTION>
THREE MONTHS
ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
-------------------------- --------------
1996 1997 1998 1998 1999
------ ------ ------ ----- -----
<S> <C> <C> <C> <C> <C>
Revenues................................... 100.0% 100.0% 100.0% 100.0% 100.0%
----- ----- ----- ----- -----
Costs and expenses:
Costs of revenues........................ 52.7 44.7 52.7 50.3 59.9
Selling and marketing.................... 5.4 5.0 3.2 5.3 1.4
General and administrative............... 29.0 28.9 35.3 28.4 44.1
Depreciation............................. 8.1 7.2 7.8 6.4 7.0
Stock-based compensation expense......... -- -- 1.3 -- 5.0
----- ----- ----- ----- -----
Total costs and expenses......... 95.1 85.8 100.3 90.4 117.4
----- ----- ----- ----- -----
Operating income (loss).................... 4.9 14.2 (0.3) 9.6 (17.4)
Net interest (expense)..................... -- -- (0.3) -- (0.7)
Income tax provision (benefit)............. 2.4 5.7 0.7 2.8 (5.2)
----- ----- ----- ----- -----
Net income (loss).......................... 2.5% 8.5% (1.3)% 6.8% (12.9)%
===== ===== ===== ===== =====
</TABLE>
COMPARISON OF QUARTERS ENDED MARCH 31, 1999 TO MARCH 31, 1998
Revenues
Our revenues increased 0.7% to $3.00 million in the quarter ended March 31,
1999, compared to $2.98 million in the quarter ended March 31, 1998. Increased
revenues resulting from two major systems integration sales were offset by a
12.6% reduction in colocation and Internet connectivity revenues.
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Cost of Revenues
Our cost of revenues increased 20% to $1.8 million in the quarter ended March
31, 1999, compared with $1.5 million in the quarter ended March 31, 1998. This
increase was primarily the result of the increased volume of computer equipment
sold in connection with the increased systems integration sales recognized.
Selling and Marketing
Our sales and marketing expenses decreased 74.1% to $41,000 in the quarter ended
March 31, 1999, compared to $158,000 in the quarter ended March 31, 1998. This
decrease is attributable primarily to sales commissions and costs associated
with a 1998 trade show that were not incurred in the 1999 period.
General and Administrative
General and administrative expenses increased 56.4% to $1.3 million for the
quarter ended March 31, 1999, compared to $847,000 for the quarter ended March
31, 1998. The increase was primarily due to an increase in personnel expense of
$280,000, facilities cost increase of $65,000, and an increase in outside
services and professional fees of $60,000.
Depreciation
Our depreciation expense increased 10.5% to $210,000 in the quarter ended March
31, 1999, compared to $190,000 in the quarter ended March 31, 1998. The increase
is due primarily to the buildout of our new network operations center in 1998.
Stock-Based Compensation
Stock-based compensation of $151,000 was amortized during the quarter ended
March 31, 1999.
Net Interest Income (Expense)
We incurred net interest expense of $22,000 in the quarter ended March 31, 1999,
compared to $1,000 in the quarter ended March 31, 1998. This change was a result
of increased borrowing for network equipment under our lines of credit that was
used to purchase network equipment.
COMPARISON OF YEARS ENDED 1998 TO 1997
Revenues
Our revenues increased 12.7% to $11.7 million in 1998, compared to $10.4 million
in 1997. This growth in revenues resulted from an 11% increase in sales of
dedicated Internet connectivity and hosting services, a tenfold increase in
revenues derived from private network connectivity services and a 34% increase
in sales generated by systems integration services. Dedicated Internet
connectivity service is service provided over a circuit which is available 24
hours-a-day, seven days-a-week for the sole purpose of delivering the Internet
connectivity. Approximately 74% of our 1998 revenues was generated from our
Internet and network connectivity services, approximately 16% from value-added
services and approximately 7% from hosting services. Offsetting these increases
were reductions in revenues of $545,000 realized from dial-up customers and
reduced fees for installation services. This decrease resulted from our
increased focus on providing dedicated Internet and higher value services to
business and government customers.
Cost of Revenues
Our cost of revenues increased 32.9% to $6.2 million in 1998, compared with $4.6
million in 1997. Of this increase, $1.2 million was primarily due to increased
one time connectivity charges arising from the expansion of our network and
installation charges of $139,000. The expansion resulted in incremental unused
capacity. In addition, we had increased costs of $286,000 arising from hardwares
sales with our systems integration services.
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Selling and Marketing
Our selling and marketing expenses decreased 28.9% to $371,000 in 1998, compared
to $522,000 in 1997. This decrease is attributable primarily to reduced
commissions expense. Commissions in 1998 were based upon total contract value
equalling the term of the contract multiplied by monthly service fees. The
decrease in commissions expense in 1998 results from fewer sales of longer-term
versus shorter-term contracts than in 1997 and increased purchases by our
existing customer base of increased access speeds and additional space rather
than increases in the number of new customers. The decrease in longer-term
contracts is due to a general industry decrease in the prices for the services
we provide, making customers reluctant to sign longer-term contracts. The
increase in shorter-term contracts does not materially impact the conduct of our
business. We also experienced a reduction in our sales force in 1998 due to a
number of factors including normal attrition and our being involved in
negotiations in the second and third quarters of 1998, relating to potential
business combinations with companies with existing sales forces. We believe our
involvement in these negotiations caused a higher attrition rate for our sales
staff than we have historically experienced. These negotiations also caused us
to postpone our efforts to hire additional and replace lost sales staff.
General and Administrative
General and administrative expenses increased 37.6% to $4.1 million for 1998,
compared to $3.0 million for 1997. Approximately $675,000 of this increase
relates to salaries and benefits resulting from an increase in personnel.
Facilities and related expenses increased by $424,000 primarily as a result of
the expansion of our network infrastructure.
Depreciation
Our depreciation expense increased 22.0% to $909,000 in 1998, compared to
$745,000 in 1997. The increase is due to additional capital expenditures
incurred during 1998 for telecommunications equipment and facilities
improvements. On January 1, 1998, we changed the estimated useful lives for our
switches and routers from three to five-year lives. This change reduced 1998
depreciation by $237,000. We made this change to more accurately reflect our
historical experience with respect to the actual useful lives of the equipment.
Stock-Based Compensation
Stock-based compensation of $156,000 was amortized during the year ended
December 31, 1998, and stock-based compensation of $792,000 will be amortized
over the remaining vesting periods of the related options, including $394,000 in
the year ending December 31, 1999. In addition, we issued stock options to
employees during the first quarter of 1999, which will result in additional
stock-based compensation of $98,000 being recorded in 1999, $50,000 of which
will be amortized as an expense 1999. Based on these issuances of stock options
below the fair value of our stock, we will record a total stock-based
compensation charge in 1999 of approximately $444,000.
Net Interest Income (Expense)
We incurred net interest expense of $30,000 in 1998, compared to $5,000 in
income in 1997. This change was a result of increased borrowing for network
equipment under our lines of credit.
COMPARISON OF YEARS ENDED 1997 TO 1996
Revenues
Our revenues increased 63.3% to $10.4 million in 1997, compared to $6.4 million
in 1996. Approximately $4.9 million of this increase is due to growth in
revenues generated by our Internet connectivity services and installation fees.
This increase was slightly offset by a $917,000 aggregate decrease in dial-up
customer and systems integration services revenues.
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Cost of Revenues
Our cost of revenues increased 38.7% to $4.6 million in 1997, compared to $3.3
million in 1996. This increase resulted from a $1.4 million increase due to
larger connectivity charges and other costs incurred with our network expansion.
In addition, costs arising from our systems integration services were $118,000
less than the prior year.
Selling and Marketing
Our selling and marketing expenses increased 51.3% to $522,000 in 1997, compared
to $345,000 in 1996. This increase is attributable primarily to increased
commissions and travel and entertainment expenses.
General and Administrative
General and administrative expenses increased 62.9% to $3.0 million in 1997,
compared to $1.8 million in 1996. Salaries and general office expenses increased
by $584,000 as we hired more personnel to keep pace with the growth in demand
for our services. In addition, bad debt expenses increased by $573,000.
Depreciation
Our depreciation expense increased 45.5% to $745,000 in 1997, compared to
$512,000 in 1996. The increase was primarily the result of additional capital
expenditures incurred for telecommunications equipment and facilities
improvements.
FACTORS AFFECTING OPERATING RESULTS
We expect to experience significant fluctuations in our future quarterly and
annual results of operations due to a variety of factors, most of which are
outside our control. For a list of factors affecting our operating results, see
"Risk Factors -- Our operating results in one or more future periods are likely
to fluctuate significantly" and the other risk factors described in this
prospectus. Due to all of these factors, we believe that period-to-period
comparisons of our operating results are not necessarily meaningful and should
not be relied upon as indications of future performance.
YEAR 2000 COMPLIANCE DISCLOSURE
The year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. As a result,
date-sensitive software may recognize a date using "00" as the year 1900 rather
than the year 2000. In addition, the year 2000 is a leap year, and some computer
programs may not properly provide for February 29, 2000. System failures and
miscalculations causing disruptions of normal business activities may occur
including, among other things, a temporary inability to process transactions,
send invoices, or engage in similar normal business activities. As a result,
many companies' software and computer systems may need to be upgraded or
replaced in order to comply with year 2000 requirements. We are currently in the
process of reviewing our network switching, routing and telephone equipment,
constituting the equipment used in providing our Internet and network connection
services, as well as our internal management information systems, in order to
identify and modify those items and systems that are not year 2000 compliant. We
do not have and are not developing a contingency plan in the event our systems
fail due to year 2000 related problems.
Our year 2000 readiness review includes assessment, implementation, testing and
upgrading or replacing non-compliant items as appropriate. We have completed
most of our review of all of our software, switches and routers and other
systems and anticipate completion of our assessment and implementation by
mid-1999 and completion of all year 2000 testing during the third quarter of
1999. To date, we have evaluated our internally developed systems, consisting of
our management information system, provisioning tracking system, technical
information database and customer and network information database and believe
that they are year 2000 compliant. However, we utilize software and hardware
developed by third
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<PAGE> 36
parties both for our network and internal information systems. We have reviewed
the year 2000 compliance statements issued by, reviewed publicly available
information regarding, or have sought oral and written assurances from, our
significant suppliers. Nine of them have indicated that their products are year
2000 compliant, and none have indicated that remediation measures are necessary.
We intend to continue to seek assurances from our other suppliers during the
course of our year 2000 readiness review. To the extent that our systems are not
year 2000 compliant, we are modifying such systems to make them compliant.
Noncompliant items are replaced or otherwise remediated and then tested during
the review process. To date, we have identified the need to upgrade our Cascade
OpenView Layer 2 network management and switch operating system software to
Ascend Naviscare software. We anticipate completing this upgrade by mid-1999.
Assessment of our telephony systems has not yet been completed but is currently
in process. We expect these modifications will be made on a timely basis and do
not believe that the cost of the modifications will have a material effect on
our business, results of operations or financial condition. To date, we have not
incurred material costs in upgrading and replacing non-compliant items.
Additionally, we are continuing to assess the year 2000 compliance of our
services and systems. We believe our services and systems assessed to date do
not contain material year 2000 deficiencies. We estimate that the capital and
other costs associated with any upgrade and conversion of our existing services
and systems relating to the year 2000 issue will not be material.
We expect to continue assessing and testing our internal information technology,
which we refer to as IT, and non-IT systems to mid-1999 with the assessment and
remediation process described above. To ensure year 2000 compliance we will
upgrade the server on which our accounting software runs in the third quarter of
1999. We are not currently aware of any material operations issues or costs
associated with preparing our internal IT and non-IT systems for the year 2000.
However, we may experience material unanticipated problems and costs caused by
undetected errors or defects in the technology, including embedded technology,
used in our internal IT and non-IT systems.
Based upon our correspondence with and the publicly available information
regarding our primary equipment, telecommunications and data communications
providers, we are aware that more than three-quarters of these providers are in
the process of reviewing and implementing their own year 2000 compliance
programs. We are in the process of contacting the remaining quarter of our
suppliers to determine the scope of their year 2000 compliance programs. Of the
providers from whom we received correspondence, none of them has indicated that
they have not considered year 2000 compliance, none have indicated that they are
currently year 2000 compliant and all have indicated that they expect to be year
2000 compliant by the end of 1999. At this time, CRL is not aware of, and cannot
determine, apart from the public materials reviewed and assurances received, how
many of its providers are implementing remediation measures which affect CRL. We
do not believe that we will be afforded the opportunity to test the systems of
these providers. If our primary providers experience business interruptions as a
result of the failure to achieve year 2000 compliance, our ability to provide
Internet connectivity could be impaired, which could have a material adverse
effect on our business, results of operations and financial condition.
Our services and systems operate in complex network environments and directly
and indirectly interact with a number of other hardware and software systems. We
face risks to the extent that suppliers of products, services and systems
purchased by us and others with whom we transact business, including those which
form significant portions of our network and may be sole or limited source
suppliers, such as Ascend Communications, Inc., the provider of our Cascade
switches, do not have business systems or products that comply with year 2000
requirements, despite the implementation of a year 2000 compliance program or
assurances of year 2000 compliance by all of such suppliers. Ascend
Communications, Inc.'s public disclosure indicates that it has a plan in place
to become, to the extent it is not already, year 2000 compliant by June 1999. We
have received assurances from approximately one third of our suppliers that
their networks are year 2000 compliant including our two most significant
equipment suppliers, Ascend and Cisco. If these networks fail, our business will
be significantly impacted.
We do not currently have any information regarding the year 2000 status of our
customers, many of whom are private companies. As is the case with similarly
situated companies, if our customers experience year 2000 problems, which result
in business interruptions or otherwise impact their operations, we could
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experience a decrease in the demand for our services, which could have a
material adverse impact on our business, results of operations and financial
condition.
We have not incurred any significant expenses to date associated with our year
2000 plan and are not aware of any material costs associated with our
anticipated year 2000 efforts. Our expectation that we will be able to upgrade
our services and systems to address the year 2000 issue and our expectation
regarding the costs associated with these upgrades are forward-looking
statements subject to a number of risks and uncertainties. Actual results may
vary materially as a result of a number of factors. We cannot assure you that we
will be able to timely and successfully modify our services and systems to
comply with year 2000 requirements. Any failure to do so could have a material
adverse effect on our business, results of operations and financial condition.
Furthermore, despite testing by us and our vendors, our services and systems may
contain undetected errors or defects associated with year 2000 date functions.
In the event any material errors or defects are not detected and fixed or third
parties cannot timely provide us with products, services or systems that meet
the year 2000 requirements, our business, results of operations and financial
condition could be materially adversely affected. Known or unknown errors or
defects that affect the operation of our services or systems could result in
delay or loss of revenues, interruption of network services, cancellation of
customer contracts, diversion of development resources, damage to our
reputation, damages paid to customers and litigation costs.
LIQUIDITY AND CAPITAL RESOURCES
We have historically generated positive cash flows from operating activities and
have financed our growth, as well as necessary capital expenditures and working
capital needs, primarily through the use of internally generated funds and lines
of credit. In addition, we have made limited use of capital lease financing. We
expect to experience a substantial increase in our operating expenses as we
implement our growth strategy and incur expenses for hiring new personnel and
for additional leased network capacity. We also anticipate an increase in our
capital expenditures consistent with our anticipated need for additional network
infrastructure. We expect our operating expenses and capital expenditures will
be a significant use of our cash resources.
We currently have agreements with commercial lenders providing for equipment
financing arrangements. Integral also has a line of credit with a commercial
lender. As of March 31, 1999, approximately $1,088,000 was outstanding under
these agreements. Amounts borrowed under these agreements are secured by
substantially all of our assets and bear interest at a weighted average rate
equal to 9.6% as of May 14, 1999. Various portions of these borrowed amounts
must be repaid in full between July 2000 and March 2003. We intend to use a
portion of the proceeds from the offering to repay the amounts outstanding under
these loan agreements. In addition, we have a $200,000 working capital line of
credit. As of March 31, 1999, we had no cash borrowings with that facility. See
"How We Intend to Use the Proceeds from the Offering."
Our net cash flows from operating activities were $705,000 for 1998, $1.7
million for 1997, and $944,000 for 1996. Our borrowings were $703,000 for 1998,
$358,000 for 1997 and zero for 1996. At December 31, 1998, we had $840,000 in
cash and cash equivalents.
Net cash used in investing activities was $1,529,000 for the year ended December
31, 1998, $1,182,000 for the year ended December 31, 1997, and $905,000 for the
year ended December 31, 1996. Cash used in investing activities was primarily
used to purchase property and network equipment.
Net cash provided by (used in) financing activities was $549,000 for the year
ended December 31, 1998, $316,000 for the year ended December 31, 1997 and
$(14,000) for the year ended December 31, 1996. In the years ended December 31,
1998 and 1997, net cash provided by financing activities resulted primarily from
borrowings. Net cash used in financing activities in the year ended December 31,
1996, resulted from debt payments.
We believe that the net proceeds of this offering, together with our existing
cash, cash equivalents and short-term investments and available credit
facilities, will be sufficient to meet our anticipated cash needs
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for working capital, repayment of debt and capital expenditures for at least the
next 12 months. Thereafter, we may require additional funds to support our
working capital and capital expenditure requirements and may seek to raise
additional funds through public or private equity or debt financings or other
sources for such requirements and acquisitions of technologies, companies and
development of our existing and new services. Any additional financing we may
need may not be available on terms favorable to us, or at all. See "Risk
Factors -- We may require substantial future capital to implement our business
plan" and "How We Intend to Use the Proceeds from the Offering."
RECENTLY ISSUED ACCOUNTING STANDARDS
In March 1998, the Accounting Standards Executive Committee of the American
Institute of Certified Public Accountants issued SOP 98-1, Accounting for the
Costs of Computer Software Developed or Obtained for Internal Use. SOP 98-1
provides guidance for an enterprise on accounting for the costs of computer
software developed or obtained for internal use. SOP 98-1 is effective for us in
fiscal 1999. We anticipate that accounting for transactions under SOP 98-1 will
not have a material impact on our financial position or results of operations.
In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, which defines derivatives, requires that all
derivatives be carried at fair value, and provides for hedge accounting when
conditions specified in SFAS No. 133 are met. SFAS No. 133 is effective for us
in fiscal 2000. We do not believe adoption of this statement will have a
material impact on our financial position or results of operations.
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BUSINESS
GENERAL
CRL Network Services is a Tier 1 Internet service provider offering customized
Internet and network management solutions to small and medium-sized businesses.
Our services include:
- connectivity to the Internet and secure private networks through our
national backbone network from which our Internet access customers can reach
every other Internet address and our network customers can reach other
destinations within their private network.
- value-added services, which are services delivered over the same circuit as
our connectivity services in addition to those services. Our current
value-added services are remote management of our customer's networks and
systems integration, which includes the resale, installation and
configuration of our customers' computer systems and software.
- hosting, which is the distribution of customers' Internet content from our
facilities.
Our customers outsource the management of their Internet and network needs to
us. We develop and construct our data switched networks and perform all data
routing and transmission for our customers. We lease fiber-optic capacity from
third-party providers over which we transmit data and peer with other
telecommunications providers to exchange data traffic.
We believe we were among the first companies involved in the development of
connectivity solutions and services for the commercial Internet. We have
developed our own high speed network, which enables us to reliably and cost
effectively deliver customized, comprehensive solutions. As of May 14, 1999, we
had 30 points of presence in major metropolitan areas that connect to the
interexchange points sanctioned by the National Science Foundation for the
transfer of Internet Protocol-based traffic between Internet backbone networks.
Our network is comprised of several elements, including 23 Cascade switches, 54
Cisco routers, facilities and clear channel fiber-optic bandwidth, which
together provide a fast, secure, high quality network capable of minimizing
outages resulting from hardware or software faults.
INDUSTRY OVERVIEW
To remain competitive, businesses today must have the ability to reliably access
and share information both externally and internally. In response, companies are
increasingly conducting business over the public Internet and their own private
networks. As a result, businesses are expanding their connectivity to the
Internet and use of both local area networks, commonly referred to as LANs, and
wide area networks, commonly referred to as WANs. The Internet's functionality
and accessibility have created an increasingly attractive commercial medium to
quickly and efficiently provide services and distribute information that
historically has been more difficult to obtain through traditional communication
channels. At the same time, businesses are continuing to develop private
networks to distribute and share information, resulting in a dramatic increase
in private network traffic as well as heightened performance requirements for
these networks. Increased use of the Internet and public and private networks
has also driven growth in the amount of sensitive corporate information shared
over networks, causing network security to become a high priority for many
businesses. As a result of these trends, a growing number of businesses view
responsive, reliable and secure networks as integral to their operations. As
these businesses evolve, the effectiveness of their networks depends largely on
the scalability and flexibility of these networks.
The proliferation of Internet use is driven by the emergence of electronic
commerce and availability of applications such as the outsourcing of help desk
functions, Internet Protocol-based voice, fax and video conferencing, purchasing
and provisioning functions, and corporate and product marketing. Businesses are
confronted with increasing customer demand for offerings of products and
services over the Internet as a result of the immediacy and convenience it
affords. As the Internet evolves, companies are transitioning from Internet use
for business-supportive functions such as marketing and customer support, to
functions
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integral to business such as transaction execution, including sales orders and
customer billing. As Internet use becomes increasingly integral to business,
businesses' emphasis on the reliability and security of their Internet access
grows in importance. Also, many businesses have emerged that focus solely on
delivering services over the Internet through Web sites and electronic commerce
applications. Their ability to offer these kinds of products and services
requires high bandwidth Internet sites and operations which are sufficiently
scalable to meet their changing needs. Due to advances in online security and
payment mechanisms, the number of businesses establishing commerce-enabled Web
sites is expected to increase dramatically. International Data Corporation
estimates that the number of consumers buying goods and services on the Internet
will grow from 18 million in 1997 to 128 million in 2002, and that the total
value of goods and services purchased over the Internet will increase from
approximately $12 billion in 1997 to approximately $425 billion by 2002.
Businesses are positioning themselves to capture this rapid growth opportunity
by enhancing their Internet presence.
The need for businesses to establish secure private wide area networks using the
services of companies like CRL has been driven by the growing importance of
connecting the geographically dispersed sites of their business, their customers
and their suppliers. As networks become a more integral part of day-to-day
operations, many companies seek to minimize network costs and improve operating
efficiencies. Traditional wide area network architectures consist of dedicated
circuits between computing facilities utilizing the same fixed bandwidth
regardless of traffic flow. New switched data technologies such as that utilized
by us share and dynamically allocate bandwidth based on prevailing traffic
patterns. The shared bandwidth of switched data technologies typically results
in wide area networks that are more reliable and cost efficient than those based
on traditional leased-line services.
Local area networks have emerged from businesses' need to access and share
internal electronic information. To enable effective internal communication and
distribution of company information, the local area network is used by
businesses seeking to decentralize their information databases. Local area
networks facilitate access to client/server-based technology such as Web-enabled
databases, shared file servers, e-mail, electronic commerce applications, and
other online information. Use of local area networks and the services of LAN
service providers will continue to grow as businesses increasingly decentralize
information.
As local area networks and wide area networks become more prominent, businesses
increasingly need remote access to their network for mobile workers. Many
businesses recognize the importance of controlling the method by which
electronic automation takes place and ensuring the security of communications
between mobile workers and the proprietary networked resources they access. The
benefits of efficiently distributing proprietary information to those with a
need to know must be weighed carefully against the possibility that unauthorized
access to sensitive information can occur due to failed security mechanisms or
poor network design.
Internet access services provided by Internet service providers interconnect
businesses and individuals to the Internet, private data networks and other
interconnected networks. Access services include high speed dedicated access
used primarily by medium-sized and larger organizations and dial-up access for
individuals and small or home office businesses. In addition to Internet access
services, business-focused Internet service providers such as CRL are
increasingly providing a range of additional communications services, including
remote management, shared and dedicated Web hosting, server colocation, network
security services, electronic commerce applications and new applications such as
Internet Protocol-based voice, fax and video conferencing. Internet service
providers who can bundle several of these communications services can satisfy
more of the needs of their customers and enhance their cross-selling
opportunities.
Several different types of Internet service providers have emerged and are
generally referred to as Tier 1, Tier 2, and Tier 3 network service providers.
International Data Corporation defines a Tier 1 network service provider as an
operator of a high quality, national backbone facility, specializing in leased
line connectivity. Also according to International Data Corporation, most Tier 1
network service providers peer directly at the National Science
Foundation-approved network access points. International Data
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Corporation defines Tier 2 and Tier 3 network service providers as those who do
not have a national backbone network.
Peering is critical to providing high quality, high speed Internet access. By
peering directly with other networks, Tier 1 Internet service providers such as
CRL are able to send Internet traffic via the most direct and reliable path to
its final destination (the fewest "hops"), thereby minimizing potential delay
and lost or corrupted data. Additionally, Tier 1 Internet service providers
maintain and control their own national backbones and are generally better able
to control the quality of service, level of data integrity and degree of
reliability than non-Tier 1 Internet service providers. Many Tier 1 providers
are also fully peered, which means they can route traffic to every other
Internet destination through peering arrangements without paying transit fees.
Because Tier 1 Internet service providers typically do not pay for the privilege
of interconnecting with other Tier 1 networks with whom they peer, they can
increase their available Internet capacity by expanding existing peering
connections with their peer networks without the high costs associated with the
retail purchase of additional Internet access. The following is a list of
Internet service providers whom we believe to be some of the Tier 1 Internet
service providers: MCI WorldCom, Inc. (UUNET), Cable & Wireless P.L.C., Sprint
Corporation, ICG Communications, Inc. (Netcom), PSINet Inc., GTE Internetworking
Incorporated (BBN Planet), Intermedia Communications Inc. (Digex), AT&T
Corporation and CRL. As the number of Internet service providers has grown, Tier
1 Internet service providers have increased their requirements for peering
arrangements, which has raised the barriers to acquiring and maintaining Tier 1
status.
The internal network design of the Internet service provider's network is also a
significant factor in determining the speed and reliability of data delivery
from source to destination. Traditional networks constructed solely of routing
devices require that a packet of information stop at a router in every point of
presence along the traveled network path. Each of these routed hops requires the
data packet to be examined by the router and a policy-based routing decision to
be made regarding the egress of the packet back onto the network. Many routing
decisions can delay the delivery of the packet to its destination. By contrast,
switched data networks can deliver information directly between the source and
destination without the need to disassemble the data packets during transit. As
a result, switched data networks generally provide higher speeds, less data
delay and overall better quality of service than traditionally routed networks.
THE MARKET OPPORTUNITY
Overview
Internet and private network operations are increasingly becoming integral to
the commercial and communication operations of businesses. The evolution and
expansion of Internet services and the networks over which they are delivered
has led to a growing need for comprehensive, bundled Internet and network
services such as those offered by CRL.
The Need for Internet Connectivity Services
The Internet continues to increase in size and importance as its role in
integral business operations expands. Businesses are looking to third-party
providers for expertise in implementing their Internet strategies. According to
Forrester Research, Internet access revenues from businesses are expected to
increase from less than $1 billion in 1997 to more than $16 billion in 2002.
Internet service providers are ideally positioned to capitalize on this growing
need of businesses to access and utilize more of the Internet.
Demand for Secure Private Networks
Historically, data communications services offered over private leased lines
were expensive, not monitored or managed for quality of service nor capable of
deflecting outages from software or hardware faults. Seeking a less expensive
alternative, some businesses use the public Internet for communications but are
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confronted with potential problems inherent in the Internet, such as
unauthorized access and data loss and reduced transmission speed, commonly
referred to as degradation. Virtual private networks are also used as another
less expensive alternative, but similarly include security concerns and
unreliable performance due to their reliance on the Internet for data
transmission. By contrast, Layer 2, switched private networks used by providers
like CRL offer a networking option which is more cost effective than traditional
point-to-point private leased lines but is an owned and controlled network not
depending upon the Internet for data transfer, eliminating security concerns and
permitting lower and more stable delay levels than data communications
alternatives relying upon the Internet.
Enhanced Network Management Services
Businesses need to ensure that their networks, information systems and
applications operate continuously as their reliance on public and private
networks increases. While large businesses are able to build and maintain
information technology departments capable of servicing their networks,
information systems and applications, small and medium-sized businesses find it
difficult to cost effectively maintain information technology departments
capable of ensuring the continuous availability of complex networks running
multiple applications. It is also difficult and expensive for small and
medium-sized businesses to continuously train their information technology
departments to support new technologies and applications. As a result, many
small and medium-sized businesses have chosen to outsource their information
technology department functions to network service providers capable of offering
a full range of these services. Traditionally, outsourcing information
technology services has required site visits from the service provider even for
routine problems often resulting in lengthy delays. As a result, small and
medium-sized businesses are seeking the ability to affordably outsource their
information technology departments to network service providers capable of
rapidly responding to problems and minimizing network downtime. International
Data Corporation reports that the U.S. market for network monitoring and
management was $2.4 billion in 1998 and is projected to reach $4.7 billion in
2002, representing an 18% annual growth rate.
Hosting Services
As Internet presence becomes increasingly critical to business operations, many
businesses are seeking to outsource hosting services, including Internet
colocation, to network service providers. By outsourcing these functions,
businesses can establish a strong Internet presence while remaining focused on
their core business operations. According to Forrester Research, revenues from
complex Web hosting will increase from approximately $200 million in 1997 to $8
billion in 2002, while intranet hosting will generate nearly $400 million in
revenues for Internet service providers by 2002. Traditional hosting companies
operate geographically dispersed networks that are subject to increased risks of
data delay and degradation or loss, as data travels across multiple network
connections, or hops. Many hosting companies also do not have the flexibility,
peering arrangements or capacity to quickly scale their services to meet the
sharp growth and high bandwidth requirements of Internet operations integral to
business. Network service providers who are able to overcome these obstacles
will be well positioned to capitalize on the growth of the Web hosting market.
OUR SOLUTION
Through our national, facilities-based fully-peered network, we offer our
customers high quality, flexible and scalable services, including:
- connectivity to the Internet and secure private networks through our
national backbone network from which our Internet access customers can reach
every other Internet address and our network customers can reach other
destinations within their private network
- value-added services delivered over the same circuit as our connectivity
services in addition to those services, consisting of remote network
management of our customers' networks and systems integration services
- hosting services
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Approximately 74% of our 1998 revenues was generated from our Internet and
network connectivity services, approximately 16% from value-added services and
approximately 7% from hosting services.
Our comprehensive suite of services enables our customers to easily and more
cost effectively address their networking needs without having to assemble
services from different vendors including resellers, Internet service providers
and information technology service providers. Our ability to provide "one-stop,"
customized network solutions facilitates our customers' ability to exploit
opportunities created by the Internet and other network systems on a timely
basis. Key advantages of our solution are:
High-Quality Performance and Reliability. We believe our high speed, private
switched network, coupled with our status as a Tier 1 Internet service provider,
enables us to provide our customers with fast and reliable data transmission
solutions. Our network operations center controls and monitors the switches,
routers and fiber-optic capacity for all data transmitted over our network 24
hours-a-day, seven days-a-week, allowing our staff to be immediately aware and
responsive to problems as they arise. This control of our network infrastructure
allows us to improve quality of service by minimizing network down time.
Management of Businesses' Critical and Support Operations. We offer our clients
the ability to outsource their network management operations to us. The services
we offer are performed by CRL, allowing us to control the quality of these
services. Through an off-site connection and our proprietary process, we can
manage our customers' internal networks as well as solving common problems that
our customers encounter. When end-users encounter a problem, we are able to
attach in real-time to our customer's desktop computers and servers to evaluate
and solve the problem as if located on-site at the customer's premises from our
facilities. In addition, we proactively monitor our customers' networks to
predict and, in some cases, prevent outages. The ability to manage our
customers' systems remotely enables us to offer custom, cost-effective network
management solutions. Businesses able to outsource many aspects of an
information technology department, from the "help desk" to enterprise-wide
server maintenance, can implement more complex applications without being
constrained by a lack of in-house computer professionals. We believe that our
services can enable our customers to implement selected intranet and extranet
business functions such as electronic commerce, free of any information
technology-related concerns. Our solutions allow our customers to more rapidly
grow their businesses with relatively modest initial and recurring information
technology-related expenditures.
Scalability and Flexibility. Our services are designed to be highly scalable and
flexible in order to meet the needs of our customers as their Internet, network
operations, and bandwidth requirements expand. Our network is designed to
provide our customers with available and uncongested bandwidth during network
traffic spikes by maintaining excess capacity and additional sources of
bandwidth. We also provide flexibility for our customers by supporting most
leading Internet hardware and software systems vendor platforms.
Bundled Service Offerings. Many enterprises today, especially those in the small
and medium-sized business market, often purchase services from a number of
vendors. For example, a company may receive its Internet access, file/Web server
connection and colocation space all from different vendors. We are able to offer
these services under customized packages through a single network connection and
also offer additional customer support and management expertise. We are able to
serve our customers' Internet and network management requirements without the
need for any additional service providers or connections.
STRATEGY
Our objective is to become the leading nationwide provider of customized
comprehensive Internet and network services to small and medium-sized
businesses. To achieve this objective, we intend to:
Further Capitalize On Our Existing Network Infrastructure. Through our direct
participation in the development and evolution of the commercial Internet, we
believe we are one of a limited number of fully-peered, Tier 1 Internet service
providers, which means we have legacy peering relationships with major Internet
service providers, including MCI WorldCom, Inc., Sprint Corporation and Cable &
Wireless P.L.C. As a result, we can transfer traffic efficiently to other
networks without paying the costs typically
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associated with transport. During the past year, we became a licensed
competitive local exchange carrier in the State of California and have begun the
application process to become a competitive local exchange carrier in several
other states to complement our national backbone network. As a competitive local
exchange carrier in any particular state, we are able to purchase unbundled
network elements from the applicable regional Bell operating company operating
in that state rather than purchase retail local loops, resulting in a
significant cost savings to us. Also, our 15 years of experience developing our
network provides us with an in-depth understanding of the key elements of
network connectivity technology. As a result, over the past decade we have built
a national backbone network which currently consists of clear channel
fiber-optic capacity, Cascade switches and Cisco routers, which are controlled
through our network operations center. Our network is fast, secure and reliable,
as well as scalable to approximately one hundred times the traffic our current
customers generate. We intend to aggressively further capitalize on our existing
network infrastructure to cost-effectively expand our customer base and deliver
additional service to our customers.
Cross Sell Value-Added Services. We intend to capitalize on our existing
customer base and future customers by aggressively cross selling our value-added
services. We are committed to offering our customers reliable value-added
network services necessary to address their Internet and network management
requirements. We believe we are currently one of only a few companies remotely
managing the customer's network from the Internet all the way to the desktop.
Based on our existing network infrastructure and expertise, we are able to offer
these services continuously, reliably and on a cost effective basis. Through
acquisitions or development of relationships with providers of leading Internet
and other network technologies, we intend to enhance and increase the services
we offer to include other value-added services, such as enhanced network
security solutions, that address our customers' rapidly evolving critical
networking needs such as electronic commerce.
Provide Bundled, Comprehensive Networking Solutions. The fragmentation among
Internet and other network service providers has resulted in users often faced
with an overwhelming array of providers and services from which to choose. For
example, it is typical for a user to purchase local loop connectivity from a
regional Bell operating company or a competitive local exchange carrier, to
purchase Internet or other wide area network connectivity from a separate
Internet or other network service provider, and to purchase network services,
like remote management, systems integration and network security, from one or
more other companies. We believe the Internet and network service provider model
is evolving towards providers who are capable of providing comprehensive
solutions by bundling several or all of these functions efficiently, reliably
and on a cost effective basis. By combining our network infrastructure with our
existing and planned array of value-added networking services, we believe we are
well positioned to become one of the premier providers of comprehensive, bundled
networking solutions to small and medium-sized businesses. Additionally, we
believe that by offering bundled services, we can reduce customer loss, increase
network usage by existing customers, cross sell additional services to existing
customers and differentiate ourselves from our competitors.
Expand Customer Base and Sales Efforts. We intend to expand our customer base by
significantly increasing our direct and indirect sales forces as well as our
marketing efforts. Our direct sales force consisted of 18 persons in four sales
offices located in San Francisco, Sacramento, Anaheim and San Diego as of May
14, 1999. Our sales force is supported in their efforts by sales engineers and,
in many instances, our senior management. We intend to increase the number of
our sales offices and to significantly expand the size of our direct sales force
with the goal of having an effective selling presence in all major domestic
metropolitan and regional markets. In addition, we are exploring other
strategies to grow our direct sales force, including developing an inside sales
center to generate additional sales. We also intend to establish and expand
relationships with potential channel partners including hardware vendors,
value-added resellers, system integrators and Web hosting companies to leverage
their sales organizations and existing customer bases. By combining an expanding
direct sales force with the sales and marketing power of targeted channel
partners, we believe we will be able to effectively market and sell our
comprehensive networking solutions to a large potential customer base throughout
the United States.
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Drive Revenue Growth by Increasing Hosting Services. Our physical presence at
key network access points provides attractive opportunities for many customers
to lease a portion of our space and purchase our colocation services. Our
hosting services permit our customers to install their equipment in close
physical proximity to major Internet access points. These connections at the
"edge" of the Internet are among the most reliable connections available. Our
presence in these locations, as well as the hardware we have installed there,
are designed to satisfy the electronic commerce and other requirements of the
most demanding Internet service providers, content providers, businesses and
government agencies. We intend to aggressively market our existing hosting
services to service these applications that are integral to business.
Accelerate Growth Through Targeted Acquisitions. The goal of our acquisition
strategy is to accelerate market penetration, build upon our core competencies
and expand our technical staff and sales force. We evaluate acquisition
candidates based on their fit with our overall business plan. When a candidate
is acquired, we will integrate our existing Internet and network connectivity
and value-added services with the service offerings of the acquired company and
use the acquired sales force and customer base to expand market opportunities.
The types of acquisitions we target include business Internet service providers
and companies with leading edge network connectivity and services technologies
that expand or enhance our existing services. Other types of targeted
acquisitions include local or regional business Internet service providers in
markets where we have established points of presence and would benefit from the
acquired company's local sales force and installed customer base through the
potential increase in our network utilization. Our recent acquisition of
Integral Networking Corporation, a systems integrator and developer of advanced
remote management services, is an example of the implementation of this
strategy.
SERVICES
We currently offer customized, comprehensive Internet and private network
solutions as well as network connectivity and value-added network services to
our customers. The diversity of services we offer permits each customer to
purchase individual services or a bundle of services that provide the most
efficient, reliable and cost effective solution to that customer's particular
needs.
Network Connectivity Services
We are a national provider of connectivity services, including a variety of
dedicated and dial-up access and customized wide area networking solutions in
both stand-alone and bundled packages, which provide high-speed continuous
access to the Internet and other networks for our customers. We also provide
turnkey configuration solutions encompassing such services as domain name
registration, leased-line ordering and installation assistance, Internet
Protocol address assignment, router configuration, installation and management,
and technical consultation services. All of our connectivity customers receive
24 hour-a-day, seven day-a-week technical support.
Dedicated Access. We offer a broad line of high speed dedicated connectivity
services providing business customers with direct access to a full range of
Internet applications. Our dedicated access service provides companies with
robust, full-time, dedicated Internet connectivity in a range of access speeds,
including fractional T1 (from 64 kilobits per second up to 1.536 megabits per
second), T1 (1.536 megabits per second), T3 (45 megabits per second) and OC3
(155 megabits per second). We recently began offering digital subscriber line
services but have generated no revenues from these services. Our dedicated
Internet access is designed to help ensure bandwidth availability for priority
business applications. We believe that the traffic-management advantages of the
data switching technology deployed in our network provide our customers with
fully integrated Internet access and improved performance.
Customized Wide Area Networking Solutions. We are dedicated to providing
effective, privately managed wide area networking services. Our customized wide
area networking services combine the high performance of private lines with the
redundancy and bandwidth efficiency of a switched service. These wide area
networking services utilize the superior line management features and cost
effectiveness of data switching technology to provide a high performance and
secure wide area network that is scalable to our customers' growing network
demands.
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The versatility of data switching technology allows our customers to easily
manage connectivity to multiple sites at a wide range of connection speeds. With
our customized wide area networking services, our engineers can help a customer
design a network to match the specific needs of the customer. Locations can be
partially or fully-meshed, offering route redundancy where necessary, and
allowing the customer to provision only the bandwidth they need.
By linking a wide area network with our Internet backbone, our customers can
optimize the bandwidth of their businesses and minimize expenses. We also offer
service level guarantees and extensive 24 hour-a-day, seven day-a-week customer
support with all of our integrated solution products.
Dial-Up Access. Our dial-up services offer a cost effective, entry-level
Internet solution that provides access to our advanced network backbone via
ordinary telephone lines at speeds of up to 56 kilobits per second using V.90
protocol.
Transit Service. Our transit service is designed for other, non-Tier 1 Internet
service providers whose networks are insufficient to transmit their customers'
data to the peering points of other networks. Our transfer service provides the
necessary link for these Internet service providers to transmit and receive data
to other networks on the Internet. This service can usually be installed in a
short time frame and gives our customers the flexibility they need to expand
their operations.
Value-Added Services
We believe that businesses will continue to increase their use of the Internet
and private networks to remain competitive and will increasingly rely upon an
expanding range of value-added services to enhance productivity, reduce costs
and improve service reliability. We offer value-added services consisting of
remote management and systems integration services. As part of our strategic
plan, we also intend to offer network security services. In addition, to
capitalize on our technologically advanced, high-capacity network
infrastructure, we intend to continue developing new value-added services that
facilitate customer use of the Internet and other networks, including
bandwidth-intensive multimedia services such as video conferencing.
Remote Management Services. Traditional network management solutions outsourced
by businesses to network service providers require network problems to be
diagnosed and resolved at the customer's site, which often results in a lengthy
response time. Through our alarm notification capability, our monitoring service
immediately alerts us to our customers' network problems and details the reason
for the problem. We can manage our customers' internal networks and solving
common problems encountered by our customers through an off-site connection and
proprietary process which permits us to attach in real-time to our customers'
desktop computers and servers and evaluate and solve the problem as if located
on-site at our customers' premises. For these reasons, our remote management
services help to significantly reduce the necessary time and expense to diagnose
and resolve network and application-oriented problems. We structure our remote
management solution to be scalable to our customers' growing needs.
Systems and Network Integration. We provide integration services such as local
and wide area network configurations, Web and database server integration and
application-specific software solutions. We configure equipment by loading
customer programs, connecting equipment to the network and servicing hardware
and software. Our staff of engineers works closely with our customers to design,
assemble, configure and install a network architecture meeting our customers'
requirements.
Firewall Solutions. The sensitive nature of business Internet traffic demands
protection from unauthorized access. Our firewall solutions provide users with
secure access to the Internet as well as create an electronic barrier between a
customer's internal network and the public Internet. Our firewalls can also
restrict access between departments as well as track communications to ensure
that these communications follow a customer's established security procedures.
We work with a variety of vendors to provide customized firewall solutions for
each of our customers with specialized security needs.
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Hosting Services
Our existing network infrastructure, with its physical presence of network
equipment at major domestic network access points connecting all of the
interexchange points sanctioned by the National Science Foundation, provides an
easy and cost-effective solution for businesses to directly connect their
equipment through CRL to the Internet and other networks through our existing
nationwide backbone. Our colocation facilities allow our customers to install
their equipment as close to our network core as physically possible and are
configured in a manner to satisfy their networking and Internet operations that
are integral to business. Our infrastructure supports the Internet hardware and
software vendor platforms of most leading vendors, including Intel Corporation,
Microsoft Corporation and Sun Microsystems, Inc. The flexibility and scalability
of our network infrastructure permits our customers to purchase additional space
and power as needed, and to install and maintain their own hardware and
software. Our primary colocation facilities have uninterruptible AC or DC power
supply and back up equipment, fire suppression equipment, HVAC (heating,
ventilation and air conditioning), separate cooling zones, seismically-braced
racks and high levels of physical security, including card key access and video
surveillance.
Customers can select from a variety of options including shared rack facilities,
highly secure cabinets and enclosed cage facilities based upon their business
and technical requirements. Because many applications are dynamic and require
immediate hardware and software upgrades to maintain or achieve targeted service
levels, our colocation customers are offered 24 hour-a-day, seven day-a-week
physical and remote access to our facilities. We offer five options to satisfy
our customers' needs:
- Switched Ethernet Service, which is a 10 megabit per second service
connection onto our backbone router shared by other customers
- Dedicated Ethernet Service, which is a 10 megabit per second service
connection directly onto our backbone router not shared with any other
customers
- Switched Fast Ethernet Service, which is a switched ethernet service with a
100 megabit per second Internet connection
- Dedicated Fast Ethernet Service, which is a dedicated ethernet service with
a 100 megabit per second Internet connection
- Gigabit Fast Ethernet Service, which is a switched ethernet service with a
1,000 megabit per second Internet connection
The majority of our revenues from hosting services during 1998 and the first
quarter of 1999 was generated by our Dedicated Fast Ethernet Service. While the
Switched Ethernet Service is currently used by the greatest number of our
hosting service customers, our customers are able to choose the speed that best
suits their diverse needs which is generally based on our customers' projections
of the quantity of data to be delivered from their respective Web sites.
CUSTOMERS
We have established a diverse customer base including Internet service and
content providers, businesses, government agencies and educational institutions
to whom we offer a wide range of services including Internet and network
connectivity, value-added and hosting services. In addition, we provide dial-up
Internet access services to consumers. No customer accounted for more than 2.6%
of our revenues in either 1997 or 1998. The revenues derived from our top 10
customers accounted for 16% of our total
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revenues in 1998. The following is a representative list of customers as of May
14, 1999 including the customers from each area of business from which CRL
generated the largest amount of revenue in 1998 or that were among the top
twenty customers on the basis of revenues to CRL during the first quarter of
1999:
<TABLE>
<S> <C> <C> <C>
------------------------------------------------------------------------------------------
INTERNET SERVICE INTERNET CONTENT BUSINESSES ENGAGED GOVERNMENTAL AGENCIES
PROVIDERS PROVIDERS IN ELECTRONIC AND EDUCATIONAL
--------------------- --------------------- COMMERCE INSTITUTIONS
--------------------- ---------------------
CTSNET AdForce, Inc. Citizen One Software City of Vallejo
(Imgis.com) Police
GST Call America Intersat Department
Digiweb Inc. Interprovincial
Harvard Net/Comstor Satellite Services Pacific Union College
Information Access Limited
Interaccess Co. Technologies, Inc. Tustin Unified School
Red Storm District
Internet America, Pathlink Technology Entertainment, Inc.
Inc. Corporation U.S. Department of
Ulead Systems, Inc. Commerce
Lightspeed Software Walnut Creek
CDROM, Wilshire Associates U.S. Federal Reserve
Incorporated Incorporated Board
------------------------------------------------------------------------------------------
</TABLE>
We aggressively pursue small and medium-sized business customers and seek to
provide them with connectivity and customized, cost-effective network management
solutions. The following are representative examples of the needs of our
customers and the core solutions we currently provide to our customers.
WALNUT CREEK CDROM, INCORPORATED: Walnut Creek CDROM, Incorporated is an
Internet-based freeware site using file transfer protocol, a tool used to
download files from the Internet and is our customer with the highest volume of
data. Typical of the demands of our customers who are high bandwidth content
users, Walnut Creek CDROM needed a reliable, Tier 1 provider to support its
traffic flows, which can often reach 98 megabits per second for a sustained
period of time. Walnut Creek CDROM uses our 100 megabits per second dedicated
fast ethernet service to connect directly to our core backbone at our San
Francisco network operations center. This high speed, direct Internet solution
meets our customer's bandwidth requirements and increases network reliability by
reducing the number of router hops to the Internet. We provide the 24
hour-a-day, seven day-a-week network management required to deliver Walnut Creek
CDROM's round-the-clock Internet applications.
J. LINNEMAN & CO.: J. Linneman & Co., a reinsurance agency associated with
Lloyd's of London, like many of our customers using our wide area network
services, required a reliable, private data switched network to handle sensitive
and mission-critical information. Without a managed network to facilitate
internal company communication, company officials were concerned that
underwriters could potentially over-insure national clients. Using our wide area
networking services, we developed and deployed a customized data network between
J. Linneman's headquarters in San Francisco and regional offices in Atlanta,
Chicago and Hartford. An Internet connection was also secured for each location.
In order to meet J. Linneman's demand for scalability and cost control, we
provide varying bandwidth to each city, with the option for an increase at any
time.
RIVER CITY PETROLEUM: River City Petroleum, Inc. is a fleet fueling and
wholesale fuels provider and is one of our largest remote management services
customers. River City Petroleum had built a local area network but had little
expertise to install new network elements, nor, like many of our value-added
service customers, did they want to oversee the day-to-day management and
administration activities a network requires. Using our proprietary remote
management services, we developed and deployed a customized solution for River
City Petroleum that reduces costly systems administrator fees and protects the
firm's mission-critical data by handing off the day-to-day management to us.
River City Petroleum can now focus on continuing its acquisition-oriented
growth, not its local area network.
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These customers and the services which we provide them reflect our focus on
small and medium-sized businesses.
Our success substantially depends on the continued growth of our customer base
and retention of our customers. Our ability to attract new customers will depend
on a variety of factors, including the willingness of businesses to outsource
their mission-critical networking and Internet operations, the reliability and
cost effectiveness of our services and our ability to effectively market such
services. Substantially all of our customer contracts have terms ranging from
one to three years.
A failure on our part to develop these relationships could materially and
adversely impact our ability to generate increased revenues, which would
negatively affect our financial results. We also intend to significantly
increase our sales and marketing expenditures, which may not necessarily result
in increased sales of our services. For a detailed discussion of the risks, see
"Risk Factors -- We are subject to the risks from our lengthy sales cycle."
OUR NETWORK
Our network enables us to provide our current service offerings and is the
platform from which we intend to expand our service offerings. Our network is
comprised of several elements, including routers, switches, facilities and clear
channel fiber-optic capacity, which together provide a fast, secure, high
quality network capable of reducing the risk of outages resulting from hardware
or software faults. In addition, we have both public and private peering
agreements allowing us to connect directly with all major Internet service
providers. The following map illustrates our network and peering relationships:
[Graphics depict a map of United States Entitled "Networks Built for Business"
with CRL logo, reflecting CRL's network connecting cities nationwide, including
symbols designating CRL's Regional Hubs, CRL Points of Presence or Service
Areas, Internet Protocol Backbone and Switched Backbone]
LOGO
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Network Equipment
Our network consists of 23 Cascade data switches and 54 Cisco routers located
throughout our points of presence. Routers are typically used as "Layer 3"
networking devices, which must disassemble each packet of data they receive,
make a policy-based routing destination decision according to Internet
Protocol-based routing tables, and then reassemble the packet and send it to the
destination determined by the routing protocol then in effect. These routing
protocol tables must be frequently updated by the router to reflect changes in
the tables arising from numerous events, including changes in peering
relationships.
Switches are typically "Layer 2" networking devices, which means they make
connections a layer below the Internet. Switches determine routing destinations
based on the Layer 2 addresses attached to each packet without disassembling the
data packets. By operating one layer below the Internet without the need to
disassemble packets, switches can significantly reduce delay and data
degradation, as well as increase security. As a result of the complexity and
multitude of networks that transport information over the Internet, switches are
often an essential component to deliver information in the fastest and most
reliable manner.
We have invested significant capital in switches, which are more expensive than
routers. Switches, when properly configured with routers, enhance the speed and
reliability of networks by:
- minimizing the number of connections, or hops, a data packet must take,
which minimizes the time required to deliver the packet
- reducing the number of times a packet must be disassembled by routers, which
reduces the opportunities for router errors
- decreasing the instances where packets must travel over public networks,
which decreases the likelihood of delay and data degradation
Our national network of switches and routers permits us to customize our network
connectivity by creating an efficient "virtual circuit" for each customer, a
logical connection between the physical devices transmitting, directing and
receiving the data packets.
Switches have other advantages over routers as well. If a network outage occurs,
our Cascade switches can re-route data between our routers so that our network
does not experience an interruption of service during the outage. This process
allows our routers to forward more packets without making complex routing
decisions. Our Cascade switches are multi-protocol capable, allowing us to
operate Internet Protocol and other protocols as required.
Network Facilities
We have constructed a national backbone network with points of presence in 30
cities including 16 of the largest 20 cities in the United States. We control
our points of presence, including our network operations center in San
Francisco, under leases with terms ranging from month-to-month to six years,
that allow us to control the quality and security of the operations. We can
upgrade our points of presence as desired and are able to significantly reduce
the length of time of network interruptions because we control our facilities.
We have points of presence in major population centers around the United States,
including San Francisco, Los Angeles, San Diego, Phoenix, Denver, Dallas, Vienna
(Virginia) and Chicago, which represent the locations of the largest volume of
our data traffic. We also have points of presence in 22 other cities throughout
the United States.
Many of our points of presence are located in, or in close physical proximity
to, "carrier hotels." Carrier hotels are facilities where major interexchange
carriers and Internet service providers have physical points of presence. Our
actual location in, or in close proximity to, the same building in which the
switches and routers of these carriers and providers are located offers us the
ability to quickly and easily interconnect our equipment to theirs by our simply
installing a "pipe" connection between our equipment and theirs. Without this
close physical proximity, the services and expense of a third party, like an
incumbent local exchange carrier or competitive access provider, would be
necessary to connect us to the interexchange
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carrier or other provider. Our leases in these carrier hotels have expiration
terms ranging from December 2000 to 2003, except for one lease, which expires in
June 1999, but has a 2-year renewal option that we intend to exercise. Based
upon our discussions with these carrier hotels or from our customers who have
recently tried to rent space at these carrier hotels, we believe that at least
half of the carrier hotels have limited availability for new lessees due to a
lack of physical space, lack of infrastructure required for additional lessees
or the carrier hotels' desire not to admit additional lessees because of the
nature of such lessees' equipment and its requirements for the leased space.
Because of this limitation, we have an advantage over many of our competitors
who are unable to lease space in the facility or in close enough proximity to
the facility and need the services of a third party to provide similar
connectivity.
As we expand, we expect to increase our number of points of presence. Each point
of presence is monitored through our network operations center on a 24
hour-a-day, seven day-a-week basis, which allows us to rapidly identify and
resolve any service interruptions. All of our points of presence are connected
directly to local operators including regional Bell operating companies and
competitive local exchange carriers. Where practical, our local connections are
made at the DS-3 level, which allows us to install up to 28 customers at a time
on an expedited basis without the need for any wiring or physical changes within
our points of presence.
We currently lease clear channel fiber-optic capacity on networks from companies
such as Qwest Communications Corporation and IXC Communications, Inc. We have
chosen short-term leases of fiber-optic capacity as opposed to acquiring
indefeasible rights of use for fiber-optic capacity due to rapidly declining
bandwidth costs. We believe that our choice has had a significant impact on our
ability to maintain a relatively low cost structure network. Through our leased
fiber-optic capacity, we are able to easily create customized data switched
networks for ourselves or others. As we expand and seek additional leased
fiber-optic capacity, we believe that capacity will be available. Several major
fiber construction projects have commenced in the domestic United States, and
frequently the developer of a fiber route will exchange access with other fiber
carriers in a "route swap." Such "route swaps" bring a new vendor of fiber along
a particular route to the marketplace, and ultimately serve to drive the price
of fiber-optic capacity down.
Our network operations center located in San Francisco is operated on a 24
hour-a-day, seven day-a-week basis. This network operations center functions
primarily to ensure that our backbone network is operational at an optimal level
and has the ability to ingress and egress traffic. In addition, the center
monitors the connections between the backbone network and the customer. If the
customer's network fails, we notify the customer of their network failure and
begin working immediately to correct the failure.
Peering Relationships
We have both public and private peering relationships. A peering relationship
permits the direct connection of two providers to exchange data without the
necessity of paying a third party. We believe we were one of the first companies
to provide commercial Internet access to both consumers and corporations. As the
Internet and Internet interexchange points have evolved, we have been well
positioned to become and have become a significant peering partner. We currently
have public peering at the major interexchange points sanctioned by the National
Science Foundation including the following locations where we experience the
highest volume of data exchange:
- MAE East in Vienna, Virginia
- MAE West at Nasa Ames Research Center in Palo Alto, California
- the Fix West Federal Interconnect Exchange at Nasa Ames Research Center in
Palo Alto, California
- the Sprint Network Access Point in Pensauken, New Jersey
- the AADS Network Access Point in Chicago, Illinois
- the Pacific Bell Network Access Point in San Francisco, California
- the Pacbell Switched Multimegabit Data Service Cloud in Northern California
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- the Commercial Internet Exchange router in Santa Clara, California
As is typical industry practice, we have reciprocal peering relationships with
other Internet service providers that offer significant traffic exchange. Our
open network policy allows us to make cost-based peering decisions between
public and private peering points to route traffic efficiently.
Subject to few exceptions, our peering relationships generally are not subject
to any written agreements and could be terminated at any time. For those peering
arrangements subject to contracts, there are no minimum or fixed charges for
data exchange. Such agreements generally do impose minimum usage requirements at
levels which CRL has in the past always exceeded. However, these contracts can
be terminated by either party where the peering could have a detrimental impact
on a party's network. Any network may refuse to peer with any other network. As
the Internet has evolved, network service providers have determined whether they
will recognize a second provider as a peer based on the impact on its customers
of failing to do so. The first provider makes this determination by analyzing
how many customers of the second provider rely on it as their sole source of
connectivity to the Internet. If the second provider has customers who look to
that provider as their sole source, and the first and second providers refuse to
peer with one another, the portions of each provider's customer base that are
sole source will be unable to connect with each other over the Internet. Another
basis upon which a network may refuse to peer with another is to avoid peering
with a network run by inexperienced technicians which can result in data being
sent to the wrong location.
As a result of our early involvement in the Internet, we are a Tier 1 Internet
service provider and have peering relationships with other Tier 1 Internet
service providers.
SALES AND MARKETING
Our sales and marketing objective is to achieve broad market penetration and
increase brand name recognition among small and medium-sized businesses,
Internet service and content providers, government agencies and educational
institutions on a national basis through the expansion of our sales organization
and extensive marketing activities. As of May 14, 1999, we employed 25 persons
in sales and marketing. We have developed a multi-tiered sales strategy to sell
and market to our target markets through direct sales, Internet alliances,
channel relationships and customer referrals.
Direct Sales. Our direct sales force currently consists of highly trained
individuals located in San Francisco, California and three other sales offices
in the United States. Approximately 99% of our sales are currently generated by
our direct sales force. Our sales force is supported in their sales efforts by a
sales engineer and, in many instances, by senior management. We believe that the
integration of our sales engineers with our sales account managers assists both
the establishment of customer relationships as well as the migration of
customers to increased use of our services through cross selling of our
value-added services. We have developed programs to attract and retain high
quality, motivated sales representatives with the necessary technical skills,
consultative sales experience and knowledge of their local markets. These
programs include technical and sales process training and instruction in
consultative selling techniques. We have also developed sales compensation plans
that provide significant incentives for exceeding performance targets. We are
actively seeking to expand our direct sales force and sales engineering staff.
Our direct sales process consists of a multifaceted approach to lead generation
and includes direct mail, advertising, Web-based marketing, networking and cold
calling. We target small and medium-sized businesses nationwide with particular
emphasis on those geographic areas where we have points of presence. Prospects
are qualified through a needs-based consultative sales process and, depending
upon the complexity of the client need, sales engineers and senior management
are called upon to develop solutions.
Develop Channel Relationships. We are in the process of developing relationships
with potential channel partners including hardware vendors, value-added
resellers, system integrators and Web hosting companies to leverage their sales
organizations. A channel partner is a CRL customer who acts as a reseller of our
services. Compensation received by our channel partners may consist of a
one-time payment based upon a
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percentage of the price of the services sold, a one-time payment and a residual
percentage of CRL's monthly customer billings, or payment based upon the
differential between the price at which the channel partner sold the services
and CRL's price for such services. We began our channel partnerships in the
first quarter of 1999 and had contracts with twenty partners at May 14, 1999. We
believe that by relying upon the sales forces of these companies, we can attract
customers in a cost-effective manner, as well as provide co-branded Internet and
network management service offerings for our channel partners. We are actively
engaged in hiring experienced channel managers to focus exclusively on
developing these relationships.
By providing Internet and network management solutions, our partners can satisfy
the demands of their customers, as well as create opportunities for new
business. We will offer the expertise involved with a complex networking
infrastructure that will allow our partners to focus on their own areas of
expertise. This relationship will provide our partner with the tools needed to
bundle Internet access with a variety of services provided by us or our partner,
and gain the competitive edge needed to attract and maintain more customers,
increase market share and grow.
Because we realize that most companies have specific operating requirements, we
have designed a flexible program to accommodate specific needs. We will both
provide the necessary network connectivity and serve as a technical resource for
our partners. Engineers in our networking operating center monitor the network
around the clock to ensure the highest quality Internet, remote management
service and hosting services and technical support for our partner and its
customers. Instead of spending time and money building a national network
infrastructure, partners will be able to simply add Internet, remote management
service and hosting services to their existing products by becoming part of our
network. By bundling Internet, remote management service and hosting services
with existing products, the partner will be able to offer a high quality network
connection to the Internet with the ease of one bill and one point-of-contact
for customers.
Marketing. Our marketing program is intended to build national and local
strength and brand awareness. We use print advertising and direct mail in
targeted markets and publications to enhance awareness and acquire leads for our
direct sales force. We also use telemarketing programs, Web marketing and joint
promotional efforts.
CUSTOMER SUPPORT
We offer a high level of customer service and quality assurance by understanding
the technical requirements and business objectives of our customers and
addressing their needs proactively on an individual basis. By working closely
with our customers, we are able to enhance the performance of our customers'
Internet and network operations, avoid downtime, rapidly resolve problems and
make appropriate adjustments in services as customer needs change over time. We
work with our customers over time to ensure that we are offering the appropriate
types and quality of service. As of May 14, 1999, we had 14 employees dedicated
to customer service and quality assurance.
Upon receipt of a signed sales contract, the salesperson prepares a sales order
form and sends it to our provisioning department which, after initial review,
forwards the sales order to our finance department for approval and set up on
the billing system.
Within the provisioning department the sales order is logged into a tracking
system that is reviewed by management on a weekly basis. The provisioning
department arranges all internal and external activities to complete the
installation of the sales order. As necessary, they arrange for purchase,
delivery and setup of equipment, arrange for necessary circuits with various
telecommunications vendors and complete necessary changes to our network through
our engineering department.
Upon completion of all necessary installations, the customer is contacted for
testing and acceptance. Customer information is entered into an operations
database and our finance department is notified to begin billing.
Ongoing customer service is provided by our technical support group. Our network
operations center operates and is available for technical support 24
hours-a-day, seven days-a-week, 365 days-a-year. They
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monitor customer circuits real-time on the same basis. As problems are
identified or customer calls are received they are logged into a trouble ticket
system and worked through to resolution. Inquiries can be accepted by voice or
e-mail and are typically answered within a few minutes or hours of receipt.
Resolution times vary depending upon the problem's severity and complexity.
Resolution times that exceed a few hours are escalated to management.
Our enhanced customer support systems monitor and track support questions from
our customers. These systems were developed to help the network engineers track
problems efficiently and reliably. They provide an accurate history of each
account enabling the engineers to quickly access support inquiries and provide
us with valuable historical data about each account. Every time a support
question is called in, a historical record, commonly referred to as a
"trouble-ticket," is opened. Until the problem is resolved, the trouble-ticket
remains open. When necessary, the trouble-ticket is escalated in order to reach
the fastest possible resolution. The escalation chart is made available to our
customers.
COMPETITION
Our competitors generally may be divided into four principal groups:
- telecommunications carriers including regional Bell operating companies
- Internet service providers
- network and system integrators
- online network service providers
Telecommunications Carriers. Many long distance companies including AT&T
Corporation, Cable & Wireless P.L.C., Sprint Corporation, MCI WorldCom, Inc.,
Qwest Communications International Inc., Level 3 Communications Inc., IXC
Communications, Inc. and Frontier Corporation offer Internet access services and
network services. Recent reforms in federal regulation of the telecommunications
industry have created greater opportunities for incumbent local exchange
carriers such as PacBell Internet, and competitive local exchange carriers such
as WinStar Communications, Inc., to enter the Internet connectivity market. We
believe that there is a move toward horizontal integration by these kinds of
carriers through acquisitions of, joint ventures with, or the wholesale purchase
of connectivity from, Internet service providers in order to meet the Internet
connectivity requirements of their business customers. Accordingly, we expect
that we will experience increased competition from the traditional
telecommunications carriers. In addition to their greater network coverage,
market presence and financial, technical and personnel resources, many of these
telecommunications carriers also have large existing commercial customer bases.
Internet Service Providers. Our competitors include Internet service providers
with a national or global presence that focus on business customers, such as
PSINet, Inc. and UUNET Technologies, Inc. We also compete with Internet service
providers that cluster in major markets and regional Internet service providers
that have facilities in key metropolitan areas, including Verio, Inc., and
specialized Internet service providers such as Concentric Network Corporation,
Exodus Communications, Inc., AboveNet Communications Inc. and AppliedTheory
Corporation, as well as emerging Internet service providers. While we believe
that our state-of-the-art network infrastructure, quality customer service and
proactive support teams distinguish us from most Internet service providers,
many of these competitors have greater financial, technical, and marketing
resources, larger customer bases, greater name recognition and more established
relationships in the industry.
Network and System Integrators. We compete with large information technology
outsourcing firms such as the Big 5 accounting firms, EDS Corp., Perot Systems
Corporation and similar firms. These firms tend to focus on large customers who
outsource entire information technology functions or re-engineer their
information technology infrastructure. We believe that we are distinguished from
these competitors because we specialize in Internet Protocol-based integration
for the businesses and government agencies focused on Internet and other network
operations. We also compete with smaller network and systems integrators.
However, we believe that our expertise with large and complex systems, our
methodology and
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our ability to offer one-stop solutions for integration, data center services
and network connectivity set us apart from this segment of the competition.
Online Network Service Providers. In providing consumer Internet access, we
compete with online network service providers such as America Online,
Compuserve, MSN (The Microsoft Network) and Prodigy Communication Corporation.
The services offered by these companies often includes access to content
specific to each company. While we believe that our consumer products are
competitively priced and that our support and proactive network maintenance give
us an advantage over our competitors, many of these competitors have greater
financial, technical and marketing resources, larger customer bases, greater
name recognition, wider customer reach and more established relationships in the
industry.
We believe the primary competitive factors in our markets are:
- a reliable and powerful network infrastructure
- a broad range of services and technical expertise
- quality of customer service
- experienced and knowledgeable sales force and engineers
Many of our competitors may be able to develop and expand their communications
and network infrastructures more quickly, adapt more swiftly to new or emerging
technologies and changes in customer requirements, take advantage of acquisition
and other opportunities more readily, and devote greater resources to the
marketing and sale of their services than we can. In addition, we believe
competition in our markets will intensify as new competitors enter our markets
which have no significant barriers to entry. In addition, some of our
competitors may bundle other services and products, offer their services at more
attractive prices, or offer other high speed data services using alternative
delivery methods.
We do not currently compete internationally. If the ability to provide Internet
access internationally becomes a competitive advantage in the Internet access
industry, we may be at a competitive disadvantage relative to our competitors.
For more information concerning the competition we face and the factors
affecting our ability to compete, see "Risk Factors -- The markets for our
services is characterized by many competing technologies, and the technologies
on which our services are based may not compete effectively," "-- The markets in
which we compete are highly competitive and we may not be able to compete
effectively especially against companies with greater resources" and "-- We may
have to reduce the cost of our services to remain competitive."
INTELLECTUAL PROPERTY RIGHTS
We believe our success depends more upon our technical expertise than our
proprietary rights. We rely upon a combination of copyright, trademark and trade
secret laws and contractual restrictions to protect our proprietary technology
and rights in our services. We have no patented technology that would preclude
or inhibit competitors from entering our market. We have entered into
confidentiality and invention assignment agreements with all of our Integral
Networking Corporation employees and our technical personnel at CRL, and
nondisclosure agreements with our suppliers, distributors and appropriate
customers to control access to and disclosure of our proprietary information.
Despite these precautions, a third party could potentially copy or otherwise
obtain and use our products or technology without authorization or to develop
similar technology independently. We cannot assure you that such measures have
been, or will be, adequate to protect our proprietary technology or deter
third-party development of similar technologies. We also rely on technologies
that we license from third parties such as network management software. We do
not license any other technology that is not generally available. These
third-party technology licenses may not always continue to be available to us on
commercially reasonable terms. The loss of such technology could require us to
obtain substitute technology of lower quality or performance standards or at
greater cost, which could affect us in a material adverse manner. To date, we
have not been notified that we infringe the proprietary rights of third parties,
but there can be no assurance that third parties will not claim infringement by
us. We expect that participants in our markets will be increasingly subject to
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infringement claims as the number of technologies and competitors in our
industry grows. Any such claim, whether meritorious or not, could be time
consuming, result in costly litigation, cause service delays or require us to
enter into royalty or licensing agreements. Such royalty or licensing agreements
might not be available on terms acceptable to us or at all. As a result, any
such claim could have a material adverse effect upon our business, results of
operations and financial condition.
GOVERNMENT REGULATION
Currently only a small body of laws and regulations directly apply to access to
or commerce on the Internet. However, due to the Internet's increasing
popularity and use, laws and regulations may be adopted at the international,
federal, state and local levels with respect to the Internet, covering issues
such as user privacy, freedom of expression, pricing, characteristics and
quality of products and services, taxation, advertising, intellectual property
rights, information security and the convergence of traditional
telecommunications services with Internet communications. Moreover, a number of
laws and regulations have been proposed and are currently being considered by
federal, state and foreign legislatures with respect to such issues. The nature
of any new laws and regulations and the manner in which existing and new laws
and regulations may be interpreted and enforced cannot be fully determined. The
adoption of any future laws or regulations might decrease the Internet's growth,
decrease demand for our services, impose taxes or other costly technical
requirements or otherwise increase the cost of doing business or in some other
manner have a material adverse effect on us. In addition, applicability to the
Internet of existing laws governing issues such as property ownership,
copyrights and other intellectual property issues, taxation, libel, obscenity
and personal privacy is uncertain. As our services are available over the
Internet in multiple states, and as we facilitate sales by our customers to end
users located in such states, such jurisdictions may claim that we are required
to qualify to do business as a foreign corporation in each such state. Any such
new legislation or regulation, or the application of laws or regulations from
jurisdictions whose laws may not currently apply to our business, could have a
material adverse effect on us.
The Telecommunications Act of 1996 imposes criminal liability on persons sending
or displaying in a manner available to minors indecent material on an
interactive computer service such as the Internet and on an entity knowingly
permitting facilities under its control to be used for such activities. Sections
of the Communications Decency Act of 1996 that, among other things, proposed to
impose criminal penalties on anyone distributing "indecent" material to minors
over the Internet, were held to be unconstitutional by the United States Supreme
Court. Legislation similar to the Communications Decency Act could subject us
and/or our customers to potential liability, which in turn could have an adverse
effect on us. Additionally, the Child Online Protection Act of 1998 prohibits
and imposes criminal penalties and civil liability on anyone engaged in the
business of selling or transferring, by means of the World Wide Web, material
that is harmful to minors without restricting access to such material by persons
under seventeen years of age. Numerous states have adopted or are currently
considering similar types of legislation. The imposition upon us, our customers
or other persons of potential liability for such materials carried on or
disseminated through our systems could require us to implement measures to
reduce our exposure to such liability. Such measures may require the expenditure
of substantial resources or the discontinuation of some of our product or
service offerings. Further, the costs of defending against any such claims and
potential adverse outcomes of such claims could have a material adverse effect
on us. The Child Online Protection Act has been challenged by civil rights
organizations in part on the grounds that it violates the First Amendment. A
United States District Court has preliminary enjoined enforcement of the law
until final resolution of the case. A similar statute was held unconstitutional
by the United States Supreme Court in 1997.
The law relating to the liability of online service providers, private network
operators and Internet service providers for information carried on or
disseminated through the facilities of their networks is continuing to evolve
and remains unsettled. In the past, one federal district court in the northern
district of California, where we conduct business, has ruled that Internet
service providers could be found liable for copyright infringement as a result
of information disseminated through their networks. We cannot assure you that
similar claims will not be asserted in the future. Federal laws have been
enacted, however, which provide
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Internet service providers with immunity from publisher or speaker liability for
information that is disseminated through their networks when they are acting as
mere conduits of information. A Federal Court of Appeals has recently held that
the Telecommunications Act creates immunity from liability on the part of
Internet service providers for libel claims arising out of information
disseminated over their services by third-party content providers. In addition,
the Digital Millennium Copyright Act, enacted in 1998, creates a safe-harbor
from copyright infringement liability for Internet service providers if:
- the transmission was initiated by or at the direction of a person other than
us
- the transmission or routing is carried out through an automatic technical
process without selection of the material by us
- we do not elect the recipients of the material except as an automatic
response to the request of another person
- a copy of the material in the course of intermediate or transient storage is
maintained on the system in a manner accessible to no one other than the
recipients or for a period longer than is reasonably necessary for the
transmission or routing to occur and
- no modification of the transmission's content occurs through our system
We cannot assure you, however, that the Digital Millennium Copyright Act or any
other legislation will protect us from copyright infringement liability. We
maintain general liability insurance. However, any imposition of liability on us
for alleged negligence, intentional torts such as infringement, or other
liability could have a material adverse effect on us.
Both the provisioning of Internet access service and the provisioning of
underlying telecommunications services are affected by federal, state and local
regulation. The Federal Communications Commission exercises jurisdiction over
all facilities of, and services offered by, telecommunications carriers to the
extent that they involve the provision, origination or termination of
jurisdictionally interstate or international communications, including by
competitive local exchange carriers. The state regulatory commissions retain
jurisdiction over the same facilities and services to the extent they involve
origination or termination of jurisdictionally intrastate communications. In
addition, as a result of the passage of the Telecommunications Act, state and
federal regulators share responsibility for implementing and enforcing the
domestic pro-competitive policies of the Telecommunications Act. In particular,
state regulatory commissions have substantial oversight over the provision of
interconnection and non-discriminatory network access by incumbent local
exchange carriers. Municipal authorities generally have some jurisdiction over
access to rights of way, franchises, zoning and other matters of local concern.
Government agencies do not regulate Internet operations distinctly from their
regulation of businesses generally. However, the Federal Communications
Commission continues to review its regulatory position on the usage of the basic
network and communications facilities by Internet and other network service
providers. In an April 1998 report, the Federal Communications Commission
determined that Internet service providers should not be treated as
telecommunications carriers and should consequently not regulated. However, this
report stated that it expected the regulatory status of Internet service
providers in the future to continue to be uncertain. The report concluded that
some services offered over the Internet, such as phone-to-phone Internet
protocol telephony, may be functionally indistinguishable from traditional
telecommunications service offerings, and their non-regulated status may have to
be re-examined.
Changes in the regulatory structure and environment affecting the Internet
access market, including regulatory changes that directly or indirectly affect
telecommunications costs or increase the likelihood of competition from regional
Bell operating companies or other telecommunications companies, could have an
adverse effect on our business. Although the Federal Communications Commission
has decided not to allow local telephone companies to impose per-minute access
charges on Internet service providers, and that decision has been upheld by the
reviewing court, further regulatory and legislative consideration of this issue
is likely. In addition, some telephone companies are seeking relief through
state regulatory agencies. Such rules, if adopted, are likely to have a greater
impact on consumer-oriented Internet access providers than on
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business-oriented Internet service providers, such as us. Nonetheless, the
imposition of access charges would affect our costs of serving dial-up customers
and could have a material adverse effect on us.
We have recently received approval to operate as a competitive local exchange
carrier in California and intend to apply to receive similar status in other
states. Where we have competitive local exchange carriers status, regional Bell
operating companies are obligated to provide us with local connectivity loops at
prices that are substantially below the prices paid by Internet and other
network service providers that are not competitive local exchange carriers. As a
provider of domestic basic telecommunications services, particularly competitive
local exchange services, we could become subject to further regulation by the
Federal Communications Commission and/or other regulatory agencies, including
those at the state and local levels. The Telecommunications Act has caused
fundamental changes in the markets for local exchange services. In particular,
the Telecommunications Act and the Federal Communications Commission rules
issued pursuant to it mandate competition in local markets and require that
incumbent local exchange carriers interconnect with competitive local exchange
carriers. Under the provisions of the Telecommunications Act, the Federal
Communications Commission and state public utility commissions share
jurisdiction over the implementation of local competition, the Federal
Communication Commission was required to promulgate general rules and the state
commissions were required to arbitrate and approve individual agreements.
However, the Federal Communication Commission interconnection rules implementing
the Telecommunications Act were appealed and the U.S. Court of Appeals for the
Eighth Circuit issued a decision vacating the FCC's pricing rules, as well as
other portions of the FCC's interconnection rules, on the grounds that the FCC
had improperly intruded into matters reserved for state jurisdiction. On January
25, 1999, the Supreme Court largely reversed the Eighth Circuit's order, holding
that the FCC had general jurisdiction to implement local competition provisions
of the Telecommunications Act. In so doing, the Supreme Court stated that the
FCC has authority to set pricing guidelines for unbundled network elements, to
prevent incumbent local exchange carriers from disaggregating existing
combinations of network elements, and to establish "pick and choose" rules
regarding interconnection agreements (which would permit a carrier seeking
interconnection to "pick and choose" among the terms of service from other
interconnection agreements between the incumbent local exchange carriers and
other competitive local exchange carriers). This action reestablishes the
validity of many of the FCC rules vacated by the Eighth Circuit. Although the
Supreme Court affirmed the FCC's authority to develop pricing guidelines, the
Supreme Court did not evaluate the specific pricing methodology adopted by the
FCC and has remanded the case to the Eighth Circuit for further consideration.
In its decision, however, the Supreme Court also vacated the FCC's rule that
identifies the unbundled network elements that incumbent local exchange carriers
must provide to competitive local exchange carriers. The Supreme Court found
that the FCC had not adequately considered certain statutory criteria for
requiring incumbent local exchange carriers to make those network elements
available to competitive local exchange carriers and must reexamine the matter.
Thus, while the Supreme Court resolved many issues, including the FCC's
jurisdictional authority, other issues remain subject to further consideration
by the courts and the FCC. The Eighth Circuit has not yet reinstated the FCC's
rules that were affirmed by the Supreme Court, and several incumbent local
exchange carriers have asked the Eighth Circuit not to reinstate those rules
until further legal challenges have been resolved. We cannot predict the
ultimate disposition of those matters. The possible impact of this decision,
including the portion dealing with unbundled network elements, on existing
interconnection agreements between incumbent local exchange carriers and
competitive local exchange carriers or on agreements that may be negotiated in
the future also cannot be determined at this time.
A critical issue for competitive local exchange carriers is the right to receive
reciprocal compensation for the transport and termination of Internet traffic.
We believe that, under the Telecommunications Act and current Federal
Communications Commission rules, competitive local exchange carriers are
entitled to receive reciprocal compensation from incumbent local exchange
carriers. However, some incumbent local exchange carriers have disputed payment
of reciprocal compensation for Internet traffic, arguing that Internet service
provider traffic is not local traffic. Most states have required incumbent local
exchange carriers to pay Internet service providers reciprocal compensation.
However, federal regulators and some state regulators are currently considering
the proper jurisdictional classification of local calls placed to an Internet
service provider and whether Internet service provider calling triggers an
obligation to pay reciprocal compensation. On October 30, 1998, the Federal
Communications Commission determined that
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dedicated digital subscriber line service is an interstate service and properly
tariffed at the interstate level. On February 25, 1999, the Federal
Communications Commission ruled that calls to Internet service providers for
Internet access were long distance, not local, calls. However, the ruling upheld
existing reciprocal compensation agreements in some states, including
California. Because of our reciprocal compensation agreement with Pacific Bell,
we do not expect this ruling will have a material effect on our operating costs
in the near future. If incumbent local exchange carriers charge fees for
carrying Internet traffic and Internet access becomes more expensive in the
longer term, this ruling may have an adverse effect on our potential future
revenues as well as increase our costs.
As we become a competitor in local exchange markets, we will become subject to
state requirements regarding provision of intrastate services. These
requirements may include the filing of tariffs containing rates and conditions.
As a new entrant without market power, we expect to face a relatively flexible
regulatory environment. Nevertheless, it is possible that some states could
impose a variety of requirements on our operations, such as the approval of the
public utilities commission for the issuance of debt or equity or other
transactions that would result in a lien on our property used to provide
intrastate services.
EMPLOYEES
As of May 14, 1999, we had 61 employees, of which 25 were employed in sales and
marketing, 8 were assigned to engineering and service development, 14 were
employed in customer service and technical support, and 14 were in finance and
administration. We believe that our future success will depend in part upon our
continued ability to attract, hire and retain qualified personnel. The
competition for such personnel is intense, and we may not be able to identify,
attract and retain such personnel in the future. None of our employees is
represented by a labor union and management believes that our employee relations
are good.
FACILITIES
Our executive offices are located in San Francisco, California and consist of
approximately 4,650 square feet that are leased pursuant to an agreement that
expires in August 1999 with a three year renewal option. Additionally, we
sublease additional offices in San Francisco, California of approximately 3,500
square feet pursuant to an agreement that expires in September 1999. We also
have a network operating center in San Francisco of approximately 4,000 square
feet under a lease expiring in 2005. Beginning in the third quarter 1999, we
intend to commence relocating and consolidating our San Francisco operations. We
intend to complete the relocation and consolidation in the fourth quarter of
1999. We are also currently in negotiations with the lessor of our San Francisco
network operating center to lease additional space. We also intend to complete
the expansion of our main operational center in Sacramento, California in the
fourth quarter of 1999. This Sacramento facility consists of 4,000 square feet
under a lease agreement that expires in 2001. In addition, we lease
approximately 1,100 square feet in Vienna, Virginia (a major network access
point often referred to as MAE East) under an agreement that expires in 2000
with a five year renewal option. We also lease approximately 1,400 square feet
in the One Wilshire Building in Los Angeles under an agreement that expires in
2001. We lease facilities in 26 other cities throughout the United States for
our sales offices and regional network operating centers.
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MANAGEMENT
DIRECTORS, EXECUTIVE OFFICERS AND KEY EMPLOYEES
Our directors, director nominees, executive officers and key employees are as
follows:
<TABLE>
<CAPTION>
NAME AGE POSITIONS
---- --- ---------
<S> <C> <C>
DIRECTORS AND EXECUTIVE
OFFICERS:
James G. Couch............. 34 President, Chief Executive Officer, Chairman of the
Board and Secretary
Robert B. Murphy, Jr....... 47 Executive Vice President and Chief Financial Officer
John A. Blair.............. 52 Vice President of Business Development
Sam Traznik................ 34 Vice President of Direct Sales
Steven T. Stenberg......... 38 Director and Member of the Audit and Compensation
Committees
Jack M. Fields, Jr......... 47 Director Nominee and Member of the Compensation
Committee
Stephen C. Mott............ 49 Director Nominee
Thor Geir Ramleth.......... 40 Director Nominee and Member of the Audit Committee
KEY EMPLOYEES:
Robyn L. Raschke........... 34 Vice President of Finance
Philip A. Burkhart......... 37 Vice President of Channel Sales
Robert L. Ross............. 30 President, Integral Networking Corporation
Tracy M. Corrington........ 33 Director of Marketing
David L. Greenman.......... 31 Director of Systems Engineering
Richard J. Quosig.......... 45 National Sales Director
</TABLE>
JAMES G. COUCH founded our company in 1983 and has been President, Chief
Executive Officer and Chairman of the Board since incorporation in 1993. He
began developing applications for advanced networking systems with CRL and
worked closely with the National Science Foundation and Bellcore in the
transition of the Internet to a commercial medium.
ROBERT B. MURPHY, JR. has served as our Executive Vice President and Chief
Financial Officer since April 1999. Prior to joining us, Mr. Murphy was the
Executive Vice President/Chief Financial Officer of Savvis Communications
Corporation, a nationwide provider of access and Internet services, from 1997 to
April 1999. From 1992 to 1996, Mr. Murphy was the Senior Vice President/Chief
Financial Officer of Access America Telemanagement, a provider of
telecommunications services to small and medium-sized businesses. Mr. Murphy
also held positions as Vice President/Chief Financial Officer at United
Telemanagement, Inc. from 1989 to 1992 and at Belmac Corporation from 1988 to
1989. Prior to this, Mr. Murphy had seven years of investment banking
experience.
JOHN A. BLAIR has served as Vice President of Business Development since October
1998. Prior to joining us, Mr. Blair had been, since 1996, the President and a
director of Executive Strategies, his own management consulting company that
served the hi-tech and Internet service provider markets. From 1994 to 1996, Mr.
Blair was the Vice President of Operations with DG Systems, a company engaged in
digital distribution of advertising media. Mr. Blair also has more than 15 years
experience with financial institutions including Citibank N.A., Ameritrust and
Crocker Bank.
SAM TRAZNIK has served as our Vice President of Direct Sales since April 1999.
Mr. Traznik has worked previously with GTE Internetworking as its Regional Vice
President and General Manager, Pacific Northwest from 1997 to April 1999. From
1996 to 1997, Mr. Traznik was the President and General Manager of Advanced
Technology Marketing, a provider of Internet consulting services. From 1995 to
1996, Mr. Traznik was the Director of VAR Channels and Sales, Southern
California at Exodus
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<PAGE> 61
Communications, Inc., an Internet service provider From 1989 to 1995, Mr.
Traznik was the National Sales Manager at Qualstar Corporation, a provider of
data communications and data storage products.
JACK M. FIELDS, JR. has agreed to serve as a director of our company upon
completion of the offering. Since January 1997, Mr. Fields has been the Chief
Executive Officer of Twenty-First Century Group, a government affairs company,
and the Chief Executive Officer of Texana Global, a firm dealing with
entrepreneurial projects in the telecommunications industry. From 1981 to 1996,
Mr. Fields was a member of the United States Congress. During 1995 and 1996, Mr.
Fields served as Chairman of the House Telecommunications and Finance
Subcommittee, which authored the Telecommunications Act of 1996 and has
jurisdiction and oversight over the Federal Communications Commission and the
Securities and Exchange Commission. Mr. Fields is also a director of AIM
Management, Administaff, Inc. and Telscape International, Inc.
STEVEN T. STENBERG has served as a director of our company since March 1999.
Since 1992, Mr. Stenberg has been President and Chief Executive Officer of his
own accounting firm, which currently has seven employees, and is a certified
public accountant.
STEPHEN C. MOTT has agreed to serve as director of our company upon completion
of the offering. Since 1995, Mr. Mott has been the Chief Executive Officer of
CSI Management, Inc., an internet consulting and investment firm. From October
1995 until February 1998, Mr. Mott was the Senior Vice President -- Electronic
Commerce/New Ventures at Mastercard International Incorporated. From 1987 to
1995, Mr. Mott was the Chief Executive Officer, Chief Operating Officer and
Chief Financial Officer of Cognitive Systems, Inc., an artificial intelligence
and database mining technology company, and was the Chief Executive Officer of
Ingenia, Inc. when Ingenia purchased a portion of Cognitive Systems' business
from September 1994 to October 1995.
THOR GEIR RAMLETH has agreed to serve as director of our company upon completion
of the offering. Mr. Ramleth has been the Chief Executive Officer and a director
of ZeroDotNet, Inc. since April 1999. Mr. Ramleth was the President and Chief
Executive Officer of Genuity, Inc., an Internet service provider, from December
1995 to November 1998. Prior to that, Mr. Ramleth was the Manager of Commercial
Systems at Bechtel Group, Inc. from February 1995 to December 1995, where he was
responsible for consolidating all commercial systems activities. From February
1993 to February 1995, Mr. Ramleth was the Practice Director at Oracle
Corporation. Since January 1998, Mr. Ramleth has served as a director at
UWI.com.
ROBYN L. RASCHKE was appointed as our Vice President of Finance effective March
1, 1999. Prior to that, she served as Controller of our company since March
1997. She held the position of Assistant Controller at Greenbrier Capital
Corporation from 1992 to 1997. She has also worked at Touche Ross & Co. as a
senior auditor. Ms. Raschke has a masters degree in accounting from the
University of Georgia and is a certified public accountant.
PHILIP A. BURKHART has served as Vice President of Channel Sales since December
1998. Prior to that, he served as our Vice President of Operations since May
1995. He was instrumental in the build-out of our national backbone network and
developed the technical support/customer service and provisioning departments
within our company. Between 1991 and 1994, Mr. Burkhart worked for KBLCOM/Time
Warner where he managed its data, voice communications and video services and
Internet network throughout South Texas.
ROBERT L. ROSS founded Integral Networking Corporation in 1989 and continues to
serve as its President since our merger with Integral in December 1998. In 1996,
Mr. Ross developed Integral's remote management services. Mr. Ross was
instrumental in the completion of Integral's Network Operations Center, and, as
President of Integral, continues to provide support and vision to the remote
management service program. He has prior experience as a systems engineer at
Microage Corp. and is a Certified Novell Engineer.
TRACY M. CORRINGTON has served as Director of Marketing since September 1998 and
is responsible for marketing communications, marketing product development and
media relations. Ms. Corrington worked
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<PAGE> 62
previously with Teleport Communications Group, Inc. between 1994 and 1998,
holding management positions in marketing, public relations and communications.
Prior to that, she worked for seven years as a print investigative reporter with
several media/newspaper companies.
DAVID L. GREENMAN has served as Director of Systems Engineering since December
1998. Mr. Greenman has prior systems management and consulting experience at
Walnut Creek CDROM, Incorporated, where he has been the Systems Manager from
1995 to the present. He also was cofounder and principal architect in 1993 of
The FreeBSD Project, an operating support system that is currently used by a
variety of Fortune 500 businesses, and remains active in that project. Mr.
Greenman has also held positions with Artisans Northwest Productions, Telecom
Broadcasting, Inc., Clear View Satellite Systems and Reynolds Media Services.
RICHARD J. QUOSIG has served as National Sales Director since September 1998 and
has 12 years of telecommunications sales experience. Prior to joining us, Mr.
Quosig worked as General Manager of the flagship Silicon Valley office of
Frontier Global Center from 1997 to September 1998. From March 1996 to February
1997, Mr. Quosig worked as a Strategic Account Manager with Teleport
Communications Group, Inc. From January 1995 to January 1996, Mr. Quosig was a
Regional Sales Manager with Winstar Wireless, where he managed the eastern
portion of the United States. Prior to that, Mr. Quosig was a sales manager with
Nynex Mobile Communications from January 1994 to January 1995. Mr. Quosig was
also the national account manager at McCaw Communications (AT&T Wireless) from
January 1992 to January 1994.
BOARD COMMITTEES
The Audit Committee has the responsibility of reviewing our audited financial
statements and accounting practices, and to consider and recommend the
employment of, and approve the fee arrangements with, independent accountants
for both audit functions and for advisory and other consulting services. Upon
completion of the offering, the Audit Committee will be comprised of Messrs.
Ramleth and Stenberg. The Compensation Committee reviews and approves the
compensation and benefits for our key executive officers, administers our
employee benefit plans and makes recommendations to the Board of Directors
regarding such matters. Upon completion of the offering, the Compensation
Committee will be comprised of Messrs. Fields and Stenberg.
DIRECTORS COMPENSATION
Each non-employee director receives an initial option grant for 30,000 shares
upon becoming a director of CRL and a minimum annual option grant under our 1999
Stock Incentive Plan to purchase 5,000 shares. This amount may be increased for
any particular non-employee directors or all non-employee directors at the
discretion of the Board of Directors, but the maximum number of shares
underlying any annual option granted to any non-employee director may not exceed
50,000 shares. The initial option grants and annual option grants generally vest
over a period of three years. See "Management -- Stock Options." We also pay the
expenses of our non-employee directors in attending Board meetings. No
additional compensation is paid to any of our employee directors for serving on
our Board of Directors.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
Prior to this offering, our Board of Directors did not have a compensation
committee and all compensation decisions were made by the full Board of
Directors. In the year ended December 31, 1998, the full Board of Directors,
which solely consisted of James G. Couch, determined the compensation of all
executive officers, including Mr. Couch in his capacity as President and Chief
Executive Officer. Upon completion of this offering, the Compensation Committee
will make all compensation decisions. No interlocking relationship exists
between the Board of Directors or Compensation Committee and the board of
directors or compensation committee of any other company, nor has any such
interlocking relationship existed in the past.
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<PAGE> 63
EXECUTIVE COMPENSATION
The table below summarizes the annual and long term compensation paid by us
during the fiscal year ended December 31, 1998 to those persons who were, as of
December 31, 1998, (i) our President and Chief Executive Officer and (ii) our
other compensated executive officer whose total annual salary and bonus exceeded
$100,000 during the year ended December 31, 1998.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
AWARDS
ANNUAL COMPENSATION ------------
------------------------------------ SECURITIES
OTHER UNDERLYING
NAME AND PRINCIPAL POSITION SALARY BONUS COMPENSATION(1) OPTIONS(#)
--------------------------- -------- ----- --------------- ------------
<S> <C> <C> <C> <C>
James G. Couch........................ $329,527 $ -- -- --
President, Chief
Executive Officer and Director
Philip Burkhart....................... $115,972 $ -- $8,730 --
Vice President of Channel Sales
</TABLE>
- -------------------------
(1) The figures shown in the last column designated "Other Compensation"
represent our forgiveness of a portion of a loan made by CRL to Mr.
Burkhart. Until December 1998, Mr. Burkhart served as the Vice President of
Operations and was an executive officer of CRL.
No options were granted to the named executives in the last fiscal year.
AGGREGATED OPTION EXERCISES DURING LAST FISCAL YEAR AND FISCAL YEAR END OPTION
VALUES
The table below sets forth information regarding options exercised during the
year ended December 31, 1998 by the executive officers identified in the Summary
Compensation Table above, as well as the aggregate value of unexercised options
held by those executive officers at December 31, 1998. We have no outstanding
stock appreciation rights.
<TABLE>
<CAPTION>
VALUE OF UNEXERCISED
NUMBER OF UNEXERCISED IN-THE-MONEY OPTIONS
SHARES OPTIONS AT FISCAL YEAR END AT FISCAL YEAR END($)(1)
ACQUIRED ON VALUE --------------------------- ---------------------------
NAME EXERCISE(#) REALIZED EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- -------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
James G. Couch............ -- -- 38,421 153,685 $125,637 $502,550
Philip Burkhart........... -- -- 38,421 153,685 125,637 502,550
</TABLE>
- -------------------------
(1) There was no public trading market for the common stock as of December 31,
1998. Accordingly, these values have been calculated on the basis of fair
market value of common stock of $5.10 per share. Therefore, the value of
options in the table is calculated based on the $5.10 per share value, less
the applicable exercise price per share, multiplied by the number of shares
underlying these options.
401(k) PLAN
We have an employee profit sharing plan that is intended to qualify as a
deferred salary arrangement under Section 401(k) of the Internal Revenue Code.
Under our 401(k) Plan, our officers and other employees may elect to defer up to
15% of their compensation, subject to limitations under the Internal Revenue
Code. We may from time to time also make contributions on behalf of each officer
or other employee, which contributions vest depending on the length of
employment of each respective officer or employee. Amounts deferred are
deposited by us in a trust account for distribution to employees upon
retirement, attaining age 65, permanent disability, death, termination of
employment or the occurrence of conditions constituting extraordinary hardship.
We have not made matching contributions on behalf of our officers and other
employees in the past.
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<PAGE> 64
STOCK OPTIONS
1997 Equity Incentive Plan
On August 8, 1997, our Board of Directors adopted, and our stockholders
approved, the CRL Network Services, Inc. 1997 Equity Incentive Plan. The 1997
Equity Incentive Plan provides for the grant of incentive and non-statutory
options, restricted stock or stock bonuses to purchase up to an aggregate of the
number of shares of common stock equal to 10% of the total number of shares of
our authorized common stock. Incentive stock options can be granted only to our
full-time employees, including officers and directors who are also employees,
while non-statutory stock options, restricted stock and stock bonuses can be
granted to our employees, officers and directors, consultants and advisors.
Participants in the 1997 Equity Incentive Plan are selected by our Board of
Directors, or by a committee of directors selected by the Board of Directors.
The Board of Directors or the committee is empowered to determine the terms and
conditions of each award granted under the 1997 Equity Incentive Plan, subject
to limitations including that no option can have a term in excess of ten years,
or five years if granted to an employee owning more than 10% of our outstanding
common stock. In the event of:
- a merger or consolidation in which we are not the surviving corporation
(other than a merger or consolidation with a wholly-owned subsidiary or a
reincorporation in a different jurisdiction)
- our dissolution or liquidation
- a sale of all or substantially all of our assets
- any other transaction that qualifies as a "corporate action" under Section
424(a) of the Internal Revenue Code
the number of vested shares under all options granted pursuant to the 1997
Equity Incentive Plan will increase as if the holder had remained our employee
for an additional one year from the date of such event. The Board of Directors
may amend or modify the 1997 Equity Incentive Plan at any time subject to any
required shareholder approval. The 1997 Equity Incentive Plan will terminate on
the earliest of:
- August 7, 2007
- the date in which all shares available for issuance under the 1997 Equity
Incentive Plan have been issued as fully-vested shares
- the termination of all outstanding options in connection with a change of
control in which the successor corporation does not assume the 1997 Equity
Incentive Plan
As of March 31, 1999, options to purchase 1,006,320 shares, at a weighted
average exercise price of $2.18, were outstanding under the 1997 Equity
Incentive Plan. There have been no restricted stock awards or stock bonuses
awarded. We do not intend to make any further option grants under this plan.
1999 Stock Incentive Plan
On March 18, 1999, our Board of Directors adopted, and our stockholders
approved, the CRL Network Services, Inc. 1999 Stock Incentive Plan. The 1999
Stock Incentive Plan does not limit any award to any specified form or
structure. The types and amount of awards will be determined at the discretion
of the Board of Directors or committee of the Board of Directors empowered to
administer the 1999 Stock Incentive Plan. As amended on May 18, 1999, the
maximum number of shares of common stock that may be issued under the 1999 Stock
Incentive Plan is 2,000,000 shares. If incentive stock options are issued, these
options must comply with Section 422 of the Internal Revenue Code. Participants
in the 1999 Stock Incentive Plan are selected by a committee of directors
selected by the Board of Directors as a whole, each member of which must be a
"non-employee director" as this term is defined under the Securities Exchange
Act of 1934, as amended. This committee is also empowered to determine the terms
and conditions of each option or other stock-based award granted under the 1999
Stock Incentive Plan, subject to the limitations regarding incentive stock
options imposed by the Internal Revenue Code. The Board of
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Directors may amend or modify the 1999 Stock Incentive Plan at any time subject
to any required shareholder approval. The 1999 Stock Incentive Plan will
terminate on March 17, 2009. There are currently no options or other awards
outstanding under the 1999 Stock Incentive Plan.
EMPLOYMENT AGREEMENTS
We entered into an employment agreement with James G. Couch, our President and
Chief Executive Officer, on March 15, 1999. Under the terms of this employment
agreement, Mr. Couch will receive an annual base salary of $320,000, which may
be increased at the discretion of the Board of Directors, and at the discretion
of the Board of Directors, a bonus. The term of this employment agreement ends
on February 28, 2002, and is automatically renewable for consecutive one-year
periods unless advance notice is given by either party. We may terminate Mr.
Couch or Mr. Couch may voluntarily resign at any time. If Mr. Couch is
terminated by us without cause, he will be entitled to receive twelve months'
salary, payable in equal monthly installments over the twelve month period
following termination. We are not obligated to pay any specified amount if we
terminate Mr. Couch for cause.
In connection with our merger with Integral Networking Corporation, we entered
into an employment agreement and a non-competition agreement with Robert L.
Ross, Integral's President, to continue to serve as President of Integral
Networking Corporation, our wholly-owned subsidiary. The employment agreement's
term expires December 21, 2000. Mr. Ross receives a salary of at least $56,500
and a bonus of up to $100,000 based upon targeted personal and company
performance. We may terminate Mr. Ross at any time upon written notice. Mr. Ross
may terminate his employment with us if we fail to cure any breach within 30
days following written notice from him to us describing the breach. In the event
that we terminate Mr. Ross's employment without cause before the end of its
term, we are obligated to pay Mr. Ross his then current salary until the end of
the term or for three months, whichever is less.
For more information regarding our arrangements with our key employees, See
"Risk Factors -- Our success will depend on the continued performance of our key
personnel."
LIMITATION OF LIABILITY AND INDEMNIFICATION
Our Certificate of Incorporation and Bylaws require us to indemnify our
officers, directors, employees and other agents to the full extent permitted by
law, including those circumstances in which indemnification would otherwise be
discretionary. Delaware law provides that a corporation's certificate of
incorporation may contain a provision eliminating or limiting the personal
liability of a director for monetary damages for breach of their fiduciary
duties as directors, except for liability for any breach of their duty of
loyalty to the corporation or its stockholders, acts or omissions not in good
faith or which involve intentional misconduct or a knowing violation of law,
unlawful payments of dividends or unlawful stock repurchases or redemptions as
provided in Section 174 of the Delaware General Corporation Law or any
transaction from which the director derived an improper personal benefit. Our
Bylaws also permit us to advance expenses incurred by an indemnified director or
officer in connection with the defense of any action or proceeding arising out
of such director's or officer's status or service as one of our directors or
officers upon any undertaking by such director or officer to repay such advances
if it is ultimately determined that such director or officer is not entitled to
such indemnification. In addition, our Certificate of Incorporation expressly
authorizes the use of indemnification agreements. We currently have no
indemnification agreements with our officers, directors or employees.
CERTAIN TRANSACTIONS
We were party to an airplane leasing agreement with FBN Holding Corp., the sole
stockholder of which is James G. Couch, our President and Chief Executive
Officer. Under the terms of this agreement, we were able to lease aircraft from
FBN on an hourly basis at FBN's then prevailing rate, which included, without
additional charge, all fuel, insurance, repairs and maintenance. Changes in the
FBN prevailing hourly rate required 30 days written prior notice to us. This
agreement was terminated effective April 30, 1999. During 1998, we paid FBN an
aggregate of approximately $144,000 for our use, at various times during the
year,
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of an airplane owned by FBN. We believe the rates charged by FBN were equivalent
to the rates we could obtain from unaffiliated third parties.
In August 1995, we made a loan in the amount of $106,000 with an interest rate
of 7.5% to Mr. Couch. The promissory note delivered to us specified that the
entire principal amount plus accrued interest was to be repaid by July 10, 2000.
During 1998, the stockholder repaid the entire remaining amount outstanding
under the promissory note.
We have employment agreements for specified terms with Messrs. Couch and Ross.
See "Management -- Employment Agreements."
All future transactions among us, our directors, principal stockholders and
their affiliates will be approved by a majority of the Board of Directors,
including a majority of the independent and disinterested directors.
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<PAGE> 67
PRINCIPAL AND SELLING STOCKHOLDERS
The following table sets forth certain information regarding the beneficial
ownership of our common stock as of May 14, 1999, and as adjusted to reflect the
sale of 5,000,000 shares by us and the sale of 850,000 shares by the selling
stockholder, by (i) each of our directors and director nominees, (ii) each
person or group known to us to be the beneficial owner of more than 5% of our
outstanding common stock, (iii) our named executive officers whose total salary
and bonus exceeded $100,000 during the year ended December 31, 1998, (iv) the
selling stockholder, and (v) all of our directors and executive officers as a
group. Each of these persons has the sole voting and investment power with
respect to the shares owned. Except as otherwise indicated, the address of each
holder identified below is care of CRL Network Services, Inc., One Kearny
Street, Suite 1450, San Francisco, California 94108.
<TABLE>
<CAPTION>
SHARES NUMBER SHARES
BENEFICIALLY OWNED OF BENEFICIALLY OWNED
PRIOR TO OFFERING(1) SHARES AFTER THE OFFERING(1)
--------------------- BEING ---------------------
NAME NUMBER PERCENT OFFERED NUMBER PERCENT
---- ---------- ------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C>
James G. Couch.................... 16,953,757(2) 88.9% 850,000 16,103,757 66.9%
Philip Burkhart(3)................ 60,000(4) 0.3% -- 60,000 0.2%
Steven T. Stenberg................ -- -- -- -- --
Jack M. Fields, Jr. .............. -- -- -- -- --
Stephen C. Mott................... -- -- -- -- --
Thor Geir Ramleth................. -- -- -- -- --
All directors and executive
officers as a group (5
persons)........................ 16,953,757(2) 88.9% 850,000 16,103,757 66.9%
</TABLE>
- -------------------------
(1) In calculating beneficial and percentage ownership, all shares of common
stock that a named stockholder or specified group will have the right to
acquire within 60 days of the date of this prospectus upon exercise of
stock options are deemed to be outstanding for the purpose of computing the
ownership of such stockholder, but are not deemed to be outstanding for the
purpose of computing the percentage of common stock owned by any other
stockholder. As of May 14, 1999, an aggregate of 19,038,832 shares of
common stock were outstanding.
(2) Includes 38,421 shares issuable upon exercise of stock options held by Mr.
Couch but does not include 153,685 shares issuable upon exercise of stock
options that have been granted but are not exercisable within 60 days of
the date of this prospectus.
(3) Until December 1998, Mr. Burkhart was an executive officer of CRL, serving
as Vice President of Operations.
(4) Does not include 132,106 shares issuable upon exercise of stock options
which have been granted but are not exercisable within 60 days of the date
of this prospectus.
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DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 70,000,000 shares of common stock,
$.0001 par value, and 5,000,000 shares of preferred stock, $.01 par value. The
description of our capital stock below and provisions of our charter documents
is not complete and is qualified by our Certificate of Incorporation and Bylaws,
which are included as exhibits to the Registration Statement that this
prospectus is a part of.
COMMON STOCK
As of May 14, 1999, there were 19,038,832 shares of common stock outstanding
that were held of record by five stockholders. Upon completion of this offering,
there will be 24,038,832 shares of our common stock outstanding assuming no
exercise of the underwriters' over-allotment option and no exercise of
outstanding options. Holders of the common stock are entitled to one vote per
share on each matter submitted to a vote of our stockholders. Cumulative voting
for the election of directors is not authorized by our Certificate of
Incorporation, which means that the holders of a majority of the shares voted
can elect all of the directors then standing for election. Subject to
preferences that may be applicable to the holders of any outstanding series of
our preferred stock, each holder of common stock is entitled to receive
dividends, if any, as may be declared by our Board of Directors out of funds
legally available for the payment of dividends. We have not granted dividends in
the past and have no current plans to do so in the future. See "Dividend
Policy." Upon our liquidation, dissolution or winding up, our common
stockholders are entitled to share ratably in all of our assets which are
legally available for distribution, after payment of all debts and other
liabilities and the liquidation preference of any outstanding series of
preferred stock. Holders of common stock have no preemptive, subscription,
redemption or conversion rights. The outstanding shares of common stock are, and
the shares to be sold by us in the offering will be, when issued and delivered,
validly issued, fully-paid and non-assessable under the Delaware General
Corporation Law.
PREFERRED STOCK
As of May 14, 1999, no shares of preferred stock were outstanding. Our Board of
Directors is authorized, subject to any limitations of the Delaware General
Corporation Law, but without further vote or action by our stockholders, to
issue preferred stock in one or more series. The Board of Directors can
establish the number of shares of each series, to fix the designations, powers,
preferences and rights of the shares of each such series, including dividend
rights, dividend rates, conversion rights, voting rights, terms of redemption,
redemption prices and liquidation preferences. The Board of Directors can also
establish any qualifications, limitations or restrictions of the preferred
stock, and to increase or decrease the number of shares of any such series, but
not below the number of shares of such series then outstanding. The Board of
Directors may authorize the issuance of preferred stock with voting or
conversion rights that could adversely affect the voting power or other rights
of the holders of common stock. While providing flexibility in connection with
possible acquisitions and other corporate purposes, the issuance of preferred
stock may have the effect of delaying, deferring or preventing a change in
control of our company. We have no current plans to issue any shares of
preferred stock.
CERTAIN PROVISIONS IN OUR CERTIFICATE OF INCORPORATION AND BYLAWS
Stockholder Meetings
Our Bylaws provide that any action required to be taken or that may be taken at
any meeting of our stockholders may only be taken at a meeting of stockholders
and may not be taken by the written consent of the stockholders. Special
meetings of stockholders may only be called by the Board of Directors, the
Chairman of the Board or the President and only such business brought forth by
or at the direction of the Board of Directors or the stockholders may be
conducted. If a stockholder wishes to propose an item for consideration at any
meeting, the stockholder must give written notice to us not less than 90 days
before the meeting or, if later, the tenth day following the date of the first
public announcement of the meeting,
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<PAGE> 69
or such other date as is necessary to comply with applicable federal proxy
solicitation rules and other regulations.
Board of Directors
Our Bylaws provide that the number of directors may not be less than two nor
more than seven until changed by an amendment duly adopted by the Board of
Directors or stockholders. The Bylaws further provide that the exact number of
directors shall be fixed from time to time, within such range, by the Board of
Directors. Currently, the number of directors is fixed at two. The Bylaws
provide that the Board of Directors will be divided into three classes of
directors, who will serve for staggered three-year terms. The Bylaws do not
provide for cumulation of stockholder votes in the election of directors.
According to the Bylaws, each director may be removed only for cause and only by
the affirmative vote of at least 80% of the outstanding shares of common stock.
The Bylaws provide that nominations for election of directors may be made by the
Board of Directors or any stockholder entitled to vote in the election of
directors. If a stockholder wishes to nominate a director, the stockholder must
give written notice to us not less than 90 days before the meeting or, if later,
the tenth day following the date of the first public announcement of the
meeting.
Amendment of Our Charter Documents
Our Certificate of Incorporation may not be amended without the approval the
holders of a majority of our outstanding voting shares or the approval of at
least a majority of our directors. Our Bylaws contain provisions requiring the
affirmative vote of at least 80% of outstanding shares of common stock to amend,
alter or repeal the provisions of the Bylaws relating to the calling of special
meetings of stockholders, advance notice of stockholder business or nominees,
removal of directors or stockholder action without a meeting.
These provisions of our charter documents may delay, defer or prevent a change
in control without further action by our stockholders, may discourage bids for
the common stock at a premium over the market price of the common stock and may
adversely affect the market price of the common stock.
Effect of Delaware Anti-takeover Statute
We are subject to Section 203 of the Delaware General Corporation Law which,
subject to exceptions, prohibits a Delaware corporation from engaging in any
"business combination" which includes a merger or sale of more than 10% of the
corporation's assets, with any interested stockholder for a period of three
years following the date that such stockholder became an interested stockholder,
unless:
- before such date, the board of directors of the corporation approved either
the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder;
- upon completion of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time the
transaction commenced, excluding those shares owned by persons who are
directors and also officers; or
- on or after such date, the business combination is approved by the board of
directors and authorized at an annual or special meeting of stockholders,
and not by written consent, by the affirmative vote of at least two-thirds
of the outstanding voting stock which is not owned by the interested
stockholder.
In general, Section 203 defines an "interested stockholder" as any entity or
person beneficially owning 15% or more of the outstanding voting stock of the
corporation or any entity or person affiliated with or controlling or controlled
by such entity or person. See "Risk Factors -- Anti-takeover provisions could
negatively impact our stockholders."
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<PAGE> 70
TRANSFER AGENT AND REGISTRAR
The transfer agent and registrar for our common stock is ChaseMellon Shareholder
Services, L.L.C. Its address is 400 S. Hope Street, 4th Floor, Los Angeles, CA
90071 and its telephone number is (213) 553-9700.
LISTING
Application has been made to have our common stock approved for quotation on the
Nasdaq National Market under symbol "CRLX."
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<PAGE> 71
SHARES ELIGIBLE FOR FUTURE SALE
Prior to this offering, there has been no market for our common stock. Future
sales of substantial amounts of our common stock in the public market could
adversely affect prevailing market prices.
Upon completion of this offering, there will be 24,038,832 shares of our common
stock outstanding assuming no exercise of the underwriters' over-allotment
option and no exercise of outstanding options. Of these shares, the 5,850,000
shares sold in this offering will be freely tradable without restriction or
further registration under the Securities Act, except for any such shares held
by our "affiliates" (as defined below). The remaining 18,188,832 shares held by
existing stockholders are "restricted securities" as that term is defined in
Rule 144 under the Securities Act. Restricted securities and any shares
purchased in the offering by one of our "affiliates" may not be sold in the
public market without registration under the Securities Act or in compliance
with an applicable exemption from registration as provided in Rule 144 or 701
under the Securities Act, which rules are summarized below.
In general, under Rule 144 as currently in effect, a person or persons whose
shares are aggregated who has beneficially owned shares of our common stock for
at least one year including the holding period of any prior owner other than any
of our "affiliates," or who is one of our "affiliates," is entitled to sell
within any three-month period a number of shares or, in the case of an
"affiliate," a number of such restricted securities and shares purchased in the
public market, that does not exceed the greater of:
- 1% of the shares of our common stock then outstanding, equaling
approximately 240,000 shares immediately after this offering, or
- the average weekly trading volume of our common stock in the public market
during the four calendar weeks immediately before such sale.
Sales under Rule 144 are also subject to certain requirements as to the manner
of sale, notice and availability of current public information about us.
Under Rule 144(k), a person who has not been one of our "affiliates" at any time
during the 90 days before a sale, and who has beneficially owned shares proposed
to be sold for at least two years, is entitled to sell such shares without
regard to the volume limitations, manner of sale provisions or notice
requirements.
Subject to a number of limitations on the aggregate offering price of a
transaction and other conditions, Rule 701 of the Securities Act, as currently
in effect, permits the resale of securities originally purchased from us by our
employees, directors, officers, consultants or advisers prior to the closing of
this offering in connection with a compensatory stock or option plan or written
agreement, by persons who are not our "affiliates" subject only to the
manner-of-sale provisions of Rule 144 and by our affiliates under Rule 144
without compliance with its minimum holding period requirement.
All of our officers, directors and stockholders have generally agreed that they
will not, without the prior written consent of CIBC World Markets Corp., which
consent may be withheld in its sole discretion, and subject to limited
exceptions, directly or indirectly, sell, offer, contract or grant any option to
sell, make any short sale, pledge, transfer, establish an open "put equivalent
position" within the meaning of Rule 16a-1(h) under the Exchange Act, or
otherwise dispose of any shares of common stock, options or warrants to acquire
common stock, or securities exchangeable or exercisable for or convertible into
common stock currently owned either of record or beneficially by them or
announce the intention to do any of the acts listed above, for a period
beginning on the date of this prospectus and continuing to the date which is 180
days after the date of this prospectus. CIBC World Markets Corp. may, in its
sole discretion and any time without notice, release all or any portion of the
securities subject to these lock-up agreements. In addition, we have agreed
that, for a period of 180 days after the date of this prospectus, we will not,
without the consent of CIBC World Markets Corp., issue, offer, sell or grant
options to purchase or otherwise dispose of any equity securities or securities
convertible into or exchangeable for equity securities except for (i) the
issuance of shares of common stock offered hereby and (ii) the grant of options
to purchase shares of common stock under the 1999 Stock Incentive Plan and
shares of common
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<PAGE> 72
stock issued upon the exercise of outstanding options on or after the date of
this prospectus. See "Underwriting."
There are no restrictions on resale with respect to any of our securities, other
than restrictions imposed by lock-up agreements and applicable securities laws.
As a result of the lock-up agreements described above and the provisions of Rule
144 and 701, the restricted shares will be available for sale in the public
market immediately upon expiration of the 180 day lock-up period, subject to the
volume limitations and other conditions of Rule 144. Sales of our common stock
by these stockholders could have a material adverse effect on the trading price
of our common stock.
We have granted options to purchase up to 1,006,320 shares of common stock under
the 1997 Equity Incentive Plan of which, options to purchase 60,000 shares have
been exercised as of May 14, 1999. Concurrently with the sale of the shares
offered hereby, we intend to grant options to purchase an additional 350,000
shares of common stock pursuant to the 1999 Equity Incentive Plan. An additional
1,650,000 shares currently are reserved for issuance under the 1999 Stock
Incentive Plan. No options are outstanding under the 1999 Stock Incentive Plan.
Immediately after this offering, we intend to register the sale of the shares of
common stock issuable under the 1997 Equity Incentive Plan and 1999 Stock
Incentive Plan under the Securities Act. See "Management -- Stock Options."
Accordingly, as awards under the stock option plans vest, shares issued upon
exercise of these stock options will be freely tradable and available for sale
in the open market, immediately after the 180-day lock-up agreements expire,
except such shares as may be acquired by one of our "affiliates."
On April 27, 1999, our principal stockholder, James Couch, sold 542,888 shares
of CRL common stock to ZeroDotNet, Inc. at a price equal to $9.21 per share in a
private transaction. Mr. Thor Geir Ramleth, who has agreed to serve as a
director of CRL upon completion of this offering, is the Chief Executive Officer
and a director of ZeroDotNet, Inc. In connection with this sale, CRL granted
registration rights to the buyer, including the right to demand one registration
for at least 50% of the purchased shares at any time during the period beginning
120 days after CRL's initial public offering through the second anniversary of
CRL's initial public offering. The registration rights terminate if all the
purchased shares could be sold in one transaction under Rule 144 without
exceeding the volume limitations of that rule. In addition, if we propose to
register any of our shares of common stock under the Securities Act, the buyer
is entitled to notice of and may include the purchased shares in the
registration. If the registration involves an underwriting, the underwriters may
eliminate shares in the registration and underwriting, and the shares included
in the registration must be allocated first to CRL, then to the buyer. CRL
agreed to provide the registration rights described above in exchange for the
buyer agreeing to enter into the lock-up agreement for a period of 180 days
after the date of this prospectus. The buyer must obtain a waiver of the lock-up
agreement to exercise the registration rights described above during the 180 day
period of the lock-up.
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<PAGE> 73
UNDERWRITING
CRL Network Services, Inc. and the selling stockholder have entered into an
underwriting agreement with the underwriters named below. CIBC World Markets
Corp. and Lehman Brothers Inc. are acting as representatives of the
underwriters.
The underwriting agreement provides for the purchase of a specific number of
shares of common stock by each of the underwriters. The underwriters'
obligations are several, which means that each underwriter is required to
purchase a specified number of shares, but is not responsible for the commitment
of any other underwriter to purchase shares. Subject to the terms and conditions
of the underwriting agreement, each underwriter has severally agreed to purchase
the number of shares of common stock set forth opposite its name below:
<TABLE>
<CAPTION>
UNDERWRITER NUMBER OF SHARES
----------- ----------------
<S> <C>
CIBC World Markets Corp. ...................................
Lehman Brothers Inc.........................................
DLJdirect Inc...............................................
---------
Total....................................................... 5,850,000
=========
</TABLE>
This is a firm commitment underwriting. This means that the underwriters have
agreed to purchase all of the shares offered by this prospectus (other than
those covered by the over-allotment option described below) if any are
purchased.
The representatives have advised CRL and the selling stockholder that the
underwriters propose to offer the shares directly to the public at the public
offering price that appears on the cover page of this prospectus. In addition,
the representatives may offer some of the shares to selected securities dealers
at such price less a concession of $ per share. The underwriter may also
allow, and such dealers may reallow, a concession not in excess of $ per
share to other dealers. After the shares are released for sale to the public,
the representatives may change the offering price and other selling terms at
various times. An electronic prospectus is available on the website maintained
by DLJdirect Inc.
CRL and the selling stockholder have granted the underwriters an over-allotment
option. This option, which is exercisable for up to 30 days after the date of
this prospectus, permits the underwriters to purchase a maximum of 877,500
additional shares from the selling stockholder or, at the selling stockholder's
option, CRL, to cover over-allotments. If the underwriters exercise all or part
of this option, they will purchase shares covered by the option at the initial
public offering price that appears on the cover page of this prospectus, less
the underwriting discount. If this option is exercised in full from the selling
stockholder, the total price to public will be $ , the total proceeds to
CRL will be $ and the total proceeds to the selling stockholder will be
$ . If this option is exercised in full from CRL, the total proceeds to
CRL will be $ and the total proceeds to the selling stockholder will be
$ . The underwriters have severally agreed that, to the extent the
over-allotment option is exercised, they will each purchase a number of
additional shares proportionate to the underwriter's initial amount reflected in
the foregoing table.
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<PAGE> 74
The following table provides information regarding the amount of the discount to
be paid to the underwriters by CRL and the selling stockholder.
<TABLE>
<CAPTION>
TOTAL WITH FULL TOTAL WITH FULL
EXERCISE OF EXERCISE OF
TOTAL WITHOUT EXERCISE OF OVER-ALLOTMENT OVER-ALLOTMENT
PER SHARE OVER-ALLOTMENT OPTION OPTION(1) OPTION(2)
--------- ------------------------- --------------- ---------------
<S> <C> <C> <C> <C>
CRL Network Services, Inc.........
Selling Stockholder...............
Total...................
</TABLE>
- -------------------------
(1) Assumes the over-allotment shares are sold by the selling stockholder.
(2) Assumes the over-allotment shares are sold by CRL.
CRL estimates that the total expenses of the offering to be paid by CRL,
excluding the underwriting discount, will be approximately $1,090,000.
CRL and the selling stockholder have agreed to indemnify the underwriters
against some specified liabilities, including liabilities under the Securities
Act of 1933.
CRL, its officers and directors and other stockholders have generally agreed to
a 180-day "lock up" with respect to 18,128,832 shares of common stock and other
CRL securities that they beneficially own, including securities that are
convertible into shares of common stock and securities that are exchangeable or
exercisable for shares of common stock. This means that, for a period of 180
days following the date of this prospectus, CRL and such persons may not offer,
sell, pledge or otherwise dispose of these CRL securities without the prior
written consent of CIBC World Markets Corp.
The representatives have informed CRL that they do not expect discretionary
sales by the underwriters to exceed five percent of the shares offered by this
prospectus.
There is no established trading market for the shares. The offering price for
the shares has been determined by CRL and the representatives, based on the
following factors:
- negotiations among CRL and the representatives
- prevailing market and economic conditions
- the financial information of CRL
- the history of, and the prospects for CRL
- CRL and the industry in which it competes
- an assessment of CRL management, its past and present operations, the
prospects for, and timing of, future revenues of CRL
- the present stage of CRL's development and the above factors in relation to
market values and valuation measures of other companies engaged in
activities similar to those of CRL's
The initial public offering price set forth on the cover page of this prospectus
should not, however, be considered an indication of the actual value of the
common stock. Such price is subject to change as a result of market conditions
and other factors. There can be no assurance that an active trading market will
develop for the common stock or that the common stock will trade in the public
market subsequent to this offering at or above the initial offering price.
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<PAGE> 75
Rules of the Securities and Exchange Commission may limit the ability of the
underwriters to bid for or purchase shares before the distribution of the shares
is completed. However, the underwriters may engage in the following activities
in accordance with the rules of the Securities and Exchange Commission:
- Stabilizing transactions -- The representatives may make bids or purchases
for the purpose of pegging, fixing or maintaining the price of the shares,
so long as stabilizing bids do not exceed a specified maximum.
- Over-allotments and syndicate covering transactions -- The underwriters may
create a short position in the shares by selling more shares than are set
forth on the cover page of this prospectus. If a short position is created
in connection with the offering, the representatives may engage in syndicate
covering transactions by purchasing shares in the open market. The
representatives may also elect to reduce any short position by exercising
all or part of the over-allotment option.
- Penalty bids -- If the representatives purchase shares in the open market in
a stabilizing transaction or syndicate covering transaction, they may
reclaim a selling concession from the underwriters and selling group members
who sold those shares as part of this offering.
Stabilization and syndicate covering transactions may cause the price of the
shares to be higher than it would be in the absence of such transactions. The
imposition of a penalty bid might also have an effect on the price of the shares
if it discourages resales of the shares.
Neither CRL nor the underwriters makes any representation or prediction as to
the effect that the transactions described above may have on the price of the
shares. These transactions may occur on the Nasdaq National Market or otherwise.
If such transactions are commenced, they may be discontinued without notice at
any time.
Neither CRL nor the underwriters makes any representation or prediction as to
the effect that the transactions described above may have on the price of the
shares. These transactions may occur on the Nasdaq National Market or otherwise.
If such transactions are commenced, they may be discontinued without notice at
any time.
LEGAL MATTERS
Certain legal matters with respect to the legality of the issuance of the shares
of common stock offered hereby will be passed upon for us and the selling
stockholder by Gibson, Dunn & Crutcher LLP, San Francisco, California. Certain
legal matters in connection with this offering will be passed upon for the
underwriters by Brobeck, Phleger & Harrison LLP, San Francisco, California.
EXPERTS
The financial statements included in this prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report appearing
herein in the registration statement, and have been so included in reliance upon
the report of such firm given upon their authority as experts in accounting and
auditing.
WHERE YOU CAN FIND MORE INFORMATION
We filed with the Securities and Exchange Commission a Registration Statement on
Form S-1 under the Securities Act with respect to the shares of common stock
offered hereby. This prospectus does not contain all of the information
contained in the Registration Statement and the exhibits and schedule filed with
the Registration Statement. For further information with respect to CRL Network
Services, Inc. and the common stock offered hereby, reference is made to the
Registration Statement and the exhibits and schedules filed as a part of the
Registration Statement. Statements contained in this prospectus concerning the
contents of any contract or any other document referred to are not necessarily
complete; reference is
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<PAGE> 76
made in each instance to the copy of such contract or document filed as an
exhibit to the Registration Statement. Each such statement is qualified in all
respects by such reference to such exhibit. The Registration Statement,
including exhibits and schedules thereto, may be inspected without charge at the
Securities and Exchange Commission's public reference facilities in Room 1024,
450 Fifth Street, N.W., Washington, D.C. 20549, and at the Securities and
Exchange Commission's regional offices located at the Northwest Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and Seven World
Trade Center, 13th Floor, New York, New York 10048, and copies of all or any
part of the Registration Statement may be obtained from such offices after
payment of fees prescribed by the Securities and Exchange Commission. The
Securities and Exchange Commission maintains a World Wide Web site that contains
reports, proxy and information statements and other information regarding
registrants that file electronically with the Securities and Exchange Commission
at http://www.sec.gov.
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<PAGE> 77
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Independent Auditors' Report................................ F-2
Consolidated Balance Sheets as of December 31, 1997 and 1998
and as of March 31, 1999 (unaudited)...................... F-3
Consolidated Statements of Operations for the Years ended
December 31, 1996, 1997 and 1998 and the Three Months
Ended March 31, 1998 and 1999 (unaudited)................. F-4
Consolidated Statements of Stockholders' Equity for the
Years ended December 31, 1996, 1997
and 1998 and March 31, 1999 (unaudited)................... F-5
Consolidated Statements of Cash Flows for the Years ended
December 31, 1996, 1997 and 1998 and the Three Months
Ended March 31, 1998 and 1999 (unaudited)................. F-6
Notes to Consolidated Financial Statements.................. F-7
</TABLE>
F-1
<PAGE> 78
INDEPENDENT AUDITORS' REPORT
To the Stockholders and Board of Directors of
CRL Network Services, Inc.:
We have audited the accompanying consolidated balance sheets of CRL Network
Services, Inc. and subsidiary as of December 31, 1997 and 1998, and the related
consolidated statements of operations, stockholders' equity and cash flows for
each of the three years in the period ended December 31, 1998. These financial
statements are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, such consolidated financial statements present fairly, in all
material respects, the financial position of CRL Network Services, Inc. and
subsidiary as of December 31, 1997 and 1998, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1998, in conformity with generally accepted accounting principles.
/s/ DELOITTE & TOUCHE LLP
San Francisco, California
March 18, 1999 (April 28, 1999 as to the last paragraph in Note 12)
F-2
<PAGE> 79
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31,
--------------- MARCH 31,
1997 1998 1999
------ ------ -----------
(UNAUDITED)
(NOTE 1)
<S> <C> <C> <C>
ASSETS
Current Assets:
Cash and equivalents...................................... $1,115 $ 840 $ 354
Accounts receivable, net of allowances for doubtful
accounts of $162, $484 and $484, respectively.......... 1,229 1,309 1,008
Deferred tax assets....................................... 101 85 85
Other..................................................... 161 131 645
------ ------ ------
Total current assets................................... 2,606 2,365 2,092
Property and equipment, net................................. 1,801 2,445 2,385
Other assets................................................ 48 45 45
------ ------ ------
Total assets...................................... $4,455 $4,855 4,522
====== ====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................................... $ 637 $ 892 $ 814
Deferred revenue.......................................... 603 594 217
Accrued liabilities....................................... 628 170 546
Current portion of long-term obligations.................. 166 270 280
Other..................................................... 18 9 6
------ ------ ------
Total current liabilities.............................. 2,052 1,935 1,863
Deferred tax liabilities.................................... 246 313 313
Long-term obligations....................................... 402 847 822
------ ------ ------
Total liabilities...................................... 2,700 3,095 2,998
Commitments and contingencies
Stockholders' equity:
Preferred stock, $.01 par value, 5,000,000 shares
authorized; none issued and outstanding................
Common stock, $0.0001 par value, 70,000,000 shares
authorized; 18,978,832 shares issued and outstanding... 6 6 6
Common stock options...................................... 948 1,046
Deferred stock compensation............................... (792) (739)
Retained earnings......................................... 1,749 1,598 1,211
------ ------ ------
Total stockholders' equity............................. 1,755 1,760 1,524
------ ------ ------
Total liabilities and stockholders' equity........ $4,455 $4,855 4,522
====== ====== ======
</TABLE>
See notes to the consolidated financial statements.
F-3
<PAGE> 80
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
-------------------------- ----------------
1996 1997 1998 1998 1999
------ ------ ------ ------ ------
(UNAUDITED)
(NOTE 1)
<S> <C> <C> <C> <C> <C>
REVENUES:
Colocation and internet connectivity........ $4,600 $8,873 $9,681 $2,452 $2,142
Systems integration and hardware sales...... 1,753 1,502 2,011 529 861
------ ------ ------ ------ ------
Total revenues...................... 6,353 10,375 11,692 2,981 3,003
------ ------ ------ ------ ------
COSTS AND EXPENSES:
Cost of colocation and internet
connectivity............................. 2,219 3,631 4,871 1,211 1,229
Cost of system integration and services..... 1,127 1,009 1,295 288 569
Selling and marketing....................... 345 522 371 158 41
General and administrative.................. 1,840 2,997 4,124 847 1,325
Depreciation................................ 512 745 909 190 210
Stock-based compensation expense............ 156 151
------ ------ ------ ------ ------
Total costs and expenses............ 6,043 8,904 11,726 2,694 3,525
------ ------ ------ ------ ------
OPERATING INCOME (LOSS)....................... 310 1,471 (34) 287 (522)
Net interest income (expense)................. 1 5 (30) (1) (22)
------ ------ ------ ------ ------
Income (loss) before income taxes............. 311 1,476 (64) 286 (544)
Income tax provision (benefit)................ 150 591 87 83 (157)
------ ------ ------ ------ ------
NET INCOME (LOSS)............................. $ 161 $ 885 $ (151) $ 203 $ (387)
====== ====== ====== ====== ======
Net income (loss) per common share --
Basic and diluted........................... $ 0.01 $ 0.05 $(0.01) $ 0.01 $(0.02)
Weighted average common shares outstanding:
Basic....................................... 18,979 18,979 18,979 18,979 18,979
Diluted..................................... 18,979 19,142 18,979 19,283 18,979
</TABLE>
See notes to the consolidated financial statements.
F-4
<PAGE> 81
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
COMMON STOCK COMMON DEFERRED TOTAL
------------------- STOCK STOCK RETAINED STOCKHOLDERS'
SHARES AMOUNT OPTIONS COMPENSATION EARNINGS EQUITY
---------- ------ ------- ------------ -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1996........... 18,978,832 $6 $ $ $ 703 $ 709
Net income......................... 161 161
---------- -- ------ ----- ------ ------
Balance, December 31, 1996......... 18,978,832 6 864 870
Net income......................... 885 885
---------- -- ------ ----- ------ ------
Balance, December 31, 1997......... 18,978,832 6 1,749 1,755
Compensatory stock arrangements.... 948 (948)
Amortization of deferred stock
compensation..................... 156 156
Net loss........................... (151) (151)
---------- -- ------ ----- ------ ------
Balance, December 31, 1998......... 18,978,832 6 948 (792) 1,598 1,760
Compensatory stock arrangements
(unaudited)...................... 98 (98)
Amortization of deferred stock
compensation (unaudited)......... 151 151
Net loss (unaudited)............... (387) (387)
---------- -- ------ ----- ------ ------
Balance, March 31, 1999
(unaudited)...................... 18,978,832 $6 $1,046 $(739) $1,211 $1,524
========== == ====== ===== ====== ======
</TABLE>
See notes to the consolidated financial statements.
F-5
<PAGE> 82
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
<CAPTION>
THREE MONTHS
YEARS ENDED DECEMBER 31, ENDED MARCH 31,
------------------------- ---------------
1996 1997 1998 1998 1999
----- ------- ------- ------- -----
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Cash Flows from Operating Activities:
Net income (loss)................................. $ 161 $ 885 $ (151) $ 203 $(387)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Depreciation................................... 512 745 909 190 210
Stock-based compensation expense............... 156 151
Loss on disposal of fixed assets............... 13 3
Deferred taxes................................. 52 50 89 (14)
Changes in assets and liabilities:
Accounts receivable, net..................... (372) (588) (80) (119) 301
Other assets................................. 4 (64) 9 39 (514)
Accounts payable and accrued expenses........ 337 535 (209) (344) 298
Other liabilities............................ 250 170 (18) 34 (380)
----- ------- ------- ------- -----
Net cash provided by (used in) operating
activities.............................. 944 1,746 705 (11) (318)
----- ------- ------- ------- -----
Cash Flows from Investing Activities:
Additions to property and equipment............... (988) (1,336) (1,553) (275) (159)
Proceeds from sale of property and equipment...... 17 143 6
Decrease in notes receivable from related parties,
net............................................ 66 11 24
----- ------- ------- ------- -----
Net cash used in investing activities..... (905) (1,182) (1,529) (275) (153)
----- ------- ------- ------- -----
Cash Flows from Financing Activities:
Credit line borrowings............................ 358 703 136 48
Principal payments on borrowings.................. (14) (42) (154) (36) (63)
----- ------- ------- ------- -----
Net cash provided by (used in) financing
activities.............................. (14) 316 549 100 (15)
----- ------- ------- ------- -----
Net Increase (Decrease) in Cash and Equivalents..... 25 880 (275) (186) (486)
Cash and Equivalents at Beginning of Period......... 210 235 1,115 1,115 840
----- ------- ------- ------- -----
Cash and Equivalents at End of Period............... $ 235 $ 1,115 $ 840 $ 929 $ 354
===== ======= ======= ======= =====
Supplemental Disclosure of Cash Flow Information:
Cash paid for interest............................ $ 7 $ 23 $ 70 $ 13 $ 22
Cash paid for taxes............................... 165 166 577 351
Supplemental Disclosure of Noncash Financing
Activities:
Equipment acquired under capital lease............ $ 133 $ 133
</TABLE>
See notes to the consolidated financial statements.
F-6
<PAGE> 83
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996, 1997 AND 1998, AND
THE MONTHS ENDED MARCH 31, 1999 (UNAUDITED)
(IN THOUSANDS, EXCEPT FOR SHARE AND PER SHARE INFORMATION)
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES
THE COMPANY -- CRL Network Services, Inc. and subsidiary ("CRL" or the
"Company") was incorporated in the state of California in 1993. CRL is a Tier 1
Internet service provider focused on offering tailored Internet and network
management solutions to small and medium-sized businesses across the United
States through a national fiber-optic data network.
UNAUDITED INTERIM FINANCIAL INFORMATION -- The interim financial information as
of March 31, 1999 and for the three months ended March 31, 1998 and 1999 is
unaudited and has been prepared on the same basis as the audited financial
statements. In the opinion of management, such unaudited information includes
all adjustments (consisting only of normal recurring adjustments) necessary for
a fair presentation of the interim information. Operating results for the three
months ended March 31, 1999 are not necessarily indicative of the results that
may be expected for the year ending December 31, 1999.
PRINCIPLES OF CONSOLIDATION -- The consolidated financial statements include the
accounts of CRL and its wholly owned subsidiary. All intercompany balances and
transactions have been eliminated.
USE OF ESTIMATES -- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
CASH AND EQUIVALENTS -- The Company considers all highly liquid monetary
instruments with an original maturity of three months or less from the date of
purchase to be cash equivalents.
PROPERTY AND EQUIPMENT -- Property and equipment are recorded at cost and
depreciated using the straight-line method over their useful lives. Equipment
held under capital leases is amortized on the straight-line method over the
shorter of the lease term or the estimated useful life of the asset. Estimated
useful lives are as follows:
<TABLE>
<S> <C>
Machinery, equipment and purchased software................. 3 to 5
Furniture and fixtures...................................... 5 to 7
Airplane.................................................... 10
</TABLE>
REVENUE RECOGNITION -- Revenues from colocation and internet connectivity
include internet and secure private network connectivity, remote management
services and hosting services. Revenues from these services are generally earned
from fixed term contracts lasting from 12 to 36 months. Revenues are recognized
on a pro rata basis when the services are performed. Deferred revenue represents
amounts billed in advance of services not yet provided. Revenues from systems
integration and hardware sales result from short term contracts and revenue is
recognized when hardware is shipped and the installation and integration is
complete.
ADVERTISING EXPENSES -- All costs related to marketing and advertising the
Company's products are expensed in the periods incurred. Advertising expenses
were $80, $27 and $60 for 1996, 1997 and 1998, respectively.
INCOME TAXES -- The Company accounts for income taxes using the asset and
liability method in accordance with Statement of Financial Accounting Standards
No. 109 ("SFAS 109"). Under this method, deferred tax liabilities and assets are
determined based on the difference between the financial
F-7
<PAGE> 84
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
statement and tax bases of assets and liabilities using enacted tax rates in
effect for the year in which the differences are expected to reverse.
STOCK-BASED COMPENSATION -- The Company accounts for stock-based awards to
employees using the intrinsic value method in accordance with APB No. 25,
Accounting for Stock Issued to Employees. Accordingly, no accounting recognition
is given to stock options granted at fair market value until they are exercised.
Compensation expense related to employee stock options is recorded if, on the
date of grant, the fair value of the underlying stock exceeds the exercise
price.
CONCENTRATION OF CREDIT RISK -- Financial instruments that potentially subject
the Company to concentration of credit risk consist of trade receivables. The
Company's receivables are subject to geographic concentrations of credit risk.
This risk is mitigated by the Company's credit evaluation process and the
reasonably short collection terms. The Company does not require collateral or
other security to support accounts receivable and maintains reserves for
potential credit losses.
FINANCIAL INSTRUMENTS -- The Company's financial instruments include cash and
equivalents, accounts receivable and debt. At December 31, 1997 and 1998, the
carrying amounts of these instruments approximates their fair values.
IMPAIRMENT OF LONG-LIVED ASSETS AND LONG-LIVED ASSETS TO BE DISPOSED OF -- The
Company evaluates its long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of such assets or
intangibles may not be recoverable. Recoverability of assets to be held and used
is measured by a comparison of the carrying amount of an asset to future
undiscounted net cash flows expected to be generated by the asset. If such
assets are considered to be impaired, the impairment to be recognized is
measured by the amount by which the carrying amount of the assets exceeds the
fair value of the assets. Assets to be disposed of are reported at the lower of
the carrying amount or fair value less costs to sell.
NET INCOME (LOSS) PER SHARE -- Basic income (loss) per share excludes dilution
and is computed by dividing net income (loss) by the weighted-average number of
common shares outstanding for the period. Diluted income (loss) per share
reflects the potential dilution that could occur if options to issue common
stock were exercised.
STOCKHOLDERS' EQUITY -- In August 1997, the Company's Board of Directors
authorized a 2,318 for 1 stock split. The stock split was effective and
distributed to the sole stockholder of record on August 8, 1997. Additionally,
in December 1998, the Company's Board of Directors authorized a 20 for 1 stock
split. The stock split was effective and distributed to the sole stockholder of
record on December 2, 1998. All share information in the financial statements
has been restated to give retroactive recognition to the stock splits.
In December 1998, the Board also authorized an increase in the number of
authorized shares of common stock to 200,000,000 (not giving effect to the
reincorporation).
COMPREHENSIVE INCOME -- There are no differences between comprehensive income
and net income as reported in the Company's statements of operations.
RECLASSIFICATIONS -- Certain prior years amounts have been reclassified to
conform to the current year presentation. Such reclassifications had no effect
on stockholders' equity or net income (loss).
RECENTLY ISSUED ACCOUNTING STANDARDS -- In March 1998, the Accounting Standards
Executive Committee of the American Institute of Certified Public Accountants
issued SOP 98-1, Accounting for the Costs of Computer Software Developed or
Obtained for Internal Use. SOP 98-1 provides guidance for an enterprise on
accounting for the costs of computer software developed or obtained for internal
use. SOP 98-1 is
F-8
<PAGE> 85
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
effective for the Company in fiscal 1999. The Company anticipates that
accounting for transactions under SOP 98-1 will not have a material impact on
the Company's financial position or results of operations.
In June 1998, the FASB issued SFAS No. 133, Accounting for Derivative
Instruments and Hedging Activities, which defines derivatives, requires that all
derivatives be carried at fair value, and provides for hedge accounting when
conditions specified in SFAS No. 133 are met. SFAS No. 133 is effective for the
Company in fiscal 2000. The Company does not believe adoption of this statement
will have a material impact on the Company's financial position or results of
operations.
NOTE 2 -- MERGER
On December 21, 1998, the merger of Integral Networking Corporation ("Integral")
was completed. Under the terms of the Integral merger, which was accounted for
as a pooling-of-interests, 434,832 shares of CRL common stock were exchanged for
all of the outstanding Integral common shares at an exchange ratio of 5.80
shares of CRL for each share of Integral.
The financial information for all prior periods presented has been restated to
present the combined financial condition and results of operations for both
companies as if the merger had been in effect for all periods presented.
The following table presents a reconciliation of net sales and net income (loss)
previously reported by the company to those presented in the accompanying
consolidated financial statements.
<TABLE>
<CAPTION>
1996 1997 1998
------ ------- -------
<S> <C> <C> <C>
Net sales:
CRL.......................................... $5,206 $ 9,340 $ 9,929
Integral..................................... 1,147 1,035 1,763
------ ------- -------
Combined....................................... $6,353 $10,375 $11,692
------ ------- -------
Net income (loss):
CRL.......................................... $ 237 $ 891 $ (123)
Integral..................................... (76) (6) (28)
------ ------- -------
Combined....................................... $ 161 $ 885 $ (151)
====== ======= =======
</TABLE>
NOTE 3 -- ALLOWANCES FOR DOUBTFUL ACCOUNTS
Allowances for doubtful accounts are estimated and established based on
historical experience and specific circumstances of each customer. Additions to
the allowance are charged to general and administrative expenses. Accounts
receivable are written off against the allowance for doubtful accounts when an
account is deemed uncollectible. Recoveries on accounts receivable previously
charged off as uncollectible are credited to the allowance for doubtful
accounts. Changes in the allowance for doubtful accounts were as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
1996 1997 1998 MARCH 31, 1999
---- ----- ---- ------------------
(UNAUDITED)
<S> <C> <C> <C> <C>
Beginning balance................. $ 7 $ 96 $162 $ 484
Additions......................... 112 624 508 126
Writeoffs......................... (23) (558) (186) (126)
---- ----- ---- -----
Balance, end of period............ $ 96 $ 162 $484 484
==== ===== ==== =====
</TABLE>
F-9
<PAGE> 86
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4 -- PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
1997 1998
------ ------
<S> <C> <C>
Machinery, equipment and purchased software................ $2,892 $4,208
Furniture and equipment held under capital lease........... 265 135
Furniture and fixtures..................................... 191 558
Airplane................................................... 40 40
------ ------
Total............................................ 3,388 4,941
Less accumulated depreciation.............................. (1,587) (2,496)
------ ------
Total............................................ $1,801 $2,445
====== ======
</TABLE>
On April 15, 1997, the Company sold an airplane with book value of $148 for
$143.
The accumulated depreciation associated with furniture and equipment held under
capital lease was $70 and $67 at December 31, 1997 and 1998, respectively.
Effective January 1, 1998, the Company changed the estimated service lives of
its switches and routers from three to five years. The effect of this change in
estimate increased 1998 operating income by $237, increased net income by $142
and increased diluted earnings per share by $0.01.
NOTE 5 -- LONG-TERM OBLIGATIONS
On September 2, 1997, the Company entered into a revolving line of credit
agreement for $50 with a bank. As of December 31, 1998, the line had no
available credit and a variable interest rate that is 2.5% above the prime rate
(10.25% at December 31, 1998). All borrowings are to be repaid over a period of
no more than five years.
On September 26, 1997, the Company entered into a line of credit agreement for
$500 with a bank. As of December 31, 1998 the line has no available credit and
has a variable interest rate that is 1.75% above the prime rate (9.5% at
December 31, 1998). All borrowings are personally guaranteed by the Chief
Executive Officer and are to be repaid over a period of no more than 8 years. On
March 30, 1998, the Company entered into an equipment line of credit agreement
for $692 with a bank. The equipment line is available for one year at an
interest rate of prime plus 1.5% (9.25% at December 31, 1998). As of December
31, 1998 the line had $95 of available credit. All borrowings are personally
guaranteed by the Chief Executive Officer and are to be repaid over a period of
no more than eight years. At December 31, 1998, principal repayments under these
credit agreement are required as follows:
<TABLE>
<S> <C>
1999........................................................ $ 222
2000........................................................ 223
2001........................................................ 222
2002........................................................ 257
2003........................................................ 104
------
Total............................................. $1,028
======
</TABLE>
In September 1998 the Company entered into two additional credit agreements with
a bank. The first agreement makes $200 available for one year at an interest
rate of prime plus 1.5% for general business purpose. The second agreement is an
equipment line of credit for $650. The equipment line of credit is available for
one year with a variable interest rate of prime plus 1.8%. As of December 31,
1998 the Company has had no borrowings under these agreements. All future
borrowings are to be repaid over a period of no more than eight years.
F-10
<PAGE> 87
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 5 -- LONG-TERM OBLIGATIONS (CONTINUED)
Amounts borrowed under these agreements are secured by substantially all of the
Company's assets.
NOTE 6 -- INCOME TAXES
Income taxes consist of the following at December 31:
<TABLE>
<CAPTION>
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Current:
Federal............................................. $ 72 $412 $ 21
State............................................... 26 129 (23)
---- ---- ----
Total current............................... 98 541 (2)
---- ---- ----
Deferred:
Federal............................................. 42 49 41
State............................................... 10 1 48
---- ---- ----
Total deferred.............................. 52 50 89
---- ---- ----
Total provision............................. $150 $591 $ 87
==== ==== ====
</TABLE>
The primary components of the deferred tax accounts as of December 31 are as
follows:
<TABLE>
<CAPTION>
1996 1997 1998
----- ----- -----
<S> <C> <C> <C>
Current deferred tax assets (liabilities):
Allowance for bad debts and other................ $ 27 $ 111 $ 120
Deferred rent.................................... (48) 1
Other............................................ 46 (10) (36)
----- ----- -----
Total current deferred tax assets........ $ 25 $ 101 $ 85
===== ===== =====
Noncurrent deferred tax assets (liabilities):
Deferred rent.................................... $ 8 $ 8 $ 9
Depreciation..................................... (84) (215) (386)
Federal net operating loss....................... 89
Cash to accrual adjustment....................... (42) (33) (25)
Other............................................ (6)
----- ----- -----
Total noncurrent deferred tax
liabilities............................ $(118) $(246) $(313)
===== ===== =====
</TABLE>
F-11
<PAGE> 88
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 6 -- INCOME TAXES (CONTINUED)
The Company's effective tax rate differs from the federal statutory tax rate as
follows:
<TABLE>
<CAPTION>
1996 1997 1998
---- ---- ----
<S> <C> <C> <C>
Federal statutory tax rate.............................. 34% 34% (34)%
State taxes, net of federal benefit..................... 6 6 (6)
Tax effect of permanent items........................... 72
50% disallowance of state tax net operating loss........ 7
Nondeductible compensation expense...................... 97
Disallowance of net operating losses.................... 12
Other................................................... (4) (1)
-- -- ---
Effective tax rate...................................... 48% 39% 136%
== == ===
</TABLE>
No valuation allowance has been established for the deferred tax asset.
Management believes that the Company will be able to realize the tax benefit of
the deferred tax assets based on expected future taxable income and the future
reversal of taxable temporary differences.
NOTE 7 -- STOCK OPTION AND OTHER EMPLOYEE BENEFIT PLANS
401(k) PLAN -- In September 1997, the Company implemented a 401(k) plan covering
all employees who have met eligibility requirements specified in the 401(k)
plan. Under the 401(k) plan, employees may elect to contribute up to 15% of
their eligible compensation (to a maximum of $10) to the 401(k) plan, subject to
limitations. The Company may make matching contributions at its discretion. As
of December 31, 1997 and 1998, the Company had not made any contributions to the
401(k) plan.
STOCK BASED COMPENSATION PLAN -- In August 1997, the Board of Directors approved
and the Company adopted the 1997 Equity Incentive Plan (the "Plan"). Under the
Plan, the Company may grant options to purchase 1,812,107 shares of common stock
to officers and employees. These options generally expire 10 years from the date
of grant and vest over a period of five years.
Option activity under the plans is as follows:
<TABLE>
<CAPTION>
NUMBER OF WEIGHTED-AVERAGE
OPTIONS EXERCISE PRICE
--------- ----------------
<S> <C> <C>
Balance, January 1, 1997........................... -- $ --
Granted............................................ 647,547 1.83
Canceled........................................... (66,667) 1.83
--------- -----
Balance, December 31, 1997 (no shares vested)...... 580,880 1.83
Granted............................................ 468,773 2.40
Canceled........................................... (96,666) 1.83
--------- -----
Balance, December 31, 1998......................... 952,987 $2.11
Granted (unaudited)................................ 53,333 3.41
--------- -----
Balance, March 31, 1999 (unaudited)................ 1,006,320 $2.18
========= =====
</TABLE>
At December 31, 1998, 96,843 shares were exercisable and 899,120 were available
for grant under the 1997 stock option plan.
During the year ended December 31, 1998, deferred compensation of $948 was
recorded for options granted of which $156 was amortized to compensation
expense. The remaining deferred compensation will be amortized over the balance
of the five-year vesting period of the stock options.
F-12
<PAGE> 89
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 -- STOCK OPTION AND OTHER EMPLOYEE BENEFIT PLANS (CONTINUED)
During the first quarter, CRL granted 43,333 stock options at a weighted average
exercise price of $2.73. These grants were made under the 1997 Equity Incentive
Plan. These options were granted below the fair market value of the stock on the
grant date. These transactions resulted in total deferred compensation expense
of $98. The compensation expense will be recorded over the five-year vesting
period of the options.
The following table summarizes information about currently outstanding and
vested stock options at December 31, 1998:
<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS VESTED
--------------------------------------- -----------------------
WEIGHTED
AVERAGE WEIGHTED WEIGHTED
OUTSTANDING AT REMAINING AVERAGE VESTED AT AVERAGE
DECEMBER 31, CONTRACTUAL EXERCISE DECEMBER 31, EXERCISE
EXERCISE PRICE 1998 LIFE PRICE 1998 PRICE
-------------- -------------- ----------- -------- ------------ --------
<S> <C> <C> <C> <C> <C>
$1.83............................ 484,213 8.69 $1.83 96,843 $1.83
2.28............................ 332,107 9.71 2.28
2.73............................ 136,667 9.98 2.73
--------- ----- ------- -----
952,987 $2.11 96,843 $1.83
========= ===== ======= =====
</TABLE>
ADDITIONAL STOCK PLAN INFORMATION -- As discussed in Note 1, the Company
accounts for its stock-based awards to employees using the intrinsic value
method in accordance with APB No. 25, Accounting for Stock Issued to Employees,
and its related interpretations.
SFAS No. 123, Accounting for Stock-Based Compensation, requires the disclosure
of pro forma net income (loss) and earnings (loss) per share had the Company
adopted the fair value method since the Company's inception. Under SFAS No. 123,
the fair value of stock-based awards to employees is calculated through the use
of option pricing models, even though such models were developed to estimate the
fair value of freely tradable, fully transferable options without vesting
restrictions, which significantly differ from the Company's stock option awards.
The Company's calculations for employee grants were made using the minimum
option pricing model with the following weighted average assumptions:
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
------------
1997 1998
---- ----
<S> <C> <C>
Dividend yield.............................................. None None
Risk free interest rate..................................... 5.7% 4.4%
Expected term, in years..................................... 5.5 3
</TABLE>
The weighted average minimum value per option as of the date of grant for
options granted during 1997 and 1998 was $0.48 and $2.13, respectively.
If the computed minimum values of the Company's stock-based awards to employees
had been amortized to expense over the vesting period of the awards as specified
under SFAS No. 123, loss attributable to
F-13
<PAGE> 90
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 -- STOCK OPTION AND OTHER EMPLOYEE BENEFIT PLANS (CONTINUED)
common stockholders and basic and diluted loss per share on a pro forma basis
(as compared to such items as reported) would have been:
<TABLE>
<CAPTION>
YEARS ENDED
DECEMBER 31,
---------------
1997 1998
----- ------
<S> <C> <C>
Net income (loss) attributable to common stockholders:
As reported............................................... $ 885 $ (151)
Pro forma................................................. 828 (192)
Diluted net income (loss) per share:
As reported............................................... $0.05 $(0.01)
Pro forma................................................. 0.04 (0.01)
</TABLE>
NOTE 8 -- NET INCOME (LOSS) PER SHARE
The following is a reconciliation of the denominators used in computing basic
and diluted net income (loss) per share (in thousands):
<TABLE>
<CAPTION>
THREE MONTHS ENDED
YEARS ENDED DECEMBER 31, MARCH 31,
-------------------------- ------------------
1996 1997 1998 1998 1999
------ ------ ------ ------- -------
<S> <C> <C> <C> <C> <C>
Shares used in the computation of Basic EPS... 18,979 18,979 18,979 18,979 18,979
Effect of dilutive stock options.............. 163 304
------ ------ ------ ------ ------
Shares used in the computation of Diluted
EPS......................................... 18,979 19,142 18,979 19,283 18,979
====== ====== ====== ====== ======
</TABLE>
The Company had options to purchase 952,987 and 1,006,320 shares of common stock
at December 31, 1998, and March 31, 1999, respectively outstanding which could
potentially dilute basic earnings per share in the future, but were excluded in
the computation of diluted net loss per share in the periods presented, as their
effect would have been antidilutive.
NOTE 9 -- RELATED PARTY TRANSACTIONS
In August 1995, the Company received a 7.5% promissory note for $106 from a
stockholder for cash. The note specified that the entire principal plus accrued
interest were to be paid by July 10, 2000. During 1998, the stockholder repaid
the remaining amount outstanding.
In April 1996, the Company received an 8% promissory note for $25 from an
employee. The note specified that payment of principal and interest is to be
paid annually in the amount of $5 plus accrued interest until fully paid. At
December 31, 1998, the remaining balance on this note was $15.
In 1997 CRL entered into an agreement with FBN Holding Co. ("FBN") to lease
aircraft time. The sole owner of FBN is also the President and Chief Executive
Officer of CRL. This agreement may be canceled at any time by either party with
30-day notice. The amount paid to FBN for travel services under the agreement
amounted to $0, $104 and $144 for the years ended December 31, 1996, 1997 and
1998, respectively.
NOTE 10 -- GEOGRAPHIC INFORMATION AND MAJOR CUSTOMERS
CRL operates in a single industry segment encompassing internet access and
related managed data services and equipment sales. All of CRL's revenues in each
year is received from customers based in the
F-14
<PAGE> 91
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 10 -- GEOGRAPHIC INFORMATION AND MAJOR CUSTOMERS (CONTINUED)
United States. Approximately $5,221, $8,181 and $8,950 of CRL's revenues were
received from customers in the thirteen Western U.S. states and $5,010, $7,653
and $8,174 was received from customers in California for 1996, 1997 and 1998,
respectively.
No single customer accounted for 10% or more of CRL's net sales in any year.
NOTE 11 -- COMMITMENTS AND CONTINGENCIES
LEASES -- CRL leases office and storage space under operating leases with terms
ranging from month-to-month to six years at various times through 2005. Rent
expense under all leases was $145, $224 and $377 for 1996, 1997 and 1998,
respectively. Future minimum lease payments for capital lease obligations and
net lease payments under noncancelable operating leases with remaining terms in
excess of one year at December 31, 1998 are as follows:
<TABLE>
<CAPTION>
CAPITAL LEASE OPERATING
OBLIGATIONS LEASES
------------- ---------
<S> <C> <C>
Year ending December 31:
1999............................................... $49 $ 453
2000............................................... 38 326
2001............................................... 253
2002............................................... 205
2003............................................... 121
Thereafter......................................... 201
--- ------
Total minimum lease payments............... 87 $1,559
======
Less amount representing interest.................... (9)
---
Capital lease obligations............................ 78
Less current portion................................. (49)
---
Long-term portion.................................... $29
===
</TABLE>
TELECOMMUNICATIONS AND PEERING ARRANGEMENTS -- CRL enters into
telecommunications agreements with telephone companies who provide local access
for dial-up customers to CRL's Internet backbone. The terms of the service
agreements vary from one to two years and provide CRL with preferred rates. If
CRL prematurely cancels one of these service contracts, the service provider, at
its discretion, can charge the difference between their regular rates and the
preferred rate over the term of the service. Accordingly, the financial
commitment under these agreements would be the cancellation fee. In the past, no
service provider has exercised this option. Management believes that potential
additional charges, if any, from early cancellation of vendor service contracts
would not have a material effect on the financial statements.
CRL is party to numerous peering arrangements with other internet providers to
allow for the exchange of internet traffic. CRL does not record any revenue or
expense associated with these non-cash transactions as such transactions do not
represent the culmination of the earnings process and the fair value of such
transactions are not reasonably determinable. There is no financial commitment
under these peering arrangements.
Subject to few exceptions, CRL's peering relationships are not subject to any
written agreements and could be terminated at any time. For those peering
arrangements subject to contracts, there are no
F-15
<PAGE> 92
CRL NETWORK SERVICES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 11 -- COMMITMENTS AND CONTINGENCIES (CONTINUED)
minimum fixed charges for data exchange. Such agreements generally do impose
minimum usage requirements at levels which CRL has in the past always exceeded.
LEGAL MATTERS -- CRL is involved in a limited number of claims and legal actions
arising out of the normal course of business. Management does not expect that
the outcome of these cases will have a material effect on CRL's financial
position, results of operations or cash flow.
QWEST DISPUTE -- CRL is currently in a dispute with Qwest Communications
Corporation involving fiber cable they own connecting several cities. Qwest
agreed to lease fiber that was to be installed and available to CRL by specified
dates. Qwest did not complete installation as agreed. CRL believes that Qwest is
obligated to provide free service as a result of the installation delay. As of
December 31, 1998, Qwest has demanded payment of $136 which includes a credit of
$108 for free service. CRL disputes the installation dates and application of
service order terms and is seeking to negotiate a settlement of the dispute. As
of December 31, 1998, no accrual had been made for the Qwest dispute.
NOTE 12 -- SUBSEQUENT EVENTS
On March 11, 1999, CRL terminated its relationship with FBN effective April 30,
1999 (see Note 9).
On March 18, 1999, the Board of Directors adopted, subject to stockholder
approval, the 1999 Stock Incentive Plan. A total of 1,000,000 shares of common
stock have initially been reserved for issuance under the 1999 Stock Incentive
Plan.
On March 18, 1999, the Board of Directors adopted, subject to stockholder
approval, the reincorporation of CRL in the State of Delaware and the associated
exchange of one share of common stock of CRL for every three shares of common
stock of CRL's California predecessor. Such reincorporation and stock exchange
will become effective prior to the effective date of the initial public offering
contemplated by CRL. All share and per share amounts in these financial
statements have been adjusted to give effect to the reincorporation and one for
three stock exchange. In addition, upon reincorporation in the State of
Delaware, the Board of Directors is authorized to issue up to 5,000,000 shares
of preferred stock in one or more series.
On April 28, 1999 CRL completed the reincorporation of CRL in the State of
Delaware and the associated exchange of one share of common stock of CRL for
every three shares of common stock of CRL's California predecessor.
F-16
<PAGE> 93
- --------------------------------------------------------------------------------
LOGO
5,850,000 SHARES
COMMON STOCK
--------------------
PROSPECTUS
--------------------
, 1999
CIBC WORLD MARKETS
LEHMAN BROTHERS
------------------------
DLJdirect INC.
- --------------------------------------------------------------------------------
YOU MAY RELY ONLY ON THE INFORMATION CONTAINED IN THIS PROSPECTUS. WE HAVE NOT
AUTHORIZED ANYONE TO PROVIDE PROSPECTIVE INVESTORS WITH DIFFERENT OR ADDITIONAL
INFORMATION FROM THAT CONTAINED IN THIS PROSPECTUS. THIS PROSPECTUS IS NOT AN
OFFER TO SELL NOR IS IT SEEKING AN OFFER TO BUY THESE SECURITIES IN ANY
CIRCUMSTANCES WHERE THE OFFER OR SALE IS UNLAWFUL. THE INFORMATION CONTAINED IN
THIS PROSPECTUS IS CORRECT ONLY AS OF THE DATE OF THIS PROSPECTUS, REGARDLESS OF
THE TIME OF THE DELIVERY OF THIS PROSPECTUS OR ANY SALE OF THESE SECURITIES.
DEALER PROSPECTUS DELIVERY OBLIGATION: UNTIL , 1999 (25 DAYS AFTER
THE DATE OF THIS PROSPECTUS), ALL DEALERS THAT BUY, SELL OR TRADE THESE SHARES
OF COMMON STOCK, WHETHER OR NOT PARTICIPATING IN THIS OFFERING, MAY BE REQUIRED
TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE DEALERS' OBLIGATION TO
DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO THEIR
UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
<PAGE> 94
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 13. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
The following costs and expenses, other than underwriting discounts and
commissions, payable by the Registrant in connection with this offering. All
amounts are estimates except the SEC registration fee, the NASD filing fee and
the Nasdaq National Market listing fee.
<TABLE>
<S> <C>
SEC registration fee........................................ $ 28,054
NASD fee.................................................... 10,592
Nasdaq National Market listing fee.......................... 95,000
Printing and engraving costs................................ 140,000
Legal fees and expenses..................................... 450,000
Accounting fees and expenses................................ 300,000
Blue Sky fees and expenses.................................. 3,000
Transfer agent and registrar fees and expenses.............. 3,500
Miscellaneous............................................... 59,854
----------
Total............................................. $1,090,000
==========
</TABLE>
ITEM 14. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the General Corporation Law of the State of Delaware provides for
the indemnification of officers and directors under certain circumstances
against expenses incurred in successfully defending against a claim and
authorizes Delaware corporations to indemnify their officers and directors under
certain circumstances against expenses and liabilities incurred in legal
proceedings involving such persons because of their being or having been an
officer or director. Article VIII of the Registrant's Certificate of
Incorporation and the Registrant's Bylaws provide that all persons who the
Registrant is empowered to indemnify pursuant to the provisions of Section 145
of the Delaware General Corporation Law (or any similar provision or provisions
of applicable law at the time in effect), shall be indemnified by the Registrant
to the full extent permitted thereby. The foregoing right of indemnification
shall not be deemed to be exclusive of any other rights to which those seeking
indemnification may be entitled under any by-law, agreement, vote of
stockholders or disinterested directors, or otherwise.
Section 102(b) of the Delaware General Corporation Law permits a corporation, by
so providing in its certificate of incorporation, to eliminate or limit
director's liability to the corporation and its stockholders for monetary
damages arising out of certain alleged breaches of their fiduciary duty. Section
102(b)(7) provides that no such limitation of liability may affect a director's
liability with respect to any of the following: (i) breaches of the director's
duty of loyalty to the corporation or its stockholders; (ii) acts or omissions
not made in good faith or which involve intentional misconduct of knowing
violations of law; (iii) liability for dividends paid or stock repurchased or
redeemed in violation of the Delaware General Corporation Law; or (iv) any
transaction from which the director derived an improper personal benefit.
Section 102(b)(7) does not authorize any limitation on the ability of the
corporation or its stockholders to obtain injunctive relief, specific
performance or other equitable relief against directors.
Reference is made to the Underwriting Agreement, the proposed form of which is
filed as Exhibit 1.1, pursuant to which the underwriters agree to indemnify the
directors and certain officers of the Registrant and certain other persons in
certain circumstances.
ITEM 15. RECENT SALES OF UNREGISTERED SECURITIES.
Since January 1, 1996, the Registrant's predecessor company has issued and sold
the following securities:
On December 21, 1998, in connection with the Registrant's merger with Integral
Networking Corporation, the Registrant issued 413,091 shares of its common stock
to Robert Ross and 21,741 shares of its common
II-1
<PAGE> 95
stock to Jim and Judy Linstruth (giving effect to the Registrant's
reincorporation in Delaware and the associated exchange of one share of common
stock of the Registrant for every three shares of common stock of CRL's
California predecessor), the three former shareholders of Integral Networking
Corporation, as consideration for all the outstanding shares of Integral
Networking Corporation.
The issuance and sale of the above securities were exempt from registration
under the Securities Act in reliance upon Section 4(2) of the Securities Act
promulgated thereunder. The recipients of securities in each such transaction
represented their intentions to acquire the securities for investment only and
not with a view to or for sale in connection with any distribution thereof, and
appropriate legends were affixed to the share certificates issued in such
transactions. All recipients had adequate access to information about the
Registrant.
On April 27, 1999, Philip Burkhart exercised an option to purchase 60,000 shares
of the Registrant's common stock for an aggregate exercise price of $109,800.
The issuance of these securities was exempt from registration under the
Securities Act in reliance on Rule 701 promulgated under the Securities Act.
Such issuance was made pursuant to the Registrant's 1997 Equity Incentive Plan.
On April 28, 1999, CRL Network Services, Inc., a California corporation ("CRL
California"), merged with and into its wholly-owned subsidiary, CRL Network
Services, Inc., a Delaware corporation ("CRL Delaware"). In connection with the
merger, CRL Delaware issued shares of its common stock to the holders of common
stock of CRL California, such that the holders of common stock of CRL California
received a proportionate interest in CRL Delaware common stock. The issuance of
the securities and such reincorporation were exempt from the registration
requirements of the Securities Act, due to the exemptions from registration
provided by Sections 3(a)(9) and 4(2) thereof.
ITEM 16. EXHIBITS
(a) Exhibits
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
1.1 Form of Underwriting Agreement.(1)
2.1 Certificate of Merger between the Registrant and CRL Network
Services, Inc., a California corporation ("CRL
California").(3)
3.1 Articles of Incorporation of CRL California.(1)
3.2 Certificate of Incorporation of the Registrant.(1)
3.3 Bylaws of CRL California.(1)
3.4 Bylaws of the Registrant.(3)
4.1 Specimen form of Registrant's Common Stock Certificate.
5.1 Opinion of Gibson, Dunn & Crutcher LLP.
10.1 Employment Agreement between the Registrant and James G.
Couch dated as of March 15, 1999.(1)
10.2 Employment Agreement between the Registrant and Robert A.
Ross dated December 21, 1998.(1)
10.3 1997 Equity Incentive Plan.(1)
10.4 1999 Stock Incentive Plan, as amended.
10.5 Equipment Lease between Saddleback Financial Corporation and
CRL Network Services, Inc. executed on June 12, 1997.(1)
10.6 Addendum to Lease between Saddleback Financial Corporation
and CRL Network Services, Inc. executed June 12, 1997.(1)
10.7 Mandatory Purchase Option Letter between Saddleback
Financial Corporation and CRL Network Services, Inc.
executed June 12, 1997.(1)
</TABLE>
II-2
<PAGE> 96
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.8 Wells Fargo Bank $500,000 Equipment Line of Credit made
available to CRL Network Services dated September 25,
1997.(1)
10.9 Wells Fargo Bank $692,000 Equipment Line of Credit made
available to CRL Network Services dated March 30, 1998.(1)
10.10 Wells Fargo Bank $650,000 Equipment Line of Credit made
available to CRL Network Services dated September 29,
1998.(1)
10.11 Wells Fargo Bank $200,000 PrimeLine of Credit made available
to CRL Network Services dated September 28, 1998.(1)
10.12** Agreement between Pacific Bell and CRL Network Services
dated as of September 22, 1998.
10.13** Master Services Agreement between GST-Telecom California
Inc. and CRL Network Services dated August 31, 1998.
10.14 Domestic (U.S.) Direct Peering Agreement between MCI
Telecommunications Corporation and CRL Network Services
dated August 1, 1998.(2)
10.15** Agreement between CRL Network Services, Inc. and the
National Aeronautics and Space Administration dated July 16,
1998.
10.16** Service Agreement between IXC Carrier, Inc. and CRL Network
Services dated April 22, 1996.
10.17** Amendment #1 to Service Agreement between IXC Carrier, Inc.
and CRL Network Services dated April 16, 1997.
10.18** Terms and Conditions Governing the Provision of Network
Connectivity Products and Services by Sprint dated January
6, 1998.
10.19** Private Line Services Agreement between Qwest Communications
Corporation and CRL Network Services dated October 10, 1997.
10.20 Reimbursable Space Act Agreement between the National
Aeronautics and Space Administration Ames Research Center
and CRL Network Services, Inc. dated December 3, 1996 and
executed March 7, 1997.(1)
10.21 Office Lease Agreement between Maria Chen, as Lessor and the
Registrant dated December 5, 1995.(1)
10.22 Amendment to lease by and between Maria Chen and the
Registrant dated December 1, 1998.(1)
10.23 The 120 Montgomery Street Office Lease dated February 4,
1994 between the Equitable Montgomery Company and Orrell &
Company, Inc.(1)
10.24 Sublease between Orrell & Company, Inc., 120 Montgomery
Associates, LLC and the Registrant dated February 20,
1998.(1)
10.25 Office Lease between WHLNF Real Estate Limited Partnership
and the Registrant dated August 28, 1998.(1)
10.26 Office Lease between One Wilshire Arcade Imperial, Ltd. by
Paramount Group, Inc. and the Registrant dated March 8,
1998.(1)
10.27 Deed of Lease between Gosnell Properties, Inc. and the
Registrant dated September 20, 1996.(1)
10.28 Standard Industrial Lease -- Multi Tenant between Robert A.
Bell and Bob Ross, d/b/a/ Integral Network Corporation dated
March 30, 1998.(1)
10.29 Qualified Retirement Plan and Trust Defined Contribution
Basic Plan Document.(1)
10.30 Defined Contribution Plan and Trust Adoption Agreement.(1)
10.31 Agreement and Plan of Reorganization among the Registrant,
Integral Networking Corporation, RMS Sub Inc. and the
shareholders of Integral Networking Corporation dated
December 21, 1998.(1)
10.32 U.S. Simply Business Premium Line Agreement between Integral
Networking Corporation and U.S. Bank dated September 2,
1997.(1)
</TABLE>
II-3
<PAGE> 97
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.33 Airplane Leasing Agreement dated February 15, 1999, between
the Registrant and FBN Holding Corp.(1)
21.1 Subsidiaries of the Registrant.(1)
23.1 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit
5.1).
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Jack M. Fields, Jr.(1)
23.4 Consent of Steven T. Stenberg.(1)
23.5 Consent of John A. Blair.(1)
23.6 Consent of Thor Geir Ramleth.(1)
23.7 Consent of Stephen C. Mott
24.1 Power of Attorney.(1)
24.2 Power of Attorney for Robert B. Murphy, Jr.(3)
27.1 Financial Data Schedule.(1)
</TABLE>
- -------------------------
** Certain information in this exhibit was omitted and filed separately with
the Securities and Exchange Commission pursuant to a confidential treatment
request as to omitted portions of the exhibit.
(1) Previously filed as an exhibit to the Registrant's Registration on Form S-1
(File No. 333-34793) filed with the Commission on March 22, 1999.
(2) Previously filed as an exhibit to Amendment No. 1 to the Registration
Statement filed with the Commission on April 2, 1999.
(3) Previously filed as an exhibit to Amendment No. 2 to the Registration
Statement filed with the Commission on April 28, 1999.
ITEM 17. UNDERTAKINGS
The Registrant hereby undertakes to the underwriters at the closing specified in
the underwriting agreement to provide certificates in such denominations and
registered in such names as required by the underwriters to permit prompt
delivery to each purchaser.
Insofar as indemnification for liabilities arising under the Securities Act of
1933, as amended (the "Securities Act") may be permitted to directors, officers
and controlling persons of the Registrant pursuant to the Delaware General
Corporation Law, the Registrant's Certificate of Incorporation, the Registrant's
Bylaws, or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Securities Act, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other than the
payment by the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(i) For purposes of determining any liability under the Securities Act, the
information omitted from the form of prospectus filed as part of this
Registration Statement in reliance upon Rule 430A and contained in a form
of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or
497(h) under the Act is part of this Registration Statement as of the time
it was declared effective.
(ii) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus
shall be deemed to be a new registration statement for the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
II-4
<PAGE> 98
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant has duly caused this Amendment No. 4 to the Registration Statement to
be signed on its behalf by the undersigned, thereunto duly authorized, in the
City of San Francisco, State of California, on the 18th day of May 1999.
CRL Network Services, Inc.
By: /s/ JAMES G. COUCH
------------------------------------
James G. Couch
President and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Amendment No. 4 to the Registration Statement on Form S-1 has been signed below
by the following persons in the capacities and on the dates indicated:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>
/s/ JAMES G. COUCH President, Chief Executive Officer, May 18, 1999
- ------------------------------------------ Chairman of the Board and Secretary
James G. Couch (Principal Executive Officer)
* Executive Vice President and Chief May 18, 1999
- ------------------------------------------ Financial Officer (Principal Financial
Robert B. Murphy, Jr. Officer)
* Vice President of Finance (Principal May 18, 1999
- ------------------------------------------ Accounting Officer)
Robyn L. Raschke
* Director May 18, 1999
- ------------------------------------------
Steven T. Stenberg
</TABLE>
* By: /s/ JAMES G. COUCH
-------------------------
James G. Couch
Attorney-in-fact
II-5
<PAGE> 99
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
1.1 Form of Underwriting Agreement.(1)
2.1 Certificate of Merger between the Registrant and CRL Network
Services, Inc., a California corporation ("CRL
California").(3)
3.1 Articles of Incorporation of CRL California.(1)
3.2 Certificate of Incorporation of the Registrant.(1)
3.3 Bylaws of CRL California.(1)
3.4 Bylaws of the Registrant.(3)
4.1 Specimen form of Registrant's Common Stock Certificate.
5.1 Opinion of Gibson, Dunn & Crutcher LLP.
10.1 Employment Agreement between the Registrant and James G.
Couch dated as of March 15, 1999.(1)
10.2 Employment Agreement between the Registrant and Robert A.
Ross dated December 21, 1998.(1)
10.3 1997 Equity Incentive Plan.(1)
10.4 1999 Stock Incentive Plan, as amended.
10.5 Equipment Lease between Saddleback Financial Corporation and
CRL Network Services, Inc. executed on June 12, 1997.(1)
10.6 Addendum to Lease between Saddleback Financial Corporation
and CRL Network Services, Inc. executed June 12, 1997.(1)
10.7 Mandatory Purchase Option Letter between Saddleback
Financial Corporation and CRL Network Services, Inc.
executed June 12, 1997.(1)
10.8 Wells Fargo Bank $500,000 Equipment Line of Credit made
available to CRL Network Services dated September 25,
1997.(1)
10.9 Wells Fargo Bank $692,000 Equipment Line of Credit made
available to CRL Network Services dated March 30, 1998.(1)
10.10 Wells Fargo Bank $650,000 Equipment Line of Credit made
available to CRL Network Services dated September 29,
1998.(1)
10.11 Wells Fargo Bank $200,000 PrimeLine of Credit made available
to CRL Network Services dated September 28, 1998.(1)
10.12** Agreement between Pacific Bell and CRL Network Services
dated as of September 22, 1998.
10.13** Master Services Agreement between GST-Telecom California
Inc. and CRL Network Services dated August 31, 1998.
10.14 Domestic (U.S.) Direct Peering Agreement between MCI
Telecommunications Corporation and CRL Network Services
dated August 1, 1998.(2)
10.15** Agreement between CRL Network Services, Inc. and the
National Aeronautics and Space Administration dated July 16,
1998.
10.16** Service Agreement between IXC Carrier, Inc. and CRL Network
Services dated April 22, 1996.
10.17** Amendment #1 to Service Agreement between IXC Carrier, Inc.
and CRL Network Services dated April 16, 1997.
10.18** Terms and Conditions Governing the Provision of Network
Connectivity Products and Services by Sprint dated January
6, 1998.
10.19** Private Line Services Agreement between Qwest Communications
Corporation and CRL Network Services dated October 10, 1997.
</TABLE>
<PAGE> 100
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
10.20 Reimbursable Space Act Agreement between the National
Aeronautics and Space Administration Ames Research Center
and CRL Network Services, Inc. dated December 3, 1996 and
executed March 7, 1997.(1)
10.21 Office Lease Agreement between Maria Chen, as Lessor and the
Registrant dated December 5, 1995.(1)
10.22 Amendment to lease by and between Maria Chen and the
Registrant dated December 1, 1998.(1)
10.23 The 120 Montgomery Street Office Lease dated February 4,
1994 between the Equitable Montgomery Company and Orrell &
Company, Inc.(1)
10.24 Sublease between Orrell & Company, Inc., 120 Montgomery
Associates, LLC and the Registrant dated February 20,
1998.(1)
10.25 Office Lease between WHLNF Real Estate Limited Partnership
and the Registrant dated August 28, 1998.(1)
10.26 Office Lease between One Wilshire Arcade Imperial, Ltd. by
Paramount Group, Inc. and the Registrant dated March 8,
1998.(1)
10.27 Deed of Lease between Gosnell Properties, Inc. and the
Registrant dated September 20, 1996.(1)
10.28 Standard Industrial Lease -- Multi Tenant between Robert A.
Bell and Bob Ross, d/b/a/ Integral Network Corporation dated
March 30, 1998.(1)
10.29 Qualified Retirement Plan and Trust Defined Contribution
Basic Plan Document.(1)
10.30 Defined Contribution Plan and Trust Adoption Agreement.(1)
10.31 Agreement and Plan of Reorganization among the Registrant,
Integral Networking Corporation, RMS Sub Inc. and the
shareholders of Integral Networking Corporation dated
December 21, 1998.(1)
10.32 U.S. Simply Business Premium Line Agreement between Integral
Networking Corporation and U.S. Bank dated September 2,
1997.(1)
10.33 Airplane Leasing Agreement dated February 15, 1999, between
the Registrant and FBN Holding Corp.(1)
21.1 Subsidiaries of the Registrant.(1)
23.1 Consent of Gibson, Dunn & Crutcher LLP (included in Exhibit
5.1).
23.2 Consent of Deloitte & Touche LLP.
23.3 Consent of Jack M. Fields, Jr.(1)
23.4 Consent of Steven T. Stenberg.(1)
23.5 Consent of John A. Blair.(1)
23.6 Consent of Thor Geir Ramleth.(1)
23.7 Consent of Stephen C. Mott
24.1 Power of Attorney.(1)
24.2 Power of Attorney for Robert B. Murphy, Jr.(3)
27.1 Financial Data Schedule.(1)
</TABLE>
- -------------------------
** Certain information in this exhibit was omitted and filed separately with
the Securities and Exchange Commission pursuant to a confidential treatment
request as to the omitted portions of the exhibit.
(1) Previously filed as an exhibit to the Registrant's Registration Statement on
Form S-1 (File No. 333-34793) (the "Registration Statement") filed with the
Commission on March 22, 1999.
(2) Previously filed as an exhibit to Amendment No. 1 to the Registration
Statement filed with the Commission on April 2, 1999.
(3) Previously filed as an exhibit to Amendment No. 2 to the Registration
Statement filed with the Commission on April 28, 1999.
<PAGE> 1
EXHIBIT 4.1
FRONT
COMMON
STOCK
COMMON
STOCK
INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE
CRL
THIS CERTIFICATE IS TRANSFERABLE IN
RIDGEFIELD PARK, NJ OR NEW YORK, NY
SEE REVERSE FOR CERTAIN DEFINITIONS
CUSIP 12626Y 10 4
THIS CERTIFIES THAT ________________ IS THE RECORD HOLDER OF
FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, $0.0001 PAR VALUE PER
SHARE, OF CRL NETWORK SERVICES, INC.
transferable on the books of the Corporation by the holder hereof in person or
by duly authorized attorney upon surrender of this Certificate properly
endorsed. This Certificate is not valid until countersigned by the Transfer
Agent and registered by the Registrar.
WITNESS the facsimile seal of the Corporation and the facsimile signatures of
its duly authorized officers.
Dated:
SECRETARY PRESIDENT AND CHIEF EXECUTIVE OFFICER
COUNTERSIGNED and registered:
CHASEMELLON SHAREHOLDER SERVICES, L.L.C.
TRANSFER AGENT and registrar
BY
AUTHORIZED SIGNATURE
<PAGE> 2
BACK
CRL NETWORK SERVICES, INC.
A statement of the powers, designations, preferences and relative,
participating, optional or other special rights of each class of stock or series
thereof and the qualifications, limitations or restrictions of such preferences
and/or rights as established, from time to time, by the Certificate of
Incorporation of the Corporation and by any certificate of determination, the
number of shares constituting each class and series, and the designations
thereof, may be obtained by the holder hereof upon request and without charge
from the Secretary of the Corporation at the principal office of the
Corporation.
The following abbreviations, when used in the inscription on the face of this
certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM N as tenants in common
TEN ENT N as tenants by the entireties
JT TEN N as joint tenants with right of
survivorship and not as tenants
in common
COM PROP N as community property
UNIF GIFT MIN ACT N ............ Custodian.............
(Cust) (Minor)
under Uniform Gifts to Minors
Act...............................................
(State)
UNIF TRF MIN ACT N ............ Custodian (until age......)
(Cust)
................... under Uniform Transfers
(Minor)
to Minors Act ....................................
(State)
Additional abbreviations may also be used though not in the above list.
FOR VALUE RECEIVED, hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)
Shares
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint
Attorney
to transfer the said stock on the books of the within named Corporation with
full power of substitution in the premises.
Dated
X
X
NOTICE:
<PAGE> 3
THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME(S) AS WRITTEN
UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR
ENLARGEMENT OR ANY CHANGE WHATEVER.
Signature(s) Guaranteed
By
THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS,
STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN
AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE
17Ad-15.
<PAGE> 1
EXHIBIT 5.1
[Gibson, Dunn & Crutcher LLP Letterhead]
May 18, 1999
(415) 393-8200 C 18949-00002
CRL Network Services, Inc.
One Kearny Street, Suite 1450
San Francisco, CA 94108
Re: CRL Network Services, Inc. - Form S-1
Registration Statement (No. 333-74793)
Ladies and Gentlemen:
We are acting as special counsel for CRL Network Services, Inc., a
Delaware corporation (the "Company"), in connection with the registration of up
to an aggregate of 6,727,500 shares of the Company's Common Stock, $.0001 par
value per share (the "Shares"), on the Registration Statement on Form S-1 (File
No. 333-74793), including amendments and exhibits thereto (the "Registration
Statement"), filed by the Company with the Securities and Exchange Commission
(the "Commission") under the Securities Act of 1933, as amended (the "Act"). Of
the 6,727,500 Shares, 877,500 Shares are subject to an option granted to the
Underwriters (as defined below) to cover overallotments. The Selling Stockholder
(as defined in the Registration Statement) proposes to sell 850,000 shares of
the Shares (1,727,500 of the Shares if all of the over-allotment option shares
are sold by the Selling Stockholder). We understand that the Company and Mr.
James G. Couch propose to sell the Shares to a group of underwriters (the
"Underwriters") represented by CIBC World Markets Corp. and Lehman Brothers Inc.
for offering to the public.
On the basis of such investigation as we have deemed necessary, we are
of the opinion that the Shares (i) have been duly authorized and (ii) when
issued and sold in the manner described in the Registration Statement and in
accordance with an underwriting agreement to be
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CRL Network Services, Inc.
May 18, 1999
Page 2
entered into among the Company, the Selling Stockholder and the Underwriters
substantially in the form filed as an exhibit to the Registration Statement,
will be legally issued, fully paid and nonassessable.
We are admitted to practice in California. We are not admitted to
practice in Delaware. However, we are generally familiar with Delaware General
Corporation Law and have made such review thereof as we consider necessary for
the purpose of rendering this opinion. Subject to the foregoing, this opinion is
limited to the Delaware General Corporation Law and the present federal laws of
the United States.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement and to the reference to this firm under the heading
"Legal Matters" contained in the prospectus that forms a part of the
Registration Statement. In giving this consent, we do not admit that we are
within the category of person whose consent is required under Section 7 of the
Act or the General Rules and Regulations of the Commission. This opinion is
rendered solely for your benefit and may not be otherwise copied, quoted or
relied upon without prior written consent.
Very truly yours,
/s/ Gibson, Dunn & Crutcher LLP
GIBSON, DUNN & CRUTCHER LLP
KRL/LAF/PLW
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EXHIBIT 10.4
1999 STOCK INCENTIVE PLAN
OF
CRL NETWORK SERVICES, INC.
March 18, 1999
as amended on
May 18, 1999
(All share amounts reflect the reincorporation
of the Company in Delaware)
SECTION 1. PURPOSE OF PLAN
The purpose of this 1999 Stock Incentive Plan (this "Plan") of CRL
Network Services, Inc. (the "Company"), is to enable the Company to attract,
retain and motivate its employees and consultants by providing for or increasing
the proprietary interests of such employees and consultants in the Company, and
to enable the Company to attract, retain and motivate its non-employee directors
and further align their interest with those of the stockholders of the Company
by providing for or increasing the proprietary interest of such directors in the
Company.
SECTION 2. PERSONS ELIGIBLE UNDER PLAN
Any person, including any director of the Company, who is an
officer or employee of or consultant to the Company or any of its subsidiaries
(an "Employee") and any director of the Company who is not an Employee (a
"Nonemployee Director") shall be eligible to be considered for the grant of
Awards (as defined herein); provided that only persons who are employees of the
Company shall be eligible to be considered for the grant of "Incentive Stock
Options" (as defined herein).
SECTION 3. AWARDS
(a) The Board of Directors or the Committee (as hereinafter
defined), on behalf of the Company, is authorized under this Plan to enter into
any type of arrangement with an Employee or a Nonemployee Director that is not
inconsistent with the provisions of this Plan and that, by its terms, involves
or might involve the issuance of (i) shares of Common Stock, par value $.0001
per share, of the Company (collectively "Common Shares"), or (ii) a right or
interest with an exercise or conversion privilege at a price related to the
Common Shares or with a value derived from the value of the Common Shares, which
right or interest may, but need not, constitute a Derivative Security (as such
term is defined in Rule 16a-1 promulgated under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as such rule may be amended from time to
time). The entering into of any such arrangement is referred to herein as the
"grant" of an "Award."
(b) Common Shares may be issued pursuant to an Award for any
lawful consideration as determined by the Committee, including, without
limitation, services rendered by the recipient of such Award.
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(c) Awards are not restricted to any specified form or structure
and may include, without limitation, sales or bonuses of stock, restricted
stock, stock options, reload stock options, stock purchase warrants, other
rights to acquire stock, securities convertible into or redeemable for stock,
stock appreciation rights, limited stock appreciation rights, phantom stock,
dividend equivalents, performance units or performance shares, and an Award may
consist of one such security or benefit or two or more of them in tandem or in
the alternative.
(d) Subject to the provisions of this Plan, the Committee, in its
sole and absolute discretion, shall determine all of the terms and conditions of
each Award granted under this Plan, which terms and conditions may include,
among other things:
(i) a provision permitting the recipient of such Award,
including any recipient who is a director or officer of the Company, to
pay the purchase price of the Common Shares or other property issuable
pursuant to such Award, and/or such recipient's tax withholding
obligation with respect to such issuance, in whole or in part, by any
one or more of the following:
(A) the delivery of cash or a promissory note, the
terms and conditions of which shall be determined by the
Committee,
(B) the delivery of previously owned shares of
capital stock of the Company (including "pyramiding") or other
property deemed acceptable by the Committee, provided that the
Company is not then prohibited from purchasing or acquiring
shares of its capital stock or such other property,
(C) a reduction in the amount of Common Shares or
other property otherwise issuable pursuant to such Award, or
(D) any other lawful consideration deemed
acceptable by the Committee.
(ii) a provision specifying the exercise or settlement
price for any option, stock appreciation right or similar Award, or
specifying the method by which such price is determined; provided, that,
if the Company is subject to the reporting requirements of the Exchange
Act, the exercise or settlement price of any option, stock appreciation
right or similar Award that is intended to qualify as performance based
compensation ("Performance Based Compensation") for purposes of Section
162(m) of the Internal Revenue Code of 1986, as amended (the "Code"),
shall be not less than the fair market value of a Common Share on the
date such Award is granted;
(iii) a provision relating to the exercisability and/or
vesting of Awards, lapse and non-lapse restrictions upon the Common
Shares obtained or obtainable under Awards or under the Plan and the
termination, expiration and/or forfeiture of Awards;
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(iv) a provision conditioning or accelerating the receipt
of benefits pursuant to such Award, either automatically or in the
discretion of the Committee, upon the occurrence of specified events,
including, without limitation, a change of control of the Company (as
defined by the Committee), an acquisition of a specified percentage of
the voting power of the Company, the dissolution or liquidation of the
Company, a sale of substantially all of the property and assets of the
Company or an event of the type described in Section 8 hereof; and/or
(v) any provisions required in order for such Award to
qualify as an incentive stock option (an "Incentive Stock Option") under
Section 422 of the Code, provided that the recipient of such Award is
eligible under the Code to receive an Incentive Stock Option, and, if
the Company is subject to the reporting requirements of the Exchange
Act, any provisions required in order for such Award to qualify (A) as
Performance Based Compensation and/or (B) for an exemption from Section
16 of the Exchange Act.
(e) Notwithstanding any other provision of this Plan, no
Nonemployee Director shall be granted Awards in excess of 50,000 shares of
Common Stock during any one calendar year. The limitation set forth in this
Section 3(e) shall be subject to adjustment as provided in Section 8 hereof, but
only to the extent such adjustment would not affect the status of compensation
attributable to Awards hereunder as Performance-Based Compensation.
SECTION 4. GRANTS TO NON-EMPLOYEE DIRECTORS
(a) Each non-employee director of the Company shall receive an
option to purchase a minimum of a number of shares of Common Stock upon such
director's appointment to the Board of Directors as is determined by resolution
of the Board of Directors. The terms and conditions of such award shall be
determined by the Committee.
(b) On the date of the Company's next annual meeting of
stockholders, and each subsequent year thereafter, each non-employee director
who has been re-elected as director shall receive an option to purchase
5,000 shares of Common Stock. The terms and conditions of such award shall
be determined by the Committee.
(c) In its discretion, the Committee may increase the number of
shares purchasable upon exercise of such option for any director individually,
provided that the total number of shares purchasable upon exercise of all
options granted to any non-employee director in any year shall not be greater
than 50,000 shares.
SECTION 5. STOCK SUBJECT TO PLAN
(a) The aggregate number of Common Shares that may be issued
pursuant to all Incentive Stock Options granted under this Plan shall not exceed
2,000,000, subject to adjustment as provided in Section 8 hereof.
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(b) The aggregate number of Common Shares issued and issuable
pursuant to all Awards (including Incentive Stock Options) granted under this
Plan shall not exceed 2,000,000, subject to adjustment as provided in Section
8 hereof.
(c) For purposes of Section 5(b) hereof, the aggregate number of
Common Shares issued and issuable pursuant to all Awards granted under this Plan
shall at any time be deemed to be equal to the sum of the following:
(i) the number of Common Shares that were issued prior to
such time pursuant to Awards granted under this Plan, other than Common
Shares that were subsequently reacquired by the Company pursuant to the
terms and conditions of such Awards and with respect to which the holder
thereof received no benefits of ownership such as dividends; plus
(ii) the number of Common Shares that were otherwise
issuable prior to such time pursuant to Awards granted under this Plan,
but that were withheld by the Company as payment of the purchase price
of the Common Shares issued pursuant to such Awards or as payment of the
recipient's tax withholding obligation with respect to such issuance;
plus
(iii) the maximum number of Common Shares issuable at or
after such time pursuant to Awards granted under this Plan prior to such
time.
(d) The "Fair Market Value" of a Common Share or other security
on any date (the "Determination Date") shall be determined as follows:
(i) If the Common Shares are not publicly traded on the
business day immediately preceding the Determination Date, then Fair
Market Value shall equal the price at which one could reasonably expect
such Common Shares to be sold in an arm's length transaction, for cash,
other than on an installment basis, to a person not employed by,
controlled by, in control of or under common control with the issuer of
such Common Shares. Such Fair Market Value shall be that which has
currently or most recently been determined for this purpose by the Board
or at the discretion of the Board, by an independent appraiser or
appraisers selected by the Board, in either case giving due
consideration to recent transactions involving shares of such Common
Shares, if any, the Company's net worth, prospective earning power and
dividend-paying capacity, the goodwill of the Company's business, the
issuer's industry position and its management, that Company's economic
outlook, the values of securities of issuers whose stock is publicly
traded and which are engaged in similar businesses, the effect of
transfer restrictions to which such Common Shares may be subject under
law and under the applicable terms of any contract governing such stock,
the absence of a public market for such Common Shares and such other
matters as the Board or its appraiser or appraisers deem pertinent. The
determination by the Board or its appraiser or appraisers of the Fair
Market Value shall, if not unreasonable, be conclusive and binding
notwithstanding the possibility that other persons might make a
different, and also reasonable, determination. If the Fair Market Value
to be used was thus fixed
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more than sixteen months prior to the day as of which Fair Market Value
is being determined, it shall in any event be no less than the book
value of the Common Shares being valued at the end of the most recent
period for which financial statements of the issuer are available; or
(ii) If the Common Shares are publicly traded on the
business day immediately preceding the Determination Date, then Fair
Market Value shall equal the closing price per Common Share or unit of
such other security on the business day immediately preceding the
Determination Date, as reported in The Wall Street Journal, Western
Edition (or, if such day is not a trading day in the principal
securities market or markets for such Common Shares, on the nearest
preceding trading day), as reported with respect to the market (or the
composite of markets, if more than one) in which shares of such Common
Shares are then traded, or, if no such closing prices are reported, on
the basis of the mean between the high bid and low asked prices that day
on the principal market or quotation system on which Common Shares are
then quoted, or, if not so quoted, as furnished by a professional
securities dealer making a market in the Common Shares selected by the
Board or the Committee.
SECTION 6. DURATION OF PLAN
Options shall not be granted under this Plan after March 17,
2009. Although Common Shares may be issued on or after March 17, 2009 pursuant
to Options granted prior to such date, no Common Shares shall be issued under
this Plan after March 16, 2019.
SECTION 7. ADMINISTRATION OF PLAN
(a) This Plan shall be administered by a committee (the
"Committee") of the Board of Directors of the Company (the "Board") consisting
of two or more directors, each of whom is a "non-employee director" (as such
term is defined in Rule 16b-3 promulgated under the Exchange Act, as such Rule
may be amended from time to time); provided, however, that in the event the
Committee is not comprised of two or more "non-employee directors," then (i) the
Committee shall only be authorized and empowered to recommend to the Board all
things necessary or desirable in connection with the administration of this
Plan, including, without limitation, the things listed in Section 7, (ii) all
recommendations of the Committee relating to this Plan shall be subject to final
approval by the Board and (iii) all references herein to the Committee shall be
deemed to refer to the Board; provided further, that unless otherwise determined
by the Board, with respect to any Award that is intended to qualify as
Performance-Based Compensation, the Plan shall be administered by a committee
consisting of two or more directors, each of whom is an "outside director" (as
such term is defined under Section 162(m) of the Code).
(b) Subject to the provisions of this Plan, the Committee shall
be authorized and empowered to do all things necessary or desirable in
connection with the administration of this Plan, including, without limitation,
the following:
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(i) adopt, amend and rescind rules and regulations
relating to this Plan;
(ii) determine which persons are Employees and to which of
such Employees, if any, Awards shall be granted hereunder;
(iii) grant Awards to Employees and Nonemployee Directors
(provided that Nonemployee Directors shall not be eligible to be
considered for the grant of Incentive Stock Options) and determine the
terms and conditions thereof, including (A) the number of Common Shares
issuable pursuant thereto and (B) the exercise price for any Awards;
(iv) determine whether, and the extent to which,
adjustments are required pursuant to Section 8 hereof; and
(v) interpret and construe this Plan and the terms and
conditions of all Awards granted hereunder.
SECTION 8. ADJUSTMENTS
If the outstanding securities of the class then subject to this
Plan are increased, decreased or exchanged for or converted into cash, property
or a different number or kind of securities, or if cash, property or securities
are distributed in respect of such outstanding securities, in either case as a
result of a reorganization, merger, consolidation, recapitalization,
restructuring, reclassification, dividend (other than a regular, quarterly cash
dividend) or other distribution, stock split, reverse stock split or the like,
or if substantially all of the property and assets of the Company are sold,
then, unless the terms of such transaction shall provide otherwise, the
Committee may make appropriate and proportionate adjustments in (a) the number
and type of shares or other securities or cash or other property that may be
acquired pursuant to Incentive Stock Options and other Awards theretofore
granted under this Plan, (b) the maximum number and type of shares or other
securities that may be issued pursuant to Incentive Stock Options and other
Awards thereafter granted under this Plan, and (c) the maximum number of Common
Shares for which options may be granted during any one calendar year; provided,
however, that no adjustment shall be made under this Section 8 to the number of
Common Shares that may be acquired pursuant to outstanding Incentive Stock
Options or the maximum number of Common Shares with respect to which Incentive
Stock Options may be granted under this Plan to the extent such adjustment would
result in such options being treated as other than Incentive Stock Options;
provided further that no such adjustment shall be made to the extent the
Committee determines that such adjustment would result in the disallowance of a
federal income tax deduction for compensation attributable to Options hereunder
by causing such compensation to be other than Performance-Based Compensation.
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SECTION 9. AMENDMENT AND TERMINATION OF PLAN
The Board may amend or terminate this Plan at any time and in any
manner; provided, however, that no such amendment or termination shall deprive
the recipient of any Award theretofore granted under this Plan, without the
consent of such recipient, of any of his or her rights thereunder or with
respect thereto; provided, further, that the Board shall not, without the
approval of the shareholders of the Company, amend the Plan in any manner that
requires such shareholder approval pursuant to the Code or any applicable
securities laws.
SECTION 10. EFFECTIVE DATE OF PLAN
The Stock Incentive Plan shall be effective as of March 18,
1999, the date upon which it was approved by the Board; provided, however, that
no Awards may be granted nor may Common Shares be issued under this Stock
Incentive Plan until it has been approved, directly or indirectly, by the
affirmative votes of the holders of a majority of the securities of the Company
present, or represented, and entitled to vote at a meeting duly held in
accordance with the laws of the State of Delaware.
SECTION 11. COMPLIANCE WITH OTHER LAWS AND REGULATIONS
This Plan, the grant and exercise of Awards thereunder, and the
obligation of the Company to sell and deliver Common Shares under such Awards,
shall be subject to all applicable federal and state laws, rules and regulations
and to such approvals by any governmental or regulatory agency as may be
required. The Company shall not be required to issue or deliver any certificates
for shares of Common Stock prior to the completion of any registration or
qualification of such shares under any federal or state law or issuance of any
ruling or regulation of any government body which the Company shall, in its sole
discretion, determine to be necessary or advisable.
SECTION 12. NO RIGHT TO COMPANY EMPLOYMENT
Nothing in this Plan or as a result of any Award granted pursuant to
this Plan shall confer on any individual any right to continue in the employ of
the Company or any of its subsidiaries or affiliates or interfere in any way
with the right of the Company (or its subsidiaries or affiliates, as applicable)
to terminate an individual's employment at any time, with or without cause. The
agreement evidencing an Award may contain such provisions as the Committee may
approve with respect to the effect of approved leaves of absence.
SECTION 13. LIABILITY OF COMPANY
The Company and any affiliate which is in existence or hereafter comes
into existence shall not be liable to an Employee, Nonemployee Director or other
persons as to:
(a) The Non-Issuance of Common Shares. The non-issuance or sale
of Common Shares as to which the Company has been unable to obtain from any
regulatory body having jurisdiction the authority deemed by the Company's
counsel to be necessary to the lawful issuance and sale of any Shares hereunder;
and
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(b) Tax Consequences. Any tax consequence expected, but not
realized, by any Employee or Nonemployee Director or other person due to the
issuance, exercise, settlement, cancellation or other transaction involving any
Award granted hereunder.
SECTION 14. GOVERNING LAW
This Plan and any Awards and agreements hereunder shall be interpreted
and construed in accordance with the laws of the State of Delaware and
applicable federal law.
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EXHIBIT 10.12
AGREEMENT
BETWEEN
PACIFIC BELL
AND
CRL NETWORK SERVICES
Certain portions of this document in Attachment 8 and Attachment 9 have been
omitted and filed separately with the Securities and Exchange Commission based
on a request for confidential treatment with respect to the omitted portions.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
Section Page
- ------- ----
<S> <C>
PREFACE 1
AGREEMENT 1
RECITALS 1
DEFINITIONS and ACRONYMS 2
GENERAL TERMS AND CONDITIONS 2
1. Reservation of Rights to Appeal or Petition for Reconsideration 2
2. Provision of Local Service and Unbundled Network Elements 2
3. Term of Agreement; Transitional Support 4
4. Good Faith Performance 5
5. Option to Obtain Local Services or Network Elements Under Other
Agreements 5
6. Responsibility of Each Party 5
7. Governmental Compliance 5
8. Responsibility For Environmental Contamination 6
9. Regulatory Matters 7
10. Liability and Indemnity 8
11. Audits and Inspections 10
12. Service Performance Measures and Related Remedies 12
13. Uncollectible or Unbillable Revenues 13
14. Customer Credit History 13
15. Force Majeure 14
16. Certain State and Local Taxes 15
17. Alternative Dispute Resolution 15
18. Notices 16
19. Confidentiality and Proprietary Information 17
20. Branding 19
21. Miscellaneous 19
</TABLE>
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ATTACHMENTS
Attachment 1 Definitions
Attachment 2 Acronyms
Attachment 3 Alternative Dispute Resolution
Attachment 4 Directory Listing Requirements
Attachment 5 Local Services Resale
Attachment 6 Specifications, Service Descriptions and Implementation
Schedule for Unbundled Network Elements
Attachment 7 Network Element Combinations
Attachment 8 Pricing
Attachment 9 Access to Verigate and LEX Operations Support Systems
Attachment 10 Ancillary Functions
Attachment 11 Provisioning and Ordering
Attachment 12 Maintenance
Attachment 13 Connectivity Billing and Recording
Attachment 14 Provision of Customer Usage Data
Attachment 15 Local Number Portability and Number Assignment
Attachment 16 Security
Attachment 17 Service Performance Measures and Related Remedies
Attachment 18 Interconnection
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PREFACE
AGREEMENT
This Agreement, which shall become effective as of the _____ day of
_________, 1998 ("Effective Date"), is entered into by and between CRL Network
Services ("CLEC"), a California corporation, having an office at One Kearny
Street, Suite 1450, San Francisco, CA and PACIFIC BELL ("PACIFIC"), a California
corporation, having an office at 2150 Webster St., Oakland, California.
RECITALS
WHEREAS, The Telecommunications Act of 1996 was signed into law on
February 8, 1996 (the "Act") and substantially amends the Communications Act of
1934; and
WHEREAS, the Act places certain duties and obligations upon, and
grants certain rights to, Telecommunications Carriers; and
WHEREAS, PACIFIC is an Incumbent Local Exchange Carrier; and
WHEREAS, PACIFIC is willing to sell unbundled Network Elements and
Ancillary Functions and additional features, as well as services for resale, on
the terms and subject to the conditions of this Agreement; and
WHEREAS, CLEC is a Telecommunications Carrier and has requested that
PACIFIC negotiate an Agreement with CLEC for the provision of interconnection,
unbundled Network Elements (including Ancillary Functions and additional
features), and services pursuant to the Act and in conformance with PACIFIC's
duties under the Act; and
WHEREAS, the Parties have arrived at this Agreement through voluntary
negotiations and arbitration undertaken pursuant to the Act,
NOW, THEREFORE, in consideration of the premises and the mutual
covenants of this Agreement, CLEC and PACIFIC hereby agree as follows:
DEFINITIONS AND ACRONYMS
For purposes of this Agreement, certain terms have been defined in
Attachment 1 and elsewhere in this Agreement to encompass meanings that may
differ from, or be in addition to, the normal connotation of the defined word.
Unless the context clearly indicates otherwise, any term defined or used in the
singular shall include the plural. The words "shall" and "will" are used
interchangeably throughout this Agreement and the use of either connotes a
mandatory requirement. The use of one or the other shall not mean a different
degree of right or obligation for either Party. A defined word intended to
convey its special meaning is capitalized when used. Other terms that are
capitalized, and not defined in this Agreement, shall have the meaning
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2
in the Act, unless the context clearly indicates otherwise. For convenience of
reference only, Attachment 2 provides a list of acronyms used throughout this
Agreement.
GENERAL TERMS AND CONDITIONS
1. RESERVATION OF RIGHTS TO APPEAL OR PETITION FOR RECONSIDERATION
1.1. The filing of this arbitrated Agreement with the Commission in
accordance with Decision No. 96-12-034 dated December 9,1996
("Decision") In the Matter of the Petition of AT&T
Communications of California, Inc. for Arbitration Pursuant to
Section 252 of the Telecommunications Act of 1996 to Establish
an Interconnection Agreement with Pacific Bell, Application
96-08-040 (Filed August 20,1996) does not in any way constitute
a waiver by either CLEC or PACIFIC of any right which either
Party may have to appeal or to petition the Commission for
reconsideration of any determination contained in the Decision,
or to seek modification of any language of the Agreement which
was included (or excluded) due to mistake or clear inadvertence
caused by the limited amount of time given to prepare this
Agreement under the Commission's rules.
2. PROVISION OF LOCAL SERVICE AND UNBUNDLED ELEMENTS
2.1. This Agreement and its Attachments are subject to the Act,
regulations thereunder and relevant FCC and Commission decisions
in effect on the Effective Date of this Agreement. The effect on
this Agreement of changes in the Act, regulations thereunder and
relevant FCC and Commission decisions is set forth in Section 9
of this Agreement.
2.2. This Agreement, which consists of this statement of General
Terms and Conditions, and Attachments 1 through 18, inclusive,
sets forth the terms, conditions and prices under which PACIFIC
agrees to provide to CLEC (a) services for resale (hereinafter
referred to as "Local Services") and (b) certain unbundled
Network Elements, Ancillary Functions and additional features
and (c) other services or combinations of such Local Services,
Network Elements, Ancillary Functions and other services
("Combinations") for CLEC's own use or for resale to others, and
for purposes of offering telecommunications services of any
kind. This Agreement also sets forth the terms and conditions
for the interconnection of CLEC's network to PACIFIC's network
and the reciprocal compensation for the transport and
termination of telecommunications traffic. Unless otherwise
provided in this Agreement, and except where not technically
feasible in a given area, PACIFIC will perform all of its
obligations hereunder throughout its entire service area,
provided, however, that PACIFIC is not required, except at
CLEC's request pursuant to Section 1.6 of Attachment 6, to
install new or improved facilities in areas where they do not
currently exist.
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3
2.3. Subject to this Agreement and its Attachments, the Network
Elements, Ancillary Functions, Combinations, Local Services, or
other services provided pursuant to this Agreement may be
connected to other Network Elements, Ancillary Functions,
Combinations, Local Services, or other services provided by
PACIFIC or to any Network Elements, Ancillary Functions,
Combinations, Local Services or other services provided by CLEC
itself or by any other vendor. Subject to the requirements of
this Agreement and its Attachments, CLEC may, at any time add,
delete, relocate or modify the Network Elements, Ancillary
Functions, Local Services, Combinations or other services
purchased hereunder.
2.4. PACIFIC will not discontinue any unbundled Network Element,
Ancillary Service or Combination thereof during the term of this
Agreement without CLEC's consent, except (i) to the extent
required by network changes or upgrades, in which event PACIFIC
will comply with the network disclosure requirements stated in
the Act and FCC regulations thereunder; or (ii) if required by a
final order of a court, the FCC or the Commission as a result of
remand or appeal of the FCC's First Interconnection Order. In
the event such a final order allows but does not require
discontinuance, PACIFIC may, on thirty (30) days written notice,
require that such terms be renegotiated, and the Parties shall
renegotiate in good faith such mutually acceptable new terms as
may be required or appropriate to reflect the results of such
action. In the event that such new terms are not renegotiated
within ninety (90) days after such notice, or if the Parties are
unable to agree, either Party may submit the matter to the
Alternative Dispute Resolution Process described in Attachment
3.
2.5. PACIFIC will not withdraw any Local Service without providing
one-hundred five (105) days advance notice, from the date of
notice to the date of withdrawal of the service, to CLEC of
PACIFIC's intent to withdraw the service, inclusive of the time
required to file and the Commission to consider an advice letter
to withdraw the service pursuant to General Order 96A. If
PACIFIC discontinues a Local Service or Combination of Local
Services, PACIFIC shall either (a) limit the discontinuance to
new customers and grandfather the service for all CLEC resale
customers who subscribe to the service as of the date of
discontinuance; or (b) offer to CLEC for resale an alternative
service, having substantially similar capabilities and terms and
conditions.
3. TERM OF AGREEMENT; TRANSITIONAL SUPPORT
3.1. This Agreement shall expire on 12/19/99, and thereafter the
Agreement shall continue in force and effect unless and until a
new agreement, addressing all of the terms of this Agreement,
becomes effective between the Parties. The Parties agree to
commence negotiations on a new agreement no less than six (6)
months before the end of the three (3) years after this
Agreement becomes effective. In the event that such new terms
are not renegotiated within such six (6) month
<PAGE> 7
4
period, either Party may submit the matter to the Alternative
Dispute Resolution Process described in Attachment 3.
3.2. PACIFIC recognizes that the Network Elements, Ancillary
Functions, Combinations, Local Services and other services
provided hereunder are vital to CLEC and must be continued
without interruption, and that CLEC may itself provide or retain
another vendor to provide such comparable Network Elements,
Ancillary Functions, Combinations, Local Services or other
services. PACIFIC and CLEC agree to cooperate in an orderly and
efficient transition to CLEC or another vendor. PACIFIC and CLEC
further agree to cooperate in effecting the orderly transition
to CLEC or another vendor such that the level and quality of the
Network Elements, Ancillary Functions, Combinations, Local
Services, and other services are not degraded and to exercise
their best efforts to effect an orderly and efficient
transition. CLEC shall be responsible for coordinating such
transition.
4. GOOD FAITH PERFORMANCE
In the performance of their obligations under this Agreement, the
Parties shall act in good faith and consistently with the intent of the
Act. Where notice, approval or similar action by a Party is permitted or
required by any provision of this Agreement (including, without
limitation, the obligation of the Parties to further negotiate the
resolution of new or open issues under this Agreement), such action
shall not be unreasonably delayed, withheld or conditioned.
5. OPTION TO OBTAIN LOCAL SERVICES OR NETWORK ELEMENTS UNDER OTHER
AGREEMENTS
At CLEC's request and pursuant to section 252 of the Act, regulations
thereunder and relevant court decisions, PACIFIC shall make available to
CLEC, without unreasonable delay, any interconnection, service or
network element contained in any agreement to which PACIFIC is a party
that has been filed and approved by the Commission.
6. RESPONSIBILITY OF EACH PARTY
Each Party is an independent contractor, and has and hereby retains the
right to exercise full control of and supervision over its own
performance of its obligations under this Agreement and retains full
control over the employment, direction, compensation and discharge of
all employees assisting in the performance of such obligations. Each
Party will be solely responsible for all matters relating to payment of
such employees, including compliance with social security taxes,
withholding taxes and all other regulations governing such matters. Each
Party will be solely responsible for proper handling, storage, transport
and disposal at its own expense of all (i) substances or materials that
it or its contractors or agents bring to, create or assume control over
at Work Locations or, (ii) Waste resulting therefrom or otherwise
generated in connection with its or its contractors' or agents'
activities at the Work Locations. Subject to the limitations on
liability and except as otherwise provided in this Agreement, each Party
<PAGE> 8
5
shall be responsible for (i) its own acts and performance of all
obligations imposed by Applicable Law in connection with its activities,
legal status and property, real or personal and, (ii) the acts of its
own affiliates, employees, agents and contractors during the performance
of that Party's obligations hereunder.
7. GOVERNMENTAL COMPLIANCE
CLEC and PACIFIC each shall comply at its own expense with all
Applicable Law that relates to (i) its obligations under or activities
in connection with this Agreement; or (ii) its activities undertaken at,
in connection with or relating to Work Locations. CLEC and PACIFIC each
agree to indemnify, defend (at the other Party's request) and save
harmless the other, each of its officers, directors and employees from
and against any losses, damages, claims, demands, suits, liabilities,
fines, penalties and expenses (including reasonable attorneys' fees)
that arise out of or result from (i) its failure or the failure of its
contractors or agents to so comply or (ii) any activity, duty or status
of it or its contractors or agents that triggers any legal obligation to
investigate or remediate environmental contamination. PACIFIC will be
solely responsible for obtaining from Governmental Authorities, building
owners, other carriers, and any other persons or entities, all rights
and privileges (including, but not limited to, space and power), which
are necessary for PACIFIC to provide the Network Elements, Ancillary
Functions, Combinations, Local Services and other services pursuant to
this Agreement. To the extent necessary, CLEC will cooperate with
PACIFIC in obtaining such rights and privileges.
8. RESPONSIBILITY FOR ENVIRONMENTAL CONTAMINATION
8.1. CLEC shall in no event be liable to PACIFIC for any costs
whatsoever resulting from the presence or release of any
environmental hazard that CLEC did not introduce to the affected
work location, provided that activities of CLEC or its agents
did not cause or contribute to a release. PACIFIC shall
indemnify, defend (at CLEC's request) and hold harmless CLEC,
each of its officers, directors and employees from and against
any losses, damages, claims, demands, suits, liabilities, fines,
penalties and expenses (including reasonable attorneys' fees)
that arise out of or result from (i) any environmental hazard
that PACIFIC, its contractors or agents introduce to the work
locations or (ii) the presence or release of any environmental
hazard for which PACIFIC is responsible under applicable law.
8.2. PACIFIC shall in no event be liable to CLEC for any costs
whatsoever resulting from the presence or release of any
environmental hazard that PACIFIC did not introduce to the
affected work location, provided that actions of PACIFIC or its
agents did not cause or contribute to a release. CLEC shall
indemnify, defend (at PACIFIC's request) and hold harmless
PACIFIC, each of its officers, directors and employees from and
against any losses, damages, claims, demands, suits,
liabilities, fines, penalties and expenses (including reasonable
attorneys fees) that arise out of or result from (i) any
environmental hazard that CLEC, its contractors
<PAGE> 9
6
or agents introduce to the work locations or (ii) the presence
or release of any environmental hazard for which CLEC is
responsible under applicable law.
9. REGULATORY MATTERS
9.1. PACIFIC shall be responsible for obtaining and keeping in effect
all FCC, state regulatory commission, franchise authority and
other regulatory approvals that may be required in connection
with the performance of its obligations under this Agreement.
CLEC shall be responsible for obtaining and keeping in effect
all FCC, state regulatory commission, franchise authority and
other regulatory approvals that may be required in connection
with its obligations under this Agreement, and with its offering
of services to CLEC Customers contemplated by this Agreement.
CLEC shall reasonably cooperate with PACIFIC in obtaining and
maintaining any required approvals for which PACIFIC is
responsible, and PACIFIC shall reasonably cooperate with CLEC in
obtaining and maintaining any required approvals for which CLEC
is responsible.
9.2. To the extent that PACIFIC is required by any Governmental
Authority to file a tariff or make another similar filing in
connection with the performance of any action that would
otherwise be governed by this Agreement, the terms of this
Agreement shall control, unless this Agreement links a term,
condition or price in this Agreement to a specific tariff, in
which case the terms of the tariff as modified from time to time
will apply. If, subsequent to the effective date of any tariff
incorporated by reference into this Agreement, PACIFIC is
ordered not to file tariffs with the state regulatory commission
or the FCC, or is permitted not to file tariffs (and elects not
to do so), either generally or for specific Network Elements,
Ancillary Functions, Combinations, Local Services or other
services provided hereunder, the terms and conditions of such
tariffs as of the date on which the requirement to file such
tariffs was lifted shall, to the degree not inconsistent with
this Agreement, be deemed incorporated in this Agreement by
reference.
9.3. In the event that any final and nonappealable legislative,
regulatory, judicial or other legal action renders this
Agreement or any Attachment hereto inoperable, materially
affects any material terms of this Agreement, or materially
affects the ability of CLEC or PACIFIC to perform any material
terms of this Agreement, CLEC or PACIFIC may, on thirty (30)
days written notice (delivered not later than thirty (30) days
following the date on which such action has become legally
binding and has otherwise become final and nonappealable)
require that such terms be renegotiated, and the Parties shall
renegotiate in good faith such mutually acceptable new terms as
may be required. In the event that such new terms are not
renegotiated within ninety (90) days after such notice, the
dispute shall be referred to the Alternative Dispute Resolution
procedures set forth in Section 17 and Attachment 3.
<PAGE> 10
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9.4. Pursuant to the Decision (at 11-12), unless the Parties
voluntarily agree otherwise, all terms of this Agreement will be
subject to modification based on future Commission decisions.
10. LIABILITY AND INDEMNITY
10.1. Liabilities of CLEC - CLEC's liability to PACIFIC during any
Contract Year resulting from any and all causes, other than as
specified in Sections 7, 8, 10.3 and 10.4, shall not exceed the
total of any amounts due and owing by CLEC to PACIFIC under this
Agreement during the Contract Year during which such cause
accrues or arises.
10.2. Liabilities of PACIFIC - PACIFIC's liability to CLEC during any
Contract Year resulting from any and all causes, other than as
specified in Sections 7, 8, 10.3 and 10.4, shall not exceed
Twenty Five Million Dollars ($25,000,000).
10.3. No Consequential Damages - NEITHER CLEC NOR PACIFIC SHALL BE
LIABLE TO THE OTHER PARTY FOR ANY INDIRECT, INCIDENTAL,
CONSEQUENTIAL, RELIANCE, OR SPECIAL DAMAGES SUFFERED BY SUCH
OTHER PARTY (INCLUDING WITHOUT LIMITATION DAMAGES FOR HARM TO
BUSINESS, LOST REVENUES, LOST SAVINGS, OR LOST PROFITS SUFFERED
BY SUCH OTHER PARTY), REGARDLESS OF THE FORM OF ACTION, WHETHER
IN CONTRACT, WARRANTY, STRICT LIABILITY, OR TORT, INCLUDING
WITHOUT LIMITATION NEGLIGENCE OF ANY KIND WHETHER ACTIVE OR
PASSIVE, AND REGARDLESS OF WHETHER THE PARTIES KNEW OF THE
POSSIBILITY THAT SUCH DAMAGES COULD RESULT. EACH PARTY HEREBY
RELEASES THE OTHER PARTY (AND SUCH OTHER PARTY'S SUBSIDIARIES
AND AFFILIATES, AND THEIR RESPECTIVE OFFICERS, DIRECTORS;
EMPLOYEES AND AGENTS) FROM ANY SUCH CLAIM. NOTHING CONTAINED IN
THIS SECTION 10 SHALL LIMIT PACIFIC'S OR CLEC'S LIABILITY TO THE
OTHER FOR (i) WILLFUL OR INTENTIONAL MISCONDUCT (INCLUDING GROSS
NEGLIGENCE); (ii) BODILY INJURY, DEATH OR DAMAGE TO TANGIBLE
REAL OR TANGIBLE PERSONAL PROPERTY PROXIMATELY CAUSED BY
PACIFIC'S OR CLEC'S NEGLIGENT ACT OR OMISSION OR THAT OF THEIR
RESPECTIVE AGENTS SUBCONTRACTORS OR EMPLOYEES, NOR SHALL
ANYTHING CONTAINED IN THIS SECTION 10 LIMIT THE PARTIES'
INDEMNIFICATION OBLIGATIONS, AS SPECIFIED BELOW. FOR PURPOSES OF
THIS SECTION 10, AMOUNTS DUE AND OWING TO EITHER PARTY PURSUANT
TO ATTACHMENT 17 SHALL NOT BE CONSIDERED TO BE INDIRECT,
INCIDENTAL, CONSEQUENTIAL, RELIANCE, OR SPECIAL DAMAGES.
<PAGE> 11
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10.4. Obligation to Indemnify - Each Party shall, and hereby agrees
to, defend at the other's request, indemnify and hold harmless
the other Party and each of its officers, directors, employees
and agents (each, an "Indemnitee") against and in respect of any
loss, debt, liability, damage, obligation, claim, demand,
judgment or settlement of any nature or kind, known or unknown,
liquidated or unliquidated, including without limitation all
reasonable costs and expenses incurred (legal, accounting or
otherwise) (collectively, "Damages") arising out of, resulting
from or based upon any pending or threatened claim, action,
proceeding or suit by any third party (a "Claim") (i) alleging
any breach of any representation, warranty or covenant made by
such indemnifying Party (the "Indemnifying Party") in this
Agreement, (ii) based upon injuries or damage to any person or
property or the environment arising out of or in connection with
this Agreement that are the result of the Indemnifying Party's
actions, breach of Applicable Law, or status or the actions,
breach of Applicable Law, or status of its employees, agents and
subcontractors, or (iii) for actual or alleged infringement of
any patent, copyright, trademark, service mark, trade name,
trade dress, trade secret or any other intellectual property
right, now known or later developed (referred to as
"Intellectual Property Rights") to the extent that such claim or
action arises from the Indemnifying Party's or the Indemnifying
Party's customer's use of the Network Elements, Ancillary
Functions, Combinations, Local Services or other services
provided under this Agreement.
10.5. Obligation to Defend; Notice; Co-operation - Whenever a Claim
shall arise for indemnification under Section 10.4, the relevant
Indemnitee, as appropriate, shall promptly notify the
Indemnifying Party and request the Indemnifying Party to defend
the same. Failure to so notify the Indemnifying Party shall not
relieve the Indemnifying Party of any liability that the
Indemnifying Party might have, except to the extent that such
failure prejudices the Indemnifying Party's ability to defend
such Claim. The Indemnifying Party shall have the right to
defend against such liability or assertion in which event the
Indemnifying Party shall give written notice to the Indemnitee
of acceptance of the defense of such Claim and the identity of
counsel selected by the Indemnifying Party. Except as set forth
below, such notice to the relevant Indemnitee shall give the
Indemnifying Party full authority to defend, adjust, compromise
or settle such Claim with respect to which such notice shall
have been given, except to the extent that any compromise or
settlement shall prejudice the Intellectual Property Rights of
the relevant Indemnitees. The Indemnifying Party shall consult
with the relevant Indemnitee prior to any compromise or
settlement that would affect the Intellectual Property Rights or
other rights of any Indemnitee, and the relevant Indemnitee
shall have the right to refuse such compromise or settlement
and, at the refusing Party's or refusing Parties' cost, to take
over such defense, provided that in such event the Indemnifying
Party shall not be responsible for, nor shall it be obligated to
indemnify the relevant Indemnitee against, any cost or liability
in excess of such refused compromise or settlement. With respect
to any defense accepted by the Indemnifying Party, the relevant
Indemnitee shall be entitled to participate with
<PAGE> 12
9
the Indemnifying Party in such defense if the Claim requests
equitable relief or other relief that could affect the rights of
the Indemnitee and also shall be entitled to employ separate
counsel for such defense at such Indemnitee's expense. In the
event the Indemnifying Party does not accept the defense of any
indemnified Claim as provided above, the relevant Indemnitee
shall have the right to employ counsel for such defense at the
expense of the Indemnifying Party. Each Party agrees to
cooperate and to cause its employees and agents to cooperate
with the other Party in the defense of any such Claim and the
relevant records of each Party shall be available to the other
Party with respect to any such defense.
11. AUDITS AND INSPECTIONS
11.1. Subject to PACIFIC's reasonable security requirements and except
as may be otherwise specifically provided in this Agreement,
CLEC may audit PACIFIC's books, records, and other documents
once in each Contract Year for the purpose of evaluating the
accuracy of PACIFIC's billing and invoicing for services
provided by PACIFIC to CLEC hereunder. CLEC may employ other
persons or firms for this purpose. Such audit shall take place
at a time and place agreed on by the Parties no later than
thirty (30) days after notice thereof to PACIFIC.
11.2. Subject to CLEC's reasonable security requirements and except as
may be otherwise specifically provided in this Agreement,
PACIFIC may audit CLEC's books, records, and other documents
once in each Contract Year for the purpose of evaluating the
accuracy of CLEC's billing and invoicing for services provided
by CLEC to PACIFIC hereunder. PACIFIC may employ other persons
or firms for this purpose. Such audit shall take place at a time
and place agreed on by the Parties no later than thirty (30)
days after notice thereof to CLEC.
11.3. Each Party shall promptly correct any billing or invoicing
errors that are revealed in an audit, including making refund of
any overpayment in the form of a credit, or payment of any under
payment in the form of a debit, on the invoice for the first
full billing cycle after the Parties have agreed upon the
accuracy of the audit results. Any disputes concerning audit
results shall be resolved pursuant to the Alternate Dispute
Resolution procedures described in Attachment 3.
11.4. Each Party shall cooperate fully in any such audit, providing
reasonable access to any and all appropriate employees and
books, records and other documents reasonably necessary to
assess the accuracy of each Party's billing and invoicing.
11.5. Either Party may audit the other Party's books, records and
documents more than once during any Contract Year if the
previous audit found previously uncorrected net variances or
errors in invoices in the other Party's favor with an aggregate
value of at least three percent (3%) of the amounts payable by
the Party being audited under this Agreement during the period
covered by the audit.
<PAGE> 13
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11.6. Audits shall be at the requesting Party's expense, subject to
reimbursement by the audited Party in the event that an audit
finds an adjustment in the charges or in any invoice paid or
payable by the requesting Party hereunder by an amount that is,
on an annualized basis, greater than three percent (3%) of the
aggregate charges to the requesting Party under this Agreement
during the period covered by the audit.
11.7. Upon (i) the discovery by a Party of overcharges not previously
reimbursed to the other Party or (ii) the resolution of disputed
audits, the audited Party shall promptly reimburse the
requesting Party the amount of any overpayment, plus interest at
the prime rate compounded daily for the number of days from the
date of overpayment to and including the date that payment is
actually made. In no event, however, shall interest be assessed
on any previously assessed or accrued late payment charges.
11.8. Upon (i) the discovery by either Party of underpayments not
previously paid to the other Party, or (ii) the resolution of
disputed audits, the audited Party shall promptly pay the other
Party the amount of any underpayment, plus interest at the prime
rate compounded daily from the date of underpayment to and
including the date that payment is actually made.
11.9. Subject to PACIFIC's reasonable security requirements and except
as may be otherwise specifically provided in this Agreement,
CLEC shall have the following audit rights in addition to the
financial audit rights provided above: (a) if CLEC has a
reasonable basis to believe that an audit is required to confirm
PACIFIC's compliance with the Act or this Agreement, CLEC may
inspect once, in each Contract Year, PACIFIC's books, records,
and other documents relevant to the Network Elements, Ancillary
Functions, Combinations, Local Services, or other services
provided to CLEC for the purpose of evaluating PACIFIC's
compliance with the terms and conditions of this Agreement; and
(b) CLEC shall have the audit rights specified in Attachments 17
and 18. CLEC employees may conduct audits pursuant to this
Section 11.9, unless PACIFIC reasonably maintains that the
books, records and other documents relating to CLEC are
impossible or impractical to segregate from documents containing
proprietary information of other parties, in which case, the
audit shall be conducted by a mutually designated third Party
auditor, with the expense shared equally by the Parties,
provided, however, that (a) if the auditor finds that PACIFIC
has complied with the Act or this Agreement, CLEC shall pay for
the audit; and (b) if the auditor finds that PACIFIC has not
complied with the Act or this Agreement, PACIFIC shall pay for
the audit.
12. SERVICE PERFORMANCE MEASURES AND RELATED REMEDIES
12.1. Remedies. The remedies set forth in Attachment 17 shall apply
when default has occurred as defined in this Agreement, and,
where appropriate, default notice has
<PAGE> 14
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been given. Payment of remedies shall be in the nature of
liquidated damages to the non-defaulting Party, and shall be in
lieu of all other damages related to the default, including
without limitation liability imposed by tariff for the same
default. Where more than one performance category is subject to
the remedy, a remedy payment for each category will be made by
the defaulting Party to the non-defaulting Party, except where
remedies involve waiver of non-recurring charges, the charge
will only be waived once per affected service order. Remedies
for comparative measures will be paid only for those defaulting
performance areas for the number of provisioning and maintenance
items that would restore service levels to parity based on the
measured performance for the same class of service, at the same
time in the same geographic area.
12.2. In order that both Parties may have the opportunity to evaluate
the forecasting, operational processes and service levels
provided under the Agreement, remedies will not be applied in
the first six months from the Effective Date of the Agreement.
Prior to the commencement of remedies, each Party will measure
performance and, as mutually agreed, will change measurements,
objectives and remedy limits when actual performance indicates
that any of the measurements, objectives or remedy limits are
ineffective or inappropriate for the service or Network Element
being provided.
12.3. The Parties may amend, modify, delete or add remedies by mutual
agreement and modification of Attachment 17.
13. UNCOLLECTIBLE OR UNBILLABLE REVENUES
13.1. Uncollectible or unbillabel revenues resulting from, but not
confined to, provisioning, maintenance, or signal network
routing errors shall be the responsibility of the Party causing
such error.
14. CUSTOMER CREDIT HISTORY
CLEC and PACIFIC agree to make available to the Centralized Credit Check
System (CCCS) on a timely basis the following customer payment history
components for each person or entity that applies for local or intraLATA
toll Telecommunications Service(s) from either carrier, and for each
unpaid closed account. Such information shall be provided on the
condition that the CCCS will only make such information available to the
carrier to which the person or entity in question has applied for
telephone service when CCCS has unpaid closed account information for
that applicant.
Customer's full name, surname, given name, middle name or initial;
Service address, when service was/is provided;
Mailing address, where bills are sent;
Current telephone number;
Applicant's previous phone number; if any;
Spouse's name, if applicable;
<PAGE> 15
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Valid identifying number(s) for customer and/or spouse, e.g.
Social Security Number, Driver's License, etc.;
Specific Data regarding accounts that have left an unpaid debt with the
utility; and
Payments and adjustments on unpaid accounts to update current balance
due information.
15. FORCE MAJEURE
15.1. Except as otherwise specifically provided in this Agreement,
neither Party shall be liable for any delay or failure in
performance of any part of this Agreement caused by a Force
Majeure condition, including acts of the United States of
America or any state, territory or political subdivision
thereof, acts of God or a public enemy, fires, floods, disputes,
freight embargoes, earthquakes, volcanic actions, wars, civil
disturbances, or other causes beyond the reasonable control of
the Party claiming excusable delay or other failure to perform.
Provided, Force Majeure shall not include acts of any
Governmental Authority relating to environmental, health or
safety conditions at Work Locations. If any Force Majeure
condition occurs, the Party whose performance fails or is
delayed because of such Force Majeure condition shall give
prompt notice to the other Party, and upon cessation of such
Force Majeure condition, shall give like notice and commence
performance hereunder as promptly as reasonably practicable.
15.2. Notwithstanding subsection 15.1, preceding, no delay or other
failure to perform shall be excused pursuant to this Section:
(i) by the acts or omissions of a Party's subcontractors,
material men, suppliers or other third persons providing
products or services to such Party unless such acts or omissions
are themselves the product of a Force Majeure condition, (ii) if
the delay or failure relates to environmental, health or safety
conditions at Work Locations and, (iii) unless such delay or
failure and the consequences thereof are beyond the control and
without the fault or negligence of the Party claiming excusable
delay or other failure to perform.
16. CERTAIN STATE AND LOCAL TAXES
Any state or local excise, sales, or use taxes (excluding any taxes
levied on income) resulting from the performance of this Agreement shall
be borne by the Party upon which the obligation for payment is imposed
under applicable law, even if the obligation to collect and remit such
taxes is placed upon the other Party, provided, however, that the other
Party has not acted in a manner that has materially impaired the ability
of the liable Party to contest the tax or the amount of the tax (and
interest and penalties, etc.) regardless of whether the impairment was
foreseeable. If the other Party has materially impaired the ability of
the liable Party to contest the tax or the amount of the tax, the Party
causing the impairment shall be liable for the tax (interest and
penalties, etc.) caused by the Party's impairment. Any such taxes shall
be shown as separate items on applicable billing documents between the
Parties. The Party so obligated to pay any such taxes may contest the
same in good faith, at its own expense, and shall be entitled to the
benefit of any refund or recovery, provided that such Party shall not
permit any lien to
<PAGE> 16
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exist on any asset of the other Party by reason of the contest. The
Party obligated to collect and remit shall cooperate in any such contest
by the other Party;
17. ALTERNATIVE DISPUTE RESOLUTION
All disputes, claims or disagreements (collectively "Disputes") arising
under or related to this Agreement or the breach hereof, except those
arising pursuant to Attachment 13, Connectivity Billing, shall be
resolved according to the procedures set forth in Attachment 3. Disputes
involving matters subject to the Connectivity Billing provisions
contained in Attachment 13, shall be resolved in accordance with the
Billing Disputes section of Attachment 13. In no event shall the Parties
permit the pendency of a Dispute to disrupt service to any CLEC Customer
contemplated by this Agreement. The foregoing notwithstanding, neither
this Section 17 nor Attachment 3 shall be construed to prevent either
Party from (a) invoking a remedy required or permitted by the Act or FCC
regulations thereunder or (b) seeking and obtaining temporary equitable
remedies, including temporary restraining orders. A request by a Party
to a court or a regulatory authority for interim measures or equitable
relief shall not be deemed a waiver of the obligation to comply with
Attachment 3.
18. NOTICES
Any notices or other communications required or permitted to be given or
delivered under this Agreement shall be in hard-copy writing (unless
otherwise specifically provided herein) and shall be sufficiently given
if delivered personally or delivered by prepaid overnight express
service to the following (unless otherwise specifically required by this
Agreement to be delivered to another representative or point of
contact):
If to CRL Network Services:
Jim Couch
President
One Kearny Street, Suite 1450
San Francisco, CA 94108
and
Contracts Administrator
One Kearny Street, Suite 1450
San Francisco, CA 94108
If to PACIFIC:
Director, Competitor Provider Accounts
370 Third Street, Room 716
San Francisco, CA 94107
<PAGE> 17
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and
James B. Young
General Attorney & Assistant General Counsel
Pacific Telesis Legal Group
140 New Montgomery Street, Room 1811
San Francisco, CA 94105
Fax: (415) 974-5570
Either Party may unilaterally change its designated representative
and/or address for the receipt of notices by giving seven (7) days prior
written notice to the other Party in compliance with this Section. Any
notice or other communication shall be deemed given when received.
19. CONFIDENTIALITY AND PROPRIETARY INFORMATION
19.1. For the purposes of this Agreement, "Confidential Information"
means confidential or proprietary technical or business
Information given by the Discloser to the Recipient. All
information which is disclosed by one Party to the other in
connection with this Agreement shall automatically be deemed
proprietary to the Discloser and subject to this Agreement,
unless otherwise confirmed in writing by the Discloser. In
addition, by way of example and not limitation, all orders for
Network Elements Ancillary Functions, Combinations, Local
Services or other services placed by CLEC pursuant to this
Agreement, and information that would constitute Customer
Proprietary Network Information of CLEC Customers pursuant to
the Act and the rules and regulations of the FCC, and Recorded
Usage Data as described in Attachment 14, whether disclosed by
CLEC to PACIFIC or otherwise acquired by PACIFIC in the course
of the performance of this Agreement, shall be deemed
Confidential Information of CLEC for all purposes under this
Agreement.
19.2. For a period of five (5) years from the receipt of Confidential
Information from the Discloser, except as otherwise specified in
this Agreement, the Recipient agrees (a) to use it only for the
purpose of performing under this Agreement; (b) to hold it in
confidence and disclose it to no one other than its employees
having a need to know for the purpose of performing under this
Agreement; and (c) to safeguard it from unauthorized use or
disclosure with at least the same degree of care with which the
Recipient safeguards its own Confidential Information. If the
Recipient wishes to disclose the Discloser's Confidential
Information to a third party agent or consultant, such
disclosure must be mutually agreed to in writing by the Parties
to this Agreement, and the agent or consultant must have
executed a written agreement of non-disclosure and non-use
comparable in scope to the terms of this Section.
19.3. The Recipient may make copies of Confidential Information only
as reasonably necessary to perform its obligations under this
Agreement. All such copies shall
<PAGE> 18
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bear the same copyright and proprietary rights notices as are
contained on the original.
19.4. The Recipient agrees to return all Confidential Information in
tangible form received from the Discloser, including any copies
made by the Recipient, within thirty (30) days after a written
request is delivered to the Recipient, or to destroy all such
Confidential Information. except for Confidential Information
that the Recipient reasonably requires to perform its
obligations under this Agreement. If either Party loses or makes
an unauthorized disclosure of the other Party's Confidential
Information, it shall notify such other Party immediately and
use reasonable efforts to retrieve the lost or wrongfully
disclosed information.
19.5. The Recipient shall have no obligation to safeguard Confidential
Information: (a) which was in the possession of the Recipient
free of restriction prior to its receipt from the Discloser; (b)
after it becomes publicly known or available through no breach
of this Agreement by the Recipient; (c) after it is rightfully
acquired by the Recipient free of restrictions on its
disclosure; or (d) after it is independently developed by
personnel of the Recipient to whom the Discloser's Confidential
Information had not been previously disclosed. In addition,
either Party shall have the right to disclose Confidential
Information to any mediator, arbitrator, state or federal
regulatory body, the Department of Justice or any court in the
conduct of any mediation, arbitration or approval of this
Agreement or in any proceedings concerning the provision of
interLATA services by PACIFIC. Additionally, the Recipient may
disclose Confidential Information if so required by law, a
court, or governmental agency, so long as the Discloser has been
notified of the requirement promptly after the Recipient becomes
aware of the intended disclosure, and so long as the Recipient
undertakes all lawful measures to avoid disclosing such
information until Discloser has had reasonable time to seek a
protective order that covers the Confidential Information to be
disclosed.
19.6. Each Party's obligations to safeguard Confidential Information
disclosed prior to expiration or termination of this Agreement
shall survive such expiration or termination.
19.7. Except as otherwise expressly provided elsewhere in this
Agreement, no license is hereby granted under any patent,
trademark, or copyright, nor is any such license implied, solely
by virtue of the disclosure of any Confidential Information.
19.8. Each Party agrees that the Discloser would be irreparably
injured by a breach of this Agreement by the Recipient or its
representatives and that the Discloser shall be entitled to seek
equitable relief, including injunctive relief and specific
performance, in the event of any breach of the provisions of
this Agreement. Such remedies shall not be deemed to be the
exclusive remedies for a breach of this Agreement, but shall be
in addition to all other remedies available at law or in equity.
<PAGE> 19
16
19.9. Nothing in this Section 19 shall prevent PACIFIC from using
Recorded Usage Data for the limited purpose of network planning
and management.
20. BRANDING
20.1. Services offered by CLEC that incorporate Network Elements,
Ancillary Functions or Combinations made available to CLEC
pursuant to this Agreement, and Local Services that CLEC offers
for resale shall be branded as stated in the Attachments to this
Agreement. In no event shall PACIFIC personnel installing or
repairing CLEC Local Service, Network Elements, or Combinations
initiate a conversation with the end user customer to market
PACIFIC products or services. PACIFIC personnel shall respond to
any inquires from end users or consumers concerning PACIFIC's
products or services by providing a telephone number to call for
information.
21. MISCELLANEOUS
21.1. Delegation or Assignment - Neither Party shall assign any of its
rights or delegate any of its obligations under this Agreement
without the prior written consent of the other Party which will
not be unreasonably withheld. Any prohibited assignment or
delegations shall be null and void.
21.2. Subcontracting - Neither Party shall subcontract the performance
of any obligation under this Agreement without the prior written
consent of the other Party, which shall not be unreasonably
withheld. If any obligation is performed through a
subcontractor, the original Party shall remain fully responsible
for the performance of this Agreement in accordance with its
terms, including any obligations it performs through
subcontractors, and shall be solely responsible for payments due
its subcontractors. No contract, subcontract or other agreement
entered into by either Party with any third party in connection
with the provision of Local Services or Network Elements
hereunder shall provide for any indemnity, guarantee or
assumption of liability by, or other obligation of, the other
Party to this Agreement with respect to such arrangement, except
as consented to in writing by the other Party. No subcontractor
shall be deemed a third party beneficiary for any purposes under
this Agreement.
21.3. Nonexclusive Remedies - Except as otherwise expressly provided
in this Agreement, each of the remedies provided under this
Agreement is cumulative and is in addition to any remedies that
may be available at law or in equity.
21.4. No Third-Party Beneficiaries - Except as may be specifically set
forth in this Agreement, this Agreement does not provide and
shall not be construed to provide third parties with any remedy,
claim, liability, reimbursement, cause of action, or other
privilege.
<PAGE> 20
17
21.5. Referenced Documents - Whenever any provision of this Agreement
refers to a technical reference, technical publication, CLEC
practice, PACIFIC practice, any publication of
telecommunications industry administrative or technical
standards, or any other document specifically incorporated into
this Agreement, it will be deemed to be a reference to the most
recent version or edition (including any amendments,
supplements, addenda, or successors) of such document that is in
effect, and will include the most recent version or edition
(including any amendments, supplements, addenda, or successors)
of each document incorporated by reference in such a technical
reference, technical publication, CLEC practice, PACIFIC
practice, or publication of industry standards. Should there be
an inconsistency between or among publications or standards, the
Parties shall mutually agree which requirement shall apply.
21.6. Governing Law - The validity of this Agreement, the construction
and enforcement of its terms, and the interpretation of the
rights and duties of the Parties shall be governed by the laws
of the State of California other than as to conflicts of laws,
except insofar as federal law may control any aspect of this
Agreement, in which case federal law shall govern such aspect.
The Parties submit to personal jurisdiction in San Francisco,
California and waive any and all objections to California venue.
21.7. Publicity and Advertising - Neither Party shall publish or use
any advertising, sales promotions or other publicity materials
that use the other Party's logo, trademarks or service marks
without the prior written approval of the other Party.
21.8. Amendments or Waivers - Except as otherwise provided in this
Agreement, no amendment or waiver of any provision of this
Agreement, and no consent to any default under this Agreement
shall be effective unless the same is in writing and signed
either by an officer of the Party against whom such amendment,
waiver or consent is claimed or by the designated representative
of such an officer. In addition, no course of dealing or failure
of a Party strictly to enforce any term, right or condition of
this Agreement shall be construed as a waiver of such term,
right or condition. By entering into this Agreement neither
Party waives any right granted to it pursuant to the Act.
21.9. Severability - If any term, condition or provision of this
Agreement is held to be invalid or unenforceable for any reason,
such invalidity or unenforceability shall not invalidate the
entire Agreement, unless such construction would be
unreasonable. The Agreement shall be construed as if it did not
contain the invalid or unenforceable provision or provisions,
and the rights and obligations of each Party shall be construed
and enforced accordingly; provided, however, that in the event
such invalid or unenforceable provision or provisions are
essential elements of this Agreement and substantially impair
the rights or obligations of either Party, the Parties shall
promptly negotiate a replacement provision or provisions.
<PAGE> 21
18
21.10. Entire Agreement - This Agreement, which shall include the
Attachments, Appendices and other documents referenced herein,
constitutes the entire Agreement between the Parties concerning
the subject matter hereof and supersedes any prior agreements,
representations, statements, negotiations, understandings,
proposals or undertakings, oral or written, with respect to the
subject matter expressly set forth herein.
21.11. Definitions and Diagrams: The definitions contained in
Attachment 1 are meant to accurately describe the meaning
accorded the term as required by the Act and as used in this
Agreement. In the event of any disagreement between a definition
of the term in the Act, in Attachment 1 or any other part of
this Agreement (including the Attachments), the definition in
the Act shall supersede any definition in the Agreement or
Attachments and any specific definition in an Attachment other
than Attachment 1 shall supersede the definition in Attachment
1. Throughout this Agreement and its Attachments, various
diagrams are used. These diagrams are illustrative only, and, in
the event of any disagreement between the diagram and the words
of this Agreement, the words of this Agreement shall control.
21.12. Survival of Obligations - Any liabilities or obligations of a
Party for acts or omissions prior to the cancellation or
termination of this Agreement, any obligation of a Party under
the provisions regarding indemnification, Confidential
Information, limitations on liability, and any other provisions
of this Agreement which, by their terms, are contemplated to
survive (or to be performed after) termination of this
Agreement, shall survive cancellation or termination thereof.
21.13. Executed in Counterparts - This Agreement may be executed in any
number of counterparts, each of which shall be deemed an
original; but such counterparts shall together constitute one
and the same instrument.
21.14. Headings of No Force or Effect - The headings of Articles and
Sections of this Agreement are for convenience of reference
only, and shall in no way define, modify or restrict the meaning
or interpretation of the terms or provisions of this Agreement.
<PAGE> 22
19
In witness whereof, the Parties have executed this Agreement through their
authorized representatives.
PACIFIC BELL CRL NETWORK SERVICES
Signature: /S/ Sandy Kinney Signature: /S/ James Couch
------------------------ ------------------------
Printed Name: Sandy Kinney Printed Name: James Couch
--------------------- ---------------------
Title: VP-GM Industry Markets Title: President
---------------------------- ----------------------------
Date: 9/22/98 Date: 9/9/98
----------------------------- -----------------------------
<PAGE> 23
ATTACHMENT 1
Page 1
ATTACHMENT 1
DEFINITIONS
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ATTACHMENT 1
Page 2
1. "Access Tandem Switches" are switches used to connect End Offices to
Interexchange Carrier switches. PACIFIC's Access Tandem Switches are
also used to connect and switch traffic between and among Central
Office Switches.
2. "Act" means the Communications Act of 1934, 47 U.S.C. 151 et seq., as
amended by the Telecommunications Act of 1996, and as interpreted
from time to time in the duly authorized rules and regulations of the
FCC or the Commission.
3. "Advanced Intelligent Network (AIN) Trigger Capability" is a network
functionality that permits specific conditions to be programmed into
a switch which, when met, directs the switch to suspend call
processing and to receive special instructions for further call
handling instructions in order to enable carriers to offer advanced
features and services.
4. "AMA" means the Automated Message Accounting structure inherent in
switch technology that initially records telecommunication message
information. AMA format is contained in the Automated Message
Accounting document, published by Bellcore as GR-1100-CORE which
defines the industry standard for message recording.
5. "Ancillary Functions" are services or facilities that PACIFIC offers
to CLEC so that CLEC may obtain and use unbundled Network Elements or
PACIFIC services to provide telecommunications services to CLEC's
customers. Ancillary Functions include collocation and rights of way,
and may include other services or facilities as mutually agreed to by
the parties.
6. "Applicable Law" shall mean all laws, statutes, common law,
regulations, ordinances, codes, rules, guidelines, orders, permits
and approvals of any Governmental Authority, including without
limitation those relating to the environment, health and safety,
which apply or relate to Work Locations or the subject matter of this
Agreement.
7. "CLEC Customer" means the relationship for a specific service with
any business or residential customer to the extent such customer
purchases CLEC services.
8. "Automatic Number Identification" or "ANI" means a Feature Group D
signaling parameter that refers to the number transmitted through the
network identifying the billing number of the calling party.
9. "Automatic Location Identification/(ALI)" means the feature of E911
that displays at the PSAP the address of the calling telephone
number. This feature requires a data storage and retrieval system for
translating telephone numbers to the associated address. ALI
information may include Emergency Service Number (ESN), street
address, room or floor, and names of the enforcement, fire and
medical agencies with jurisdictional responsibility for the address.
The Management System (E911) database is used to update the Automatic
E911 Location Identification (ALI) databases.
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10. "Automatic Route Selection (ARS)" is a service feature that provides
for automatic selection of the most appropriate outbound route for
each call based on criteria programmed into the system.
11. "Busy Line Verification" or "BLV" means a service in which an end
user requests an operator to confirm the busy status of a line.
12. "Busy Line Verification and Interrupt" or "BLVI" means a service in
which an end user requests an operator to confirm the busy status of
a line and requests an interruption of the call.
13. "CABS" means the Carrier Access Billing System.
14. "Calling Party Number (CPN)" means a Common Channel Signaling
parameter which refers to the number transmitted through the network
identifying the calling party.
15. "Central Office Switch" or "Central Office" means a switching entity
within the public switched telecommunications network, including but
not limited to End Office Switches and Tandem Switches. Central
Office Switches may be employed as combination End Office/Tandem
Switches.
16. "CLC Operations Handbook" means Sections 16.6 and 16.7 of the CLC
Handbook, which address PACIFIC's Operations and Administration
interfaces for local interconnection and SS7.
17. "Centralized Message Distribution System" ("CMDS") means the
transport system that LECs use to exchange outcollect and CABS access
messages among each other and other parties connected to CMDS.
18. "Charge Number" means a CCS signaling parameter that refers to the
number transmitted through the network identifying the billing number
of the calling party.
19. "Centrex" means a Telecommunications Service that uses central office
switching equipment for call routing to handle direct dialing of
calls, and to provide many private branch exchange-like features.
20. "CLASS (Custom Local Area Signaling Service) and Custom Features"
means a grouping of optional enhancements to basic local exchange
service that offers special call handling features to end users
(e.g., call waiting, call forwarding and automatic redial).
21. "Combination" shall have the meaning set forth in 47 C.F.R. Sec.
51.315.
22. "Commission" means the California Public Utilities Commission.
23. "Common Channel Signaling" or "CCS" means a method of digitally
transmitting call set-up and network control data over a special
network fully separate from the public
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switched network elements that carry the actual call. Signaling
System 7 ("SS7") is the CCS network presently used by
telecommunications carriers.
24. "Competitive Local Carrier (CLC) or Competitive Local Exchange
Carrier (CLEC)" is a carrier who competes in the provision of local
exchange telecommunications service as set forth in Opinion, Appendix
C, Section 3(B), and is not an Incumbent LEC as defined by 47 U.S.C.,
Section 251(h) of the Act.
25. "Conduit" means a tube or similar enclosure that may be used to house
communication or communications-related power cables. Conduit may be
underground or above ground (for example, inside buildings) and may
contain one or more inner ducts. An inner duct means a separate tube
or enclosure within a conduit.
26. "Confidential Information" has the meaning set forth in Section 18.1
of the General Terms and Conditions.
27. "Contract Year" means a twelve (12) month period during the term of
the contract commencing on the Effective Date and each anniversary
thereof.
28. "Control Office" means an exchange carrier center or office
designated as its company 5 single point of contact for the
provisioning and maintenance of its portion of interconnection
arrangements
29. "Cross Connection" means an intra-wire center channel connecting
separate pieces of telecommunications equipment
30. "Customer Usage Data" means the local Telecommunications Services
usage data of an CLEC Customer, measured in minutes, sub-minute
increments, message units, or otherwise, that is recorded by PACIFIC
and forwarded to CLEC.
31. "Directory Number Call Forwarding (DNCF)" means an interim form of
Service Provider Number Portability ("SPNP") which is provided
through existing and available call routing and call forwarding
capabilities. DNCF will forward calls dialed to an original telephone
number to a new telephone number on a multi-path basis. DNCF is not
limited to listed directory numbers.
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32. "Discloser" means that party to this Agreement which has disclosed
Confidential Information to the other party.
33. "DSX Panel" means a cross-connect bay or panel used for the
termination of equipment and facilities operating at digital rates.
34. "DS-0" means a digital signal rate of 64 Kilobits per second
("kbps").
35. "DS-1" means a digital signal rate of 1.544 Megabits Per Second
("Mbps").
36. "DS-3" means a digital signal rate of 44.736 Mbps.
37. "E911 Management System (MS)" A system of computer programs used by
PACIFIC to create, store and update the data that provides Selective
Routing (SM) and/or Automatic Location Identification (ALI).
38. "E911 Management System Gateway" is a processor that can relieve the
host computer (management system) of performing certain tasks, such
as message handling, code conversion, error control and application
functions.
39. "E911 Service" is a method of routing 911 calls to a PSAP that uses
customer location data in the ALI/DMS to determine the PSAP to which
a call should be routed.
40. "Effective Date" is the date indicated in the Preface on which the
Agreement shall become effective.
41. "EISCC" or "Expanded Interconnection Cross Connection" means the
connection between the collocation point of termination ("POT') and
the unbundled Network Element or interconnection point to a switched
or dedicated service in PACIFIC's network.
42. "Electronic File Transfer" means any system or process that utilizes
an electronic format and protocol to send or receive data files.
43. "End Office Switches" are switches from which end users' Exchange
services are directly connected and offered.
44. "Environmental Hazard" means any substance the presence, use,
transport, abandonment or disposal of which (i) requires
investigation, remediation, compensation, fine or penalty under any
Applicable Law (including, without limitation, the Comprehensive
Environmental Response Compensation and Liability Act, Superfund
Amendment and Reauthorization Act, Resource Conservation Recovery
Act, the Occupational Safety and
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Health Act and provisions with similar purposes in applicable
foreign, state and local jurisdictions) or (ii) poses risks to human
health, safety or the environment (including, without limitation,
indoor, outdoor or orbital space environments) and is regulated under
any Applicable Law.
45. "Exchange Message Record" or "EMR" means the standard used for
exchange of telecommunications message information among LECs for
billable, non-billable, sample, settlement and study data. EMR format
is contained in BR-010-200-010 CRIS Exchange Message Record, a
Bellcore document which defines industry standards for exchange
message records.
46. "Exchange Service" is as defined in the Act.
47. "FCC" means the Federal Communications Commission.
48. "First Interconnection Order" means the First Report and Order issued
In the Matter of Implementation of the Local Competition provision in
the Telecommunications Act of 1996 (CC Docket No. 96-98, FCC 96-325)
(released August 8,1996).
49. "Governmental Authority" means any federal, state, local, foreign or
international court, government, department, commission, board,
bureau, agency, official, or other regulatory, administrative,
legislative or judicial authority with jurisdiction.
50. "Interconnection" is as described in the Act.
51. "Interexchange Carrier (IEC or IXC)" means a provider of
interexchange telecommunications services.
52. "Interim Number Portability" or "INP" means the delivery of service
provider Number Portability capabilities through the use of
switch-based call routing as described in 47 C.F.R. Sec. 52.7.
53. "Integrated Services Digital Network" or "ISDN" means a digital
switched network service. "Basic Rate ISDN" provides for channelized
(23 bearer and 1 data) end-to-end digital connectivity for the
transmission of voice or data on either or both bearer channels and
packet data on the data channel. "Primary Rate ISDN" provides for 24
bearer and 1 data channels.
54. "LATA-Wide Terminating Interconnection" means an interconnection
arrangement whereby one Party interconnects to a single designated
tandem switch of the other Party to terminate local and intraLATA
toll. The Party providing such termination will designate the tandem
switch where such interconnection is to occur.
55. "Line Information Data Base(s) (LIDB)" means one or all, as the
context may require, of the Line Information Databases owned
individually by ILECs and other entities which provide, among other
things, calling card validation functionality for telephone line
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number cards issued by ILECs and other entities. A LIDB also contains
validation data for collect and third number-billed calls, which
include billed number screening.
56. "Line Side" refers to End Office switch connections that have been
programmed to treat the circuit as a local line connected to a
terminating station (e.g., an ordinary subscriber's telephone station
set, a PBX, answering machine, facsimile machine or computer). Line
Side connections offer only those transmission and signal features
appropriate for a connection between an End Office and such
terminating station.
57. "Link" has the meaning set forth in Attachment 6, Section 3.
58. "Local Calls" are as defined by the Commission. Local Calls currently
include all 0-12 mile calls based on the rate centers of the
originating and terminating NPA-NXXs of the callers (these include
ZUM Zone 1 and ZUM Zone 2 calls) and, where established in incumbent
LEC tariffs, ZUM Zone 3 and Extended Area Service (EAS) calls.
59. "Local Exchange Routing Guide" or "LERG" means a Bellcore Reference
Document used by LECs and IXCs to identify NPA-NXX routing and homing
information as well as Network Element and equipment designations.
60. "Local Exchange Traffic" means traffic originated on the network of a
LEC in a LATA and completed directly between that LEC's network and
the network of another LEC in that same LATA, including intraLATA
toll traffic and traffic originated to or terminated from LECs not
party to this Agreement. Local Exchange Traffic does not include
traffic that is routed to or terminated from the network of an IXC.
61. "Local Interconnection Trunks/Trunk Groups" are used for the
termination of Local Exchange Traffic, using Bellcore Technical
Reference GR-317-CORE ("GR-317").
62. "Local Loop" shall have the meaning set forth in 47 C.F.R. Section
51.319(a).
63. "Local Number Portability (LNP)" means the ability of users of
telecommunications services to retain, at the same location, existing
telecommunications numbers without impairment of quality,
reliability, or convenience when switching from one
telecommunications carrier to another.
64. "Local Service" has the meaning set forth in Attachment 5, Section
1.1.
65. "Loop" has the meaning set forth in Attachment 6, Section 3.
66. "MECAB" means the Multiple Exchange Carrier Access Billing document
prepared under the direction of the Billing Committee of the Ordering
and Billing Forum "OB F", which functions under the auspices of the
Carrier Liaison Committee of the Alliance for Telecommunications
Industry Solutions (ATIS), Section 23.1 of Part 1. The MECAB
document, published by Bellcore as Special Report SR-BDS-000983,
contains the recommended guidelines for the billing of access and
other connectivity services
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provided by two or more LECs (including LECs and CLECs), or by one
LEC or CLEC in two or more states within a single LATA.
67. "Meet Point Trunks/Trunk Groups" ("MPTGs") are used for the joint
provision of Switched Access services, utilizing Bellcore Technical
References GR-394-CORE ("GR-394") and GR-317 CORE ("GR-317"). MPTGs
are those between a local End Office and an Access Tandem as
described in FSD 20-24-0000 and 20-24-0300.
68. "MECOD" means the Multiple Exchange Carriers Ordering and Design
Guidelines for Access Services - Industry Support Interface, a
document developed by the Ordering/Provisioning Committee under the
auspices of the OBF, which functions under the auspices of the
Carrier Liaison Committee of the ATI S. The MECOD document, published
by Bellcore as Special Report SR STS-002643, establishes methods for
processing orders for access and other connectivity service which is
to be provided by two or more local carriers (including a LEC and a
CLC), or by one LEC or CLEC in two or more states within a single
LATA.
69. "Mid-Span Meet" means an interconnection between two LECs whereby
each provides its own cable and equipment up to the meet point of the
cable facilities. The meet point is the demarcation establishing
ownership of and responsibility for each LEC's portion of the
transmission facility.
70. "911 Service" means a universal telephone number which gives the
public direct access to the PSAP. Basic 911 service collects 911
calls from one or more local exchange switches that serve a
geographic area. The calls are then sent to the authority designated
to receive such calls.
71. "Network Element" is as defined in the Act.
72. "North American Numbering Plan (NANP)" means the system of telephone
numbering employed in the United States, Canada, and certain
Caribbean countries.
73. "Numbering Plan Area (NPA)" is also sometimes referred to as an area
code and the three digit indicator that is defined by the "A", "B"
and "C" digits of each 10-digit telephone number within the NANP.
Each NPA contains 800 possible NXX Codes. There are two general
categories of NPA. "Geographic NPA" is associated with a defined
geographic area, and all telephone numbers bearing such NPA are
associated with services provided within that Geographic area. A
"Non-Geographic NPA," also known as a "Service Access Code" ("SAC
Code"), is typically associated with a specialized telecommunications
service which may be provided across multiple geographic NPA areas;
500, Toll Free Service NPAs, 700, and 900 are examples of
Non-Geographic NPAs.
74. "Number Portability" is as defined in the Act.
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75. "NXX", "NXX Code" or "Central Office Code" means the three digit
switch entity indicator that is defined by the "D", "E" and "F"
digits of a 10-digit telephone number within the NANP. Each NXX Code
contains 10,000 station numbers.
76. "OBF" means the Ordering and Billing Forum (OBF), which functions
under the auspices of the Carrier Liaison Committee (CLC) of the
Alliance for Telecommunications Industry Solutions (ATIS).
77. "Originating Line Information (OLI)" is an SS7 Feature Group D
signaling parameter which refers to the number transmitted through
the network identifying the billing number of the calling party.
78. "PACIFIC" means Pacific Bell.
79. "Party" means either CLEC or PACIFIC. "Parties" means CLEC and
PACIFIC.
80. "Percent Local Usage or "PLU" means a percentage amount that
represents the ratio of the local minutes to the sum of local and
intraLATA toll minutes sent between the Parties over Local
Interconnection Trunks. Directory Assistance, BLV/BLVI, 900, 976,
transiting calls from other LECs, WSP traffic and interLATA Switched
Access calls are not included in the calculation of PLU.
81. "Permanent Number Portability (PNP)" means a long-term solution to
provide LNP for all customers and all providers consistent with the
Act and implementing regulations.
82. "Physical Collocation" shall have the meaning set forth in 47 C.F.R.
Section 51.5.
83. "Point of Interconnection" or "P0I" means a physical location at
which the Parties' networks meet for the purpose of establishing
interconnection. POIs include a number of different technologies and
technical interfaces based on the Parties' mutual agreement.
84. "Pole Attachment" means the connection of a facility to a utility
pole. Some examples of facilities are mechanical hardware, grounding
and transmission cable, and equipment boxes.
85. "Port" means a termination point in the end office switch. For
purposes of general illustration, a Port includes a line card and
associated peripheral equipment on an End Office Switch which serves
as the hardware termination for line or trunk side facilities
connected to the End Office switch. Each line side Port is typically
associated with one or more telephone numbers that serve as the
customer's network address.
86. "Public Safety Answering Point (PSAP)" means the designated agency to
which calls to E911/911 services are routed.
87. "Rate Center" identifies the specific geographic point and
corresponding geographic area which are associated with one or more
particular NPA-NXX codes which have been assigned to a LEC (or CLEC)
for its provision of Exchange Services. The rate point is a
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geographic location identified by specific V&H (vertical and
horizontal coordinates), which are used to measure distance sensitive
end user traffic to/from the particular NPA-NXX designations with the
specific Rate Center.
88. "Rating Point" means the Vertical and Horizontal ("V&H") coordinates
associated with a particular telephone number for rating purposes.
89. "Real Time" means the actual time in which an event takes place, with
the reporting on or the recording of the event practically
simultaneous with its occurrence.
90. "Recipient" means that party to this Agreement to which Confidential
Information has been disclosed by the other party.
91. "Recorded Usage Data" has the meaning set forth in Attachment 14.
92. "Release" means any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching, or
migration, including without limitation, the movement of
Environmental Hazards through or in the air, soil, surface water or
groundwater, or any action or omission that causes Environmental
Hazards to spread or become more toxic or more expensive to
investigate or remediate.
93. "Right of Way (ROW)" means the right to use the land or other
property of a third party or governmental authority to place poles,
conduits, cables, other structures and equipment, or to provide
passage to access such structures and equipment. A ROW may run under,
on, or above public or private property (including air space above
public or private property) and may include the right to use discrete
space in buildings, building complexes or other locations.
94. "Routing Point" means a location which a LEC has designated on its
own network as the homing or routing point for traffic inbound to
Exchange Service provided by the LEC which bears a certain NPA-NXX
designation. The Routing Point is employed to calculate mileage
measurements for the distance-sensitive transport element charges of
Switched Access services. The Routing Point need not be the same as
the Rating Point, nor must it be located within the Rate Center area,
but must be in the same LATA as the NPA-NXX.
95. "Served Premises" means collectively, the CLEC designated locations
to which CLEC orders Network Elements, Ancillary Functions or
Combinations.
96. "Service Control Point" or "SCP" means a node in the CCS network to
which information requests for service handling, such as routing, are
directed and processed. The SCP is a real time database system that,
based on a query from a Service Switching Point ("SSP"), performs
subscriber or application-specific service logic and then sends
instructions back to the SSP on how to continue call processing.
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97. "Service provider local number portability" shall have the same
meaning as Number Portability as defined in the Act and FCC
regulations thereunder.
98. "Signal Transfer Point" or "STP" means equipment that performs a
packet switching function that routes signaling messages among SSPs,
SCPs, Signaling Points ("SPs"), and other STPs in order to set up
calls and to query databases for advanced services.
99. "Special Construction" shall have the meaning set forth in PACIFIC's
Schedule P.U.C. No. 175-T, Section 15.1(B) and (H) as of the
Effective Date of this Agreement and shall not be subject to change
except upon mutual agreement of the Parties (even if the underlying
tariff changes), provided that CLEC will be treated no less favorably
than PACIFIC treats its own end-user customers.
100. "Switched Access" service means an offering of access to services or
facilities for the purpose of the origination or termination of
traffic from or to Exchange Service customers in a given area
pursuant to a Switched Access tariff Switched Access services
includes: Feature Group A ("FGA)", Feature Group B ("FGB"), Feature
Group C ("FGC"), Feature Group D ("FGD"), Toll Free Service, 700 and
900 access. Switched Access service does not include traffic
exchanged between LECs for purpose of local exchange interconnection.
101. "Switched Access Meet Point Billing" means a billing arrangement used
when two or more LECs jointly provide a Switched Access service over
Meet Point Trunks, with each LEC receiving an appropriate share of
the revenues. The access services will be billed using Switched
Access rate structures, and the LECs will decide whether a single
bill or multiple bill will be sent. If the LECs cannot agree,
multiple bills will be sent.
102. "Tandem Switches" are switches that are used to connect and switch
trunk circuits between and among Central Office Switches.
103. "Toll Traffic" means IntraLATA traffic falling outside of the normal
free calling area as defined by the Commission.
104. "Toll Free Service" means service provided with any dialing sequence
that invokes toll-free, i.e., 800-like, service processing. Toll Free
Service includes calls to the Toll Free Service 800/888 NPA SAC
codes.
105. "Transit Rate" is the rate that applies to local and toll calls sent
between a LEC and a CLC destined for a third-party LEC or CLC.
106. "Trunk-Side" refers to a Central Office switch connection that is
capable of, and has been programmed to treat the circuit as
connecting to another switching entity, for example, another Central
Office switch. Trunk-Side connections offer those transmission and
signaling features appropriate for the connection of switching
entities and cannot be used for the direct connection of ordinary
telephone station sets.
11
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ATTACHMENT 1
Page 12
107. "Unbundled Services Cross Connector" "USCC" is a connection between
an unbundled link, which terminates at the distribution frame, and
the cross connect system, for the purpose of combining an unbundled
link and PACIFIC unbundled transport when multiplexing is required.
108. "Virtual Collocation" shall have the meaning set forth in 47 C.F.R.
Sec. 51.5.
109. "Voluntary Federal Customer Financial Assistance Programs" are
Telecommunications Services provided to low-income subscribers,
pursuant to requirements established by the appropriate state
regulatory body.
110. "Waste" means all hazardous and non-hazardous substances and
materials which are intended to be discarded, scrapped, or recycled,
associated with activities CLEC or PACIFIC or their respective
contractors or agents perform at Work Locations. It shall be presumed
that all substances or materials associated with such activities,
that are not in use or incorporated into structures (including
without limitation damaged components or tools, leftovers,
containers, garbage, scrap, residues or by products), except for
substances and materials that CLEC, PACIFIC or their respective
contractors or agents intend to use in their original form in
connection with similar activities, are Waste. "Waste" shall not
include substances, materials or components incorporated into
structures (such as cable routes) even after such components or
structure are no longer in current use.
111. "Wire Center" denotes a building or space within a building which
serves as an aggregation point on a given carrier's network, where
transmission facilities and circuits are connected or switched.
PACIFIC Bell's Wire Center can also denote a building in which one or
more Central Offices, used for the provision of Exchange Services and
access services, are located. However, for purposes of collocation,
Wire Center shall mean those points eligible for such connections as
specified in FCC Docket No.91-141, and rules adopted pursuant
thereto, as modified by subsequent FCC decisions.
112. "Wireless Service Provider or "WSP" means a provider of Commercial
Mobile Radio Services ("CMRS") e.g., cellular service provider,
Personal Communications Services provider, or paging service
provider.
113. "Work Locations" means any real estate that CLEC or PACIFIC, as
appropriate, owns, leases or licenses or in which it holds easements
or other rights to use, or does use, in connection with this
Agreement.
12
<PAGE> 35
ATTACHMENT 2
ACRONYMS
<PAGE> 36
ATTACHMENT 2
ACRONYMS
<TABLE>
<CAPTION>
ACRONYM DEFINITION
<S> <C>
ACRONYM DEFINITION
AAA American Arbitration Association
AIN Advanced Intelligent Network
ALI Automatic Location Identification/
AMA Automated Message Accounting
AMI Alternate Mark Inversion
ANSI American National Standards Institute
ARPM Average Revenue Per Message
APTOS Automated Pricing, Terminals, Options and Services
ATIS Alliance for Telecommunications Industry Solutions
ATM Asynchronous Transfer Mode
B8ZS Bipolar 8 Zero Substitution
BICI Broadband Inter-Carrier Interface
BITS Building Integrated Timing Supply
BLV/BLVI Busy Line Verification/Interrupt
BOSS Billing & Ordering Support System
BRCS Business and Residential Customer Service
C Network Element Combination
C-DTTA Combination of Dedicated Transport & Tandem
C-LPLS Combination of Loop & Local Switching
C- Combination Local Service, Common Transport Signaling, Databases and/or
LSCTSSDBTS Tandem Switching
CABS Carrier Access Billing System
CAMA ANI Centralized Automatic Message Accounting - Automatic Number
Identification
CAP Competitive Access Provider
CCITT Consultative Committee on International Telegraph & Telephone
CCS Common Channel Signaling
CCSNIS Common Channel Signaling Network Interface Specification
CESAR Customer's Enhanced System for Access Requests
CIC Carrier Identification Code
CLASS Custom Local Area Signaling Service
CLC/CLEC Competitive Local Exchange Carrier
CLEO Cleopatra (subsystem of CESAR)
CLFI Common Language Facility Interface
CLLI Common Language Location Identifier
CMDS Centralized Message Distribution Systems
CMIP Coded Mark Inversion Protocol
CO Central Office
CPE Customer Premises Equipment
</TABLE>
<PAGE> 37
ATTACHMENT 2
<TABLE>
<S> <C>
CPN Calling Party Number
CRDD Customer Requested Due Dates
CT Common Transport
CY Current Year
D4 Digital Channel Bank Type 4
DA Directory Assistance
DACS Digital Access Crossconnect Systems
DB Database
DB Service Central Points/Databases
DCC Data Communications Channel
DCS Digital Cross-Connect System
DF Distribution Frame
DID Direct Inward Dialing
DLC Digital Loop Carrier
DLCI Data Link Connection Identifier
DMOQs Direct Measures Of Quality
DN Directory Numbers
DN-RI Directory Number - Route Index
DS-1 Digital Signal Level One
DS-3 Digital Signal Level Three
DS0 Digital Signal Level Zero
DSN Data Set Name
DSX Digital Cross Connect
DT Dedicated Transport
DTMF Dual-Tone Multi Frequency
E Network Element
E&M Ear & Mouth Signaling
E-LP Element Loop
EAMF Equal Access Multi-Frequency
EBCDIC Extended Binary-Coded Decimal Interexchange Code
EBI Electronic Bonding Interface
EFT Electronic Fund Transfer
EI Electronic Interface
EICC Expanded Interconnection Cross Connect
EMR Exchange Message Record
EO End Office
ESF Extended Super Frame
ESL Essential Service Line
ESN Emergency Service Number
ETTR Estimated Time To Repair
FCC Federal Communications Commission
FDI Feeder Distribution Interface
</TABLE>
3
<PAGE> 38
ATTACHMENT 2
<TABLE>
<S> <C>
FN Fiber Node
FOC Firm Order Confirmation
FRF Frame Relay Forum
FUNI Framebased User To Network Interface
GTT Global Title Translation
HDT Host Digital Terminal
HFC Hybrid Fiber Coax
HFC-HDT Hybrid Fiber Coax - Host Digital Terminal
ID Remote Identifiers
IEC Interexchange Carrier
IECs Interexchange Carriers
IEEE Institute Of Electrical And Electronic Engineers
IISP Interim Interswitch Signaling Protocol
ILEC Incumbent Local Exchange Carrier
IN Intelligent Network
INA Integrated Network Access
INP Interim Number Portability
ISC Interconnection Services Center
ISDN Integrated Services Digital Network
ISDNUP Integrated Services Digital Network User Part
ISNI Intermediate Signal Network Identifier
ISO International Standardization Organization
ISUP Integrated Services Userpart
ITU International Telecommunications Union
IVMS Interswitch Voice Messaging Service
LARG LIDB Access Routing Guide
LASS Local Area Signaling Services
LATA Local Access Transport Area
LC Loop Concentrator/Multiplexor
LCC Line Class Code
LD Loop Distribution
LEC Local Exchange Carrier
LEC DA LEC Directory Assistance
LEC SCE LEC Service Creation Environment
LEC SCP LEC Service Control Point
LEC SMS LEC Service Management System
LEC SSP LEC Service Switching Point
LERG Local Exchange Carrier Routing Guide
LF Loop Feeder
LFACS Loop Facilities Assignment and Control System
LGX Lightguide Cross-Connect
LIDB Line Information Data Base
</TABLE>
4
<PAGE> 39
ATTACHMENT 2
<TABLE>
<S> <C>
LIDB/AS Line Information Data Base Administrative System
LI-OFFICE Local Interconnection Office
LMI Local Management Interface
LNP Local Number Portability
LP Loop
LRECL Logical Record Length
LRN Local Routing Number
LS Local Switching
LSNE Local Switching Network Element
LSO Local Serving Office
LSSGR LATA Switching Systems Generic Requirements
MDF Main Distribution Frame
MDU Multiple Dwelling Unit
MDU/BCL Multiple Dwelling Unit/Business Customer Location
MECAB Multiple Exchange Carrier Billing
MECOD Multiple Exchange Carriers Ordering And Design
MF Multi-Frequency
MIB Management Information Base
MLT Mechanized Loop Tests
MOP Methods Of Procedure
MOS Modified Operator Services
MOU Minutes Of Use
MR Modification Request
MRVT MTP Routing Verification Test
MSAG Master Street & Address Guide
MTP Message Transfer Port
NANP North American Numbering Plan
NDM Network Data Mover
NEBS Network Equipment Building System
NI Network Interface Device
NID Network Interface Device
NIU Network Interface Unit
NMS Network Management System
NNI Network To Network Interface
NPA Numbering Plan Area
NVT Network Validation Test
OA Operator Assistance
OAM Operation And Maintenance
OAM&P Operations Administration Maintenance & Provisioning
OBF Ordering & Billing Forum
OC Optical Carrier
OC3 Optical Carrier Level 3
</TABLE>
5
<PAGE> 40
ATTACHMENT 2
<TABLE>
<S> <C>
ODS Optical Distribution
OLI Originating Line Indicator
OMAP Operations, Maintenance & Administration Part
ORT Operational Readiness Test
OS Operator Services
OSS Operations Support Systems
OSSGR Operator Services Systems Generic Requirements
PBSM Pacific Bell Service Manager
PBX Private Branch Exchange
PDH Plesiochronous Digital Hierarchy
PEC Primary Exchange Carrier
PIC Primary Interexchange Carrier
PLU Percent Local Usage
PNP Permanent Number Portability
POI Point Of Interface
POI Points Of Interconnection
POT Point Of Termination
POTS Plain Old Telephone Service
PREMIS Premise Information System
PRI Primary Rate Interface
PSAP Public Safety Answering Point
PUC Public Utilities Commission
RAO Regional Accounting Office
RCF Remote Call Forwarding
RECFM Record Format
RI Route Index
RI-PH Route Index - Portability Hub
ROW Right Of Way
RPC Regional Processing Center
RSM Remote Switch Module
RT Remote Terminal
SAC Service Area Code
SAG Street Address Guide
SCCP Signaling Connection Control Point
SCE Service Creation Environmental
SCP Service Control Points
SDH Synchronous Digital Hierarchy
SECAB Small Exchange Carrier Access Billing
SL Signaling Link Transport
SMDI-E Standard Message Desk Interface - Enhanced
SMS Service Management System
SNI Simple Network Interface
</TABLE>
6
<PAGE> 41
ATTACHMENT 2
<TABLE>
<S> <C>
SNMP Simple Network Management Protocol
SONET Synchronous Optical Network
SORD Service Order Retrieval And Distribution
SPOC Single Point Of Contact
SPOI Signaling Point Of Interconnection
SRVT SCP Routing Verification Test
SS SS7 Message Transfer & Connection Control
SS7 Signaling System 7
SSP Switching Services Port
STP Signaling Transfer Point
STS Synchronous Transport Signal
STS-1 Synchronous Transport Signal Level 1
STSn Synchronous Transport Signal Level N
SWF-DSI Switched Functional DS1 Service Capability
T1.5 T Carrier Transport @ 1.544 mb
T3 T Carrier Transport @ 45 mb
T&M Time & Material
TCAP Transaction Capabilities Application Port
TDEV Time Deviation
TDI Tie Down Information
TIA/EIA Telecommunications Industries Association/Electronic Industries
Association
TR Technical Requirements
TS Tandem Switching
TSG Trunk Sub-Group
TSGR Transport System Generic Requirements
TSLRIC Total Service Long Run Incremental Cost
TSP Telecommunications Services Priority
UNI User to Network Interface
USCC Unbundled Service Cross Connect
VB Variable Block
VCI Virtual Channel Identifier
VF Voice Frequency
V&H Vertical & Horizontal
WDM Wavelength Division Multiplexing
WSP Wireless Service Provider
WTN Working Telephone Number
</TABLE>
7
<PAGE> 42
ATTACHMENT 3
ATTACHMENT 3
ALTERNATIVE DISPUTE RESOLUTION
ATTACHMENT 3: TABLE OF CONTENTS
<TABLE>
<S> <C>
ALTERNATIVE DISPUTE RESOLUTION
1 Purpose.................................................................1
2. Exclusive Remedy........................................................1
3. Informal Resolution of Disputes.........................................2
4. Initiation of an Arbitration............................................2
5. Governing Rules for Arbitration.........................................2
6. Appointment and Removal of Arbitrator...................................3
7. Duties and Powers of the Arbitrator.....................................3
8. Discovery...............................................................4
9. Privileges..............................................................4
10. Location of Hearing.....................................................4
11. Decision................................................................4
12. Fees....................................................................4
13. Confidentiality.........................................................5
14. Service of Process......................................................5
</TABLE>
<PAGE> 43
ATTACHMENT 3
Page 1
ALTERNATIVE DISPUTE RESOLUTION
1. PURPOSE
This Attachment 3 is intended to provide for the expeditious,
economical, and equitable resolution of disputes between PACIFIC and
CLEC arising under this Agreement.
2. EXCLUSIVE REMEDY
2.1 Except for disputes or matters (i) for which the total value of the
amount in controversy exceeds Twenty Five Million Dollars ($25,000,000),
(ii) for which this Agreement or the Telecommunications Act of 1996
specifies a particular remedy or procedure, (iii) for which a Party
seeks injunctive relief and/or specific performance in any Court of
competent jurisdiction, or (iv) which are covered by the Billing
Disputes provisions contained in Attachment 13 (Connectivity Billing and
Recording), informal resolution and arbitration under the procedures
provided herein shall be the exclusive remedy for all disputes between
PACIFIC and CLEC arising out of this Agreement or its breach. PACIFIC
and CLEC agree not to resort to any court, agency, or private group with
respect to such disputes except in accordance with this Attachment.
2.1.1 If, for any reason, certain claims or disputes are deemed to be
nonarbitrable, the non-arbitrability of those claims or disputes shall
in no way affect the arbitrability of any other claims or disputes.
2.1.2 If, for any reason, the FCC or any other federal or state regulatory
agency exercises jurisdiction over and decides any dispute related to
this Agreement, or to the Act, or to any tariff and, as a result, a
claim is adjudicated in both an agency proceeding and an arbitration
proceeding under this Attachment 3, the following provisions shall
apply:
2.1.2.1 To the extent required by law, the agency ruling shall be binding upon
the parties and shall take precedence over any contrary ruling of the
arbitrator for those matters within the jurisdiction and authority of
such agency.
2.1.2.2 The arbitration ruling rendered pursuant to this Attachment 3 shall be
binding upon the parties for purposes of establishing their respective
contractual rights and obligations under this Agreement.
3. INFORMAL RESOLUTION OF DISPUTES
3.1 Prior to initiating an arbitration pursuant to the American Arbitration
Association ("AAA") rules, as described below, the parties to this
Agreement shall submit any dispute between PACIFIC and CLEC for
resolution to an Inter-Company Review Board consisting of one
representative from CLEC at the Director-or-above level and one
representative from PACIFIC at the Vice-President-or-above level (or at
such lower level as each Party may designate).
1
<PAGE> 44
ATTACHMENT 3
Page 2
3.2 The Parties may enter into a settlement of any dispute at any time The
Settlement Agreement shall be in writing, and shall identify how the
Arbitrator's fee for the particular proceeding, if any, will be
apportioned.
3.3 At no time, for any purposes, may a Party introduce into evidence or
inform the Arbitrator of any statement or other action of a Party in
connection with negotiations between the Parties pursuant to the
Informal Resolution of Disputes provision of this Attachment 3.
4. INITIATION OF AN ARBITRATION
If the Inter-Company Review Board is unable to resolve the dispute
within 30 days (or such longer period as agreed to in writing by the
Parties) of such submission, and the Parties have not otherwise entered
into a settlement of their dispute, either Party may initiate an
arbitration in accordance with the AAA rules.
5. GOVERNING RULES FOR ARBITRATION
The rules set forth below and the rules of the AAA shall govern all
arbitration proceedings initiated pursuant to this Attachment; however,
such arbitration proceedings shall not be conducted under the auspices
of the AAA unless the Parties mutually agree. Where any of the rules set
forth herein conflict with the rules of the AAA, the rules set forth in
this Attachment shall prevail.
6. APPOINTMENT AND REMOVAL OF ARBITRATOR
6.1 A sole Arbitrator (the "Arbitrator") will preside over each dispute
submitted for arbitration under this Agreement.
6.2 The Parties shall appoint each Arbitrator. Each Arbitrator will serve
until a decision is rendered. Each appointment will be made by mutual
agreement in writing within thirty (30) days after the Parties have
initiated an arbitration proceeding (or such longer period as the
Parties may mutually agree to in writing).
6.3 In the event that an Arbitrator resigns or becomes unable to discharge
his or her duties, the Parties shall, by mutual written Agreement,
appoint a replacement Arbitrator within thirty (30) days after such
resignation, removal, or inability, unless a different time period is
mutually agreed upon in writing by the Parties. Any matters pending
before the Arbitrator at the time he or she resigns, is removed, or
becomes unable to discharge his or her duties, will be assigned to the
replacement Arbitrator as soon as the replacement Arbitrator is
appointed.
6.4 In the event that the Parties do not appoint an Arbitrator within the
time limit set forth in Section 6.2 of this Attachment 3, or a
replacement Arbitrator within the time limit set forth in Section 6.3 of
this Attachment 3, either Party may apply to AAA for appointment of such
Arbitrator. Prior to filing an application with the AAA, the Party
filing such
2
<PAGE> 45
ATTACHMENT 3
Page 3
application shall provide ten (10) days prior written notice to the
other Party to this Agreement.
7. DUTIES AND POWERS OF THE ARBITRATOR
7.1 The Arbitrator shall receive complaints, and other permitted pleadings,
oversee any discovery which is permitted, administer oaths and subpoena
witnesses pursuant to the United States Arbitration Act, hold hearings,
issue decisions, and maintain a record of proceedings. The Arbitrator
shall have the power to award any remedy or relief that a court with
jurisdiction over this Agreement could order or grant, including,
without limitation, the awarding of damages, pre-judgement interest, or
imposition of sanctions for abuse or frustration of the arbitration
process, except that the Arbitrator may not award injunctive relief,
punitive damages or any remedy rendered unavailable to the Parties
pursuant to Section 10.3 of this Agreement.
7.2 The Arbitrator shall not have the authority to limit, expand, or
otherwise modify the terms of this Agreement.
8. DISCOVERY
There shall be no discovery except for the exchange of documents deemed
necessary by the Arbitrator to an understanding and determination of the
dispute. PACIFIC and CLEC shall attempt, in good faith, to agree on a
plan for document discovery. Should they fail to agree, either PACIFIC
or CLEC may request a joint meeting or conference call with the
Arbitrator. The Arbitrator shall resolve any disputes between PACIFIC
and CLEC, and such resolution with respect to the need, scope, manner,
and timing of discovery shall be final and binding.
9. PRIVILEGES
Although conformity to certain legal rules of evidence may not be
necessary in connection with arbitrations initiated pursuant to this
Attachment, the Arbitrator shall, in all cases, apply the
attorney-client privilege and the work product immunity doctrine.
10. LOCATION OF HEARING
Unless both Parties agree otherwise, any hearings shall take place in
San Francisco, California.
11. DECISION
The Arbitrator's decision and award shall be final and binding, and
shall be in writing unless the Parties mutually agree in writing to
waive the requirement of a written opinion. Judgment upon the award
rendered by the Arbitrator may be entered in any court having
jurisdiction thereof. Either Party may apply to the United States
District Court for the district in which the hearing occurred for an
order enforcing the decision.
3
<PAGE> 46
ATTACHMENT 3
Page 4
12 FEES
12.1 The Arbitrator shall, in his or her discretion, apportion the
Arbitrator's fees and expenses to reflect the relative success of each
Party. In accordance with Section 3.2. of this Attachment 3, in the
event that the Parties settle a dispute before the Arbitrator reaches a
decision with respect to that dispute, the Settlement Agreement must
specify how the Arbitrator's fees for the particular proceeding will be
apportioned.
12.2 In an action to enforce or confirm a decision of the Arbitrator, the
prevailing Party shall be entitled to its reasonable attorneys' fees,
costs, and expenses necessarily incurred in the enforcement proceedings
without regard to the local rules of the district in which the suit is
brought.
13. CONFIDENTIALITY
13.1 PACIFIC, CLEC, and the Arbitrator will treat the arbitration proceeding,
including the hearings and conferences, discovery, or other related
events, as confidential, except as necessary in connection with a
judicial challenge to, or enforcement of, an award, or unless otherwise
required by an order or lawful process of a court or governmental body.
13.2 In order to maintain the privacy of all arbitration conferences and
hearings, the Arbitrator shall have the power to require the exclusion
of any person, other than a Party, counsel thereto, or other essential
persons.
13.3 To the extent that any information or materials disclosed in the course
of an arbitration proceeding contains proprietary or confidential
information (Confidentiality Information) of either Party, it shall be
safeguarded in accordance with Section 19 of the Agreement. However,
nothing in Section 19 of the Agreement shall be construed to prevent
either Party from disclosing the other Party's Confidential Information
to the Arbitrator in connection with or in anticipation of an
arbitration proceeding. In addition, the Arbitrator may issue orders to
protect the confidentiality of proprietary information, trade secrets,
or other sensitive information.
14. SERVICE OF PROCESS
Service may be made by submitting one copy of all pleadings and
attachments and any other documents requiring service to each Party and
one copy to the Arbitrator. Service shall be deemed made (i) upon
receipt if delivered by hand; (ii) the next business day if sent by
overnight courier service; or (iii) upon confirmed receipt if
transmitted by facsimile. If service is by facsimile, a copy shall be
sent the same day by hand delivery or overnight courier service.
14.1 Service by CLEC to PACIFIC and by PACIFIC to CLEC at the address
designated for delivery of notices in this Agreement shall be deemed to
be service to PACIFIC or CLEC, respectfully.
4
<PAGE> 47
ATTACHMENT 4
DIRECTORY LISTING REQUIREMENTS
<PAGE> 48
Attachment 4
Page 1
ATTACHMENT 4
DIRECTORY LISTING REQUIREMENTS
1. GENERAL
PACIFIC shall make available to CLEC, for CLEC Customers,
nondiscriminatory access to its telephone number and address directory
listings ("Directory Listings"), under the following terms and
conditions:
2. WHITE AND YELLOW PAGE LISTINGS
PACIFIC publishes and distributes white pages directories through its
wholly owned subsidiary PBD, as its agent for the white pages. PBD also
publishes and distributes yellow pages directories. With respect to
those directories, upon receipt of the necessary customer information
from CLEC, PACIFIC will include, at no charge, a standard, basic listing
(i) of CLEC's residence customers in the appropriate white pages
directory and, (ii) of CLEC's business customers in the appropriate
white pages and yellow pages directories. Additionally, CLEC's customers
each will have delivered to them at no charge one copy of appropriate
white and yellow pages directories. Where an CLEC Customer has two
numbers for a line due to the implementation of interim Local Number
Portability; the second number shall be considered part of the one White
Pages basic listing. PACIFIC shall permit CLEC Customers the option of
not having a published White Pages listing; this option will be provided
at the same price PACIFIC charges its end user customers for the same
option. PACIFIC shall include in its master subscriber list database all
Subscriber Listing Information for CLEC Customers; PACIFIC's use of CLEC
Subscriber Listing information is subject to Section 6 of this
Attachment 4.
3. DIRECTORIES
3.1 Upon receipt of the necessary customer information from CLEC, PACIFIC
shall deliver Directory Listings in book form ("Telephone Directories")
to each of CLEC's exchange service Customers with or without charge on
the same basis that it delivers Telephone Directories to its own
customers with or without charge. There is no limit on the total number
of directories that may be delivered by PACIFIC. Timing of such delivery
and the determination of which Telephone Directories shall be delivered
(whether by customer address, NPNNXX or other criteria), and the number
of Telephone Directories to be provided per customer, shall be provided
under the same terms that PACIFIC delivers Telephone Directories to its
own local service customers.
3.2 PACIFIC shall make available recycling services for Telephone
Directories to CLEC Customers under the same terms and conditions that
PACIFIC makes such services available to its own local service
customers.
<PAGE> 49
Attachment 4
Page 2 of 3
4. DIRECTORY LISTING CRITERIA
The general terms relating to white and yellow page listings and
non-published listings are set forth in PACIFIC's Schedule Cal.P.U.C.
No. 175T, Sec. 93. Information relating to paid advertising, publication
schedules and coverage of specific directories may be obtained by CLEC
from PBD. PACIFIC's listing handbook will be available in the CLC
Handbook. PACIFIC will update the CLC Handbook as product offerings or
product process changes are made. The changes will be available
automatically to CLEC through LI-OFFICE. Until such time as PACIFIC's
Listings Handbook is available through LI-OFFICE, PACIFIC shall provide
an updated paper copy of the CLC Listings Handbook on a quarterly basis
starting not later than ten (10) days after the Effective Date of this
Agreement. This Listing Handbook update will include all changes to the
directory listing criteria.
5. CUSTOMER INFORMATION LISTING
In areas where CLEC provides (or plans to provide service within the
next 12 months) exchange service, PACIFIC shall include, in the Customer
Guide section of each Telephone Directory, not less than one full page
of information about CLEC services, including addresses and telephone
numbers for CLEC Customer service. A maximum of two pages will be
provided without charge to CLEC. Pages in excess of two will be charged
by PACIFIC in accordance with the nondiscriminatory rates contained in
PACIFIC's Schedule Cal P.U.C. tariff No. 175-T, Sec.9.2 ("Customer Guide
Service Tariff"). The form and content of such customer information
section shall be determined by CLEC and shall be provided by CLEC to
PACIFIC. However neither Party's content can contain puffery or rate
comparisons with other companies. At CLEC's option, the form and content
of this customer information may vary per community directory.
6. SALE OF CLEC SUBSCRIBER LISTING INFORMATION
PACIFIC will include Subscriber List Information of published CLEC local
exchange customers in PACIFIC's Telephone Directory Reproductions Rights
Service, unless instructed in writing by CLEC not to release Subscriber
List Information to independent directory publications. PACIFIC will
include the Subscriber List Information of CLEC local exchange customers
in PACIFIC's voice and electronic
Directory Assistance Services.
Section 2 notwithstanding and subject to the following conditions, CLEC
may direct PACIFIC not to release CLEC's Customers' Subscriber List
Information to independent directory publications if the Parties first
agree:
1) on the timing and method for CLEC to specify which CLEC
Customer Subscriber List Information is not to be
included in sales to independent directory publications;
and,
<PAGE> 50
2) on the appropriate charge for listing such CLEC
Customers in PACIFIC's directories
If the Parties can not agree on the timing, method or price the Parties
shall use the Alternative Dispute Resolution Process set forth in
Attachment 3.
3
<PAGE> 51
ATTACHMENT 5
LOCAL SERVICES RESALE
<PAGE> 52
Attachment 5
2
LOCAL SERVICES RESALE
1. TELECOMMUNICATIONS SERVICES PROVIDED FOR RESALE
1.1 This Attachment describes services which PACIFIC shall make
available to CLEC for resale pursuant to this Agreement. This
list of services is neither all inclusive nor exclusive. All
Telecommunications Services or offerings of PACIFIC which are to
be offered for resale at wholesale rates pursuant to the Act,
regulations thereunder, and relevant Commission decisions, are
subject to the terms herein, even though they are not
specifically enumerated or described. PACIFIC shall also provide
Support Functions and Service Functions, as set forth in Sections
4 and 5 of this Attachment 5. The Telecommunications Services,
Service Functions and Support Functions provided by PACIFIC
pursuant to this Agreement for resale to CLEC are collectively
referred to as "Local Service."
1.2 The rights, obligations and duties set forth in this Attachment
are subject to the Act, regulations thereunder and relevant
Commission decisions.
2. GENERAL TERMS AND CONDITIONS FOR RESALE
2.1 PRICING
The prices charged to CLEC for Local Service are set forth in
Attachment 8 of this Agreement. All Telecommunications Services,
including without limitation, promotions of more than 90 days
duration, shall be available to CLEC at wholesale rates as
specified in Attachment 8, and shall be no less favorable than
the wholesale rates made available by PACIFIC to similarly
situated CLCs; provided, however, pursuant to section 252 of the
Act, implementing regulations and any court decisions applicable
thereto, PACIFIC shall make available to CLEC, without
unreasonable delay, any Local Service contained in any agreement
to which PACIFIC is a party that has been filed and approved by
the Commission. CLEC shall be subject to the same term
commitments, volume commitments, and prohibitions against end
user aggregation to satisfy volume discounts as apply to
PACIFIC's retail customers and the resale discount set forth in
Attachment 8 shall be applied to CLEC on a customer-by-customer
basis. In no event shall CLEC be required to agree to volume or
term commitments (other than those which may be applicable to
PACIFIC's end user customers) as a condition for obtaining Local
Service at wholesale rates.
2.2 RESALE RESTRICTIONS
To the extent consistent with applicable rules and
regulations of the FCC and the Commission, including, without
limitation, Decision 96-03-020 of the Commission, CLEC may resell
Local Services to provide Telecommunications Services. PACIFIC
will not impose unreasonable or discriminatory conditions or
<PAGE> 53
Attachment 5
3
limitations on the resale of its Telecommunications Services.
Services that PACIFIC has grandfathered or grandfathers in the
future may only be resold to grandfathered subscribers.
2.3 DIALING AND SERVICE PARITY; NUMBER PORTABILITY
2.3.1 Unless technically infeasible, for resold services,
PACIFIC shall ensure that all CLEC Customers experience
the same dialing parity as similarly-situated PACIFIC
customers.
2.3.2 For resold services, PACIFIC shall ensure that all CLEC
Customers experience the same service levels as similarly
situated PACIFIC customers, and, unless technically
infeasible, that there is no loss of features or
functionalities, including, but not limited to: same dial
tone and ringing; same capability for either dial pulse or
touch tone recognition; flat and measured services; speech
recognition as available; same extended local free calling
area; 1+ IntraLATA toll calling; InterLATA toll calling
and international calling; 500, 700, 800, 900, 976 and
Dial Around (IOXXX) Services; and restricted collect and
third number billing.
2.4 CHANGES IN RETAIL SERVICE
PACIFIC will notify CLEC of any changes in the terms and
conditions under which it offers Telecommunications Services at
retail to subscribers who are not telecommunications service
providers or carriers, including, but not limited to, the
introduction of any new or discontinuance of any features,
functions, services, or promotions or the discontinuance of
current features or services, at least sixty (60) days prior to
the effective date of such change; provided, however, that with
respect to terms and conditions contained in a contract between
PACIFIC and one of its end users, PACIFIC shall notify CLEC of
changes in such terms and conditions immediately upon signing any
amendment to such contract.
2.5 PRIMARY LOCAL EXCHANGE CARRIER SELECTION
PACIFIC shall apply the principles set forth in Section 64.1100
of the FCC Rules (47 C.F.R. Section 64.1100) to the process for
end-user selection of a primary local exchange carrier. PACIFIC
shall not require a written letter of authorization from the
customer in order to process an CLEC order for Local Service for
the customer; provided, however, that if CLEC requests a
customer's service record, the provisions of Section 5.5.1 of
this Attachment shall apply.
<PAGE> 54
Attachment 5
4
3. REQUIREMENTS FOR SPECIFIC SERVICES
3.1 CENTREX REQUIREMENTS
3.1.1 At CLEC's option, CLEC may purchase the entire set of
CENTREX features or a subset of any one or any combination
of such features. The CENTREX Service provided for resale
will meet the following requirements:
3.1.1.1 All deployed features and functions of CENTREX
Service offered to any PACIFIC customer, whether
offered under tariff or otherwise, shall be
available to CLEC, where deployed, for resale,
without any customer class restrictions other
than those which may be imposed by applicable
orders of the FCC or the Commission, including,
without limitation, Commission Decision
96-03-020.
3.1.1.2 PACIFIC shall provide to CLEC a list of all
CENTREX features and functions offered by
PACIFIC within ten (10) days of the Effective
Date of this Agreement.
3.1.1.3 All service levels and features of CENTREX
Service provided by PACIFIC for resale by CLEC
shall be at parity to those provided to
PACIFIC's end user customers.
3.1.1.4 CLEC shall pay a one time, non-recurring charge,
as set forth in Attachment 8 of this Agreement
to pay for the cost of suppressing the need for
CLEC Customers to dial "9" ("Assumed Dial 9")
when placing calls outside the CENTREX System.
CLEC recognizes that there are certain problems
with Assumed Dial 9 on Centrex but such problems
would also be experienced by a PACIFIC Centrex
customer using Assumed Dial 9.
3.1.1.5 CLEC may utilize Automatic Route Selection
("ARS").
3.2 CLASS AND CUSTOM FEATURES REQUIREMENTS
CLEC may purchase the entire set of CLASS and Custom Calling
Features and functions where deployed by PACIFIC and made
available to its end-user customers, or any one or any
combination of such features, on a customer-specific basis,
without restriction on the minimum or maximum number of lines or
features that may be purchased. PACIFIC shall provide to CLEC a
list of all such CLASS and Custom features and functions within
ten (10) days of the Effective Date.
<PAGE> 55
Attachment 5
5
3.3 LIFELINE SERVICE
When a customer eligible for the Lifeline Service chooses to
obtain Local Service from CLEC, PACIFIC shall flag the account as
a Lifeline Service Customer and forward this information in
electronic format in accordance with the procedures set forth
herein. For the first ninety (90) days after the Effective Date
of this Agreement, PACIFIC will make Lifeline Service available
to CLEC at the wholesale discount specified in Attachment 8; for
such period of time, CLEC will provide PACIFIC with information
sufficient to permit PACIFIC to seek reimbursement from the
Universal Lifeline Telecommunications Service Fund. Thereafter,
CLEC will purchase basic local exchange service from PACIFIC,
less the applicable wholesale discount, for resale to Lifeline
Service customers (including customers who continue as CLEC
Lifeline Service customers after the first ninety days) and will
seek reimbursement from the Universal Lifeline Telecommunications
Service Fund.
3.4 INTERCEPT AND TRANSFER SERVICE
Upon request from CLEC, PACIFIC will provide an intercept
referral message that includes any new CLEC telephone number, for
residential customers for three (3) months, and business
customers for twelve (12) months, and PACIFIC will provide
directory updates at the next publication. This intercept
referral message shall be approved by CLEC and shall be similar
in format to the intercept referral messages currently provided
by PACIFIC for its own end users. Custom messages or extension in
duration of the referral shall be subject to the charges set
forth in Attachment 8.
3.5 E9111911 SERVICES
PACIFIC shall provide to CLEC, for CLEC Customers, E91 1/911 call
routing to the appropriate Public Safety Answering Point
(~'PSAP") with a parity level equal to that provided to PACIFIC's
end-user customers. PACIFIC shall provide and validate CLEC
Customer information to the PSAP. Upon request, PACIFIC will
provide documentation to CLEC showing the correlation between
PACIFIC's LSOs/rate centers to their E91 1 Selective Router
tandems. At the price set forth in Attachment 8, PACIFIC will
provide CLEC with access to PACIFIC's Master Street Address Guide
(MSAG), in paper form and magnetic tape, for purposes of allowing
CLEC to update and validate customer records in the E91 1
Management System (E91 1 MS) database used to support E91 1/911
services. PACIFIC will offer to CLEC a diskette version of the
MSAG, when available; availability is expected in the first
quarter of 1997. Nothing in this Agreement precludes CLEC from
establishing and updating its own ALI/DMS data base
<PAGE> 56
Attachment 5
6
4. SUPPORT FUNCTIONS FOR RESOLD SERVICES:
4.1 The following Support Functions are offered in conjunction with a
resold service: Operator Systems and Repair Services. Operator
Systems consist of Directory Assistance and Operator Services.
4.2 ROUTING TO OPERATOR SYSTEMS
Where CLEC purchases Local Service, at CLEC's option, PACIFIC
will provide the functionality and features required to modify
the originating subscriber's line at PACIFIC's local switch (LS)
or, when intraLATA presubscription is implemented, PACIFIC's
Access Tandem (AT) to route all calls to the CLEC Network for
Operator Systems. Such routing to CLEC's Operator Systems shall
be available as specified in Attachment 6, Section 4.1.4.4.
4.2.1 OPERATOR SYSTEMS: Operator Systems calls which, at CLEC's
option, are routed to PACIFIC will meet the following
requirements:
4.2.1.1 The calls will be unbranded, with no reference,
express or implied, to PACIFIC.
4.2.1.2 PACIFIC will provide Operator Systems to CLEC
which meets those which PACIFIC provides to
itself and its own end-user customers.
4.2.2 DIRECTORY ASSISTANCE:
4.2.2.1 At CLEC's option, PACIFIC shall route local
Directory Assistance calls dialed via 411 by
CLEC Customers directly to the CLEC Network. The
Parties will meet and confer immediately after
the Effective Date of this Agreement in an
effort to find a solution which can be
implemented by April 30,1997 for PACIFIC to
route local Directory Assistance dialed via
(NPA) 555-1212 by CLEC Customers directly to the
CLEC Network. In the event the Parties are
unable to agree within forty-five (45) days of
the Effective Date on a solution, the Parties
shall submit any dispute to Alternative Dispute
Resolution as set forth in Attachment 3.
4.2.2.2 PACIFIC will include the CLEC Customer's listing
in its Directory Assistance database as part of
the Service Order process. PACIFIC will honor
CLEC Customer's preferences for listing status,
including non-published and unlisted, as noted
on the Service Order Request or similar form and
will ensure that the listing appears as the
subscriber requested in the PACIFIC database
which is used to perform Directory Assistance
functions. Performance Standards associated with
this service are set forth in
<PAGE> 57
Attachment 5
7
Attachment 17 and are incorporated by this
reference. PACIFIC will provide Directory
Assistance service to CLEC that equals the
Directory Assistance Service PACIFIC provides to
itself and its own end users.
4.3 OPERATOR SERVICES
4.3.1 PACIFIC will provide the full range of Operator Services,
at the rates set forth in Attachment 8, including, but not
limited to, collect, person to person, station to station,
bill-to-third party, busy line verification and busy line
interrupt, handicapped caller assistance and emergency
call assist.
4.3.1.1 At CLEC's option, and consistent with the
implementation schedule set forth in Attachment
6, Section 4.1.4.4, PACIFIC shall route local
Operator Services calls (0+, 0-) dialed by CLEC
Customers directly to the CLEC Local Operator
Services platform. Such traffic shall be routed
over trunk groups specified by CLEC which
connect PACIFIC end offices and the CLEC Local
Operator Services platform, using standard
Operator Services dialing protocols of 0+ or
4.3.1.2 PACIFIC will provide the functionality and
features within its local switch (LS) to route
CLEC customer dialed 0- and 0+ IntraLATA calls
to the CLEC designated trunk on the Main
Distributing Frame (MDF) or Digital Cross
Connect (DSX) panel via Modified Operator
Services Signaling (MOSS) Feature Group C
signaling. In addition and at CLEC's request,
when intraLATA presubscription is implemented,
PACIFIC will provide the functionality and
features within its Access Tandem to route CLEC
customer dialed 0- and 0+ IntraLATA calls to the
CLEC designated trunk on the Main Distributing
Frame (MDF) or Digital Cross Connect (DSX) panel
via Feature Group D signaling. In all cases,
PACIFIC will provide post-dial delay at least
equal to that provided by PACIFIC for its end
user customers.
4.3.1.3 PACIFIC will warm-line transfer any CLEC
customer requesting rate information to CLEC, as
follows:
4.3.1.3.1 Warm-line transfers without charge:
PACIFIC will warm-line transfer any
CLEC customer requesting intraLATA
rate information (except calling
plan information), at no charge to
CLEC.
4.3.1.3.2 Warm-line transfers at tariffed
rate: PACIFIC will warm-line
transfer any CLEC customer
requesting
<PAGE> 58
Attachment 5
8
interLATA, interstate or
international rate information, as
well as intraLATA calling plan
information, and charge CLEC the
tariffed rate for
carrier-to-carrier warm-line
transfers.
4.3.2 Repair Calls:
Either Party shall refer repair calls (e.g., 611) dialed
by the other Party's end-user customer to the 800/888
number supplied by the other Party for the other Party's
repair center.
4.3.3 Non-discriminatory Treatment:
All direct routing capabilities described herein shall
permit CLEC Customers to dial the same telephone numbers
for CLEC Directory 12/13/96 Assistance or Local Operator
that similarly-situated PACIFIC customers dial for
reaching equivalent PACIFIC services. Such
non-discriminatory dialing to reach CLEC's Directory
Assistance or Local Operator shall be available consistent
with the implementation schedule in Attachment 6, Section
4.1.4.4
4.3.4 Emergency Calls:
PACIFIC, no later than ten (10) business days after the
Effective Date, shall provide to CLEC the emergency public
agency (e.g., police, fire, ambulance) telephone numbers
linked to each NPA-NXX. Such data will be transmitted via
the Electronic Interface described in Attachment 11, or by
an interim means agreed by the parties. PACIFIC will
electronically transmit to CLEC, in a timely manner, all
changes, alterations, modifications and updates to such
data. PACIFIC shall accurately transmit information
provided to PACIFIC by the emergency public agency, but
assumes no liability for the accuracy of such information.
4.4 BUSY LINE VERIFICATION AND EMERGENCY LINE INTERRUPT
Until such time that an electronic interface is made available by
PACIFIC to access PACIFIC's data base for Operator Services, if
CLEC has purchased the resale line without PACIFIC's Operator
Services, PACIFIC will offer Operator-to-Operator BLV/BLVI to
CLEC on a non-discriminatory basis, in accordance with LERG
instructions. PACIFIC requires that a reciprocal BLV/BLVI network
be established between PACIFIC and CLEC's operator service
provider.
<PAGE> 59
Attachment 5
9
4.5 ACCESS TO THE LINE INFORMATION DATABASE
PACIFIC shall update and maintain CLEC Customer information in
the Line Information Database LIDB in the same manner and on the
same schedule that it maintains information in LIDB for PACIFIC
customers.
4.6 TELEPHONE LINE NUMBER CALLING CARDS
Effective as of the date of an end-user's subscription to CLEC
Service, PACIFIC will remove any PACIFIC-assigned telephone line
calling card number (including area code) ("TLC") from the LIDB.
4.7 CALL BLOCKING
Upon CLEC's request, PACIFIC will provide blocking on a line by
line basis of an CLEC Customer's access to any or all of the
following call types: 900, 976, bill to third and collect, and
such other call types for which PACIFIC provides blocking to
similarly situated customers
4.8 PAY PHONE SERVICES
4.8.1 "Pay Phone Services" is defined by Section 276 of the Act
and any FCC and Commission regulations adopted thereto.
These services may include the provision of service from
public pay telephones, the provision of inmate telephone
service in correctional institutions, and the provision of
any ancillary services within the meaning of Section 276
of the Act.
4.8.2 Pay phone lines are defined as the loop from the pay phone
set point of demarcation to the Serving Wire Center. Pay
phone lines are attached to coinless and coin pay phone
sets (e.g. PACIFIC's COPT service).
4.8.3 PACIFIC will provide CLEC all retail telecommunications
functions and features provided by PACIFIC through pay
phone lines, in the same form, made available by PACIFIC
to customers for its pay phone lines customers (e.g. COPT
providers).
4.8.4 Each Party will comply with Section 276 of the Act and FCC
regulations adopted thereunder in connection with
selection of carriers for intraLATA, interLATA and
international telephone services from pay phone sets.
5. SERVICE FUNCTIONS
5.1 ELECTRONIC INTERFACE
5.1.1 PACIFIC shall provide an interim electronic
interface known as Network Data Mover ("NDM)" for
transferring and receiving all Service Orders and related
information such as Firm Order Confirmations (FOC),
Jeopardies,
<PAGE> 60
Attachment 5
10
Rejects, Simple and Complex Completions. The NDM shall be
administered through a gateway that will serve as a single
point of contact for the transmission of data from CLEC to
PACIFIC, and from PACIFIC to CLEC. The requirements and
implementation of such a data transfer system are/will be
set forth in Attachment 11 and are incorporated by this
reference as though fully set forth herein.
5.1.2 For the Long Term, PACIFIC and CLEC agree to adopt an
Electronic Bonding ("EB") standard to transmit and receive
Pre-Order, Order and Provisioning data in a "real time"
environment. Both companies agree that this solution is in
their mutual best interest and will negotiate in good
faith for the earliest possible deployment of an EB
standard, as set forth in Attachment 11. In the event the
parties are unable to reach agreement on implementation of
an EB standard, any unresolved issues will be resolved
pursuant to the Alternative Dispute Resolution procedures
in Attachment 3 to this Agreement.
5.2 WORK ORDER PROCESSES
5.2.1 PACIFIC shall ensure that all work order processes used to
provision Local Service to CLEC for resale meet the
service parity requirements set forth in this Agreement or
its Attachments
5.2.2 Additional Service Ordering, Provisioning, Maintenance,
Billing and Customer Usage Data requirements and
procedures are set forth in Attachments 11.12, 13 and 14.
5.3 POINT OF CONTACT FOR CLEC CUSTOMERS
5.3.1 Except as otherwise provided in this Agreement, CLEC shall
be the single and sole point of contact for all CLEC
Customers.
5.3.2 Each Party shall refer all questions regarding the other
Party's service or product directly to the other Party at
a telephone number specified by the other Party.
5.3.3 Each Party shall ensure that all their representatives who
receive inquiries regarding the other Party's services:
(i) provide such numbers to callers who inquire about the
other Party's services or products; and (ii) do not in any
way disparage or discriminate against the other Party, or
its products or services.
<PAGE> 61
Attachment 5
11
5.4 SINGLE POINT OF CONTACT
Each party shall provide the other party with a single point of contact
("SPOC") for all inquiries regarding the implementation of this Attachment. Each
Party shall accept all inquiries from the other Party and provide timely
responses.
5.5 PRE-SERVICE ORDER INFORMATION
To facilitate the ordering of new service for resale or changes to such
service to an CLEC Customer ("Service Order"), PACIFIC shall provide, consistent
with the implementation schedule set forth in Section 5.1.1., CLEC's
representatives with gateway access to PACIFIC's PREMIS and APTOS information.
This will allow CLEC to perform functions such as, but not limited to, Telephone
Number Assignment, an LSO to address correlation, service and feature
availability by switch type and other such functions which are deemed necessary
to provide the customer with a common experience when dealing with CLEC. Through
PREMIS, APTOS, NDM or using other methods. PACIFIC shall comply with CLEC
requests to:
5.5.1 Obtain customer information, including customer name, billing and
residence address, billing telephone number(s), current
participation in Voluntary Federal Customer Financial Assistance
Program, Telephone Relay, and other similar services, and
identification of PACIFIC features and services subscribed to by
customer. The following additional terms shall apply to
AT&T's access:
5.5.1.1 For business customers, prior to accessing such
information, AT&T shall provide Pacific with a written or
electronic statement indicating that it has the
customer's approval (verbal or written) to receive such
information. Where accessing such information via an
electronic interface, AT&T shall have obtained an
authorization to become the end user's local service
provider. AT&T shall receive and retain such information
in conformance with the requirements of 47 USC 222 (and
implementing FCC decisions thereunder).
5.5.1.2 For residence customers, prior to accessing such
information, AT&T shall, on its own behalf and on behalf
of PACIFIC, comply with all applicable requirements of
Section 2891 of the California Public Utilities Code and
47 USC 222 (and implementing FCC decisions thereunder),
and, where accessing such information via an electronic
interface, AT&T shall have obtained an authorization to
become the end user's local service provider. Accessing
such information by AT&T shall constitute certification
that AT&T is in compliance with the applicable
requirements of Section 2891 and Section 222 (and
implementing FCC decisions thereunder) and has complied
with the prior sentence. AT&T shall receive and retain
such information in conformance with the requirements of
47 USC 222 (and implementing FCC decisions thereunder).
Pursuant to Section 10 of this Agreement, AT&T agrees to
indemnify, defend and hold harmless PACIFIC against
<PAGE> 62
Attachment 5
12
any claim made by a residence customer or governmental
entity against PACIFIC or AT&T under Section 2891 or
Section 222 (and implementing FCC decisions thereunder)
or for any breach by AT&T of this Section."
5.5.2 Obtain information on all features and Telecommunication services
available, including new services, trial offers and promotions;
5.5.3 Enter the CLEC Customer order for all desired features and
services;
5.5.4 Assign a telephone number (if the CLEC Customer does not have one
assigned);
5.5.5 Identify the appropriate primary directory for each end-user
location;
5.5.6 For single-line residential service, determine if a service call
is needed to install the line or service;
5.5.7 Identify "next available due date" for service installation;
5.5.8 Provide service availability dates,
5.5.9 Order local intraLATA toll service and enter CLEC Customer's
choice of primary interexchange carrier on a single, unified
order; and
5.5.10 Suspend or terminate service to an CLEC Customer for nonpayment
and restore service, as appropriate, at parity with PACIFIC's
ability to suspend or terminate service.
5.6 PROVISIONING
After receipt and acceptance of a service order, PACIFIC shall provision
such service order in accordance with the intervals and performance standards
set forth in Attachment 17 and as set forth below
5.6.1 PACIFIC shall provide CLEC with service status notices, within
mutually agreed-upon intervals. Such status notices shall include
the following:
5.6.1.1 Firm order confirmation, including service availability
date;
5.6.1.2 Notice of service installation issued at time of
installation including any additional information, such
as material charges;
5.6.1.3 Rejections/errors in Service Orders;
5.6.1.4 Jeopardies and missed appointments;
5.6.1.5 Charges associated with necessary construction
<PAGE> 63
Attachment 5
13
5.6.1.6 Except for basic exchange service, order status at
critical intervals;
5.6.1.7 Except for basic exchange service, test results, where
available, will be provided in a form mutually
agreeable.
5.6.2 Where PACIFIC provides installation, PACIFIC shall advise an CLEC
customer to notify CLEC immediately if the CLEC Customer requests
a service change at the time of installation.
5.6.3 PACIFIC shall provide provisioning support to CLEC during normal
business hours (Monday through Friday, 8 a.m. to 5 p.m. PACIFIC
time, excluding holidays).
5.6.4 PACIFIC shall provide training for all PACIFIC employees who may
communicate, either by telephone or face-to-face, with CLEC
Customers, during the provisioning process. Such training shall
instruct the PACIFIC employees not to disparage or discriminate
against CLEC, its products or services, and shall comply with the
branding requirements of this Agreement.
5.7 MAINTENANCE
Maintenance shall be provided in accordance with the requirements and
standards set forth in Attachment 12. Maintenance will be provided by PACIFIC in
accordance with the service parity requirements set forth in this Attachment.
5.8 PROVISION OF CUSTOMER USAGE DATA
PACIFIC shall provide the Customer Usage Data recorded by the PACIFIC.
Such data shall include CLEC Customer usage data for Local Service, including
both local and intraLATA toll service, all in accordance with the terms and
conditions set forth in Attachment 14.
5.9 SERVICE/OPERATION READINESS TESTING
5.9.1 In addition to testing described elsewhere in this Section,
PACIFIC shall test the systems used to perform the following
functions sixty (60) days prior to commencement of PACIFIC's
provision of Local Service to CLEC, in order to establish system
readiness capabilities.
5.9.1.1 All interfaces between CLEC and PACIFIC work centers for
Service Order, Provisioning,
5.9.1.2 Maintenance, Billing and Customer Usage Data;
5.9.1.3 The process for PACIFIC to provide customer service
records;
5.9.1.4 The installation scheduling process;
<PAGE> 64
Attachment 5
14
5.9.1.5 Telephone number assignment;
5.9.1.6 Procedures for communications and coordination between
CLEC SPOC and PACIFIC's Interconnection Service Center
(ISC);
5.9.1.7 Procedures for transmission of Customer Usage Data; and
5.9.1.8 Procedures for transmitting bills to CLEC for Local
Service.
5.9.2 The functionalities identified above shall be tested in order to
determine whether PACIFIC performance meets the applicable
service parity requirements and other performance standards set
forth herein. PACIFIC and CLEC shall make available sufficient
technical staff to perform such testing. PACIFIC and CLEC
technical staffs shall be available to meet as necessary to
facilitate testing. PACIFIC and CLEC shall mutually agree on the
schedule for such testing.
5.9.3 At either Party's request, each Party shall provide to the other
Party any results of the testing performed pursuant to the terms
of this Attachment. Either Party may review such results and
shall notify the other Party of any failures to meet the
requirements of this Agreement.
5.9.4 During the term of this Agreement, PACIFIC shall participate in
cooperative testing requested by CLEC whenever it is deemed
necessary by CLEC to ensure service performance, reliability and
customer serviceability.
5.10 BILLING FOR LOCAL SERVICE
5.10.1 PACIFIC shall bill CLEC for Local Service provided by PACIFIC to
CLEC pursuant to the terms of this Attachment, and in accordance
with the terms and conditions for Connectivity Billing and
Recording in Attachment 13.
5.10.2 PACIFIC shall recognize CLEC as the customer of record for all
Local Service and will send all notices, bills and other
pertinent information directly to CLEC unless CLEC specifically
requests otherwise.
<PAGE> 65
ATTACHMENT 6
SPECIFICATIONS, SERVICE DESCRIPTIONS, AND IMPLEMENTATION
SCHEDULE FOR UNBUNDLED NETWORK ELEMENTS
<PAGE> 66
Attachment 6
1
ATTACHMENT 6
SPECIFICATIONS, SERVICE DESCRIPTIONS, AND IMPLEMENTATION
SCHEDULE FOR UNBUNDLED NETWORK ELEMENTS
1. GENERAL: UNBUNDLED NETWORK ELEMENTS
1.1. Access To Unbundled Elements Shall Be Specified Herein and Not
Presumed. The Network Elements offered under this Agreement shall
be clearly specified in this Agreement or the attachments hereto.
In no event will it be presumed that access to an Network Element
is offered unless so specified. The methods of access to Network
Elements described in this Attachment are not exclusive. PACIFIC
will make available any other form of access requested by CLEC
that is consistent with the Act and the regulations thereunder.
Requests for Network Elements not specified in this Attachment
shall be processed according to the process described in Section
1.6 below.
1.2 Consistent with the terms and conditions in this Attachment and
the Act and regulations thereunder, PACIFIC shall offer each
Network Element individually and in combination with any other
Network Element or Network Elements in order to permit CLEC to
combine such Network Element or Network Elements with another
Network Element or other Network Elements obtained from PACIFIC
or with network components provided by itself or by third parties
to provide Telecommunications Services to its customers.
1.3. Consistent with the terms and conditions in this Attachment and
the Act and regulations thereunder, PACIFIC will permit CLEC to
interconnect CLEC's facilities or facilities provided by CLEC or
by third parties with each of PACIFIC's Network Elements at any
point designated by CLEC that is technically feasible.
1.4. CLEC may use one or more Network Elements to provide any
Telecommunications Service. If CLEC requests a Combination not
specified in this Agreement and for which the Parties have not
agreed on methods and procedures for pre-ordering, ordering,
provisioning, maintenance, billing and pricing, the Parties will
meet and confer pursuant to Section 1 6, below, to establish the
processes necessary to provide the combination. In the event the
Parties can not agree on technical feasibility or any of the
matters specified in the foregoing sentence, the Parties will
follow the dispute resolution process set forth in Attachment 3
to the Agreement.
1.5. For each Network Element, PACIFIC shall specify a demarcation
point (e.g., an interconnection point at a Digital Signal Cross
Connect or Light Guide Cross Connect panel or a Main Distribution
Frame) and, if necessary, access to such demarcation point, which
is mutually agreed to by the Parties. However, where PACIFIC
provides contiguous Network Elements to CLEC, PACIFIC may
<PAGE> 67
Attachment 6
2
provide the existing interconnections and no demarcation point
shall exist between such contiguous Network Elements.
1.6. Attachments 6 and 7, together with Attachments 5,11,12, 13 and
14, which collectively describe the Operating Support System
Network Element, list the Network Elements and Combinations that
CLEC and PACIFIC have identified as of the Effective Date of this
Agreement. CLEC and PACIFIC agree that the Network Elements and
Combinations identified in this Agreement are not exclusive. The
process of requesting access to an Network Element or Combination
not identified herein shall be as follows:
1.6.1 Either Party may identify an Network Element or
Combination, that is not currently available in
PACIFIC's network, by providing written notice to the
other Party, which notice shall include a description of
the Network Element or Combination adequate to determine
technical feasibility and development requirements.
1.6.2 The Parties agree to immediately work together to
determine (a) the technical feasibility of the request
and (b) the requirements to develop the request, and the
anticipated cost of developing the quote. If the Network
Element or Combination is identified by CLEC, PACIFIC
shall be allowed a commercially reasonable period of
time to evaluate the technical feasibility of the
request and the requirements to develop the requested
Network Element or Combination. Notwithstanding the
foregoing, if the Parties cannot agree within forty-five
(45) days (or such other period of time as may be
mutually agreeable), whether the Network Element or
Combination is technically feasible, or on the
requirements necessary to develop the Network Element or
Combination, the Parties shall use the alternate dispute
resolution process set forth in Attachment 3 to this
Agreement.
1.6.3 The costs of developing the Network Element or
Combination, which includes, but is not limited to, the
cost of developing the quote, shall be recovered from
any entity which utilizes the Network Element or
Combination so identified, including PACIFIC and its
affiliates. In addition, CLEC shall pay its share of
PACIFIC's costs of developing any Network Element or
Combination, not identified in this Agreement
(including, but not limited to, the cost of developing
the quote) if CLEC requests development of the Network
Element or Combination but subsequently determines not
to purchase the Element or Combination. In all cases,
CLEC and PACIFIC shall meet and confer on the amount of
such costs, each Party's respective share of such costs,
and the method of recovery. In the event the Parties
cannot agree on the amount and method of recovery, the
Parties shall track their respective development costs
and will use the alternative dispute resolution process
set forth in
<PAGE> 68
Attachment 6
3
Attachment 3 to this Agreement. Any determination made
in alternative dispute resolution shall be subject to
modification by a subsequent decision of the Commission.
In no event shall either Party allow the pendancy of a
dispute concerning development costs to delay analysis
or implementation of the Network Element or Combination.
1.7 Unless specified otherwise in this Attachment, PACIFIC will make
the Network Elements identified in this Agreement, and all
Combinations specified herein used by PACIFIC in its network,
available on the Effective Date of this Agreement.
1.8 The charge(s) for Network Elements requested pursuant to Section
1.6 above shall be specified by amendment to Attachment 8.
1.9 Implementation Costs Implementation costs for all Network
Elements set forth in this Attachment will be determined and
recovered as specified in Attachment 8.
2. NETWORK INTERFACE DEVICE (NID)
2.1 General Description and Specifications of the Network Element
2.1.1 Description. NID is PACIFIC's terminal that is used to
connect the end user customer's inside wire with the
telephone network. In addition, the NID is the final
termination point, or DEMARC (demarcation point) in the
loop network where an end user customer connects its
inside wire to a telephone company's loop network.
Connection to PACIFIC's NID will permit CLEC to obtain
direct access to the end user customer's inside wire by
attaching its connecting facility directly to the same
screws or lugs being used by PACIFIC to serve the
customer.
2.1.2. Types of NID. Under this Agreement, PACIFIC shall offer
access to two general types of NIDs:
2.1.2.1. Simple NID, which is a standard network interface
(SNI) the use of which permits the end user's
customer wiring to be isolated from PACIFIC's
network.
2.1.2.2. Complex NID, which is a building terminal where
end user customer wiring terminates on PACIFIC's
network.
2.2. Form of Access
2.2.1. Form of Access Applicable to All NIDs In all
cases (simple and complex), access to PACIFIC's NID will
only be available through a separate NID provided by
CLEC, and a separate connecting facility running either
between the two NIDs, or, where a connector block is
available, between CLEC's NID and the connector block
where the end
<PAGE> 69
Attachment 6
4
user customer's inside wire is attached. Unless
otherwise agreed in writing, CLEC shall be responsible
for providing its own NID and its own connecting
facility. In addition, CLEC shall be responsible for
obtaining all approvals necessary to place its NID and
the connecting facility on the owner's premise. Nothing
in the agreement precludes the end-user customer from
re-terminating its inside wire to the CLEC-provided NID
thus eliminating the need for NID-to-NID cross-connects.
In addition, should CLEC purchase a combination of
PACIFIC's NID and PACIFIC's Links, a separate CLEC NID
will not be required.
2.2.2. Ordering. CLEC shall order access to PACIFIC's unbundled
NID by placing an order, requesting access to the
unbundled NID with PACIFIC's Local Interconnection
Service Center (LISC).
2.2.3. When orders for simple unbundled NIDs are received by
PACIFIC, PACIFIC shall make available to CLEC
information, where available, indicating the type of NID
currently employed (e.g., SNI, MPOE with Binding post
identification, MPOE with color code identification, or
neither); When orders for complex unbundled NIDs are
received by PACIFIC, PACIFIC shall make available to
CLEC information indicating the type of NID currently
employed ~ SNI, MPOE with Binding post identification,
MPOE with color code identification, or neither).
2.3. General Terms and Conditions
2.3.1. When CLEC purchases a combination of a PACIFIC NID and a
PACIFIC Link. Section 2.3.2 through 2.3.7, 2.3.10 and
2.4 will not be applied.
2.3.2. Dispatch. If the Parties agree that dispatch is required
(e.g., to clear or make available spare Binding posts in
the PACIFIC NID or to secure PACIFIC's facilities at the
premises), then PACIFIC will dispatch a service
technician to complete all necessary work at the
customer's premise to protect PACIFIC's facilities.
Dispatch charges as set forth in Attachment 8, shall
apply with each such order.
2.3.3. Protection of Facilities. In no case shall either Party
connect to the NID or tie down its connecting facility
directly over the other Party's facility without prior
approval of the other Party and without conditioning
having been performed to isolate each Party's network.
Furthermore, in no instance shall either Party attach
its connecting facility in any manner so as to cause
voltage or its own dial tone to occur on the other
Party's network.
<PAGE> 70
Attachment 6
5
2.3.4. Coordination. Unless requested by CLEC, no coordination
is provided. If CLEC requests coordination, charges will
be applied as specified in Attachment 8. In addition,
unless otherwise agreed by CLEC and PACIFIC, neither
Party shall access the other Party's NID unless the
owning Party's service technician is present, or unless
the owning Party has already made the necessary
modifications to isolate its network.
2.3.5 SNI Conversion. In all residential or small business
locations where a protector is used to connect to the
end user customer's inside wire instead of a SNI, at
CLEC's option, either the protector will be replaced and
a SNI installed or CLEC will install its own SNI and
connect the customer's inside wire to the new SNI. If
CLEC requests PACIFIC to install a new SNI, PACIFIC and
CLEC agree that the placement of a SNI will benefit each
Party, and therefore the cost of installing the new SNI
will be shared equally by PACIFIC and CLEC. The charges
for new SNI installation are specified in Attachment 8.
2.3.6. Connector Blocks When connecting to a connector block,
CLEC and PACIFIC will ensure that PACIFIC's jumpers will
be completely disconnected and not left hanging free so
as to cause potential interference with other facilities
of CLEC, PACIFIC, or the end user customer.
2.3.7. Drops. Either Party shall be permitted to secure its
drop facility to its SNI by grounding same in an
appropriate manner. Upon disconnection of service to the
end user customer, either Party may leave its drop in
place until another LEC or CLC needs access to the NID
to provide service to the customer.
2.3.8 Gaining Access the NID. The Parties each acknowledge and
agree that a special tool is necessary for access to
PACIFIC's side of the SNI. Neither Party shall attempt
to access any type of NID without the proper tool, and
any party accessing the SNI, protector, connector block,
or any other form of NID, shall exercise reasonable care
and sound technician practices so as to avoid damage to
the NID. Nothing in this section shall be construed to
allow either Party to connect its loops directly to the
other Party's NID.
2.3.9 Tagging End User Customer Facilities. Upon request,
PACIFIC will dispatch a technician to tag the end user
customer's inside wire facilities on the customer's side
of the NID. In such cases, a dispatch charge shall
apply, as specified in Attachment 8.
2.3.10. Special Construction Charges. In the event any Special
Construction is required to implement this unbundled
element at any given location,
<PAGE> 71
Attachment 6
6
Special Construction charges, as defined in Attachment I
and set forth in Attachment 8 may apply.
2.4 Rates CLEC agrees to pay NID rates as specified in Attachment 8.
2.5 Implementation Schedule PACIFIC will make unbundled NIDs
available no later than March 31,1997.
3. LOOPS
3.1. General Terms and Conditions
3.1.1. The terms Loops and Links are synonymous.
3.1.2 Use and Suitability of Loop Service. Unbundled loops may
not be used to provide any service that would degrade or
otherwise adversely affect PACIFIC's network services.
3.1.3. Assigned Telephone Number. CLEC, when not using
PACIFIC's switching capabilities, is responsible for
assigning any telephone numbers necessary to provide its
end users with Exchange Service.
3.2 Types of Loops/Links
3.2.1. 2-Wire or 4-wire Analog Basic Link. This PACIFIC
unbundled Network Element is Plain Old Telephone (POTS)
grade two-wire or 4-wire circuit or equivalent voice
frequency channel that supports analog transmission of
300-3000 Hertz (Hz) with loss no greater than 8.0 db
measured at 1004 Hz with 900 ohms at the central office
P01 and 600 ohms at the MPOE. In addition, coin
supervision and ground start signaling options are
available.
3.2.2. 2-Wire or 4-wire Analog (Assured) Link. The PACIFIC
unbundled Network Element (2-wire or 4 wire) is a voice
frequency channel that supports analog transmission of
300-3000 Hertz ("Hz") with loss no greater than 5.5db
measured at 1004 Hz with 900 ohms at the central office
P01 and 600 ohms at the MPOE.
3.2.3. 2-Wire Digital (ISDN/xDSL Capable) Link. This PACIFIC
unbundled Network Element (2-wire) is an ISDN capable
Link, which is an upgrade to the Basic Link for the
transmission of digital services having no greater loss
than 38db end-to-end, measured at 40,000 HZ with 135
ohms at the central office P01 and 135 ohms at the MPOE;
without loop repeaters, midspan repeaters may be
required. This Link will not have any load coils or
bridge taps within limits defined by the specification
applicable to the ISDN/xDSL Links. In addition, the ISDN
Capable Link, without midspan repeaters, will be used
for Link requests to support xDSL type transmission
rates.
<PAGE> 72
Attachment 6
7
3.2.4. 4-Wire Digital (1.544 mbps Capable) Link. This PACIFIC unbundled
Network Element (4-wire) is a 1.544 mbps capable Link which is an
upgrade to the Basic Link. It will be conditioned with or without
digital repeaters.
3.2.5 2 Wire Copper Link. This offering (2 wire continuous copper loop
from DF to MPOE, where facilities are available) is a physical
link which can be used to support alarm type Direct Current (DC)
service offerings. This Link will not have any load coils and
bridge taps will be within limits. This 2-wire copper link will
work with most DC alarm circuits.
3.2.6 2 Wire Copper Switched Digital Link. This offering (2 wire
continuous copper loop from DF to MPOE, where facilities are
available) is a physical link which can be used when digital
connectivity is required to the customer's premise having no
greater loss than 31 db end-to-end, measured at 80,000 HZ with
135 ohms at the central office P01 and 135 ohms at the MPOE. This
link will not have any load coils and bridge taps will be within
limits.
3.3. Form of Access Interconnection to loops will be at the central
office P01. Access to unbundled loops may occur in the following
manner:
3.3.1 By purchasing an EISCC to CLEC's collocated equipment in
the same PACIFIC Central Office, or
3.3.2. By purchasing PACIFIC's unbundled transport service, or
Special Access service at rates as specified in
Attachment 8.
3.3.3 Combining Links and PACIFIC's LSNE. In addition to the
connections described above, CLEC may combine PACIFIC's
Links with PACIFIC's LSNE.
3.3.4 Combining NID, Links and PACIFIC's LSNE. In addition to
the connections described above, CLEC may combine
PACIFIC's NID, Links and LSNE
3.4. Responsibilities of the Parties
3.4.1. For the first six months after CLEC's first order for a
Link, CLEC shall provide to PACIFIC forecasts of the
number of Links at a LATA level. Thereafter, CLEC shall
make a good faith effort to provide such forecasts to
PACIFIC at a wire center level. This includes associated
additional line ("ADL") requirements when PACIFIC's
primary residential POTS service is not to be
disconnected in the establishment of Link Service. CLEC
shall provide such forecasts to PACIFIC on a semi-annual
basis.
<PAGE> 73
Attachment 6
8
3.4.2. CLEC will provide end-user customer listing information
for the purpose of providing E91 1 Service.
3.5. Implementation Schedule
3.5.1 2-Wire Basic and 2-Wire Assured Link Service will be
available on an unbundled basis on the Effective Date
from all PACIFIC Wire Centers on a first-come,
first-served basis, applicable to all carriers,
including PACIFIC, and subject to the availability of
PACIFIC's facilities and facilities at the MPOE at the
premise of the CLEC end user customer. However, certain
of PACIFIC's geographical areas are currently served
solely via integrated digital loop carrier ("IDLC"). In
such areas PACIFIC will make reasonable efforts to
provide Links using copper facilities. Where copper
facilities are not available, PACIFIC will use other
methods to provide such Links and Special Construction
charges may apply.
3.5.2 Combination of PACIFIC's NID and its 2-Wire Basic/2-Wire
Assured Link Service will be available on the Effective
Date.
3.5.3 Implementation of other Link products. 2-Wire Digital
(ISDN/xDSL Capable) Links and 4-Wire Digital (1.544 mbps
Capable) Links shall be available on March 31,1997.
4-Wire Analog Basic Links, 4-Wire Analog Assured Links
and 2-Wire Copper Links will be available on March
31,1997; prior to this date, these facilities will be
installed on a case-by-case basis pursuant to the mutual
agreement of the Parties, provided, the provisioning
intervals in Attachments 11 and 17 will not apply to
these facilities until the Parties agree on
pre-ordering, ordering, provisioning and maintenance for
these facilities.
3.5.4 Implementation of Links combined with LSNE (Options A, B
and C). Links may be combined with LSNE simultaneously
with the availability of the particular LSNE Option
pursuant to the LSNE implementation schedule specified
in this Attachment.
3.6 Rates CLEC agrees to pay the rates for Loops specified in
Attachment 8. There will be no separate charge for NID when CLEC
purchases an unbundled loop.
4. UNBUNDLED SWITCHING
4.1. Unbundled Local Switching Network Element (LSNE). PACIFIC shall
make available unbundled switching capacity, including dial
tone, digit reception, access to signaling, deployed AIN
capabilities and vertical features, with routing to interoffice
trunks and interoffice transport provided by PACIFIC or to
designated trunk specified and purchased by CLEC. PACIFIC
designates this service "Local Switching Network Element"
(LSNE). In purchasing LSNE,
<PAGE> 74
Attachment 6
9
CLEC must obtain a Line Side Port (including a telephone number
and, at CLEC's option, a directory listing) for access to the
switching functions and vertical features provided by the
switch, and some designation of trunking for completion of
calls, with the exception of intra-switch calls. All
intra-switch calls are completed using PACIFIC's switch and no
trunk designation is made for completion of such calls.
4.1.1. Types of charges
4.1.1.1. Line Port charges as set forth in Attachment 8.
4.1.1.2. Nothing in this Section 4 means that the vertical
features are included or excluded from the prices
for switching. The issue of the appropriate
charges for vertical features, if any, shall be
as specified in Attachment 8.
4.1.1.3. Any applicable directory assistance or operator
assistance charges as set forth in Attachment 8.
4.1.1.4. Usage sensitive (per minute of use) local
switching charges, as set forth in Attachment 8
and Attachment 18. Usage will be recorded in one
second increments. Usage seconds will be totaled
for the entire monthly bill and then rounded to
the next whole minute. Usage sensitive local
switching charges will be on a per minute of use
basis and applied to all originating and
terminating traffic, including, but not limited
to local, toll, E 911 calls, calls to time and
weather announcements, etc. PACIFIC will (where
feasible) measure and charge for all
non-conversation time (e.g., ringing, calls to
busy lines, intercept). Where non-conversation
time cannot be measured the Parties will mutually
agree on the appropriate measure and charge.
4.1.1.5 Charges for completion of interconnection traffic
(local and toll) shall be determined pursuant to
Attachment 18 at the rates set forth in
Attachment 8.
4.1.2 Form of Line Port Access. Access to LSNE, as specified in Section
4.1.3 may occur in the following manner:
4.1.2.1 LSNE Access, Cross-Connection Through
Collocation: From CLEC's collocation space, CLEC
may purchase an EISCC cross-connection to
PACIFIC's Line Side Port to obtain access to
LSNE.
4.1.2.2. Combining Links and LSNE: CLEC may
combine Links and PACIFIC's LSNE. Under this
scenario, CLEC shall not be required to purchase
a cross connection facility from PACIFIC's
<PAGE> 75
Attachment 6
10
central office distribution frame to the Line
Side Port of the switch.
4.1.2.3. Combining Links, LSNE and Transport: CLEC may
combine Links (with or without a NID), the LSNE,
and transport facilities, which can be dedicated,
shared or common transport from PACIFIC. Under
this scenario. CLEC shall not be required to
purchase any cross-connection facility from
PACIFIC.
4.1.3. Types of LSNE
4.1.3.1 Option A: PACIFIC-Provided Interoffice Transport
and PACIFIC-Provided Operator and Directory
Assistance Services. In this configuration, CLEC
purchases a Line Port and receives a telephone
number and directory listing, switching capacity,
switch features including deployed AIN
capabilities and completion to PACIFIC's
interoffice trunks for all multiple-switch local
calls, calls to operator and directory assistance
services, E-91 1, intraLATA toll calls and
switched access calls. In this configuration,
intra-switch calls are also provided through
PACIFIC's switch. PACIFIC will be solely
responsible for design and engineering of the
trunks under this option. In addition, PACIFIC
will provide all 0-, operator and directory
assistance services under this option. PACIFIC's
switching capacity will be programmed to allow
routing to and from CLEC's line ports, including
operator and directory assistance calls, to
PACIFIC's network.
4.1.3.1.1 Rates The charges set forth in Section
4.1.1 shall apply.
4.1.3.2. Option B: PACIFIC-Provided Interoffice Transport
with Customized Routing-Simple and with Operator
and/or Directory Assistance (DA) Services
Unbundled from PACIFIC's Line Port Switching
Capacity. In this configuration, CLEC purchases a
Line Port and receives a telephone number and a
directory listing, Switching Capacity, switch
features (including deployed AIN capabilities)
and completion to PACIFIC's interoffice trunks
for all multiple-switch local calls, E-91 1
calls, intraLATA toll and Switched Access calls.
In this configuration, intra-switch calls are
also provided through PACIFIC's switch. With the
exception of trunks for operator and/or directory
assistance services, or both, PACIFIC will be
solely responsible for design and engineering of
its interoffice trunks. CLEC will be required to
order separate trunks for operator services
provided by itself or a third party identified by
CLEC to provide such services.
<PAGE> 76
Attachment 6
11
Transport facilities may be purchased from
PACIFIC, or connected to CLEC's facilities
through a collocation cage by obtaining a cross
connection from PACIFIC. CLEC will be responsible
for design and engineering of the operator and/or
directory assistance trunks under this option,
and shall also be responsible for designating the
transport facilities it desires, if any, from
PACIFIC and the points where these facilities
shall terminate. In addition, CLEC shall be
responsible for providing all operator and/or
directory assistance services. PACIFIC's
switching capacity will be programmed for CLEC to
allow routing of calls to PACIFIC's shared
network, except operator and/or directory
assistance calls will be routed to the trunks
designated by CLEC. In this configuration, the
following charges specified in Attachment 8 will
apply:
4.1.3.2.1 The charges set forth in 41.1 above.
4.1.3.2.2 Non recurring switch programming charges
as specified in Attachment 8.
4.1.3.2.3 Trunk Port Cross Connect Charge (EISCC).
(a) If CLEC provides its own dedicated
transport to CLEC designated DA and/or
operator platform, a cross-connection
charge from the unbundled switch element
to CLEC's designated collocation cage
located in the same office shall apply
at the rates set forth in Attachment 8.
(b) There will be no cross-connect
charge if CLEC selects dedicated
transport from PACIFIC's intrastate
Special access tariffs or PACIFIC's
unbundled dedicated transport tariff for
connection to CLEC's designated P01.
4.1.3.3. Option C: Customized Routing - Complex for CLEC
Traffic Using Routes Designated by CLEC This
option is Customized Routing for CLEC traffic in
the manner designated by CLEC, and it requires
that special, customized routing programming be
provided by CLEC. This option will include all of
the features listed in Options A and B. However,
with this Option, CLEC has the option of
directing traffic on an NPA-NXX basis to a Port
other than the standard used for PACIFIC's
routing. In this configuration, CLEC obtains one
or more Line Ports and receives a telephone
number and directory listing, switching capacity,
switch features, including deployed AIN
capabilities, and transport, that will permit the
completion of multiple-switch local calls, calls
to either operator or directory assistance
services, or
<PAGE> 77
Attachment 6
12
both, E-91 1 calls, intraLATA toll calls, and
either operator or directory assistance services,
or both, E-91 1 calls, intraLATA toll calls, and
Switched Access calls. In this configuration,
intra-switch calls will be provided through
PACIFIC's switch. Inter-switch calls will be
provided from either designated common or
dedicated transport facilities. CLEC will be
solely responsible for design and engineering of
any dedicated transport under this option.
PACIFIC will be solely responsible for design and
engineering of any PACIFIC-provided shared or
common transport used under this option.
Dedicated transport may be purchased from PACIFIC
or CLEC may provide its own. In this
configuration, the following charges will apply:
4.1.3.3.1. Rates The charges set forth in Section
4.1.3.2 shall apply.
4.1.4. Implementation Schedule
4.1.4.1. PACIFIC will make Option A available no later
than April 30,1997. CLEC can place orders for
Option A beginning March 1,1997. PACIFIC will
deploy Option A within forty-five (45) days after
CLEC's order for a particular switch, provided
that CLEC places orders for no more than fifty
(50) switches for Option A in any thirty (30) day
period.
4.1.4.2. PACIFIC will make Option B available no later
than April 30,1997. CLEC can place orders for
Option B beginning April 30,1997. Deployment of
Option B will be on a project specific basis as
mutually agreed by the Parties.
4.1.4.3. PACIFIC will make Option C available no later
than June 1, 1997. CLEC can place orders for
Option C beginning May 1,1997. PACIFIC will
deploy Option C within thirty (30) days after
CLEC's order for a particular switch, provided
that CLEC places orders for Option C for no more
than fifty (50) switches in any thirty (30) day
period. The rates in Section 4.1.3.3.1 shall
include the costs incurred in meeting this
implementation schedule.
4.1.4.4 PACIFIC will make direct routing of operator and
directory assistance as specified in Section 4.2
of Attachment 5 no later than April 30, 1997.
CLEC can place orders for direct routing
beginning on April 30, 1997. Deployment will be
on a project specific basis as mutually agreed by
the Parties.
4.2. Tandem Switching
<PAGE> 78
Attachment 6
13
4.2.1. General Description and Specifications of the Unbundled
Element PACIFIC will provide, subject to the terms and
conditions specified herein, the following unbundled
Tandem Switching:
4.2.1.1. Standard Tandem Switching Tandem Switching allows
use of the Tandem Switch itself for the
transmission of calls between two switches
connected to that tandem, without any customized
routing. PACIFIC's unbundled Tandem Switching
will permit access to the Tandem Switch to
originate a call to, or terminate a call from, a
CLC to a PACIFIC End Office, another LEC,
Wireless Service Provider, or another switch,
using the normal routing established in PACIFIC's
tandem.
4.2.1.2. Custom Tandem Switching. In addition to the
standard Tandem Switching capabilities, custom
Tandem Switching will allow CLEC to originate a
call through PACIFIC's tandem to a CLC, another
LEC, Wireless Service Provider, or another switch
using CLEC's own interoffice facilities. Custom
Tandem Switching consists of three options:
4.2.1.2.1 Option 1: Custom Basic--Use of PACIFIC's
Shared Transport. This option uses
screening that treats CLEC as a homing
End Office. The Custom Basic unbundled
Tandem Switching may use dedicated tandem
trunk groups that allow full LATA-wide
completion over PACIFIC's shared
transport. [EMR records will need to be
exchanged with ILECs who receive calls
initiated from a CLC completing over
PACIFIC's network.] Calls routed to CLEC
will use normal LERG routing.
4.2.1.2.2 Option 2: Custom Simple--Use of PACIFIC's
Common Transport This option uses
screening that treats CLEC as an IEC. The
Custom Simple unbundled Tandem Switching
will use dedicated trunk groups towards
PACIFIC's common transport that will
limit calls to the single tandem serving
area. This option is only able to use
common transport in the terminating
direction. Originating calls from
PACIFIC's End Offices must use shared
transport to the tandem. Custom Simple
uses a Type 2A trunk port with unique
screening capabilities to route traffic
to common transport trunk groups.
4.2.1.2.3 Option 3: Custom Complex--Routing
Designed to CLEC's Specifications. The
Custom Complex tandem unbundled switching
will use customized routing for calls
<PAGE> 79
Attachment 6
14
sent from CLEC to PACIFIC's tandem that
will be designed to CLEC's
specifications, where technically
feasible. The use of route advance or
overflows with this option will not
advance to or from dedicated trunk ports
to PACIFIC common or shared transport.
PACIFIC cannot bill the overflow.
Notwithstanding the foregoing, the
Parties will meet and confer immediately
after the Effective Date of this
Agreement in an effort to find a solution
which can be implemented to enable
PACIFIC to bill the overflow. In the
event the Parties are unable to agree
within forty-five (45) days of the
Effective Date on a solution, the Parties
shall submit any dispute to Alternative
Dispute Resolution as set forth in
Attachment 3.
4.2.1.3 When CLEC uses PACIFIC's LSNE (except where CLEC
requests Dedicated Transport using Options B or
C), use of the tandem is included in the common
transport charges set forth in Attachment 8.
4.2.2 Implementation Schedule
4.2.2.1. Standard Tandem Switching as described herein
will be available as of the Effective Date of
this Agreement.
4.2.2.2 Customized Tandem Switching as described in
Options 1 and 2 will be available no later than
May 31, 1997. CLEC can place orders for
Customized Tandem Switching Options 1 and 2
beginning May 1,1997. PACIFIC will deploy
Customized Tandem Switching within thirty (30)
days after CLEC places an order, provided that
CLEC places no more than four (4) such orders in
any thirty day period. Option 3 is available
where technically feasible on a mutually
agreeable date based on CLEC's design
specifications.
4.2.3 Tandem Switching Rate CLEC agrees to pay the Tandem
Switching rate listed in Attachment 8.
5. UNBUNDLED INTEROFFICE TRANSMISSION FACILITIES (TRANSPORT)
5.1 General Description and Specifications of the Network Element
PACIFIC will make available, subject to the terms and conditions
specified herein, the following unbundled transport facilities:
<PAGE> 80
Attachment 6
15
5.1.1. Entrance Facilities in Connection with Dedicated
Transport. PACIFIC will make available the following
entrance facilities, pursuant to the charges set forth
in Attachment 8, upon request of CLEC:
5.1.1.1. Connections between the PACIFIC's Wire Center
that serves an CLEC switch and the CLEC switch.
5.1.1.2. Connections between PACIFIC's serving Wire
Center and the Point of Presence of CLEC's
IXC's switch.
5.1.2 Dedicated Transport Is an interoffice transmission path
between CLEC designated locations. Such locations may
include PACIFIC Central Offices or other equipment
locations, CLEC network components, other carrier
network components or customer premises. Digital
Cross-Connect System (DCS) functionality is available as
an option which can be used in connection with Dedicated
Transport. PACIFIC will make available the following
dedicated connections, upon request of CLEC:
5.1.2.1. Connections between PACIFIC End Offices or
between PACIFIC End Offices and PACIFIC serving
Wire Centers;
5.1.2.2. Connections between a PACIFIC End Office and
CLEC collocation space located in a distant
PACIFIC End Office;
5.1.2.3. Connections between PACIFIC's End Office or
Tandem Switch and an CLEC designated premise.
5.1.3 Common Transport Common transport will be available
between PACIFIC End Offices and PACIFIC's Tandem Switch
and either Party's connecting End Office, Tandem
Switches or designated P01.
5.1.4 Shared Interoffice Transport Shared transport will only
be available where CLEC purchases LSNE. Shared transport
provides call completion from a PACIFIC End Offices
where LSNE is purchased and the terminating PACIFIC End
Office or P01 where the call leaves PACIFIC's network.
5.1.4.1. Use of the tandem is included in the Shared
Interoffice Transport charges set forth in
Attachment 8.
5.2 Form of Access
5.2.1 Dedicated Transport. CLEC may order dedicated transport
from PACIFIC from the unbundled LSNE to any other point.
5.2.2. Common Transport. Access to common transport will be
available through interconnection at the access tandem.
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5.2.3 Shared Interoffice Transport. Access to shared transport
will only be available where CLEC purchases LSNE. The
Parties acknowledge that there is no physical shared
transport to unbundle between PACIFIC's End Office
switches and PACIFIC's End Offices and Tandem Switches,
and CLEC's interest is in the shared use of transport
between PACIFIC's switches and the associated underlying
performance characteristics. PACIFIC will make available
to CLEC shared transport as currently implemented within
PACIFIC's interoffice network. PACIFIC will engineer,
provision and maintain such shared interoffice transport
facilities and equipment under existing methods and
procedures.
5.2.4. Use of DCS. PACIFIC will make available the use of DCS
equipment, which is a separate unbundled Network
Element. When unbundled DCS is provided with unbundled
transport as a combination, it shall be available on
March 31,1997. When DCS is provided without transport,
it shall be available on May 30, 1997.
5.2.5 CLEC may connect Links at PACIFIC's DF to unbundled
transport through a multiplexing, e.g., D4 channel bank,
DCS or Unbundled Services Cross Connect (USCC) at the
charges set forth in Attachment 8.
5.3. General Terms and Conditions
5.3.1. For dedicated transport, PACIFIC will provide transport
unbundled from switching and other services. Such
transport services will allow CLEC to send individual or
multiplexed switched and dedicated services between
PACIFIC's Wire Centers.
5.3.2. Dedicated transport will be available with the following
functionality or optional services:
5.3.2.1. Protection and restoration of equipment and
interfaces at parity with levels PACIFIC
maintains for its own transport facilities;
5.3.2.2. Compliance with Bellcore and industry standards
to the extent implemented in PACIFIC's transport
network
5.3.2.3. Redundant power supply or battery back-up to the
extent implemented in PACIFIC's transport
network;
5.3.2.4. Provisioning and maintenance performed to the
same extent such provisioning and maintenance is
performed on PACIFIC's own transport network.
5.3.3. Where deployed, PACIFIC will make available interoffice
transport services capable of interfacing on copper,
coaxial cable, and optical fiber
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facilities. Consistent with current bundled offerings,
the interoffice transport services will be capable of
handling transmission rates ranging from voice grade up
through Optical Carrier ("OC")-48.
5.3.4. Transmission Levels. Where deployed, PACIFIC will make
dedicated transport available at the following speeds:
DS0, DS1, D53, and commercially available Optical
Carrier levels (e.g., OC-3/12/48).
5.4. Implementation Schedule. Unbundled transport will be available as
of the effective date of this Agreement, except that unbundled
transport combined with LSNE will be available simultaneously
with the availability of the particular LSNE Option pursuant to
the LSNE implementation schedule specified in this Attachment.
Unbundled dedicated transport will be available on March 31,1997.
5.5. Rates. CLEC agrees to pay the transport rates specified in
Attachment 8.
6. SIGNALING AND DATABASES
6.1. Signaling Networks
6.1.1. General Description and Specifications of the Unbundled Element.
As described in this section, PACIFIC will make available
interconnection to its SS7 signaling network to enable signaling
necessary for call routing and completion. PACIFIC will also make
available unbundled nondiscriminatory access to SS7 signaling
links and PACIFIC's Signaling Transfer Points (STPs).
6.2. Form of Access and General Terms and Conditions
6.2.1. The Parties will interconnect their networks using SS7
signaling protocol as defined in Bellcore Technical
Reference GR-246, and GR-31 7 and GR-394 for ISDN User
Part (ISUP) for trunk signaling.
6.2.2. CLEC may establish CCS interconnections with PACIFIC
either directly or through a third party. CCS
interconnection, whether direct or by third party, shall
be pursuant to the PACIFIC Bell/Nevada Bell CCS network
interface specification document PUB L-780023-PB/NB,
which will be updated to include interconnection
interface specifications for unbundled signaling links
and access to PACIFIC's STPs. The Parties will cooperate
in the exchange of ISUP and Transaction Capabilities
Application Part (TCAP) messages to facilitate full
interoperability of CCS-based features between their
respective networks, including all CLASS features and
functions, to the extent each Party offers such features
and functions to its own end users.
6.2.3 PACIFIC's current CCS/5S7 Interconnect questionnaire
will be revised to facilitate the exchange of routing
and network architecture
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information between the Parties to provision unbundled
signaling links and STP access. The Parties shall
mutually exchange all S57 signaling parameters,
including Calling Party Number (CPN), and procedures
that are implemented within their SS7 networks as
identified in the CCS/557 Interconnect questionnaire
provided by PACIFIC's CLEC account team or other
mutually agreed process. All privacy indicators of the
Parties will be honored. Also, CLEC will provide their
SS7 network node, address information and identify the
SS7 services they request using the SS7 questionnaire.
6.2.4 PACIFIC will make available to CLEC PACIFIC's signaling
links and access to PACIFIC's STPs or access to
PACIFIC's STPs with CLEC-provided signaling links to
provide capability to support call set-up and to support
CCS-based features being provided on the effective date
of this Agreement. Signaling links will be provisioned
at 56 Kbps, or at 1.5 Mbps if available.
6.2.5. PACIFIC will provide CLEC with access through PACIFIC's
STPs to the following elements connected to PACIFIC's
SS7 network: (1) PACIFIC's SS7-capable End Offices and
Access Tandem Switches; (2) third-party CLC switches;
(3) third-party CLC STPs, if the third-party CLC and
PACIFIC have STP-to-STP interconnection; and (4) PACIFIC
will provide CLC signaling links and/or access to
PACIFIC's STPs for signaling between CLC's switches or
between CLEC and third-party switches (including
unbundled switching elements) when CLEC's and/or
third-party's switches are interconnected to PACIFIC's
SS7 signaling network.
6.2.6. At CLEC's option, CLEC may connect its switches to
PACIFIC's STPs by means of "A" link access and may
connect CLEC STPs to PACIFIC's STPs by means of "D" link
access. PACIFIC will designate the STP pair for
interconnection, and CLEC will then designate the
Signaling Point of Interconnection ("SPOI") within the
STP pair.
6.2.7. All "A" links provided by PACIFIC or CLEC will consist
of two link sets, and "D" links will consist of four
link sets.
6.2.8. CLEC's SS7 links will be interconnected to PACIFIC's
STPs in the same manner that PACIFIC connects its links
to its own STPs. When CLEC connects its links to
PACIFIC's STP a Port charge will apply as specified in
Attachment 8; provided, when CLEC provides its own links
it must access PACIFIC's STP Port through a collocation
cage.
6.2.9. PACIFIC will provide to CLEC all the signaling link
functions, and all the Signaling Connection Control
Point ("SCCP") functions that are deployed in PACIFIC's
SS7 network.
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6.2.10. PACIFIC's current CLC Handbook will be revised to
include ordering and provisioning procedures for
obtaining unbundled signaling links and/or STP access.
6.3. Implementation Schedule and Rates. SS7 STP interconnection is
available in PACIFIC access tariffs today.
6.3.1 Implementation will include testing consistent with
industry standards. Testing of SS7 interconnection shall
include completion of all tests described in PACIFIC's
CCS Network Interconnection Testing documents and
defined by the Internetwork Interoperability Test Plan
(IITP). These tests shall serve as the minimum amount of
testing required to ensure successful signaling network
internetworking.
6.3.2. Rates CLEC agrees to pay the signaling link charge
and/or signaling port charge listed in Attachment 8.
6.4 Call-Related Databases
6.4.1. Toll Free Service Database (800/888)
6.4.2 General Description and Specifications of the Unbundled
Element PACIFIC will provide access to its 800/888
database if CLEC requests such access from PACIFIC as
described below.
6.4.3. Form of Access
6.4.3.1. CLEC's query access to PACIFIC's toll free
service database (800/888) will be via
interconnection at PACIFIC's Regional or Local
STPs consistent with existing network interface
specifications. Specific terms for routing Toll
Free Services are addressed in Attachment 18.
PACIFIC's current CLC Handbook will be revised to
include ordering and provisioning procedures for
obtaining access to PACIFIC's 800/888 database.
6.4.4. Implementation Schedule Query access to 800/888 is
available today in PACIFIC's access tariffs.
6.4.5. Rates. CLEC agrees to pay the toll free service
(800/888) database query rate(s) as specified in
Attachment 8 when CLEC is the intraLATA service provider
for the toll free service customer.
6.5. Line Information Databases ("LIDB")
6.5.1. General Description and Specifications of the Unbundled
Element PACIFIC will provide access to LIDB through
interconnection at the STP. LIDB Service is provided by
PACIFIC to support alternate billing
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services. LIDB provides access to billing validation
data (calling card and billed number screening) which
resides in PACIFIC's LIDB database for use with
alternate billing services, such as Calling Card,
Collect Calls, and Third Number Billing. LIDB will
receive and respond to American National Standards
Institute Signaling System 7 protocol queries as defined
in Bellcore publication TR-TSV-000905, and PACIFIC
publication PUBL-780023 PB/NB.
6.5.2 At this time, PACIFIC has not implemented other LIDB
features such as Calling Name or Domestic Cards. If
PACIFIC offers Customer Name Address Message (CNAM)
capability, PACIFIC will offer this service to CLEC.
6.5.3. Form of Access
6.5.3.1. CLEC's query access to PACIFIC's LIDB database
will be via interconnection at PACIFIC's
Regional or Local STPs consistent with existing
network interface specifications.
6.5.3.2. If CLEC uses PACIFIC's LIDB, CLEC will send
queries to LIDB from an Operator Service System
(OSS).
6.5.3.3. PACIFIC's current CLC Handbook will be revised
to include ordering and provisioning procedures
for obtaining access to PACIFIC's LIDB
database.
6.5.4. Implementation Schedule Query access to LIDB will be
available as of the Effective Date of this Agreement.
6.5.5. Rates CLEC agrees to pay the LIDB rate as specified in
Attachment 8.
6.6 Advanced Intelligent Network Databases ("AIN")
6.6.1 General Description and Specifications of the Unbundled
Element: CLEC may purchase the entire set of Advanced
Intelligent Network ("AIN") features or functions, or
any one or any combination of such features or
functions, on a customer-specific basis. PACIFIC will
provide CLEC with query access to AIN databases to
support AIN services in two ways: from PACIFIC's
unbundled switch element or resold line; from CLEC's own
switch. PACIFIC will provide CLEC access to PACIFIC's
End-Office triggers when CLEC purchases PACIFIC's LSNE
and any available AIN services. AIN database access may
not be used to access other PACIFIC databases.
6.6.2 Form of Access. CLEC's query access to PACIFIC's AIN
SCPs will be via interconnection at PACIFIC's Regional
or Local STPs consistent
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with existing network interface specifications and using
messages conforming with Bellcore's Technical Reference
TR-NWT-001285. The requirements for these messages may
be modified by AIN access mediation (specifications not
yet available).
6.6.2.1 PACIFIC's current CLC Handbook will be revised to
include ordering and provisioning procedures to
obtain access to PACIFIC's AIN databases and/or
End-Office capabilities.
6.6.3 General Terms and Conditions. PACIFIC will require
access mediation to prevent unauthorized changes or
access to data resident in its AIN database. Such access
mediation will also provide network management functions
to prevent CLEC traffic overloads from interfering with
PACIFIC's AIN SCP operation.
6.6.4. Implementation Schedule for Query Access to AIN Using
PACIFIC's Resold Basic Exchange Service Or PACIFIC's
LSNE PACIFIC will make available such unbundled query
access to AIN no later than March 31,1997.
Implementation will include testing consistent with
standards applicable to this database.
6.6.5. Implementation Schedule for Query Access to AIN Using
CLEC's Switch Through PACIFIC's STP Implementation of
query access to AIN using CLEC's switch through
PACIFIC's STP requires special work specific to each
request, and therefore implementation shall occur on a
case-by-case basis.
6.6.6. Rates. CLEC agrees to pay the AIN rates as specified in
Attachment 8.
7. SERVICE MANAGEMENT SYSTEM ("SMS")
7.1. SMS For LIDB
7.1.1 General Description and Specifications of the Unbundled
Element. PACIFIC will provide access to the Service
Management System for LIDB, referred to as the LIDB
Administrative System (LIDB/AS) if CLEC requests such
access. Access to LIDB/AS will allow CLEC to create,
modify, update or delete the end user line information
in PACIFIC's LIDB database for CLEC Customers when
PACIFIC is the carrier of record in the LERG. For an
CLEC end user, line information includes telephone
number and preassigned calling card PIN and billed
number screening data (collect and third number billing
indicators). PACIFIC's LIDB updates are processed
continuously through service order input to LIDB/AS,
which then updates LIDB.
7.1.2. Form of Access
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7.1.2.1. PACIFIC will provide access to LIDB/AS in a
manner equivalent to how access is provided to
PACIFIC itself. CLEC shall have the ability to
create, modify, update, or delete information in
LIDB through service order processing, generated
through PACIFIC's Local Interconnection Service
Center (LISC) or electronic service order entry.
7.1.2.2. In the event CLEC requires an emergency update to
its end user line information in the LIDB
database, CLEC will be directed to PACIFIC's Data
Base Administration Center (DBAC) to process this
request. The DBAC organization provides
administrative support into LIDB/AS for PACIFIC's
business office organizations. This is the same
process used today by PACIFIC service
representatives to initiate emergency updates to
LIDB.
7.1.3. General Terms and Conditions
7.1.3.1. PACIFIC will process CLEC service order updates
to LIDB/AS in the same manner and time frames
that such updates are processed for PACIFIC
itself.
7.1.3.2. PACIFIC shall use the end user line information
of an CLEC subscriber only to update and maintain
LIDB and not for any other purpose.
7.1.3.3. CLEC may create, update, modify, or delete end
user line information of its own subscribers
through the issuance of service order activity.
CLEC shall not create, update, modify, or delete
end user line information of other carriers' end
users.
7.1.3.4. PACIFIC and CLEC will comply with the Privacy of
Customer Information requirements of Section 222
of the Act, with respect to information obtained
as a result of access to call related databases
and associated SMSs described in this Agreement.
7.1.4. Implementation Schedule
7.1.4.1 CLEC may currently update end user line
information in LIDB/AS through the service order
process. PACIFIC Bell will make available the
capability to allow provisioning and changes to
preassigned Personal Identification Number (PIN)
no later than March 31,1997.
7.1.5. Rates The SMS for LIDB is included in the LIDB query
rate specified in Attachment 8.
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7.2. SMS For AIN
7.2.1 General Description and Specifications of the Unbundled
Element
7.2.1.1 This product will allow CLEC to update AIN
service data residing in PACIFIC's AIN network
for use on the CLEC tines.
7.2.2. Form of Access
7.2.2.1 Access to AIN Service management will be provided
via electronic file transfer of CLEC data to
PACIFIC for entry by PACIFIC at one of PACIFIC's
AIN administrative terminals as is currently used
by PACIFIC for maintenance of AIN service and
subscriber data. Electronic access to an AIN SMS
system will be provided when that system is
deployed according to the implementation schedule
listed below.
7.2.3. Rates. Included in the SMS query charge specified in
Attachment 8.
7.2.4. Implementation. PACIFIC will make access to AIN Service
management available by March 31,1997.
7.3 Access to the Service Creation Environment ("SCE") of the AIN
Database
7.3.1. General Description and Specifications of the Unbundled
Element
7.3.1.1. PACIFIC will provide CLEC with access to
PACIFIC's AIN Service Creation Environment
("SCE") for the creation and modification of AIN
services. All AIN services may require testing in
PACIFIC's AIN laboratory prior to deployment into
the network. Testing will evaluate compatibility
with PACIFIC's network nodes, interaction with
other AIN, 800/888, Operator Services, and other
switch-based features, and appropriate use of
network resources.
7.3.2. Form of Access. CLEC may choose among the following
forms of access:
7.3.2.1. Under Option 1, CLEC provides PACIFIC with
documentation and logic design for the desired
service. PACIFIC Bell personnel will operate the
AIN SCE terminal to create the service as
described by CLEC.
7.3.2.2. Under Option 2, CLEC personnel will operate
PACIFIC's SCE terminals themselves.
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7.3.4.3 Under Option 3, CLEC will develop service logic
using CLEC's Bellcore SPACE platform and will
transfer the file to PACIFIC for testing and
deployment.
7.3.3. General Terms and Conditions
7.3.3.1. In all options described above, newly created or
modified services will be transferred to the AIN
laboratory for testing prior to deployment into
the network using the same tests currently
performed on PACIFIC's AIN services.
7.3.4. Implementation Schedule for SCE
7.3.4.1. PACIFIC will make Option 1 available no later
than March 31,1997.
7.3.4.2. PACIFIC will make Option 2 available when
partitioning of PACIFIC's SCE is available.
7.3.4.3. PACIFIC will make Option 3 available no later
than March 31,1997.
7.3.5. Rates. Rates for all Options shall be as specified in
Attachment 8.
8. OPERATOR SERVICES
8.1. General Description and Specifications of the Unbundled Element
8.1.1. Unbundled Operator Services allows CLEC to offer
intraLATA operator assistance services to its end user
customers using PACIFIC's Operators on an unbundled
basis.
8.1.2. PACIFIC Operator Services provides the calling party
with general assistance, assistance in completing
intraLATA calls, and a means to alternately bill calls
by dialing 0- or 0+, as follows:
8.1.2.1 IntraLATA call completion services include
Station-to-Station, Person-to-Person, connection
to DA, dialing assistance for trouble conditions,
and transfers to repair services;
8.1.2.2 Alternate billing services include Station
Collect, Station Billed to Third Number, Station
Calling Card, Person Collect, Person Billed to
Third Number, and Person Calling Card.
8.1.2.3 General assistance calls include general
assistance (e.g., time and area code requests),
dialing instructions, Busy Line Verification,
Busy Line Interrupt, credit requests (wrong
number, etc.),
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emergency assistance, disabled customer
assistance, IXC requests (customer will be
referred to "00"), and language assistance in
Spanish.
8.1.3. Branding. Whenever PACIFIC provides Operator Services on
behalf of CLEC, at CLEC's option, PACIFIC will brand the
call as an CLEC call, where technically feasible. Where
not technically feasible, such calls will be unbranded.
8.2. Form of Access
8.2.1. Trunking. If CLEC purchases the Operator Services
unbundled element, CLEC may either provision its own
trunk group or order unbundled common or dedicated
Operator Services trunks from PACIFIC to connect from an
End Office(s) to PACIFIC's DMS 200 TOPS switch. These
dedicated one-way trunk groups will conform to Modified
Operator Services Signaling ("MOSS") or Exchange Access
Operator Services Signaling ("EAOSS").
8.2.1.1. "0" and "0+" Access. If CLEC purchases the
Operator Services unbundled element, PACIFIC will
permit CLEC's local exchange customers to connect
to PACIFIC's Operator Services by dialing "0," or
"0" plus the desired intraLATA telephone number.
8.2.2. On CLEC to TOPS trunk group, PACIFIC will complete
intraLATA 0-, 0+, and 1+ coin dialed traffic only
8.2.3. With ANI 07 and ANI 06 signaling, PACIFIC will perform
all necessary switch translations in the DMS 200 TOPS
switch in order to provide billing restrictions. Call
screening and billing restrictions are provided by using
Automatic Number Identification (ANI) and screening
codes. CLEC must provide timely screening data updates
using Operator Services Screen Code Assignment List.
8.2.4. PACIFIC will access PACIFIC's LIDB for CLEC's customers
on an as-needed basis to obtain:
8.2.4.1 Billing telephone number;
8.2.4.2 Associated billing restrictions using PACIFIC's
screen code categories; and
8.2.4.3 Adds, deletes, and changes.
8.2.5 Switching and Signaling
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8.2.5.1 MOSS or EAOSS signaling are required. Documents
providing the signaling interface between CLEC EO
and TOPS are found in TR144 and TR506.
8.2.5.2 Where MOSS is selected, CLEC must order separate
trunk groups for each NPA served.
8.2.5.3. CLEC must also have a point of presence ("POP")
at PACIFIC's DMS 200 switch within each LATA
served by CLEC.
8.2.5.4. In LATAs 722, 724, and 730, CLEC may select any
of PACIFIC's DMS 200 TOPS switches as its POP.
8.2.6. Billing records will be recorded at the TOPS switch and
billing detail will be passed to CABS. Detailed billing
records will be passed to CLEC for end user billing.
8.2.6.1 AMA billing will be created at the selected DMS
200 TOPS switch. These records will be created in
Expanded Bellcore AMA Format ("EBAF") Phase 2.
8.2.6.2 Billing will be based on operator work seconds as
specified in Attachment 8.
8.2.7 For customer rate quote requests, PACIFIC's operators
will provide rating information if CLEC concurs with
PACIFIC's rates; if CLEC does not concur in PACIFIC's
rates, rate quote requests will be handled per Section
4.3.1.3 of Attachment 5.
8.3. General Terms and Conditions
8.3.1. If CLEC purchases the Operator Services unbundled
element, PACIFIC will provide CLEC nondiscriminatory
access to PACIFIC's Operator Services. The service
level, including any dialing delays, of the Unbundled
Operator Service provided to CLEC shall be at parity
with the Operator Service provided by PACIFIC to its own
customers.
8.3.2. BLV and BLVI. PACIFIC will offer operator-to-operator
BLV and BLVI to CLEC on a nondiscriminatory basis, in
accordance with LERG instructions. CLEC OS requires that
a reciprocal BLV/BLVI network be established between
PACIFIC and CLEC.
8.3.3 Operator-Assisted Calls to DA ("OADA"). PACIFIC will
offer OADA to CLEC on a nondiscriminatory basis. OADA
refers to the situation in which a customer dials "0"
and asks the operator for DA; in such situations, the
customer is automatically transferred to a DA operator.
In
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providing OADA to CLEC, PACIFIC will connect CLEC's end
user customer to PACIFIC's DA operators, and PACIFIC
will charge CLEC as specified in Attachment 8.
8.3.4. PACIFIC shall not be obligated, under any circumstances,
to provide call handling methods or credit card or other
alternate billing arrangements that are different from
those PACIFIC provides to itself or its affiliates.
8.3.5. PACIFIC shall have no duty, apart from factors within
PACIFIC's control, to ensure that CLEC's customers can
in fact access PACIFIC's Operator Services.
8.4. Implementation Schedule
8.4.1. PACIFIC will make available unbundled Operator Services
no later than April 30, 1997.
8.5. Rates CLEC will pay the rates for Operator Services as specified
in Attachment 8.
9. DIRECTORY ASSISTANCE SERVICES
9.1. General Description and Specifications of the Unbundled Element
9.1.1. PACIFIC's unbundled Directory Assistance Service
provides unbundled Directory Assistance ("DA") services
to CLEC by utilizing PACIFIC's DA database. This service
includes PACIFIC's listed customers and listings
supplied to PACIFIC for DA use by other carriers. This
DA service shall be provided at parity with PACIFIC DA
service and will utilize the same Directory Listing
source of information as PACIFIC uses for its own DA
service. PACIFIC's unbundled DA has the following
service attributes:
9.1.1.1 Database and retrieval system for PACIFIC's DA
Operator use;
9.1.1.2 Retrieval of listed telephone number and
address information for residence, business,
and government listings, requested by locality
and name, or a report that the number is not
available;
9.1.1.3 Up to three search requests per call;
9.1.1.4. Area code information for the United States and
Canada:
9.1.1.5. Exchange locality information for California;
9.1.1.6. Use of Automated Response Unit for number
quotation;
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9.1.1.7 Express Call Completion at parity with what
PACIFIC provides for itself or its affiliates.
9.1.1.8. PACIFIC's DA is available on a statewide basis
(throughout California) or by individual NPA.
9.1.1.9. PACIFIC's DA provides telephone numbers and
address information within the State of
California only.
9.1.2. Nondiscriminatory Access to Directory Listings PACIFIC
will provide CLEC with nondiscriminatory access to
PACIFIC's directory listings for DA applications. CLEC
shall pay PACIFIC for the cost of the transfer media
(magnetic tape), plus PACIFIC's reasonable costs for
preparation and shipping of the magnetic tape. PACIFIC
will not permit CLEC to have access to PACIFIC's unlisted
customer names or unlisted customer telephone numbers.
9.2. Form of Access
9.2.1. Access to Unbundled DA Services. PACIFIC will provide CLEC
nondiscriminatory access to PACIFIC's DA Services. The
service level, including any answer delays, of the
Unbundled DA Service provided to CLEC shall be at parity
with the DA Service provided by PACIFIC to its own
customers.
9.2.2. Trunking Access to PACIFIC DA may be provided either
through PACIFIC's access tandem or by dedicated trunking
from End Office and routed to the appropriate DA center
Where CLEC uses trunking from an CLEC End Office to
PACIFIC's access tandem, using local interconnection
trunks at PACIFIC's tandem, CLEC must convert all "411"
dialed calls to NPA 555-1212 prior to delivery to the
tandem as shown in the LERG.
9.2.3. Transport If CLEC has purchased PACIFIC's unbundled DA
Services element, directory transport may, at the option
of CLEC, be provided from where the home NPA access tandem
is, or from an access tandem mutually negotiated with
CLEC. PACIFIC will not provide transport across LATA
boundaries.
9.3. General Terms and Conditions
9.3.1. Branding Whenever PACIFIC provides DA services on behalf
of CLEC, at CLEC's option, PACIFIC will brand the call as
an CLEC call, where technically feasible. Where not
technically feasible, such calls will be unbranded.
<PAGE> 94
Attachment 6
29
9.3.2. Unlisted Information If CLEC has purchased PACIFIC's
unbundled DA Services element, PACIFIC emergency operators
will provide emergency assistance regarding unlisted
customers on an equal basis as PACIFIC does to its
customers
9.3.3. CLEC shall not have access to PACIFIC's customers'
unlisted telephone numbers.
9.3.4. Confidentiality of CLEC's DA and Non-Published Listings
PACIFIC will accord CLEC's DA and Non-Published listing
information the same level of confidentiality that PACIFIC
accords its own DA and Non-Published listing information.
9.3.5. DA Call Completion Service In conjunction with the
provision of unbundled DA service to CLEC, PACIFIC will
provide DA Call Completion Service (which is comparable in
every way to the DA Call Completion Service PACIFIC makes
available to its own end users) in those areas where DA
Call Completion Service is generally available and where
facilities permit.
9.3.6 If CLEC purchases PACIFIC's unbundled DA Services element,
PACIFIC's contact with CLEC's end user customers shall be
limited to that effort required to process CLEC's end user
customers' requests for DA services. PACIFIC will not
transfer, forward, or redial an CLEC's end user customer's
call to any other location for any purpose other than the
provision of DA to the customer.
9.3.7. CLEC DA service quality will be equal to that which
PACIFIC provides to its own DA customers.
9.3.8. Billing
9.3.8.1 Billing will be handled by CABS.
9.3.8.2 PACIFIC will bulk-bill CLEC, with no detailed
records. CLEC shall be responsible for billing
its end users for this service. All bills for
CLEC DA will reflect a per-call charge and the
applicable transport charges.
9.3.8.3 PACIFIC will not credit CLEC for customer
requests that are not found in the DA database.
9.3.8.4 All DA calls will be billable to CLEC, except
as specifically mentioned herein.
<PAGE> 95
Attachment 6
30
9.4 Implementation Schedule Unbundled DA services will be available
as of April 30,1997. Unbundled directory listings specified in
Section 9.1.2 are available on the Effective Date of this
Agreement.
9.5 Rates CLEC agrees to pay for DA services per Attachment 8.
10. OPERATING SUPPORT SYSTEMS
10.1 General Terms and Conditions
10.1.1 PACIFIC will provide unbundled access to its Operating
Support Systems (OSS) consistent with the requirements of
the Act, and implementing regulations, this Agreement and
its applicable Attachments.
10.1.2 The specific requirements for OSS are found in Attachments
5, 11, 12, 13 and 14.
10.2 Implementation Schedule PACIFIC will make 055 available pursuant
to the schedule set forth in Attachments 5, 11, 12, 13 and 14.
10.3 Rates CLEC agrees to pay OSS rates as specified in Attachment 8.
11. STANDARDS FOR NETWORK ELEMENTS
11.1 If one or more of the requirements set forth in this Agreement
are in conflict, CLEC shall elect which requirement shall apply.
11.2 Each Network Element and the interconnections between Network
Elements provided by PACIFIC to CLEC shall be at least equal in
the quality of design, performance, features, functions and other
characteristics, including but not limited to levels and types of
redundant equipment and facilities for power, diversity and
security, that PACIFIC provides in PACIFIC network to itself,
PACIFIC's own customers, to a PACIFIC affiliate or to any other
entity.
11.3 In the event that CLEC reasonably believes that the requirements
of this Attachment 6 are not being met, the Parties will meet and
confer concerning such engineering, design, performance and other
network data, which may be necessary to cure any engineering,
design performance of implementation deficiency. In the event
that such data indicates that the requirements of this Attachment
6 are not being met, PACIFIC shall cure any such deficiency as
soon as possible.
11.4. Subject to this Agreement and its Attachments, PACIFIC agrees to
work cooperatively with CLEC to provide Network Elements that
will meet CLEC's needs in providing services to its customers.
11.5. If PACIFIC makes available to itself or any of its end user
customers an expedited or priority provisioning capability for
Network Elements and interconnections
<PAGE> 96
Attachment 6
31
between Network Elements, then Pacific will make such capability
available to CLEC on a non-discriminatory basis.
<PAGE> 97
ATTACHMENT 7
NETWORK ELEMENT COMBINATIONS
<PAGE> 98
ATTACHMENT 7: NETWORK ELEMENT COMBINATIONS (NOTE 9)
<TABLE>
<CAPTION>
FIRST
COM NOTE 4 NOTE 1 NOTE 8 TANDEM SIGNALING DA/ ORDER
BO NID LOOP EISCC SWITCH TRANSPORT DCS SWITCHING LINKS STP SCP OS DATE COMMENTS
- --- --- ----- ----- ------ --------- --- --------- --------- --- --- -- ------- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
1. X X X 3/31/97
2. X X X 4/30/97
3. X X X X 3/31/97 If MUXing, USSC or D4 req'd
4. X X X 3/31/97 If MUXing, USSC or D4 req'd
5. X X 4/30/97 Opt. B & C. Note 2
6. X X 4/30/97 Opt. B & C. Note 2
7. X X 3/31/97
8. X X X X 4/30/97
9. X X X 4/30/97 Opt. B & C, FG-D
10. X X 4/30/97 Note 2 & 5, Opt. B & C
11. X X X X X 4/30/97 Note 2 & 5, Opt. B & C
12. X X 4/30/97 Note 6
13. X X X X 4/30/97
14. X X X X X 4/30/97 Note 3
15. X X Note 2 Opt. C
16. X X Note 2
17. X X X X X Note 2
18. X X X X X X Note 2
19. X X X X X 4/30/97
20. X X 4/30/97 Note 6
21. X X X X 4/30/97 Opt. A only, Opt. B & C
require transport, note 3
22. X X X 5/31/97
23. X X X 5/31/97 Note 6
24. X X X X 5/31/97
25. X X X X 5/31/97 Note 3
26. X X X Note 2
27. X X 4/30/97 Note 6
28. X X X X X 4/30/97 Opt. A only, Opt. B & C
require transport, note 3
29. X X X X Note 2
30. X X X X X 5/31/97 Note 6
31. X X X X X X Note 2
</TABLE>
- ----------
Note 1: Switching column: Refers to Option A unless combined with EISCC,
Transport, DCS or DA/OS.
Note 2: Available coincident with unbundled switching Option C which is
presently not technically feasible.
Note 3: Query access to LIDB, 800 & AIN.
Note 4: Loop column: for 2-wire analog (basic & assured), 2-wire digital (ISDN),
4-wire digital (1.544 mbps), 4-wire analog (basic & assured) & 2-wire
copper (two types).
Note 5: OS must use MOSS signaling prior to ILP (2-PIC) deployment. With ILP, OS
can then go to FG-D (MF or SS7) if the subscriber's line is
pre-subscribed to CLEC for intra-LATA traffic. DA requires MOSS if it
goes to OS trunking, but FG-D cannot support 411 (3-digit).
Note 6: STP port access must be ordered on a separate order.
Note 7: Applies to CLEC Operator Service & DA with unbundled switching Options B
& C.
Note 8: Transport column: Dedicated, Common, shared, entrance facilities, all
transmission rates.
Note 9: All dates are contingent on CLEC's commitment to pay the development
costs of each requested combination. Such commitment must be made for
each requested combination before 1/31/97.
<PAGE> 99
<TABLE>
<CAPTION>
FIRST
COM NOTE NOTE 1 NOTE 8 TANDEM SIGNALING DA/ ORDER
BO NID LOOP EISCC SWITCH TRANSPORT DCS SWITCHING LINKS STP SCP OS DATE COMMENTS
- --- --- ---- ----- ------ --------- --- --------- --------- --- --- --- ------- ------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
32. X X X X X X X Note 2
33. X X X 4/30/97 Opt. B & C. Note 2
34. X X X X 4/30/97 Note 5
35. X X X X X 4/30/97 Note 5
36. X X X X X X 4/30/97 Note 5
37. X X X X Note 2
38. X X X X X 4/30/97 Note 5
39. X X X X X X 4/30/97 Note 5
40. X X X X X X X 4/30/97 Note 5
41. X X X X 4/30/97 Note 5
42. X X X 4/30/97 Notes 5 & 6
43. X X X X X 5/31/97 Notes 3 & 5
44. X X X X 5/31/97 Note 7
45. X X X X X 5/31/97 Notes 5 & 6
46. X X X X X X 5/31/97 Notes 5 & 6
47. X X X X X X X 5/31/97 Notes 3 & 5
48. X X X X X 5/31/97 Note 5
49. X X X X 5/31/97 Notes 5 & 6
50. X X X X X X 5/31/97 Note 5
51. X X X X X 5/31/97 Note 7
52. X X X X X 5/31/97 Notes 5 & 6
53. X X X X X X 5/31/97 Note 5
54. X X X X X X X 5/31/97 Note 5
</TABLE>
Note 1: Switching column: Refers to Option A unless combined with EISCC,
Transport, DCS or DA/OS.
Note 2: Available coincident with unbundled switching Option C which is
presently not technically feasible.
Note 3: Query access to LIDB, 800 & AIN.
Note 4: Loop column: for 2-wire analog (basic & assured), 2-wire digital (ISDN),
4-wire digital (1.544 mbps), 4-wire analog (basic & assured) & 2-wire
copper (two types).
Note 5: OS must use MOSS signaling prior to ILP (2-PIC) deployment. With ILP, OS
can then go to FG-D (MF or SS7) if the subscriber's line is
pre-subscribed to CLEC for intra-LATA traffic. DA requires MOSS if it
goes to OS trunking, but FG-D cannot support 411 (3-digit).
Note 6: STP port access must be ordered on a separate order.
Note 7: Applies to CLEC Operator Service & DA with unbundled switching Options B
& C.
Note 8: Transport column: Dedicated, Common, shared, entrance facilities, all
transmission rates.
Note 9: All dates are contingent on CLEC's commitment to pay the development
costs of each requested combination. Such commitment must be made for
each requested combination before 1/31/97.
<PAGE> 100
ATTACHMENT 8
PRICING
<PAGE> 101
ATTACHMENT 8
Page 2
ATTACHMENT 8
PRICING
1. LOCAL SERVICES RESALE
The prices charged to CLEC for resold Local Service shall be calculated
using the avoided cost discount set forth herein. The interim wholesale
discount shall be [**] off the applicable retail rate for all PACIFIC
services subject to resale. The interim discount shall remain in effect
until the Commission determines a different wholesale discount in any
proceeding subsequent to the Effective Date of this Agreement. Once so
determined by the Commission, said different wholesale discount shall
apply instead of the interim discount for the remaining Term of this
Agreement.
The prices shall be based on PACIFIC's retail rates applicable on the
Effective Date, less the applicable discount. If PACIFIC changes its
retail rates after CLEC executes this Agreement, the applicable
discount shall be applied to the changed retail rates from the time
such changes become effective.
1.1. Non-recurring Charges for Total Services Resale
1.1.1 Non-recurring charge(s) shall be based on PACIFIC's
retail rates less the applicable discount.
1.1.2 Notwithstanding Section 1.1.1, unless changed by the
Commission, PACIFIC shall NOT charge any
non-recurring charges to switch a customer from
PACIFIC's retail service to CLEC resold service.
PACIFIC may track its one-time, non-recurring service
order costs and seek recovery of these costs in an
appropriate Commission proceeding, which CLEC shall
have the right to contest. In addition, the Parties
disagree whether the "no change-over charge" for
resold services specified in this section should
apply in the following circumstances: (1) when CLEC
moves an existing Link customer (be it an existing
CLEC Link customer or that of another CLC) to resold
Local Service; (2) when CLEC moves an existing resold
customer of another CLC to CLEC's service. For the
customer movement identified in the previous
sentence, PACIFIC may track its non-recurring
provisioning costs and its one-time non-recurring
service order costs and seek recovery of these costs
in an appropriate Commission proceeding, which CLEC
shall have the right to contest
2. UNBUNDLED NETWORK ELEMENTS
The prices charged to CLEC for Network Elements are as specified in
Appendix A to this Attachment. The prices listed in the Appendix are
interim prices only and are subject to change to conform with the rate
for unbundled Network Elements and non-recurring charges adopted by the
Commission subsequent to the Effective Date of this Agreement.
- --------------
[**] Pursuant to a request for confidential treatment, price information in this
document has been omitted and separately filed with the Securities and
Exchange Commission.
<PAGE> 102
ATTACHMENT 8
Page 3
Once the Commission-determined prices are adopted, said prices will be
substituted for the interim prices and shall apply for the remainder of
the Term of this Agreement.
3. COLLOCATION
On an interim basis, the rates contained in PACIFIC's Schedule Cal.
P.U.C. Tariff No. 175-T, Section 16, and FCC Tariff No. 128, Section
16, shall apply. Any collocation rates determined by the Commission
subsequent to the Effective Date of this Agreement shall replace such
interim rates.
4. INTERCONNECTION SERVICES
PACIFIC will make interconnection arrangements available at all
collocated locations. CLEC may choose to deliver both local and
intraLATA toll traffic over the same trunk group(s). With respect to
the previous sentence, CLEC will provide PACIFIC with the Percent Local
Usage (PLU) factor to facilitate billing of the local interconnection
rate. CLEC's PLU determination shall be subject to reasonable audit by
PACIFIC pursuant to Section 11 of this Agreement.
Prices and terms for interconnection services are specified in
Attachment 18 and Appendix 1 to this Attachment 8, including, without
limitation, the calculation of applicable charges for the completion of
toll and local traffic when PACIFIC's LSNE is used, the manner for
determining when reciprocal compensation applies for the exchange of
local traffic, and the reciprocal compensation rates for local and toll
traffic.
5. RIGHTS OF WAY, CONDUITS AND POLE ATTACHMENTS
CLEC shall pay PACIFIC a fee consistent with 47 U.S.C. Section 224 and
FCC and Commission regulations thereunder for placement of CLEC's
facilities in or on PACIFIC's poles, conduits, or rights of way. The
Parties shall mutually agree on such fee and in the event of any
dispute, will use the Alternative Dispute Resolution process set forth
in Attachment 3. Such fee is subject to change, pursuant to Section 9.3
of this Agreement, in the event the FCC issues new rules or the
Commission adopts rules setting forth a new methodology.
6. OTHER
The following prices also shall apply:
- E911 (when CLEC orders this service as a facilities-based
carrier): PACIFIC's tariff rates shall apply as set forth in
Exhibit 1 to this Attachment 8.
- PACIFIC shall provide RCF to CLEC pursuant to the terms of the
DNCF tariff (including any modification subsequently adopted
by the Commission) filed by PACIFIC, except that the Parties
(a) shall establish accounts to track
3
<PAGE> 103
ATTACHMENT 8
Page 4
their own costs of providing INP pursuant to this Agreement
and (b) agree to recover such costs consistent with FCC and
Commission requirements at such time as such requirements are
established. Until any FCC or Commission order establishes a
different cost recovery mechanism, a "bill and keep"
arrangement will apply to the ported segment of any ported
call between the Porting Party's switch and the Ported-to
Party's switch.
- References to PACIFIC's Switched and Special Access tariffs or
service shall mean the rates in PACIFIC's intrastate (Cal.
Schedule PUC 175-T) or interstate (FCC No. 128) access
tariffs, as applicable, shall apply.
- Warm line transfer: Where the Parties have agreed that CLEC
will pay PACIFIC for warm line transfer, PACIFIC's tariffed
rate for this service shall apply.
- Centrex Assumed Dial 9: PACIFIC's tariffed rate for this
service shall apply.
These rates shall remain in effect until the Commission determines
different rates in any proceeding subsequent to the Effective Date of
this Agreement. Once so determined by the Commission, said different
rates shall apply instead of the rates set forth herein for the
remaining Term of this Agreement.
7. IMPLEMENTATION COST RECOVERY
The Parties disagree whether or in what amount PACIFIC should charge
CLEC for implementation costs and service quality in excess of parity
incurred as a result of requests to establish and provide
interconnection services, Local Services, Network Elements or
Combinations. PACIFIC shall track all such costs and propose recovery
of same to the Commission. To the extent granted by the Commission,
CLEC shall pay such costs as ordered by the Commission. CLEC is free to
contest PACIFIC's right to recover any such costs and/or what its share
of such costs should be.
8. TO BE DETERMINED
In this Agreement, rates for certain services, Network Elements and
Combinations are specified as "To Be Determined" (TBD). In addition,
numerous provisions of this Agreement refer to prices set forth in
Attachment 8. In the event of such a reference in this Agreement where
there is no corresponding price in this Attachment 8, it shall be
deemed to be TBD. With respect to all TBD prices, prior to CLEC
ordering any such TBD items, the Parties shall meet and confer to
establish a price. If no agreement is reached, the Parties shall refer
any disputes to the Alternative Dispute Resolution process set forth in
Attachment 3. Any rates set in arbitration shall be subject to
modification by any subsequent decision of the Commission. CLEC shall
be responsible for payments of any such rates so established as ordered
in arbitration or by the Commission.
4
<PAGE> 104
ATTACHMENT 8
Page 1
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Monthly Service Order Connect Disconnect Change Order
NETWORK ELEMENTS Recurring Initial Additional Initial Additional Initial Additional Initial Additional
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
LOOP
Weighted 2 - Wire Basic Link
Weighted 4 - Wire Basic Link
Assured
ISDN Option
Digital Link - 1.544 Mbps
PBX
Cain
NETWORK INTERFACE DEVICE
LOCAL SWITCHING CAPABILITY
Ports
2-Wire Port
Cain Port
Centrex Port
Centrex System
Establishment [**] [**] [**] [**] [**]
ISDN Port
DID Port
DID Number Block
Hunting - Business
DS-1 Line Port
Ports Combined with Loop
Ports (All)
Vertical Features
(Weighted Avg.)
Call Forwarding Variable
Busy Call Forwarding
Delayed Call Forwarding
Call Waiting
Three Way Calling
Call Screen
Message Waiting Indicator
Repeat Dialing
Call Return
Call Forwarding Busy/Delay
Remote Call Forwarding
(Weighted Avg.)
Other Vertical Features
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------------
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
1
<PAGE> 105
ATTACHMENT 8
Page 1
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Monthly Service Order Connect Disconnect Change Order
NETWORK ELEMENTS Recurring Initial Additional Initial Additional Initial Additional Initial Additional
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Basic Switching Functions
Interoffice - Originating
Setup per Attempt
MOU
Interoffice - Terminating
Setup per Call
MOU
Interoffice
Setup per Call
MOU
Tandem Switching
Setup per Call
MOU
INTEROFFICE TRANSMISSION
Trunk Port Termination
End Office Dedicated DS 1 Port
Tandem Dedicated DS 1 Port
CLC Switched Service Establishment
1AESS [**] [**] [**] [**] [**]
5ESS
DMS100
Common Transport
Zone 1
Fixed Mileage
Variable Mileage
Zone 2
Fixed Mileage
Variable Mileage
Zone 3
Fixed Mileage
Variable Mileage
Zone 4
Fixed Mileage
Variable Mileage
Dedicated Transport
Voice Grade Dedicated Transport
Zone 1
Fixed Mileage
Variable Mileage
Zone 2
Fixed Mileage
Variable Mileage
Zone 3
Fixed Mileage
Variable Mileage
Zone 4
Fixed Mileage
Variable Mileage
DS1 Dedicated Transport
Zone 1
Fixed Mileage
Variable Mileage
Zone 2
Fixed Mileage
Variable Mileage
Zone 3
Fixed Mileage
Variable Mileage
Zone 4
Fixed Mileage
Variable Mileage
DS3 Dedicated Transport
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------------
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
2
<PAGE> 106
ATTACHMENT 8
Page 3
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Zone 1
Fixed Mileage
Variable Mileage
Zone 2
Fixed Mileage
Variable Mileage
Zone 3
Fixed Mileage
Variable Mileage
Zone 4
Fixed Mileage
Variable Mileage
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE> 107
ATTACHMENT 8
Page 4
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------------------
Monthly Service Order Connect Disconnect Change Order
NETWORK ELEMENTS Recurring Initial Additional Initial Additional Initial Additional Initial Additional
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Shared Transport
Zone 1
Fixed Mileage
Variable Mileage
Zone 2
Fixed Mileage
Variable Mileage
Zone 3
Fixed Mileage
Variable Mileage
Zone 4
Fixed Mileage
Variable Mileage
MULTIPLEXING
DS0/DS1 MUX
DS1/DS3 MUX
DCS [**] [**] [**] [**] [**]
USCC
SIGNALING SYSTEM (SS7)
STP Port
SS7 Link
Link Mileage
800 Database
LIDB Query
OPERATOR SERVICES & DA
Directory Assistance Per Call
Operator Services Per Work Sec
COLLOCATION
EISCC Combined with Loop
Basic
DS0
DS1
DS3
EISCC
Basic
DS0
DS1
DS3
Entrance Facilities
2-Wire Voice
4-Wire Voice
DS-1
DS-3 w/equip
DS-3 w/o equip
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- -----------------------
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
4
<PAGE> 108
ATTACHMENT 9
Page 1
ATTACHMENT 9
ACCESS TO VERIGATE, LEX AND OPERATIONS
SUPPORT SYSTEMS
<PAGE> 109
ATTACHMENT 9
Page 2
ATTACHMENT 9
ACCESS TO VERIGATE AND LEX OPERATIONS SUPPORT SYSTEMS
1. GENERAL CONDITIONS
1.1 This Attachment sets forth the terms and conditions under
which PACIFIC provides access to three of PACIFIC'S operations support systems
(OSS) "functions" to CLEC for pre-ordering, ordering and order statusing,
VeriGate and LEX respectively.
1.2 CLEC agrees to utilize VeriGate and LEX as described herein,
only for the purposes of establishing and maintaining Resale services or UNEs
through PACIFIC. CLEC agrees that the ordering interface will only support those
Resale and UNE services for which industry standard ordering conventions have
been adopted by the OBF. and implemented by PACIFIC. In addition, CLEC agrees
that such use will comply with the summary of SBC's Operating Practice 113, as
attached to this Attachment and the User ID request form. The Alternative
Dispute Resolution (ADR) process set forth in Attachment 3 shall apply to any
issues which arise under this Attachment 9, including any alleged non-compliance
with these security guidelines.
1.3 CLEC's access to pre-order functions described in 2.2.2 and
2.3.2 will be governed by Sections 5.5 of Attachment 5 to this Agreement for
Resale services. and by Section 5.2 of Attachment 11 to this Agreement for UNE
services.
1.4 By utilizing the electronic interfaces described herein to
access OSS functions, where CLEC has direct ordering capability, CLEC agrees not
to knowingly alter any applicable Resale rates and charges where they are
subject to the terms of this Agreement and applicable PACIFIC tariffs or PACIFIC
UNE rates and charges per the terms of this Agreement. CLEC agrees to use
reasonable business efforts to submit orders that are correct and complete.
Pacific will use reasonable business efforts to reject for processing CLEC
orders which are not correct and complete. The Parties agree to conduct internal
and independent reviews for accuracy. The audit rights in Section 11 of the
Agreement shall apply.
1.5 The Information Services (I.S.) Call Center provides a
technical support function for the OSS interfaces described in this Attachment.
CLEC will also provide a single point of contact for technical issues related to
the electronic interfaces.
1.6 PACIFIC and CLEC will establish interface contingency plans
and disaster recovery plans for the OSS interfaces described in this Attachment.
1.7 The Parties agree that the Change Management Process agreed to
and documented under the auspices of the CPUC OSS 011 will be used to manage
changes to LEX and Verigate.
<PAGE> 110
ATTACHMENT 9
Page 3
2. PRE-ORDER
2.1 Where available to Pacific, PACIFIC will provide real time
access to pre-order functions to support CLEC ordering of Resale services and
UNE via the electronic interfaces described herein. The Parties acknowledge that
ordering requirements necessitate the use of current, real time pre-order
information to accurately build service orders. The following lists represent
pre-order functions that are available to CLEC.
2.2 Pre-ordering functions for Resale include:
2.2.1 features and services available at a valid service
address (as applicable):
2.2.2 access to customer proprietary network information
(CPNI) for PACIFIC retail or resold services for
pre-ordering will include: billing name service
address. billing address. service and feature
subscription, directory listing information, long
distance carrier identity, and pending service order
activity. CLEC agrees to comply with the conditions
as described in Section 5.5 of Attachment 5 to this
Agreement;
2.2.3 a telephone number (if the end user does not have one
assigned) with the end user on-line;
2.2.4 service availability dates to the end user;
2.2.5 information regarding whether dispatch is required:
2.2.6 Primary Interexchange Carrier (PIC) options for
intraLATA toll (when available) and interLATA toll:
2.2.7 service address verification.
2.3 Pre-ordering functions for UNE include:
2.3.1 features and services available at a valid service
address (as applicable);
2.3.2 access to customer proprietary network information
(CPNI) for PACIFIC retail or resold services for
pre-ordering will include: billing name, service
address, billing address, service and feature
subscription, directory listing information, long
distance carrier identity, and pending service order
activity. CLEC agrees to comply with the conditions
as described in Section 5.2 of Attachment 11 to this
Agreement for UNE services;
2.3.3 a telephone number (if the end user does not have one
assigned) with the end user on-line;
3
<PAGE> 111
ATTACHMENT 9
Page 4
2.3.4 service availability dates to the end user where CLEC
requests PACIFIC to provision combinations of UNEs
and where such combined elements have analogous
PACIFIC retail services with flexible service
availability date functions:
2.3.5 information regarding whether dispatch is required
where CLEC requests PACIFIC to provision combinations
of UNEs and where such combined elements have
analogous PACIFIC retail services with flexible
service availability date functions;
2.3.6 Primary Interexchange Carrier (PIC) options for
intraLATA toll (when available) and interLATA toll;
2.3.7 service address verification.
2.4. Electronic Access to Pre-Order Functions: PACIFIC will provide
CLEC access to the following system:
2.4.1 VeriGate is an end-user interface developed by
PACIFIC that provides access to the pre-ordering
functions for Resale Services and UNE. VeriGate may
be used in connection with electronic or manual
ordering.
3. ORDERING/PROVISIONING
3.1 PACIFIC will provide access to ordering and statusing
functions to support CLEC provisioning of Resale services and UNEs via the OSS
interfaces described below. To order Resale services and UNEs, CLEC will format
the service request to identify what features services, or elements it wishes
PACIFIC to provision in accordance with PACIFIC LSOR and other ordering
requirements which have been reviewed and discussed by both parties. PACIFIC
will provide CLEC access to the following interfaces:
3.1.1 LSR Exchange (LEX) is a graphical user interface
provided by PACIFIC that provides access to the
ordering functions for UNEs and Resale Services.
4. REMOTE ACCESS
4.1 CLEC must access the PACIFIC OSS interfaces, described herein.
via the Pacific Remote Access Facility (PRAF). Connection to the PRAF will be
established via a "port" either through dial-up or direct connection. CLEC may
utilize a single port to access these interfaces to perform the supported
functions in PACIFIC where CLEC has executed this Attachment and purchases
System Access.
4
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ATTACHMENT 9
Page 5
5. OPERATIONAL READINESS TEST (ORT) FOR ORDERING/PROVISIONING
5.1 Prior to initial live access to interface functionality, the
Parties shall conduct Operational Readiness Testing (ORT)-which will allow for
the testing of the systems, interfaces. and processes for the OSS functions.
5.2 Prior to live system usage, CLEC must complete user education
classes for PACIFIC-provided interfaces that affect the PACIFIC network. Classes
are train-the-trainer format to enable CLEC to devise its own course work for
its own employees. Charges will apply for each class. Classes will be available
for and required for LEX. Optional classes will be available for VeriGate.
Schedules will be made available upon request and are subject to change. The
length of classes varies; the following table presents the applicable rates.
Ongoing class schedules may be requested from CLEC's account manager.
[**]
5.3 A separate agreement will be required as a commitment to pay
for a specific number of CLEC students in each class. CLEC agrees that charges
will be billed by PACIFIC and CLEC payment is due 30 days later. CLEC agrees
that personnel from other competitive Local Service Providers may be scheduled
into any class to fill any seats for which CLEC has not contracted. Class
availability is first-come, first served with priority given to CLECs who have
not yet attended the specific class.
5.4 Class dates will based upon CLEC requests and PACIFIC
availability.
5.5 CLEC agrees to pay a cancellation fee of the full price noted
in the separate agreement if CLEC cancels scheduled classes less than two weeks
prior to the scheduled start date. Should PACIFIC cancel a class for which CLEC
is registered less than two weeks prior to the schedule start date of that
class, Pacific will waive the charges for the reschedule class for the
registered students. CLEC agrees to provide to PACIFIC completed registration
forms for each student no later than one week prior to the scheduled training
class.
5.6 CLEC agrees that CLEC personnel attending classes are to
utilize only training databases and training presented to them in class.
Attempts to access any other PACIFIC or SBC system are strictly prohibited.
- -----------------------
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
5
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ATTACHMENT 9
Page 6
5.7 CLEC further agrees that training material. manuals and
instructor guides are Confidential Information as that term is defined in the
Interconnection Agreement.
6. RATES
6.1 CLEC will pay PACIFIC the OSS rate(s) set forth in California
Public Utilities Commission's first rulemaking in the Open Access and Network
Architecture Development (OANAD) proceeding or as otherwise determined by the
California Public Utilities Commission.
6.2 In the case of rates for interfaces not covered by the OANAD
proceeding. PACIFIC will charge proposed rates filed with the California Public
Utilities Commission in the interim, subject to true-up.
6.3 Should OSS rates not be established in OANAD by September 30,
1998 for LEX and VeriGate. CLEC will, under protest, pay Pacific the OSS rate of
[**] per month for LEX and [**] per month for Verigate.
6.4 CLEC will pay PACIFIC a connectivity rate of [**] per month
per T-I connection for direct access to the PRAF and/or [**] per month per port
for dial-up access to the PRAF.
6.5 All of PACIFIC's proposed rates are subject to true-up should
the final Commission determined rate be higher or lower.
6.6 The rate waiver described in 6.3 is solely for 055 functions
and not applicable to any other product, unless expressly documented in this
Agreement. Neither party waives its rights pursuant to OSS or any other product
in the OANAD proceeding, nor rights in any other product cost proceeding.
- -----------------------
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
6
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Attachment 10
Page 1
ANCILLARY FUNCTIONS
1. INTRODUCTION
This Attachment 10 sets forth the Ancillary Functions that PACIFIC
agrees to offer to CLEC so that CLEC may obtain and use unbundled
Network Elements or PACIFIC services to provide services to its
customers.
2. PACIFIC PROVISION OF ANCILLARY FUNCTIONS
2.1 The Ancillary Functions that CLEC and PACIFIC have identified as
of the Effective Date of this Agreement are Collocation, which is
addressed in Section 3, and Right of Way, which is addressed in
Section 4 of this Attachment. CLEC may use Collocation and Right
of Way to provide any feature, function, or service option that
such Ancillary Function is capable of providing or any feature,
function, or service option that is described in the relevant
technical references, or as may otherwise be designated by CLEC
consistent with the Act, the regulations thereunder and relevant
Commission decisions.
2.2 CLEC and PACIFIC agree that the Ancillary Functions identified in
this Attachment 10 are not exclusive. Either Party may identify
additional or revised Ancillary Functions as necessary to improve
services to customers, to improve network or service efficiencies
or to accommodate changing technologies, customer demand, or
regulatory requirements. Upon the identification of a new or
revised Ancillary Function, the Parties shall cooperate in an
effort to negotiate mutually agreeable rates, terms and conditions
for the provision of that Ancillary Function. If the Parties are
unable to agree on the terms and conditions for a new or revised
Ancillary Function that PACIFIC is required to offer under the
terms of the Act, either Party may invoke the Alternative Dispute
Resolution procedures established by Attachment 3. Security
procedures agreed to by PACIFIC and CLEC for the protection of
both Parties' service and property, including collocation spaces,
and procedures for law enforcement interface are described in
Attachment 16.
3. COLLOCATION
3.1 DEFINITIONS:
3.1.1 Collocation is the right of CLEC to place equipment in PACIFIC's
Local Serving Office (LSO) or other PACIFIC locations to
interconnect with PACIFIC's network. Collocation also includes
PACIFIC providing resources necessary for the operation and
economical use of collocated equipment.
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Attachment 10
Page 2
3.1.2 Physical collocation is defined in 47 C.F.R. Sec. 51.5.
3.1.3 Virtual collocation is defined in 47 C.F.R. Sec. 51.5.
3.2 TECHNICAL REQUIREMENTS
3.2.1 PACIFIC will provide for Physical Collocation and Virtual
Collocation of CLEC's transport facilities and termination
equipment necessary for interconnection of CLEC's network
facilities to PACIFIC's network or access to unbundled network
elements. Such collocation shall be provided at the rates
specified in Attachment 8 and on a nondiscriminatory basis in
accordance with the requirements of the Act and the FCC's rules
thereunder.
3.2.2 PACIFIC shall permit collocation of any type of equipment used or
useful for interconnection or access to unbundled network
elements, in accordance with the Act and sections 579 through 582
of the FCC's First Interconnection Order. Such equipment includes
but is not limited to transmission equipment, such as optical
terminating equipment and multiplexers, equipment for the
termination of basic transmission facilities and such additional
types of equipment that may be agreed to by the Parties or
designated in future FCC or Commission rulings. If a request by
CLEC to collocate is denied on the basis of the equipment to be
installed by CLEC, PACIFIC shall prove to the Commission that such
equipment is not "necessary" as defined by the FCC for
interconnection or access to unbundled network elements.
3.2.3 When providing Virtual Collocation, PACIFIC will, at a minimum,
install, maintain, and repair collocated equipment for CLEC within
the same time periods and with failure rates that are no greater
than those that apply to the performance of similar functions for
comparable equipment of PACIFIC, provided, if CLEC utilizes
nonstandard equipment or equipment not used by PACIFIC at the same
location, CLEC shall pay for (a) any special equipment PACIFIC
must purchase and (b) any training of PACIFIC personnel required
for PACIFIC to install or maintain such non-standard or special
equipment.
3.2.4 PACIFIC will make space available within or on its premises to
CLEC and other requesting telecommunications carriers on a
first-come, first-served basis, provided, however, that PACIFIC
will not be required to lease or construct additional space to
provide for Physical Collocation when existing space has been
exhausted. To the extent possible, PACIFIC will make contiguous
space available to CLEC if CLEC seeks to expand an existing
collocation space. When planning renovations of existing
facilities or constructing or leasing new facilities, PACIFIC
shall take into account projected demand for collocation space.
PACIFIC may retain a limited amount of floor space for PACIFIC's
own specific future uses for a time period up to one year on terms
no more favorable to PACIFIC than those that apply to other
telecommunications carriers seeking to
8
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Attachment 10
Page 3
reserve collocation space for their own future use. PACIFIC shall
relinquish any space held for future use before denying a request
for Virtual Collocation on grounds of space limitations, unless
PACIFIC proves to the Commission that Virtual Collocation at that
point is not technically feasible. PACIFIC may impose reasonable
restrictions on its provision of additional unused collocation
space ("warehousing") as described in Section 586 of the First
Interconnection Order to collocating telecommunications carriers,
provided, however, that PACIFIC shall not set a maximum space
limitation on CLEC unless PACIFIC proves to the Commission that
space constraints make such restrictions necessary.
3.2.5 PACIFIC will permit CLEC to collocate equipment and use such
equipment to access unbundled Network Elements obtained from
PACIFIC and will not require CLEC to bring its own transmission
facilities to PACIFIC's premises in which CLEC seeks to collocate
equipment for purposes of access to unbundled Network Elements.
3.2.6 PACIFIC will permit CLEC to interconnect its network with that of
another collocating telecommunications carrier at PACIFIC's
premises and to connect its collocated equipment to the collocated
equipment of another telecommunications carrier within the same
premises provided that the collocated equipment is also used for
interconnection with PACIFIC or for access to PACIFIC's unbundled
Network Elements. PACIFIC will provide the connection between the
equipment in the collocated spaces of two or more
telecommunications carriers via EISCCs and any necessary DCS or
other equipment at the requesting competitive local carrier's
expense, unless PACIFIC permits one or more of the collocating
parties to provide this connection for themselves. PACIFIC need
not permit collocating telecommunications carriers to place their
own connecting transmission facilities within PACIFIC's premises
outside of the actual Physical Collocation space.
3.2.7 Transferring CLEC interconnection from PACIFIC's current access
service transport or entrance facilities to EISCCs will be
accomplished within a mutually agreed-upon time frame; however, to
ensure a smooth transition from such access services to EISCCs,
CLEC must provide forecasts of its future needs for EISCC capacity
by location at least 90 days in advance of its desired transition
date.
3.2.8 PACIFIC will permit CLEC to subcontract the construction of
Physical Collocation arrangements with contractors approved by
PACIFIC, provided that PACIFIC will not unreasonably withhold
approval of contractors. Approval by PACIFIC will be based on the
same criteria PACIFIC uses in approving contractors for its own
purposes.
3.2.9 PACIFIC shall provide an EISCC for intraoffice cross-connect
(e.g., DSO, DS1, D53, 0C3, 0C12, 0C48, and STS-1 terminations) as
requested by CLEC, to meet CLEC's need for placement of equipment,
interconnection, or provision of service at rates specified in
Attachment 8.
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Attachment 10
Page 4
3.2.10 Other than reasonable security restrictions described in
Attachment 16, PACIFIC shall place no restriction on access to the
CLEC collocated space by CLEC's employees and designated agents.
Such space shall be available to CLEC designated agents 24 hours
per day each day of week. PACIFIC will not impose unreasonable
security restrictions at the premises. CLEC personnel may, with an
escort provided by PACIFIC, inspect equipment in a Virtual
Collocation location upon and after installation.
3.2.11 CLEC shall have the right, at the point of termination for the
EISCC, to assign which tie pair facilities and which channels on
multiplexers, concentrators or other equipment under CLEC's
control are used for service in the collocated space.
3.2.12 PACIFIC shall allow CLEC to select its own vendors for all
required engineering and installation services associated with its
collocated equipment (e.g., PACIFIC shall not require CLEC to
utilize PACIFIC's internal engineering or installation work forces
for the engineering and installation of CLEC's collocated
equipment). Installation of equipment in the collocated space
must comply with PACIFIC's Installation and Job Acceptance
Handbook, which has been provided to CLEC.
3.2.13 CLEC may install monitoring equipment in the collocated space to
carry data back to CLEC's work center for analysis.
3.2.14 At CLEC's request, PACIFIC shall provide POTS with a connection
jack for the collocated space. Upon CLEC's request, this service
shall be available at the CLEC collocated space on the day that
the space is turned over to CLEC by PACIFIC.
3.2.15 PACIFIC shall provide adequate lighting, ventilation, power, heat,
air conditioning, and other environmental conditions for CLEC's
space or equipment. These environmental conditions shall adhere to
Bell Communication Research (Bellcore) Network Equipment-Building
System (NEBS) standards.
3.2.16 PACIFIC shall provide access to existing eyewash stations, shower
stations, and bathrooms within the collocated facility on a 24
hours per day and 7 days per week basis for CLEC personnel and its
designated agents.
3.2.17 PACIFIC agrees to negotiate requests by CLEC for diversity of
fiber or power cabling on an individual case basis.
3.2.18 PACIFIC shall protect as proprietary to CLEC all information
provided by CLEC in requesting or maintaining a collocation
arrangement. PACIFIC shall not provide such information to any
third parties and shall limit access to the information to PACIFIC
employees having a need to know.
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Attachment 10
Page 5
3.2.19 PACIFIC shall participate in and adhere to negotiated service
guarantees, performance standards, and ISO reviews.
3.2.20 PACIFIC will complete a Environmental Health & Safety
Questionnaire for each building that collocated space is provided
in. CLEC may provide this questionnaire with its collocation
request and PACIFIC shall return it to CLEC no later than the
first meeting between representatives of CLEC and PACIFIC
scheduled to discuss implementation of a collocation application,
which generally shall be scheduled within thirty (30) days after
CLEC's collocation request ("First Customer Implementation
Meeting").
3.2.21 PACIFIC shall provide CLEC with written notice five (5) business
days prior to those instances where PACIFIC or its subcontractors
may be undertaking a major construction project in the general
area of the collocated space occupied by CLEC or in the general
area of the AC and DC power plants which support CLEC equipment.
PACIFIC will inform CLEC by telephone of any emergency related
activity that PACIFIC or its subcontractors may be performing in
the general area of the collocated space occupied by CLEC or in
the general area of the AC and DC power plants which support CLEC
equipment. Notification of any emergency related activity shall be
made immediately prior to the start of the activity so that CLEC
can take any action required to monitor or protect its service.
3.2.22 PACIFIC shall construct the collocated space in compliance with
CLEC's collocation request for cable holes, ground bars, doors,
and convenience outlets.
3.2.23 CLEC and PACIFIC will complete an acceptance walk through of all
collocated space requested from PACIFIC. Exceptions that are
noted during this acceptance walk through shall be corrected by
PACIFIC within five (5) days after the walk through. The
correction of these exceptions from the original collocation
request shall be at PACIFIC's expense.
3.2.24 PACIFIC shall provide the following to CLEC:
3.2.24.1 Once the collocation space design has stabilized, PACIFIC shall
provide non-architectural drawings depicting the exact location
and dimensions of the collocated space and any physical
obstructions.
3.2.24.2 Prior to the second meeting of CLEC and PACIFIC representatives
scheduled to plan implementation of an CLEC collocation request
("Second Customer Implementation Meeting"), PACIFIC shall provide
Telephone Equipment drawings depicting the exact location, type,
and cable termination requirements (i.e. connector type/number and
type of pairs, naming convention, etc.) for PACIFIC Point of
Termination Bay(s)
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3.2.24.3 Prior to the Second Customer Implementation Meeting, PACIFIC shall
provide drawings depicting the exact path, with dimensions, for
CLEC's fiber ingress/egress into the collocated space.
3.2.24.4 Prior to the Second Customer Implementation Meeting, PACIFIC shall
provide power cabling connectivity information, including
drawings, identifying the sizes and number of power feeders.
3.2.25 PACIFIC will provide access to CLEC to the PACIFIC Point of
Termination bays where cabling from CLEC's collocated space is
terminated for connection to PACIFIC tie pairs.
3.2.26 PACIFIC shall provide positive confirmation to CLEC when
construction of CLEC Collocated space is underway. No later than
the Second Customer Implementation Meeting, PACIFIC shall notify
CLEC of the scheduled completion and turnover dates.
3.2.27 CLEC shall be compensated by PACIFIC for any delays in the
negotiated completion and turnover dates which create expenditures
or delays to CLEC.
3.2.28 PACIFIC shall provide the following information to CLEC no later
than the First Customer Implementation Meeting:
3.2.28.1 Work restriction guidelines.
3.2.28.2 PACIFIC or Industry technical publication guidelines that impact
the design of PACIFIC collocated equipment.
3.2.28.3 PACIFIC contacts (name and telephone number) for the following
areas:
3.2.28.3.1 Engineering
3.2.28.3.2 Provisioning
3.2.28.3.3 Billing
3.2.28.3.4 Operations
3.2.28.3.5 Site and/or Building Managers
3.2.28.4 Escalation process for the PACIFIC representatives (names,
telephone numbers, escalation order) for any disputes or problems
that might arise pursuant to CLEC's collocation.
3.2.29 Power as referenced in this document refers to any electrical
power source supplied by PACIFIC for CLEC equipment or Network
Elements. Power supplied by PACIFIC will support Network Elements
or CLEC equipment at
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equipment specific DC and AC voltages. At a minimum, the power
supplied to CLEC, should be at parity with PACIFIC. Where PACIFIC
performance, availability, restoration, etc. falls below industry
standards, PACIFIC shall bring itself into compliance with such
industry standards as soon as technologically feasible.
3.2.29.1 Central office power supplied by PACIFIC into the CLEC equipment
area, should be supplied in the form of power feeders (cables) on
cable racking into the designated CLEC equipment area. The power
feeders (cables) should efficiently and economically support the
requested quantity and capacity of CLEC equipment. The termination
location should be as requested by CLEC. The number of feeder
cables requested by CLEC, in order to provide maximum reliability
to customers, is directly dependent upon the power requirements of
the equipment and facilities collocated by CLEC. The number of
feeder cables shall be determined by the manufacturer's
recommendation as provided in equipment specifications.
3.2.29.2 PACIFIC and CLEC will negotiate resolution of CLEC requests for
specific size and amperage of power feed based on standard
engineering practices.
3.2.29.3 PACIFIC power equipment supporting CLEC's equipment shall:
3.2.29.3.1 Comply with applicable industry standards (Bellcore, NEBS, IEEE,
etc.) for equipment installation, cabling practices, and physical
equipment layout;
3.2.29.3.2 Have redundant power feeds with physical diversity and battery
back-up at minimum at parity with that provided for similar
PACIFIC equipment;
3.2.29.3.3 Provide central office ground, connected to a ground electrode
located within the CLEC collocated space, at a level above the top
of CLEC equipment +/- 2 feet to the left or right of CLEC's final
request;
3.2.29.3.4 Provide feeder capacity and quantity to support the ultimate
equipment layout for CLEC equipment in accordance with CLEC's
collocation request;
3.2.29.3.5 Provide documentation submitted to and received from contractors
for any contractor bids for any work being done on behalf of CLEC
(this includes but is not limited to power supplies, and cage
construction);
3.2.29.3.6 Provide an installation sequence and access that will allow
installation efforts in parallel without jeopardizing personnel
safety or existing CLEC services;
3.2.29.3.7 Provide power plant alarms that adhere to Bell Communication
Research (Bellcore) Network Equipment-Building System (NEBS)
standards TR-EOP-000063; and
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Attachment 10
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3.2.29.3.8 Provide cabling that adheres to Bell Communication Research
(Bellcore) Network Equipment-Building System (NEBS) standards
TR-EOP-000063.
3.2.29.4 PACIFIC will provide CLEC with written notification within ten
(10) business days of any scheduled AC or DC power work or related
activity in the collocated facility that will cause an outage or
any type of power disruption to CLEC equipment located in PACIFIC
facility. PACIFIC shall provide CLEC immediate notification by
telephone of any emergency power activity that would impact CLEC
equipment.
3.2.29.5 PACIFIC employees with keys to the collocation area will be
permitted to enter the CLEC collocated space only during an
emergency, or for annual compliance reviews of the work areas.
3.2.29.6 PACIFIC shall ensure that the collocation equipment areas comply
with all applicable fire and safety codes.
3.3 TECHNICAL REFERENCES.
PACIFIC shall provide Collocation in accordance with applicable
published technical references.
4. RIGHTS OF WAY (ROW), CONDUITS, POLE ATTACHMENTS
4.1 DEFINITIONS:
4.1.1 A Right of Way (ROW) is the right to use the land or other
property of another Party to place poles, conduits, cables, other
structures and equipment, or to provide passage to access such
structures and equipment. A ROW may run under, on, or above public
or private property (including air space above public or private
property) and may include the right to use discrete space in
buildings, building complexes or other locations.
4.1.2 A conduit is a tube or similar enclosure that may be used to house
communication or communication-related power cables. Conduit may
be underground or above ground (for example, inside buildings) and
may contain one or more inner ducts. An innerduct is a separate
tube or enclosure within a conduit.
4.1.3 A pole attachment is the connection of a facility to a utility
pole. Some examples of facilities are mechanical hardware,
grounding and transmission cable, and equipment boxes.
4.2 GENERAL REQUIREMENTS
4.2.1 PACIFIC shall make ROW, conduit and pole attachments available to
CLEC through agreements consistent with applicable regulations of
the FCC and the
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Commission and this Attachment 10, Section 3, or through tariffs,
in the event PACIFIC files tariffs covering such facilities.
4.2.2 PACIFIC shall provide CLEC with non-discriminatory and
competitively neutral access, on a first-come, first-served basis,
to ROW, conduit, ducts, pole attachments and entrance facilities
that PACIFIC owns or controls.
4.2.3 Upon request, PACIFIC shall provide CLEC reasonable access on a
non-discriminatory and competitively neutral basis to building
entrance facilities (including but not limited to cable vault,
conduit, equipment rooms and telephone closets that are owned or
controlled by PACIFIC, provided the security of PACIFIC's
facilities is maintained at all times. For some locations, CLEC
personnel must be escorted, and the parties will negotiate a
reasonable arrangement, including administrative costs, if any,
for such escorted access.
4.2.4 PACIFIC may not favor itself in granting access to a ROW, conduit
or pole attachment. PACIFIC shall not deny a request from CLEC for
access to a ROW, conduit or pole attachment on the basis that such
space is reserved for PACIFIC's future business needs, except as
provided in Sections 4.2.5, 4.2.5.1 and 4.2.6.
4.2.5 PACIFIC may reserve capacity for projects for which it has
undertaken engineering studies meeting the requirements of Section
4.2.5.1, with a view toward initiation of physical construction
activities within six (6) months after the date of CLEC's request
or within eighteen (18) months after the date of CLEC's request if
PACIFIC can demonstrate a definitive schedule for completion of
the project with eighteen (18) months and that it is not possible
to commence construction within six (6) months due to action
required by others.
4.2.5.1 At CLEC's request in the event PACIFIC denies an CLEC request for
access pursuant to Section 4.2.5, the parties shall supply to each
other within thirty (30) days of the denial, subject to Section 18
of this Agreement, copies of their respective engineering studies
relating to the disputed space. PACIFIC shall prevail in its
denial of space to CLEC only if PACIFIC's engineering studies have
the same or greater level of detail and completeness as CLEC's
studies. The parties shall meet and confer in an effort to reach
an agreement that PACIFIC's engineering studies meet this
standard. If the parties fail to agree, either Party may invoke
the alternative dispute resolution process set forth in Attachment
3.
4.2.6 The duties of PACIFIC described in Sections 4.2.5 and 4.2.5.1
shall be subject to expansion or contraction in accordance with
rules adopted by the Commission that constitute regulation of
rates, terms and conditions for pole attachments within the
meaning of Section 224(c)(3) of the Act.
<PAGE> 123
Attachment 10
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4.2.7 PACIFIC may designate a duct in a mixed cable use environment or
innerduct in an all fiber environment for maintenance purposes,
for the benefit of all users, subject to Sections 4.2.7.1.4.2.7.2
and 4.2.7.3:
4.2.7.1 PACIFIC may designate for maintenance purposes one duct in a
multi-duct trough.
4.2.7.2 PACIFIC may designate for maintenance purposes one innerduct in a
multi-innerduct trough.
4.2.7.3 Where a trough contains both ducts and innerducts, PACIFIC may
designate one duct for maintenance purposes.
4.2.7.4 No Party shall use a duct or innerduct designated by PACIFIC for
maintenance under Sections 4.2.7.1, 4.2.7.2 or 4.2.7.3, except for
maintenance purposes.
4.2.8 In cases where PACIFIC reasonably believes that there is
insufficient capacity to grant a request from CLEC for access to a
ROW, conduit or pole attachment, PACIFIC must take all reasonable
steps to accommodate CLEC's request and explore potential
accommodations in good faith with CLEC.
4.2.9 In the event of an emergency affecting ROW, conduit or pole
attachments made available by PACIFIC to CLEC, PACIFIC shall
follow the mutually agreed upon Emergency Restoration Procedures
attached to the Attachment 10 as Exhibit A.
4.2.10 PACIFIC shall provide to CLEC the names, numbers of the regional
Single Points of Contact (SPOC) for administering all structure
lease and ROW agreements within each defined geographical area.
4.3 APPLICATIONS FOR SPACE
4.3.1 PACIFIC will accept or reject in writing as soon as possible, but
in any event within forty-five (45) days, CLEC's written request
for access to PACIFIC's conduit or poles. PACIFIC's failure to
respond within that time period shall be deemed a rejection of
CLEC's request.
4.3.2 If PACIFIC denies an application by CLEC for conduit or pole
space, its denial must be specific, and include all relevant
evidence or information supporting the denial.
4.4 REQUESTS FOR DRAWINGS
4.4.1 At CLEC's request, PACIFIC shall provide CLEC with detailed
engineering records and drawings of conduit, poles and other ROW
paths in selected areas as specified by CLEC within a reasonable
time frame.
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4.4.2 PACIFIC shall allow personnel designated by CLEC to examine
conduit system or pole line diagrams at PACIFIC's offices,
provided that, for security reasons, a separate room is available
for such examination. PACIFIC will make copies of such prints for
CLEC at CLEC's expense, or a mutually agreed upon third party will
be permitted to examine the diagrams.
4.5 PRE-ORDER REQUESTS FOR INFORMATION
4.5.1 CLEC may submit a written request for information to PACIFIC
before submitting an application for conduit or pole space in a
specified location.
4.5.2 PACIFIC shall provide information regarding the availability and
condition of conduit or pole attachments within ten (10) business
days of CLEC's written request for a records based answer and
twenty (20) business days of CLEC's request for a field based
answer. In the event CLEC's written request seeks information
about the availability of more than five (5) miles of conduit or
more than five hundred (500) poles, PACIFIC shall (1) provide an
initial response within ten (10) business days; (2) use reasonable
best efforts to complete its response within thirty (30) business
days; and (3) if PACIFIC is unable to complete its response within
thirty (30) business days or if the parties are unable to agree
upon a mutually satisfactory long time period for PACIFIC's
response, PACIFIC will hire outside contractors at CLEC's expense,
not to exceed PACIFIC's customary charge for the same work,
provided that before proceeding with such outside hiring, PACIFIC
shall provide to CLEC the contractor's work order and hourly rate.
4.5.3 CLEC shall have the option to be present at the field based survey
and PACIFIC shall provide CLEC at least twenty-four (24) hours
notice prior to start of such field survey. By prior arrangement,
PACIFIC shall allow CLEC personnel, accompanied by a PACIFIC
escort, to enter manholes and view pole structures.
4.6 MAKE READY WORK
4.6.1 PACIFIC shall complete the "make ready work" required on poles or
within conduit to enable CLEC to install its facilities. This work
shall be accomplished by PACIFIC at a reasonable cost within
thirty (30) business days, except that if PACIFIC requires longer
than thirty (30) business days or if the parties are unable to
agree upon a mutually satisfactory longer time period for
completion of the make ready work, outside contractors may be
hired at CLEC's expense to do the work. In that event, PACIFIC and
CLEC shall confer and agree which Party shall hire the
contractors. If CLEC hires the contractors, they must meet
PACIFIC's reasonable standards. If PACIFIC hires the contractors,
before proceeding with the work, PACIFIC shall provide to CLEC the
contractor's work order and hourly rate, which shall not exceed
PACIFIC's customary charge for the same work.
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4.7 POLE ATTACHMENTS
4.7.1 Pole Attachments will be placed in the space on the pole
designated for communications use. This space is generally located
below electric supply circuits and excludes the neutral space
between the electrical and communication space.
4.7.2 PACIFIC shall not attach, or permit other entities to attach,
facilities on existing CLEC facilities without CLEC's prior
written consent, except that such consent shall not be required
for attachments to facilities such as arms and brackets that are
designed for more than one cable.
4.7.3 CLEC may, at its option, make pole attachments using CLEC or
CLEC-designated personnel. CLEC shall follow the methods and
procedures for making pole attachments set forth in Commission
General Order No. 95 and any additional standards provided to CLEC
by PACIFIC.
4.8 CONDUITS:
4.8.1 To the extent that space is available as reasonably determined by
PACIFIC, PACIFIC shall provide CLEC space in manholes for racking
and storage of cable and other materials as requested by CLEC on a
nondiscriminatory, first-come; first-served basis.
4.8.2 PACIFIC shall remove any retired cable from its conduit at CLEC's
expense within a reasonable period of time if necessary to make
conduit space available for CLEC.
4.8.3 Upon prior notice to PACIFIC, CLEC may conduct maintenance
procedures in conduit space leased from PACIFIC. PACIFIC may
dispatch a PACIFIC technician at CLEC's expense to oversee CLEC's
work.
4.8.4 PACIFIC shall not restrict, withhold or unreasonably delay any
modifications to conduit systems necessary to allow access to
and/or egress from such systems, provided that CLEC must obtain
certification of a professional structural engineer for
modifications to post-1960 structures ensuring that the
modifications will not adversely impact the structural integrity
of the manhole.
4.8.5 Subject to accepted industry safety and engineering standards,
PACIFIC will permit manhole interconnections, breaking out of
PACIFIC manholes and breaking out of PACIFIC conduit by CLEC.
PACIFIC may not limit new duct entrances to pre-cast knockouts,
provided that CLEC must obtain certification of a professional
structural engineer for modifications to post 1960 structures
ensuring that the modifications will not adversely impact the
structural integrity of the manhole.
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4.9 INNERDUCTS
4.9.1 PACIFIC will permit CLEC, on a first-come, first-served basis, to
license the use of innerducts in ducts in which PACIFIC already
occupies an innerduct as long as one spare innerduct for
maintenance purposes remains available. If an innerduct licensed
by CLEC becomes defective, CLEC may use the spare maintenance
innerduct as long as CLEC repairs the defective innerduct for use
as a new maintenance spare as soon as possible.
4.9.2 Where spare innerduct does not exist, PACIFIC shall allow CLEC to
install innerduct in a spare PACIFIC conduit, provided that CLEC
complies with applicable law and PACIFIC's construction standards.
4.10 Access to Private Easements
4.10.1 PACIFIC shall not block any third party assignment of ROW to CLEC.
4.10.2 To the extent space is available, PACIFIC shall provide access to
ROWs it has obtained from a third party to CLEC on a
nondiscriminatory, first-come, first-served basis, provided that
any underlying agreement with such third party permits PACIFIC to
provide such access, and provided that CLEC agrees to indemnify
PACIFIC for any liability arising out of such access or use.
4.10.3 PACIFIC will, upon request by CLEC, grant CLEC access to any
private easement held by PACIFIC, in a mutually agreeable form of
sub-easement, assignment or other appropriate access. PACIFIC's
charge for such access shall be a pro rata portion of (a) the
charge paid by PACIFIC to the grantor of the easement and (b) any
other documented administrative and engineering costs incurred by
PACIFIC in obtaining the original easement, both of which shall be
determined on a case-by-case basis and calculated by taking into
account (i) the size of the area to be used by CLEC and (ii) the
number of users of PACIFIC's easement. CLEC shall also pay the
reasonable documented administrative cost incurred by PACIFIC in
processing such requests for access.
4.11 DISPUTE RESOLUTION
4.11.1 If the parties are unable to agree on a matter involving access by
CLEC to a ROW, conduit, innerducts, pole, entrance facility or
private easement owned or controlled by PACIFIC, either Party may
submit the matter to the dispute resolution process set forth in
Attachment 3 to this Agreement or may invoke applicable dispute
resolution procedures described in the Act and the FCC's First
Interconnection Order, sections 1217 through 1231.
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Attachment 10
Appendix A
page 1
EMERGENCY RESTORAL PROCEDURES
GENERAL In the event of an emergency, restoration procedures may be
affected by the presence of CLEC facilities in or on PACIFIC
structures. While PACIFIC maintains no responsibility for the
repair of damaged CLEC facilities (except under a special
maintenance contract), it must nonetheless control access to
CLEC structures if restoral of affected facilities is to be
achieved in an orderly fashion.
PRIORITIZING Where PACIFIC and CLEC are involved in emergency restorals,
access to PACIFIC's structures will be controlled by
PACIFIC's Maintenance District Manager or his/her on-site
representative according to the following guidelines:
SERVICE DISRUPTIONS/OUTAGES
- While exercising its right to first access, PACIFIC should
grant nondiscriminatory access to all occupants in or on its
facilities and every effort should be made to accommodate as
many occupants as is reasonably safe. Therefore, reasonable,
simultaneous access will not be denied unless public or other
safety considerations would prohibit such access.
- Where simultaneous access is not possible, access will next
be granted according to longevity in/on the structure (i.e.,
first in time, first in right). Where longevity in the
structure cannot be ascertained, access will be prioritized
on a first come, first served basis.
SERVICE AFFECTING
- While exercising its right to first access, PACIFIC should
grant nondiscriminatory access to all occupants in or on its
facilities and effort should be made to accommodate as many
occupants as is reasonably safe. Therefore, reasonable,
simultaneous access will not be denied unless public or other
safety considerations would prohibit such access.
- Where simultaneous access is not possible, access will next
be granted to occupants according to the level of damage to
its facilities and the likelihood that damage will result in
service disruption. Where likelihood that damage will result
is not clearly discernible, access will be granted according
to longevity in/on the structure (i.e., first in time, first
in right).
<PAGE> 128
Attachment 10
Appendix A
page 2
- Where longevity in the structure cannot be ascertained,
access will be prioritized a first come, first served basis.
POINT OF CONTACT When an emergency situation arises which necessitates CLEC
access to a manhole after PACIFIC's normal business hours,
CLEC should call PACIFIC's Emergency Control Center (ECC).
All calls during normal business hours must be directed to
the appropriate PACIFIC Single Point of Contact (SPOC). For
after-hours calls, PACIFIC's ECC will contact the Maintenance
Center responsible for after-hours coverage of the affected
area. The maintenance supervisor contacted by the ECC will
return CLEC's call and will arrange for access with on-call
maintenance field personnel during the emergency condition.
<PAGE> 129
Attachment 10
Appendix B
page 1
1. As used in this Agreement, Remote Switching Module or "RSM" means
telecommunications equipment that provides switching network, line and
trunk interfaces, and the capability to perform call processing when
isolated from a required host switch. The "host switch," which must be
provided by CLEC but not in Pacific's premises, is linked to and
controls the RSM, and provides customer feature control, interoffice
trunking, NPA-NXX routing and coordination of one or more RSMs.
2. RSMs shall be placed exclusively for the purpose of access to Pacific
unbundled network elements purchased by CLEC. No RSM shall be used to
perform switching other than between lines served directly by the RSM,
and between the RSM and its host switch located on CLEC premises. No
direct trunks may be established between the RSM and another carrier's
switch(es). Further, RSMs shall not be used to provide "information
services" or "enhanced services," as those terms have been defined by
applicable federal statutes and decisions, including those of the FCC.
3. CLEC shall not be permitted to install its own power plant for use in
connection with collocated RSM equipment. CLEC shall obtain all
necessary AC or DC power feeds from Pacific according to the terms set
forth in Schedule Cal P.U.C No. 175-T, Section 16.4. Any power
requirements beyond those provided for in the above tariff shall be
provided by Pacific to CLEC on an individual case basis.
4. Pacific shall not be obligated to monitor any alarms installed by CLEC,
other than environmental alarms (i e.: those that monitor conditions of
the equipment room, rather than the RSM itself).
5. CLEC's RSM equipment shall be grounded in such a manner as to insure
that such equipment shall cause no harm nor interference with Pacific
network facilities and equipment.
6. CLEC shall list all RSMs it intends to place in its physical
collocation space pursuant to this Agreement on each Application for
Physical Collocation. Because of space limitations RSM collocation is
not permitted in Shared Space collocation arrangements.
7. The placement of RSMs in physical collocation space shall comply fully
with all applicable physical co!location technical publication(s)
referenced in the Interconnection Agreement.
8. In no event shall Pacific be obligated to provide access for the RSM
and equipment described herein or substantially similar facilities in a
virtual collocation arrangement, whether under contract, tariff or
otherwise. The Parties agree that this RSM Agreement does not
constitute, and shall not be asserted to constitute, an admission or
waiver or precedent with any state commission, the FCC, any other
regulatory body or any court, or in
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ATTACHMENT 10
APPENDIX B
page 2
any other forum that Pacific has agreed or acquiesced that the RSM
equipment addressed in this Agreement is "equipment necessary for
interconnection or access to unbundled network elements" under 47
U.S.C. Section 251(c) (6). Pacific understands and agrees that CLEC
remains free to argue that RSM equipment, in general, is "equipment
necessary for interconnection or access to unbundled network elements"
under 47 U.S.C. Section 251(c) (6).
9 Pacific shall have the right, upon 5 business days notice to CLEC, to
inspect CLEC' physical and software configuration of CLEC's RSM for
purposes of confirming CLEC's compliance with the terms of this RSM
agreement. CLEC shall cooperate and provide information as requested by
Pacific to assist with the purposes of this inspection. Any dispute
concerning such inspections, or Pacific's right to any particular
inspection, shall be referred to the Alternative Dispute Resolution
procedures set forth in Attachment 3 to the Interconnection Agreement.
10. This Agreement shall expire or be terminated in the same time frames
and in the same manner as provided for in the Interconnection
Agreement.
<PAGE> 131
ATTACHMENT 11
PROVISIONING AND ORDERING
<PAGE> 132
ATTACHMENT 11
TABLE OF CONTENTS
PROVISIONING AND ORDERING
<TABLE>
<S> <C> <C>
1. Network Deployment................................................. 1
2. General Provisioning Requirements.................................. 1
3. Specific Provisioning Process Requirements......................... 2
4. General Ordering Requirements...................................... 4
5. Ordering Interfaces................................................ 5
6. PACIFIC Provision of Information................................... 6
7. Order Format and Data Elements for Individual Network
Elements and Combinations.......................................... 6
8. Performance Requirements........................................... 11
9. Account Maintenance................................................ 13
Appendix A:
Local Service Request Form
Appendix B:
Unbundled Network Element Provisioning Format
Appendix C:
Principles for Implementing Electronic Interfaces for Operational
Support Systems
Exhibit 1 to Appendix C:
Operation Support Systems Implementation Dates
</TABLE>
<PAGE> 133
Attachment 11
Page 1
PROVISIONING AND ORDERING
1. NETWORK DEPLOYMENT
Throughout the term of this Agreement, the quality of the technology,
equipment, facilities, processes and techniques (including, without
limitation, such new architecture, equipment, facilities, and interfaces
as PACIFIC may deploy) that PACIFIC provides to CLEC under this
Agreement must be at least equal in quality to that provided by PACIFIC to
itself.
2. GENERAL PROVISIONING REQUIREMENTS
2.1 Subject to the requirements of Attachment 6, CLEC may order Network
Elements either individually or in any combination. Combinations
("Combinations") consist of multiple Network Elements to enable CLEC to
provide service in a geographic area or to a specific customer and that
are placed on the same order by CLEC. To the extent that Combinations or
unbundled Network Elements are related and logically associated with one
another, Combinations may be ordered with a single order.
2.2 Combinations shall be identified and described by CLEC in this Agreement,
so that they can be ordered and provisioned together and shall not require
the enumeration of each Network Element within that Combination on each
provisioning order.
2.3 PACIFIC shall provide all provisioning services to CLEC during the same
business hours that PACIFIC provisions similar services for its end user
customers. Currently, those hours are Monday through Friday from 8:00 a.m.
to 5:30 p.m. PST. CLEC may request PACIFIC to provide Sunday, holiday,
and/or off-hour provisioning services. If CLEC requests that PACIFIC
perform provisioning services at times or on days other than as
required in the preceding sentence, PACIFIC shall provide CLEC a quote for
such services, consistent with PACIFIC's rates and terms for similar
services to PACIFIC's end user customers, at the rates set forth in
Attachment 8. If CLEC requests any service for which a quote is not set
forth in Attachment 8, PACIFIC will provide CLEC a quote based on state
wide average rates for the services performed. If CLEC accepts PACIFIC's
quote, PACIFIC shall perform such provisioning services.
2.4 PACIFIC's LISC is the Single Point of Contact (SPOC) for all ordering
contacts and order flow involved in the purchase of Network Elements or
Combinations. The SPOC shall provide an electronic interface twenty-four
(24) hours a day, seven (7) days a week for all ordering order flows at
parity with that PACIFIC provides to itself or affiliates. Currently,
several systems
10/16/98
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are less than twenty-four (24) hours per day, seven (7) days per week.
These systems, without limitation, and their current hours, are as follows:
1. CESAR/CLEO, Monday through Friday, 7:00 a.m. to 11:00 p.m.,
Saturday 7:00 a.m. through 5:00 p.m.;
2. PREMIS, Monday through Saturday, 6:00 a.m. through 11:00 p.m.;
3. BOSS, Monday through Saturday, 6:00 a.m. through 11:00 p.m.;
4. SORD, Monday through Friday, 6:00 a.m. through 11:00 p.m.,
Saturday 6:00 a.m. through 7:00 p.m.;
5. Scheduled Maintenance, one Sunday per month;
6. Scheduled changes to all systems, e.g., CESAR, 7:00 p.m. every
third Wednesday, etc.
2.5 The SPOC shall also provide to CLEC a toll-free nation-wide telephone
number (operational during the same hours as PACIFIC provides to its own
end user customers, currently from 8:00 a.m. to 5:30 p.m., Monday through
Friday) which will be answered by capable staff trained to answer
questions and resolve problems in connection with the provisioning of
Local Service, Network Elements or Combinations.
2.6 PACIFIC and CLEC shall mutually agree upon interface contingency and
disaster recovery plans for the ordering and provisioning of Local
Service, Network Elements or Combinations.
2.7 PACIFIC will recognize CLEC as the customer of record of all Network
Elements or Combinations ordered by CLEC and will send all notices,
invoices and pertinent information directly to CLEC.
3. SPECIFIC PROVISIONING PROCESS REQUIREMENTS
3.1 Subject to Attachment 6, when CLEC orders the LSNE (either individually or
as part of a Combination), CLEC may also obtain all currently deployed
features and functions from the specified PACIFIC switch. If CLEC requests
a feature or function that is technically available but not deployed in a
particular switch, PACIFIC shall provide CLEC a quote pursuant to Section
1.6 of Attachment 6. If CLEC accepts the quote, Pacific shall deploy the
feature pursuant to the time frames and charges set forth in the quote. In
the event that the Parties cannot agree on the deployment of, or price for
such features, CLEC may seek Alternative Dispute Resolution pursuant to
Attachment 3 of the Agreement.
3.2 When requested by CLEC and at CLEC's option, Pacific will schedule
installation appointments (PACIFIC employee dispatch) with PACIFIC's
representative on the line with CLEC's representative or provide CLEC
access
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to Pacific's scheduling system through a mutually agreed upon
Electronic Interface. PACIFIC will provide appropriate training to all
PACIFIC employees who may communicate, either by telephone or
face-to-face, with CLEC Customers. Such training shall instruct the
PACIFIC employees not to disparage or discriminate against CLEC, its
products or services and shall comply with the branding requirements of
this Agreement.
3.3 Upon request from CLEC, PACIFIC will provide an intercept referral
message for LSNE that includes any new CLEC telephone number, for
residential customers for three (3) months, and business customers for
twelve (12) months, and PACIFIC will provide directory updates at the
next publication. This intercept referral message shall be approved by
CLEC and shall be similar in format to the intercept referral messages
currently provided by PACIFIC for its own end-users. Custom messages or
extension in duration of the referral shall be subject to the charges
set forth in Attachment 8.
3.4 PACIFIC will provide CLEC with a Firm Order Confirmation (FOC) for each
order, within four (4) Business hours of PACIFIC's receipt of each
accurate and complete electronically submitted order. In the absence of
an electronically submitted order, the time frame for a FOC for
manually received orders will be as mutually agreed. In the case of a
Network Elements or Combinations, the FOC must contain an enumeration
of CLEC's ordered Network Elements or Combinations (and the specific
PACIFIC naming convention applied to that Network Element or
Combination), features, options, physical interconnection, quantity,
and PACIFIC commitment date for order completion (Committed Due Date).
3.5 Upon completion of the order, PACIFIC will provide CLEC electronically
(unless otherwise notified by CLEC) with an Order Completion per order
that states when that order was completed. PACIFIC shall respond with
specific order detail as enumerated on the FOC and shall state any
additional charges (e.g. Time and Cost charges) up to a previously
agreed upon limit associated with that order.
3.6 For new Network Elements developed based on Section 1.6 of Attachment
6, the Parties will mutually agree on the testing to be used.
3.7 When CLEC electronically orders a Local Service, Network Element or
Combination, PACIFIC shall provide notification electronically of any
instances when (1) PACIFIC's Committed Due Dates are in jeopardy of not
being met by PACIFIC on any Network Element or feature contained in any
order for Local Service, Network Elements or Combinations or (2) an
order contains Rejections/Errors in any of the data element(s) fields.
Such notice will be made as soon as the jeopardy or reject is
identified. When NDM or EBI is available and CLEC elects to place a
manual order, PACIFIC may notify
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CLEC of a jeopardy or reject condition via facsimile or telephone call to
the CLEC contact identified on the order. In all cases, PACIFIC shall
concurrently indicate its new committed due date.
3.8 At CLEC's request, PACIFIC will perform co-operative testing with CLEC
(including trouble shooting to isolate any problems) to test Local
Service. Network Elements or Combinations purchased by CLEC in order to
identify any performance problems identified at turn-up of the service.
3.9 PACIFIC shall inform CLEC if a customer action results in a reassignment
of an AIN trigger from an CLEC AIN application to some other service
provider's application. Such notification shall be completed within
twenty-four (24) hours of the action via electronic interface as
described in the Account Maintenance requirements specified in this
Attachment.
3.10 Testing of AIN based services in PACIFIC's AIN test laboratory will
identify feature interactions with existing switch-based or other types
of services. PACIFIC will provide CLEC with a list of feature
interactions uncovered during testing of any services. Disclosure of
feature interactions to CLEC's end user will be CLEC's sole
responsibility.
3.11 PACIFIC shall provision correct AIN triggers based on services ordered
by CLEC on its provisioning order.
4. GENERAL ORDERING REQUIREMENTS
4.1 Upon CLEC's request through a Suspend/Restore Order for LSNE or a
Combination containing LSNE, PACIFIC shall suspend or restore the
functionality of any Network Element or Combination to the extent
technically feasible. PACIFIC shall implement any restoration priority
on a per Network Element or Combination basis in a manner that conforms
with CLEC requested priorities and any applicable regulatory policy or
procedures. The charges for a Suspend/Restore are set forth in
Attachment 8.
4.2 PACIFIC shall provide to CLEC the functionality of blocking calls (e.g.,
900, 976 or international calls) by line.
4.3 Subject to Section 271(e)(2)(B), when intraLATA presubscription is
permissible in California, when ordering a local Switching Element, CLEC
may order from PACIFIC separate interLATA and intraLATA routing (i.e., 2
PICs where available) on a line.
4.4 As directed by CLEC, when CLEC orders a Network Element or Combination,
all pre-assigned trunk or telephone numbers currently associated with
that Network Element or Combination shall be retained, if directed by
CLEC, without loss of feature capability and without loss of associated
ancillary
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functions including, but not limited to, Directory Assistance and 911/E911
capability, unless technically infeasible.
4.5 When CLEC orders Network Elements or Combinations that are currently
interconnected and functional, such Network Elements and Combinations will
remain interconnected and functional without any disconnection or
disruption of functionality. This shall be known as Contiguous Network
Interconnection of Network Elements. There shall be no additional charge
for such interconnection.
5. ORDERING INTERFACES
5.1 PACIFIC shall provide to CLEC an Electronic Interface (EI) for
transferring and receiving orders, FOCs Service Completions, and other
provisioning data and materials as set forth in Appendix C and at the
rates set forth in Attachment 8.
5.2 When ordering LSNE, subject to the implementation schedule in this
Agreement, CLEC's representatives will have real-time access to PACIFIC
customer information systems which will allow the CLEC representatives to
perform the following tasks:
1. Obtain customer profile, including customer name, billing and
residence address, billing telephone number(s), and
identification of features and services subscribed to by
customer. Such access shall be governed by Sections 5.5.1.1 and
5.5.1.2 of Attachment 5 to this Agreement, depending on whether
the information accessed is for a residence or business customer.
2. Obtain information on all features and services available, in
end-office where customer is provisioned;
3. Enter the order for the desired features and services;
4. Provide an assigned telephone number (if the customer does not
have one assigned). Reservation and aging of these numbers
remain PACIFIC's responsibility;
5. Establish the appropriate directory listing;
6. Provide service availability dates to the customer;
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7. Provide information regarding dispatch/installation schedule, if
applicable;
8. Order intraLATA toll and access to long distance service in a
single, unified order;
9. Suspension, termination, or restoral of service where
technically feasible."
6. PACIFIC PROVISION OF INFORMATION
6.1 PACIFIC shall provide to CLEC upon request:
1. A list of all services and features technically available from each
switch that PACIFIC may use to provide a Local Switching Element, by
switch CLLI;
2. A listing by street address detail, of the service coverage area of
each wire center;
3. All engineering design and layout information for each Network
Element or Combination, in response to an order for the Network
Element or Combination;
4. A listing of all technically available functionalities for each
Network Element or Combination, in response to an order for the
Network Element or Combination;
5. As long as PACIFIC remains the code administrator for California,
notice of any NPA relief planning meetings so that CLEC may
participate in those meetings to reach industry consensus on NPA code
relief.
7. ORDER FORMAT AND DATA ELEMENTS FOR INDIVIDUAL NETWORK ELEMENTS AND
COMBINATIONS
7.1 In ordering Network Elements or Combinations, CLEC and PACIFIC will
utilize standard industry order formats and data elements developed by the
Alliance for Telecommunications Industry Solutions (ATIS), including
without limitation the Order and Billing Forum (OBF). Industry standards
do not currently exist for the ordering of all Network Elements or
Combinations. Therefore, until such standard industry order formats and
data elements are developed by the ATIS for a particular Network Element
or Combination, CLEC and PACIFIC will mutually agree to a format to be
used to address the specific data requirements necessary for the ordering
of those Network Elements or Combinations. There currently exist OBF
formats for INP and the following Network Elements: Links, Ports, and
Transport. When an ATIS standard or
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format is subsequently adopted, the Parties will use such standard or
format in lieu of any standard or format set forth in this Attachment,
unless the Parties mutually agree to continue to use the standard or
format set forth herein.
7.2 CLEC and PACIFIC shall agree upon the appropriate ordering and
provisioning codes to be used for each Network Element or Combination.
These codes shall be known as data elements.
7.3 Each order for a Network Element or a Combination will contain the
following order-level sections, as defined by the OBF or as mutually
agreed to by the Parties: Administration, Bill, Contact, and End User
Information, e.g., Local Service Request (LSR) form, Access Service
Request (ASR) form, End User Information (EU) form.
7.4 CLEC will provide provisioning data in the format defined below when
ordering Network Elements or Combinations. First, CLEC will state
whether it is ordering a Network Element (one or more of the Network
Elements described in this Agreement) or a Combination (multiple
Network Elements in the same order). CLEC will then provide data in the
following provisioning categories, such data to be provided on the OBF
ordering form as completed data fields:
1. Activity. The activity field will comply with OBF standards,
which currently include Add, Change, Disconnect and Record Only.
Order Activity Description. For each activity, a further
description of the Order Activity may be required. Consistent
with OBF standards, Modify, Cancel, Expedite, Coordinated,
Suspend and Restore. The preceding Order Activity Descriptions
may be applied to any Add, Change, Disconnect or Record Only
order. In some cases, more than one of these may apply to a
particular order. In addition, Sequence, as defined below, may
be added:
Sequence: The Parties will jointly develop the sequence that
will apply when components of the order must be worked in the
proper sequence, or when components of the order are
sequentially related to components or another order.
2. Purpose of Order. The Purpose of Order will contain a brief
statement describing the overall purpose of the order (e.g.,
Add new ISDN loop or build dedicated trunking/transport from
local end office to CLEC OSPS 5E).
3. Type of Network Element or Combination. The Type of Network
Element or Combination category consists of two parts. First,
an E (Network Element) or C (Combination) followed by a dash
and then the two character code for the Network Element(s)
(e.g., E-LS (Local Switching) and C-DT/LS (Combination of
Dedicated
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Transport and Local Switching)). Below are the Network Elements and their
two character codes:
LL Local Loop
ND Network Interface Device
DC Digital Crossconnect System (DCS)
LS Local Switching
OS Operator Systems (trunking and transport for LSNE)
CT Common Transport
DT Dedicated Transport
SS Signal Transfer Points
SL Signaling Link Transport
DB SCPs/Databases (LNP, LIDB, Toll Free)
TS Tandem Switching
The parties will mutually agree on the proper Type of Network Element or
Combination designators for other Network Elements or Combinations, e.g.,
Operator Services, Directory Services, etc.
4. Interconnection Locations. This category describes the beginning and
end-point of the Network Element or Combination. For example, the point of
termination (POT) may be listed as a switch CLLI, a frame tie down
location, a channel on a T3, or a customer address. Various types of POT
are described in the tables shown in Appendix A.
5. Interconnection Specific. The Interconnection Specific category describes
the nature of the interconnection and the appropriate relationships within
the Network Element/Combination. The appropriate type of Interconnection
Specific is described for each Network Element/Combination in the tables
shown in Appendix A. The following definitions apply:
Contiguous: All cross-connects, muxing, cross-office ties, etc. will be
included between the two interconnection points listed under
Interconnection Locations so that the Network Element or Combination is
delivered fully functional.
Routing: Indicates that routing is party of the necessary interconnection.
Functionally Inclusive: All functionality as it is defined within
Attachment 6 of this Agreement as it relates to interconnection
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when the Network Element or Combination is provisioned by
PACIFIC.
6. Element Identification. This field includes the precise
identifier of the Network Element. For example, the identifier
can be a circuit ID, facility name, switch CLLI, or Working
Telephone Number.
7. Object. The Object identifies the basic unit of the Network
Element or Combination. Examples include Network Trunk (for the
Network Element LS) and DS1 (for the Network Element DT). The
Objects related specifically to each Network Element or
Combination are provided in the tables shown in Appendix A.
8. Quantity/Capacity. This field lists the Quantity/Capacity of
Objects. For example, for the Local Loop the number "1" in this
field would indicate that one Local Loop was being ordered. On
the other hand, for the Object "DT" the number "4" would
indicate that a capacity of 4 DS1 are being ordered.
9. Options. For each Object, there may be numerous Options. This
category identifies the specific Option of the selected Object.
In most case, only one Option applies for each Object. The
specific Options for each Object are contained as shown in
Appendix A. Examples include 2-wire (for the Object Analog
Loop), DID (for the Object Customer Trunk) and ESF (for the
Object DS1).
10. Characteristics. For each Option, there may be multiple
Characteristics that require additional details. This category
identifies those Characteristics, along with the necessary
details. The appropriate type of Characteristics are described
for each Network Element or Combination within the tables shown
in Appendix A. Examples include ISDN conditioned (for the Option
2-wire) and TSG (for the option DID).
11. Features. This field identifies the Features specific to the
Network Element/Combination. For example, when the Network
Element is Local Switching, the CLASS/LASS features would be
included in this category. CLEC will direct PACIFIC which of
these features to activate for a specific customer.
12. Desired Due Date. This field identifies the date the entire
order is expected to be completed.
13. Due Date Detail. If required, this field identifies interim
dates (for Combinations where the network Element Due Dates
differ), and the relationship between the provisioning
activities internal to the order, and those provisioning
activities outside the order that may be related. Coordination
and sequencing requirements will be reflected in this field.
<PAGE> 142
Attachment 11
Page 10
14. Remarks. This field will include any remarks that are related to
the provisioning order that are not reflected elsewhere.
7.5 When ordering a Network Element (individually or as part of a
Combination), the interconnection and functionality internal to that
Network Element will not be specifically ordered by CLEC and will
automatically be provided by PACIFIC. For example, when ordering the
element DT (Dedicated Transport), the use of Digital Cross Connects
that might be necessary to provide the connectivity between two
interconnection locations will not be described on CLEC's order.
7.6 Examples of the provisioning or OBF format to be used by CLEC when
ordering certain provisioning activities for individual Network
Elements are shown in Appendix B.
7.7 CLEC may purchase Network Elements either individually or in
combinations. Combinations of Contiguous Network Elements can be
ordered (i) on a case-by-case basis for those Network Elements that
are customer-specific; or (ii) on a common-use basis for those Network
Elements that are shared by multiple customers.
7.8 When ordering either customer-specific or common-usage Combinations,
CLEC may specify the functionality of that Combination without the
need to specify the configuration of the individual Network Elements
needed to perform that functionality. For example: CLEC may also
choose to purchase from PACIFIC a Local Loop and Switching Combination
which would be comprised of the Loop and Network Element LS (Local
Switching). This Combination would allow CLEC to purchase switching
features/such as Class features) and functionalities on a per-customer
basis.
7.9 Prior to providing local service using unbundled Network Elements or
Combinations in a specific geographic area or when CLEC requires a
change of network configuration, CLEC may place an order with PACIFIC
requiring PACIFIC to prepare certain common-usage elements and
functionalities for CLEC. CLEC has identified one possible set of
these elements and functionalities as the Local Switching Conditioning
Combination. This Combination may be comprised of all or some of the
following individual Network Elements: LS (Local Switching), CT
(Common Transport), SS (Signal Transfer Points), DB (SCPs/Databases)
and TS (Tandem Switching). In order to provide these Network Elements
and their respective functionalities to CLEC, Pacific shall prepare
its network for CLEC's use of these common elements by readying each
necessary switch.
7.10 CLEC may also use unbundled Network Elements to originate and
terminate toll traffic. CLEC has identified the following two
Combinations which will allow such functionality: Toll Traffic
Combination 1, which is comprised of the
<PAGE> 143
Attachment 11
Page 11
Network Elements DT (Dedicated Transport) and LS (Local Switching); and
Toll Traffic Combination 2, which is comprised of DT (Dedicated
Transport), TS (Tandem Switching), CT (Common Transport) and LS (Local
Switching).
7.11 There are many additional Combinations which CLEC may choose to order from
PACIFIC.
8. PERFORMANCE REQUIREMENTS
8.1 CLEC will specify on each order its Desired Due Date (DDD) for completion
of that particular order. Standard intervals do not apply to orders under
this Agreement. PACIFIC will not complete the order prior to the DDD or
later than the DDD unless authorized by CLEC. If the DDD is less than the
following Network Element intervals, the order will be considered an
expedited order.
<TABLE>
-----------------------------------------------------
INTERVALS FOR ORDER COMPLETION
-----------------------------------------------------
Network Element Number of Days
-----------------------------------------------------
<S> <C>
LL 2
LS 2
OS 2
DT
DS0, DS-1, T1.5 3
STS-1, DS3/T3 5
OC-3, + 15
SS 3
SL 2
DB 2
TS 2
C-Local Switch Conditioning 20
Combination
</TABLE>
8.2 Within two (2) business hours after a request from CLEC for an expedited
order, PACIFIC shall notify CLEC of PACIFIC's confirmation to complete, or
not complete, the order within the expedited interval. A Business Hour is
any hour occurring on a business day between 8:00 a.m. and 5:00 p.m. PST.
<PAGE> 144
Attachment 11
Page 12
8.3 Once an order has been issued by CLEC and CLEC subsequently requires a new
DDD that is less than the minimum interval defined, CLEC will issue an
expedited modify order. PACIFIC will notify CLEC within two (2) Business
Hours of its confirmation to complete, or not complete, the order
requesting the new DDD.
8.4 CLEC and PACIFIC will agree to escalation procedures and contacts.
PACIFIC shall notify CLEC of any modifications to these contacts within
one (1) week of such modifications.
8.5 PACIFIC shall satisfy the following performance standards: (i) at least
90% of all orders must be completed by DDD; (ii) at least 98% of all
orders must be completed by Committed Due Date; and (iii) at least 99%
of all orders will be completed without error.
8.6 CLEC will pay for all additional cost for performance in excess of
PACIFIC's intervals for comparable services.
9. ACCOUNT MAINTENANCE
PACIFIC AND CLEC agree to the following account maintenance procedures:
9.1 OUTPLOC Transaction Feed
OUTPLOC means when an CLEC Local Service or LSNE changes from CLEC local
exchange service to another local exchange carrier. Until approved
industry standards are available, PACIFIC will notify CLEC using a 9270
CARE-like electronic record when a customer changes from CLEC Local to a
new Local Service Provider. PACIFIC will provide 9270 CARE-like records
six (6) days a week, Monday through Friday (Saturday (when change activity
occurs)), via the CONNECT: Direct interface. Electronic records will be
sent within twenty-four (24) hours of the switch being provisioned for
the customer change. CLEC understands that PACIFIC may send other
9000 series CARE-like electronic records on CLEC Local customers.
9.2 Change Request Implementation
PACIFIC will cease billing CLEC effective as of the date of the
customer's change request. If there is a delay in PACIFIC's
implementation of the customer's change request, PACIFIC will issue a
credit to CLEC for any amounts billed to CLEC with respect to that
customer following the date of the customer's change request.
9.3 Use of Service Order for PIC-Only Change
<PAGE> 145
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When an CLEC Local Customer contacts CLEC Local only to request a change
of Primary Interexchange Carrier (PIC) from one IEC to another IEC,
PACIFIC will accept the PIC-only change request from CLEC Local on the
current service order feed. PACIFIC will change its current tariffed rate
applicable to PIC-only changes.
9.4 IEC PIC Change Request
PACIFIC will not accept a PIC change request from a Long Distance carrier
for CLEC Local customers. Beginning December 1996, PACIFIC will return
such requests to the IEC indicating CLEC's Operating Company Number (OCN)
on the industry standard 3148 record.
<PAGE> 146
Attachment 11
Appendix A
Page 1
Appendix A
Local Service Request Form
The Unbundled Network Elements Service Request Form will be sent with every UNE
and TSR order and is divided into three sections: the Administrative Section,
the Bill Section, and the Contact Section.
The Administrative section is always required and contains such information as
the purchase order number, desired due date, activity, expedite, and related
order numbers.
The Billing section designates the CLEC Billing Account number to be used by the
ILEC and the CLEC billing name and address. This field is to be filled out on
all orders.
The Contact section contains contact information for the Initiator of the order,
the Implementation contact, the design contact, and maintenance contact. For
Loop and Switch orders only the initiator contact person is to be designated,
for Infrastructure provisioning, or customer orders for such things as dedicated
transport, the implementation and design contacts are to be specified.
<PAGE> 147
Attachment 11
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Administrative Section:
CCNA____PON__________________VER__SPA__LSR NO________________SC________PG__of__
D/T SENT________DDD___-___-___DFDT_____PROJECT___________________CHC__REQTYP___
ACT__SUP_EXP__EXP REASON________________________AFO____________RTR__CC_________
ENG__ALBR__AGAUTH_DATED______AUTHNM______________________
RPON____________RORD_________SAN______________CLS-SVCS______
LISTING__E911__QTY_____CUSTOMER______________________
_______________________________________________________________________________
BILL SECTION
BI__BAN_______________ACNA______BILLNM_______________________SBILLNM___________
_________
STREET__________________FLOOR____ROOM_____CITY_______________________STATE_____
ZIP CODE_________________BILLCON________________TEL NO_____________________
FAX__________________EMAIL___________VTA___________
_______________________________________________________________________________
Contact Section
INIT__________________TELNO__________FAX_______________EMAIL___________________
STREET__________________FLOOR_____________________ROOM_________________________
CITY__________________STATE____________________ZIP____________________
IMPCON___________________TEL NO_____________________PAGER______________________
ALT IMPCON_________________TEL NO_____________________PAGER____________________
DSGCON___________________DRC_______________________TEL NO___________FAX NO_____
___________________
EMAIL____________________STREET____________________FLOOR____ROOM_____CITY______
____________
REMARKS________________________________________________________________________
_________________________
<PAGE> 148
Attachment 11
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Page 3
END USER INFORMATION FORM
The End User Information form is sent with every UNE and TSR customer order is
used for ordering specific network elements or TSR to provide service for a
specific customer. It is divided into 5 parts: the Administrative Section, the
Location and Access Section, the Inside Wiring Section, the Bill Section and
the Per Customer Element Section.
The Administrative section is used to link subsequent forms to the Unbundled
Network Element Form. The information in this section is on all of the forms
that are used for ordering Unbundled Network Elements, either on a footprint
basis or on an individual customer basis. The Administrative Section contains
five fields which are required on all forms, these field are: Customer Carrier
Purchase Order Number (PON), version (VER), Local Service Request Number (LSR
NO), quantity (QTY), and the page number of (PG_of_). The Administrative
section will not be discussed on further forms.
The Location and Access form contains the customer name and Address and any
specific instruction need to access the customer equipment. This section is
required on all customer orders. The information on this section would be used
for data base entries such as E911 or DA as well designating the location of
any customer premises work.
Inside wiring is not an Unbundled Network Elements but is included here for
completeness. This section needs to be filled out only if the ILEC is the inside
wiring vendor. This section is also included to be consistent with the existing
OBF forms. The Bill Section contains the local billing account number and
information for the billing contact.
The Per Customer Network Element Section contains a listing of the specific
Network Elements which are being ordered to serve a specific customer and an
indication of any attached forms which are need for additional information
concerning the ordered Network Elements. Possible customer specific elements
are, the NID, Loop, and Local Switching. The need to provision customer specific
data base information would also be indicated here.
<PAGE> 149
Attachment 11
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END USER INFORMATION
Administrative Section:
CCNA____PON__________________VER__UNSR NO____REC TPY_____ACT__SPA____QTY_______
____PG_OF_
_______________________________________________________________________________
Location and Access
NAME_________________STREET NO________DIR_____STREET___________________LOCATION
_______________FLOOR___________ROOM____________CITY___________STATE__ZIP_______
______ALT HOUSE#_______________
LCON________________TEL NO_____________________EUMI__ACC_______________________
_______________________________________________________________________________
___________________________________________
OTHER SERVICES___________________OTHER TN__________________
OMIT LISTINGS WHITE PAGES and DA__STREET DIRECTORY___
_______________________________________________________________________________
Inside Wire
WO__WBAN______________________WCON___________________TEL NO____________________
_______________________________________________________________________________
Bill Section
LOCBAN______________________FBI__________________BILL NM_______________________
SBILL NM____________________STREET#________DIR___STREET NAME___________________
FLOOR_____________________LOCATION______________________ROOM_____________CITY__
___________________STATE___ZIP______________________
BILL CONTACT___________________TELENO___________________
_______________________________________________________________________________
Per Customer Element Section:
RESALE Y/N_ATTACHED FORM_ NID Y/N_ATTACHED FORM_
LOOP Y/N_ATTACHED FORM_
LOOP SWITCH Y/N_ATTACHED FORM_
DATA BASE ENTRY Y/N_ATTACHED FORM_
<PAGE> 150
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UNBUNDLED NETWORK ELEMENT PROVISIONING CATEGORIES
4) LOCAL SWITCHING
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Activity Type Inter- Inter- Element ID Object Option Characteristics
(one of) connection connection (one of)
Location Specific
- --------------------------------------------------------------------------------------------------------
A,C,D,R LS WTN FUNCTIONALLY WTN Line (may be POTS Signaling
Location INCLUSIVE TSG Concentrated ISDN Line Class Code
CLLI ROUTING Designaton if so Centrex WTN
Switch CLLI Switch designated) E911
CLLI Concentration
Ratio
Interface rate
(DS1,DS3)
Interface
protocol
(TR08, TR303)
- --------------------------------------------------------------------------------------------------------
Non- POTS Signaling
concentrated ISDN Line Class Code
Line Centrex WTN
E911
Interface rate
(DS0, DS1, DS3)
- --------------------------------------------------------------------------------------------------------
Network SS7 One-way
Trunk MF Two-way
Routing
Screening
TSG
- --------------------------------------------------------------------------------------------------------
</TABLE>
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UNBUNDLED NETWORK ELEMENT PROVISIONING CATEGORIES
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Activity Type Inter- Inter- Element ID Object Option Characteristics
(one of) connection connection (one of) (one of)
Location Specific
- ---------------------------------------------------------------------------------------------------------------
Customer DID Signaling
Trunk DOD Routing
Two-way Screening
TSG
- ---------------------------------------------------------------------------------------------------------------
Routing Operator
Services
Directory
Assistance
Messaging
- ---------------------------------------------------------------------------------------------------------------
LNP RCF Ported
DNRI number(s)
RIPH Shadow
LERG number(s)
Number of call
paths
- ---------------------------------------------------------------------------------------------------------------
AIN trigger Triggers Subscribed
(e.g. Off- Office-based
hook Dialing plan
immediate, Translation type
off-hook Digital sequence
delay)
- ---------------------------------------------------------------------------------------------------------------
Data Switch Switch Policing
UNI Port type (e.g. Congestion
ATM) control
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
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UNBUNDLED NETWORK ELEMENT PROVISIONING CATEGORIES
<TABLE>
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Activity Type Inter- Inter- Element ID Object Option Characteristics
(one of) connection connection (one of) (one of)
Location Specific
- ---------------------------------------------------------------------------------------------------------------
Frame
Relay)
- ---------------------------------------------------------------------------------------------------------------
Data Switch Switch Policing
NNI Port type (e.g. Congestion
ATM, control
Frame
Relay)
- ---------------------------------------------------------------------------------------------------------------
5) OPERATOR SYSTEMS
- ---------------------------------------------------------------------------------------------------------------
Activity Type Inter- Inter- Element ID Object Option Characteristics
(one of) connection connection (one of) (one of)
Location Specific
- ---------------------------------------------------------------------------------------------------------------
A,C,D,R OS Serving FUNCTIONALLY Operator O+
area (NPA- INCLUSIVE Services O-
NXX, LATA, Busy Line
State, Rate Verification
center) (BLV)
Emergency Line
Interrupt
(ELI)
911 overflow
- ---------------------------------------------------------------------------------------------------------------
Directory Service 411
Assistance Area 555-1212
Customer
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
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UNBUNDLED NETWORK ELEMENT PROVISIONING CATEGORIES
6) COMMON TRANSPORT
<TABLE>
- --------------------------------------------------------------------------------------------------------
<CAPTION>
Activity Type Inter- Inter- Element ID Object Option Characteristics
(one of) connection connection (one of) (one of)
Location Specific
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
A,C,D,R CT Serving CONTIGUOUS
area (NPA-
NXX, LATA,
State, Rate FUNCTIONALLY
center) INCLUSIVE
</TABLE>
7) DEDICATED TRANSPORT
<TABLE>
<CAPTION>
Activity Type Inter- Inter- Element ID Object Option Characteristics
(one of) connection connection (one of) (one of)
Location Specific
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
A,C,D,R DT Location CONTIGUOUS Facility DS0 No DCS Routing
CLLI name Avoidance
CLFI D4 Channel
CLLI/POT Bank A/D Conversion
DCS 1/0 Multiplexing/
De-multiplexing
Format
conversion
Signal conversion
Performance
monitoring
SONET to
Asynch.
- --------------------------------------------------------------------------------------------------------
</TABLE>
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UNBUNDLED NETWORK ELEMENT PROVISIONING CATEGORIES
<TABLE>
- --------------------------------------------------------------------------------------------------------
<CAPTION>
Activity Type Inter- Inter- Element ID Object Option Characteristics
(one of) connection connection (one of) (one of)
Location Specific
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
gateway
Broadcasting
Mapping
- --------------------------------------------------------------------------------------------------------
DS1 No DCS Signal format
(e.g. B8ZS,
AMI)
Framing format
(e.g. ESF, D4,
unframed)
DSX Multiplexing/
DCS 1/0 Demultiplexing
DCS 3/1 Format
conversion
Signal
conversion
Performance
monitoring
SONET to
Asynch.
gateway
Broadcasting
Mapping
- --------------------------------------------------------------------------------------------------------
DS3 No DCS Secure Interface
Framing format
(e.g. C-bit
- --------------------------------------------------------------------------------------------------------
</TABLE>
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UNBUNDLED NETWORK ELEMENT PROVISIONING CATEGORIES
<TABLE>
- --------------------------------------------------------------------------------------------------------
<CAPTION>
Activity Type Inter- Inter- Element ID Object Option Characteristics
(one of) connection connection (one of) (one of)
Location Specific
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
parity,
M13,
unframed)
DSX
DCS 3/1 Multiplexing/
DCS 3/3 Demultiplexing
Format
conversion
Signal
conversion
Performance
monitoring
SONET to
Asynch.
gateway
Broadcasting
Mapping
- --------------------------------------------------------------------------------------------------------
VT1.5
- --------------------------------------------------------------------------------------------------------
STSn LGX
- --------------------------------------------------------------------------------------------------------
</TABLE>
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UNBUNDLED NETWORK ELEMENT PROVISIONING CATEGORIES
8) SIGNAL TRANSFER POINTS
<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Activity Type Inter- Inter- Element ID Object Option Characteristics
(One of) connection connection (one of) (one of)
Location Specific
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
A,C,D,R SS Serving CONTIGUOUS STP CLLI A-link DS0
area (NPA- (pair) interface DS1
NXX, LATA, (pair)
State, Rate FUNCTIONALLY
center) INCLUSIVE
CLLI/POT ROUTING
- --------------------------------------------------------------------------------------------------------------------------
D-link DS0
interface DS1
(quad)
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
9) SIGNALING LINK TRANSPORT
<TABLE>
- --------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Activity Type Inter- Inter- Element ID Object Option Characteristics
(One of) connection connection (one of) (one of)
Location Specific
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
A,C,D,R SL Location CONTIGUOUS Facility Pair DS0
CLLI name DS1
Circuit ID
CLLI/POT
- --------------------------------------------------------------------------------------------------------------------------
Quad DS0
DS1
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
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UNBUNDLED NETWORK ELEMENT PROVISIONING CATEGORIES
10) SCPs/DATABASES
<TABLE>
<CAPTION>
Activity Interconnection Interconnection Object Option
(one of) Type Location Specific Element ID (one of) (one of) Characteristics
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
A, C, D, R, DB Serving area FUNCTIONALLY LNP Serving NPA-NXX
(NPA-NXX, LATA, INCLUSIVE Area LATA
State, Rate Region
Center, region),
Customer
- ----------------------------------------------------------------------------------------------------------------------
WTN LIDB Serving NPA-NXX
Area VNS
Customer Calling Card
- ----------------------------------------------------------------------------------------------------------------------
Toll Free Serving NPA-NXX
(800) Area
- ----------------------------------------------------------------------------------------------------------------------
WTN E911 Serving NPA-NXX
(ALI/DMS) Area Rate Center
Customer Region
Customer
Address, etc.
- ----------------------------------------------------------------------------------------------------------------------
WTN AIN Customer WTN
Dialing
sequence
- ----------------------------------------------------------------------------------------------------------------------
SCE/SMS/SCP AIN Subscribed
Access Triggers Office-based
(e.g. Off-hook)
</TABLE>
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UNBUNDLED NETWORK ELEMENT PROVISIONING CATEGORIES
1) TANDEM SWITCHING
<TABLE>
<CAPTION>
Activity Interconnection Interconnection Object Option
(one of) Type Location Specific Element ID (one of) (one of) Characteristics
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
A, C, D, R, TS Serving area FUNCTIONALLY Switch Network SS7 One-way
(NPA-NXX, LATA, INCLUSIVE CLLI Trunk MF Two-way
State, Rate ROUTING Routing
center) Screening
TSG
Location
CLLI
- ----------------------------------------------------------------------------------------------------------------------
Routing Operator
Services
Directory
Assistance
Messaging
- ----------------------------------------------------------------------------------------------------------------------
LNP RIPH Overflow
Primary
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
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Attachment 11
Appendix B
Page 1
UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
Example 1
PURPOSE OF ORDER: Modify Dedicated transport order, Customer PBX to CLEC 4ESS
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ORDER A ORDER ACTIVITY MODIFY __X__ CANCEL ____ EXPEDITE___ SUSPEND___
ACTIVITY: DESCRIPTION: RESTORE_____
SEQUENCE ____ COORDINATED ____ ASSOCIATED ORDER(S):
- ------------------------------------------------------------------------------------------------
TYPE E - DT
ELEMENT/COMB:
----------------------------------------------------------------------------
INTERCONNECTION FROM: [CUSTOMER prem CLLI] TO: [CLEC CFA T3 slot]
LOCATION:
----------------------------------------------------------------------------
INTERCONNECTION CONTIGUOUS
SPECIFIC:
- ------------------------------------------------------------------------------------------------
DESIRED DUE 11/03/96 DUE DATE DETAILS:
DATE:
- ------------------------------------------------------------------------------------------------
REMARKS: Order modified to reflect different CFA assignment
- ------------------------------------------------------------------------------------------------
</TABLE>
ELEMENT/COMBINATION: DT - Dedicated
Transport
- --------------------------------------
ELEMENT ID: [LEO will return facility
name, CFL]
OBJECT: DS1
- --------------------------------------
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UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
QTY/CAPACITY: 1
- --------------------------------------
OPTION: Framing D4
- --------------------------------------
CHARACTERIStICS: Signal: B8ZS
- --------------------------------------
FEATURES:
- --------------------------------------
Example 2
PURPOSE OF ORDER: Route PBX customer's traffic from end-office to PBX trunk
group to end-office to 4ESS trunk group in support of LNP
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ORDER C ORDER ACTIVITY MODIFY _____ CANCEL ____ EXPEDITE___ SUSPEND___
ACTIVITY: DESCRIPTION: RESTORE_____
SEQUENCE ____ COORDINATED _X___ ASSOCIATED ORDER(S):
- ------------------------------------------------------------------------------------------------
TYPE E - LS
ELEMENT/COMB:
----------------------------------------------------------------------------
INTERCONNECTION FROM: [LEC Switch CLLI] TO: [LEC-Switch-to-CLEC-4ESS TSG
LOCATION: designation]
----------------------------------------------------------------------------
INTERCONNECTION ROUTING
SPECIFIC:
- ------------------------------------------------------------------------------------------------
DESIRED DUE 11/03/99 DUE DATE DETAILS: Activate routing in coordination with CLEC contact
DATE:
- ------------------------------------------------------------------------------------------------
REMARKS:
- ------------------------------------------------------------------------------------------------
</TABLE>
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UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
- --------------------------------------------------------------------------------
ELEMENT/COMBINATION: LS-Local
Switching
- ------------------------------------
ELEMENT ID: [LEC Switch CLLI]
- ------------------------------------
OBJECT: LNP
- ------------------------------------
QTY/CAPACITY: N/A
- ------------------------------------
OPTION: RIPH (Route Index
Portability Hub)
- ------------------------------------
CHARACTERISTICS: [Ported Numbers]
Number of call
paths: max
- ------------------------------------
FEATURES:
- ------------------------------------
Example 3
PURPOSE OF ORDER: Suspend Local Switching functionality
- --------------------------------------------------------------------------------
ORDER C ORDER ACTIVITY MODIFY___ CANCEL___ EXPEDITE___ SUSPEND___X___
ACTIVITY: DESCRIPTION: RESTORE___
SEQUENCE___ COORDINATED___ ASSOCIATED ORDER(S):
- --------------------------------------------------------------------------------
TYPE E-LS
ELEMENT/COMB:
-------------------------------------------------------------------
INTERCONNECTION INCLUSIVE: [LEC Switch CLLI]
LOCATION:
-------------------------------------------------------------------
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UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
----------------------------------------------------------
----------------------------------------------------------
INTERCONNECTION FUNCTIONALLY INCLUSIVE
SPECIFIC:
- --------------------------------------------------------------------------------
DESIRED DUE NOW DUE DATE DETAILS:
DATE:
- --------------------------------------------------------------------------------
REMARKS: Suspend all functionality except
access to E911
- --------------------------------------------------------------------------------
ELEMENT/COMBINATION: LS-Local
Switching
- ------------------------------------
ELEMENT ID: WTN
- ------------------------------------
OBJECT: Line
- ------------------------------------
QTY/CAPACITY: 1
- ------------------------------------
OPTION: POTS
- ------------------------------------
CHARACTERISTICS:
- ------------------------------------
FEATURES:
- ------------------------------------
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Attachment 11
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UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
---------------------------------------------
Example 4
PURPOSE OF ORDER: Add LEC signaling access/capability to CLEC Switch
- --------------------------------------------------------------------------------
ORDER A ORDER ACTIVITY MODIFY___ CANCEL___ EXPEDITE___ SUSPEND _____
ACTIVITY: DESCRIPTION: RESTORE___
SEQUENCE___ COORDINATED X ASSOCIATED ORDER(S):
- --------------------------------------------------------------------------------
TYPE E-SS
ELEMENT/COMB:
-------------------------------------------------------------------
INTERCONNECTION INCLUSIVE: [Rate Center] FROM: [STP CLLI Pair]
LOCATION: TO: [CLEC POP CLLI
and DSX tie down]
TO: [CLEC POP CLLI
and DSX tie down]
-------------------------------------------------------------------
INTERCONNECTION CONTIGUOUS, FUNCTIONALLY INCLUSIVE,
SPECIFIC: ROUTING
- --------------------------------------------------------------------------------
DESIRED DUE 11/3/96 DUE DATE DETAILS: Turn up signaling network in
DATE: coordination with CLEC contact
- --------------------------------------------------------------------------------
REMARKS:
- --------------------------------------------------------------------------------
ELEMENT/COMBINATION: SS-Signal
Transfer Points
- ------------------------------------
ELEMENT ID: [STP CLLI pair]
- ------------------------------------
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UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
----------------------------------------------------------
- -------------------------------------------
[Circuit ID's for links]
- -------------------------------------------
OBJECT: A-link
- -------------------------------------------
QTY/CAPACITY: 2 (pair)
- -------------------------------------------
OPTION: DS0
- -------------------------------------------
CHARACTERISTICS:
- -------------------------------------------
FEATURES:
- -------------------------------------------
<PAGE> 165
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Page 7
UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
Example 5
PURPOSE OF ORDER: Update ALI/DMS (E911) database with new customer information
- --------------------------------------------------------------------------------
ORDER C ORDER ACTIVITY MODIFY CANCEL EXPEDITE
ACTIVITY: DESCRIPTION: ----- ----- ------
SUSPEND RESTORE
----- -----
SEQUENCE COORDINATED X
----- -----
ASSOCIATED ORDER(S):
- --------------------------------------------------------------------------------
TYPE E-DB
ELEMENT/COMB:
----------------------------------------------------------------
INTERCONNECTION Inclusive: (Rate Center served by
LOCATION: ALI/DMS database)
----------------------------------------------------------------
INTERCONNECTION FUNCTIONALLY INCLUSIVE
SPECIFIC:
- --------------------------------------------------------------------------------
DESIRED DUE 11/03/96 DUE DATE DETAILS Activate new database entry in
DATE: coordination with CLEC contact
- --------------------------------------------------------------------------------
REMARKS:
- --------------------------------------------------------------------------------
ELEMENT/COMBINATION: DB -
SCPs/Database
- -----------------------------
ELEMENT ID: WTN
- -----------------------------
OBJECT: E911 (ALI/DMS)
- -----------------------------
<PAGE> 166
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UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
---------------------------------------------
<TABLE>
<S> <C>
- -----------------------------------------
QTY/CAPACITY: 1
- -----------------------------------------
OPTION: Customer
- -----------------------------------------
CHARACTERISTICS: [New customer-specific
information]
- -----------------------------------------
FEATURES:
- -----------------------------------------
</TABLE>
<PAGE> 167
Attachment 11
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UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
---------------------------------------------
EXAMPLE 6
PURPOSE OF ORDER: Disconnect Local Switching
<TABLE>
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------
ORDER D ORDER ACTIVITY MODIFY CANCEL EXPEDITE SUSPEND
ACTIVITY: DESCRIPTION ----- ----- ----- -----
RESTORE
-----
SEQUENCE COORDINATED X ASSOCIATED ORDER(S):
----- -------
- -----------------------------------------------------------------------------------------------------------
TYPE E-DB
ELEMENT/COMB:
-----------------------------------------------------------------------------
INTERCONNECTION INCLUSIVE [LEC Switch CLLI]
LOCATION:
-----------------------------------------------------------------------------
INTERCONNECTION FUNCTIONALLY INCLUSIVE
SPECIFIC
- ----------------------------------------------------------------------------------------------------------
DESIRED DUE 11/03/96 DUE DATE DETAILS: Disconnect in coordination with CLEC contact
DATE:
- -----------------------------------------------------------------------------------------------------------
REMARKS:
- -----------------------------------------------------------------------------------------------------------
ELEMENT/COMBINATION: LS-Local
SWITCHING
- -------------------------------
ELEMENT ID: WTN
- -------------------------------
</TABLE>
<PAGE> 168
Attachment 11
Appendix B
Page 10
UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
---------------------------------------------
<TABLE>
<S> <C>
- -----------------------------------------
OBJECT: Line
- -----------------------------------------
QTY/CAPACITY: 1
- -----------------------------------------
OPTION: POTS
- -----------------------------------------
CHARACTERISTICS:
- -----------------------------------------
FEATURES:
- -----------------------------------------
</TABLE>
<PAGE> 169
Attachment 11
Appendix B
Page 11
UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
I.
Example 2
PURPOSE OF ORDER: LOOP and Switching Combination
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ORDER A ORDER ACTIVITY MODIFY ____ CANCEL ____ EXPEDITE ____ SUSPEND ____
ACTIVITY: DESCRIPTION: RESTORE ____
SEQUENCE ____ COORDINATED __X__ ASSOCIATED ORDER(S):
- -------------------------------------------------------------------------------------------------------
TYPE C - LOOP/LS
ELEMENT/COMB:
-----------------------------------------------------------------------------------
INTERCONNECTION FROM: [Customer prem] TO: [LSO CLLI, CLEC IDF frame tie down]
LOCATION:
-----------------------------------------------------------------------------------
INTERCONNECTION CONTIGUOUS, ROUTING
SPECIFIC:
- -------------------------------------------------------------------------------------------------------
DESIRED DUE 11/03/9 DUE DATE Swing loop and activate remote call forward simultaneously
DATE: 6 DETAILS:
- -------------------------------------------------------------------------------------------------------
REMARKS:
- -------------------------------------------------------------------------------------------------------
ELEMENT/COMBINATION: LOOP - Loop ELEMENT/COMBINATION: LS - Local
Switching
- ----------------------------------------------------------------------------
</TABLE>
<PAGE> 170
<TABLE>
<CAPTION>
Attachment 11
Appendix B
Page 12
UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ELEMENT ID: [LEC will return loop ID] ELEMENT ID: [LEC Switch CLLI]
- -----------------------------------------------------------------------------------------------------
OBJECT: Analog OBJECT: LNP
- -----------------------------------------------------------------------------------------------------
QTY/CAPACITY: 1 QTY/CAPACITY: N/A
- -----------------------------------------------------------------------------------------------------
OPTION: 2-wire OPTION: RCF
- -----------------------------------------------------------------------------------------------------
CHARACTERISTICS: Interface: Analog CHARACTERISTICS: [Shadow number]
number of call paths: 2
- -----------------------------------------------------------------------------------------------------
FEATURES: FEATURES:
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 171
<TABLE>
<S><C>
Attachment 11
Appendix B
Page 13
UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
Example 3
PURPOSE OF ORDER: Local Switching Condition Combination
- ------------------------------------------------------------------------------------------------------------------------------------
ORDER A ORDER ACTIVITY MODIFY _______ CANCEL _______ EXPEDITE _______ SUSPEND _______
ACTIVITY: DESCRIPTION: RESTORE _______
SEQUENCE ________ COORDINATED ________ ASSOCIATED ORDER(S):
- ------------------------------------------------------------------------------------------------------------------------------------
TYPE C - LS/CT/SS/DB/TS
ELEMENT/COMB:
- ------------------------------------------------------------------------------------------------------------------------------------
INTERCONNECTION INCLUSIVE: [NPA]
LOCATION:
- ------------------------------------------------------------------------------------------------------------------------------------
INTERCONNECTION FUNCTIONALLY INCLUSIVE
SPECIFIC:
- ------------------------------------------------------------------------------------------------------------------------------------
DESIRED DUE 11/03/96 DUE DATE DETAILS:
DATE:
- ------------------------------------------------------------------------------------------------------------------------------------
REMARKS: Prepare NPA for CLEC use of all Local Switching, Common Transport,
Signaling, Database and Tandem Switching elements.
Return CLEC Line Class Codes for all switches
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 172
<TABLE>
<S><C>
Attachment 11
Appendix B
Page 14
UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
Example 4
PURPOSE OF ORDER: Toll Traffic Combination 1 - Add toll trunking and transport between LEC end office and CLEC Switch
- ------------------------------------------------------------------------------------------------------------------------------------
ORDER A ORDER ACTIVITY MODIFY _______ CANCEL _______ EXPEDITE _______ SUSPEND _______
ACTIVITY: DESCRIPTION: RESTORE _______
SEQUENCE ________ COORDINATED ___X____ ASSOCIATED ORDER(S):
- ------------------------------------------------------------------------------------------------------------------------------------
TYPE C - DT/LS
ELEMENT/COMB:
- ------------------------------------------------------------------------------------------------------------------------------------
INTERCONNECTION FROM: [LEC Switch CLLI] TO: [CFA T3 slot]
LOCATION:
- ------------------------------------------------------------------------------------------------------------------------------------
INTERCONNECTION CONTIGUOUS, FUNCTIONALLY INCLUSIVE, ROUTING
SPECIFIC:
- ------------------------------------------------------------------------------------------------------------------------------------
DESIRED DUE 11/03/96 DUE DATE DETAILS: Do not activate routing until notified by CLEC contact
DATE:
- ------------------------------------------------------------------------------------------------------------------------------------
REMARKS:
- ------------------------------------------------------------------------------------------------------------------------------------
ELEMENT/COMBINATION: DT - Dedicated ELEMENT/COMBINATION: LS - Local
Transport Switching
- --------------------------------------------------------------------------------------
ELEMENT ID: [LEC will return facility ELEMENT ID: [LEC will return TSG
name, CLFI] designation]
- --------------------------------------------------------------------------------------
</TABLE>
<PAGE> 173
<TABLE>
<CAPTION>
Attachment 11
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Page 15
UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
OBJECT: DS1 OBJECT: Network Trunk
- -----------------------------------------------------------------------------------------------------
QTY/CAPACITY: 1 QTY/CAPACITY: 24
- -----------------------------------------------------------------------------------------------------
OPTION: Framing: ESF OPTION: SS7
- -----------------------------------------------------------------------------------------------------
CHARACTERISTICS: Signal: B8ZS CHARACTERISTICS: Two-way
[Screening]
[TSG characteristics]
[Routing]
- -----------------------------------------------------------------------------------------------------
FEATURES: FEATURES:
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 174
<TABLE>
Attachment 11
Appendix B
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UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
Example 5
PURPOSE OF ORDER: Cancel order to Add trunking and transport between LEC end-office and CLEC OSPS Switch
<S> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------------
ORDER A ORDER ACTIVITY MODIFY _______ CANCEL ___X___ EXPEDITE _______ SUSPEND _______
ACTIVITY: DESCRIPTION: RESTORE _______
SEQUENCE ________ COORDINATED ________ ASSOCIATED ORDER(S):
- ------------------------------------------------------------------------------------------------------------------------------------
TYPE C - DT/LS
ELEMENT/COMB:
- ------------------------------------------------------------------------------------------------------------------------------------
INTERCONNECTION FROM: [LEC Switch CLLI] TO: [CLEC POP CLLI and DSX tie down]
LOCATION:
- ------------------------------------------------------------------------------------------------------------------------------------
INTERCONNECTION CONTIGUOUS, FUNCTIONALLY INCLUSIVE
SPECIFIC:
- ------------------------------------------------------------------------------------------------------------------------------------
DESIRED DUE 11/03/96 DUE DATE DETAILS:
DATE:
- ------------------------------------------------------------------------------------------------------------------------------------
REMARKS:
- ------------------------------------------------------------------------------------------------------------------------------------
ELEMENT/COMBINATION: DT - Dedicated ELEMENT/COMBINATION: LS - Local
Transport Switching
- --------------------------------------------------------------------------------------
</TABLE>
<PAGE> 175
<TABLE>
<CAPTION>
Attachment 11
Appendix B
Page 17
UNBUNDLED NETWORK ELEMENT PROVISIONING FORMAT
- -----------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ELEMENT ID: [LEC will return facility ELEMENT ID: [LEC will return TSG
name, CLFI] designation]
- -----------------------------------------------------------------------------------------------------
OBJECT: DS1 OBJECT: Network Trunk
- -----------------------------------------------------------------------------------------------------
QTY/CAPACITY: 2 QTY/CAPACITY: 48
- -----------------------------------------------------------------------------------------------------
OPTION: Framing: D4 OPTION: SS7
- -----------------------------------------------------------------------------------------------------
CHARACTERISTICS: Signal: B8ZS CHARACTERISTICS: One-way (out from LEC switch)
[Screening]
[TSG characteristics]
- -----------------------------------------------------------------------------------------------------
FEATURES: FEATURES:
- -----------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 176
Attachment 11
Appendix C
Page 1
PRINCIPALS FOR IMPLEMENTING ELECTRONIC INTERFACES
FOR OPERATIONAL SUPPORT SYSTEMS
1. PREORDERING
1.1 Transaction-Based Information Exchange
The Parties agree that preordering information exchange will be transmitted over
the same interface according to the same content definition both for resold
PACIFIC services provided using UNE.
1.2 Initial Systems
CLEC will utilize various manual methods of preordering information exchange.
1.3 Long Term Systems
As soon as possible after the effective date and no later than the "Detailed
Specifications Agreed To Date" as set forth in Exhibit 1, CLEC and PACIFIC will
use their best efforts to agree to detailed specifications for upgrading the
transaction based preordering information exchange mechanism according to the
CLEC proposed data model for preordering which is based on Telecommunications
Industry Forum (TCIF) for Electronic Data Interchange (EDI), Version 6. Unless
PACIFIC and CLEC agree to an alternative exchange mechanism by February 10,
1997, the specifications will require that EC-Lite/EDI formatted content be
transmitted over a mutually agreeable X.25 or TCP/IP based network to perform
inquiries, including inquiries for Switch/Feature Availability, Address
Verification, Telephone Number Assignment, Appointment Scheduling, and Customer
Service Record requests. When the "Detailed Specifications Agreed To Date" is
met, and no additional specifications or changes are required by law, PACIFIC
will implement this upgrade by the applicable "Start Date" specified in Exhibit
1.
CLEC and PACIFIC will translate preordering data elements used in their internal
processes into the agreed upon forms, and EDI.
1.4 Batch Data Exchange
Unless another mutually agreed to alternative exists between PACIFIC and CLEC,
CLEC will use two types of orders, the Infrastructure Provisioning order and
Customer Specific Provisioning order, to establish local service capabilities
based on a UNE architecture. The Infrastructure Footprint Form and associated
<PAGE> 177
Attachment 11
Appendix C
Page 2
ASR forms (Local Switching, Interoffice Transport, Signaling and Database,
Operator Services and DA, and Operations Systems). CLEC will provide these
Infrastructure Provisioning and ASR forms via the ASR process, including passing
the information over a file transfer network, (e.g. Network Data Mover Network)
using the CONNECT: Direct file transfer product.
Customer Specific provisioning will be based on OBF LSR forms and applicable
SOSC interpretations of transactions in accordance with OBF forms. PACIFIC and
CLEC agree to adapt interfaces based on evolving ATIS/OBF and SOSC standards.
2. ORDERING AND PROVISIONING
2.1 CLEC Resells PACIFIC Telecommunications Service(s)
The exchange of information relating to the ordering and provisioning of local
service, when CLEC is the customer of record for the resold service(s), will be
based on the most current industry order formats and data elements developed in
the Ordering and Billing Forum (OBF).
2.1.1 Initial Systems
Except as provided in Exhibit 1. PACIFIC will provide CLEC, on or before the
Effective Date, with an electronic interface known as Resale Mechanized
Interface (RMI) for transmitting and receiving Service Requests and related
information such as Firm Order Confirmations (FOC, Jeopardies, Rejects, and
Completions). CLEC and PACIFIC will translate necessary data elements used in
their internal processes into mutually agreeable file formats and record
layouts. CLEC and PACIFIC will develop a mutually agreeable schedule for
transmissions throughout the day suing the CONNECT: Direct protocol.
For the ordering of products not supported by RMI, PACIFIC will provide CLEC
with other technologies mutually agreed to by the Parties.
2.1.2 Long Term Systems
As soon as possible after the Effective Date and no later than the "Details
Specifications Agreed to Date" as set forth in Exhibit 1, CLEC and PACIFIC will
use their best efforts to agree to detailed specifications for upgrading the
ordering information exchange mechanism according to the Telecommunications
Industry Forum (TCIF) for Electronic Data Interchange (EDI) CLEC and PACIFIC
mutually agree that the information exchange will be forms based, including the
use of the Local Services Request (LSR) Form, the End User Information Form and
the Resale Information Form developed by the OBF. CLEC and PACIFIC
<PAGE> 178
Attachment 11
Appendix C
Page 3
will use a mutually agreeable X.25 or TCP/IP based transport network for
exchange of transactions. CLEC and PACIFIC will translate ordering and
provisioning requests originating in their internal processes into agreed upon
forms and EDI transactions. Provided that the "Detailed Specifications Agreed To
Date" is met and no additional specifications or changes in specifications are
required by law, PACIFIC will use its best efforts to implement this upgrade by
the applicable "Start Date" specified in Exhibit 1.
2.2 CLEC Provides Service Using PACIFIC Unbundled Network Elements
2.2.1 Ordering Process and Forms
CLEC and PACIFIC will use two types of orders, an Infrastructure Provisioning
order and a Customer Specific Provisioning order to order and provision Network
Elements and Combinations.
The Infrastructure Provisioning Footprint order notifies PACIFIC of the common
use (across CLEC Retail Customers) Network Elements and Combinations that CLEC
will require, and identifies the geographic area CLEC expects to serve through
the Network Elements and Combinations ordered. PACIFIC and CLEC will mutually
agree on necessary modifications to the existing ordering process and forms used
for Exchange Access products until the OBF has adopted an acceptable alternative
method. In addition PACIFIC will accept a modified version of the Translation
Questionnaire (TQ) Form adopted by the OBF. The modified TQ will be sent to
PACIFIC, and PACIFIC will modify the routing tables for its end offices to
accommodate the treatment of customer calling associated with the combination of
Network Elements and Combinations that CLEC is employing to deliver service.
CLEC will provide the Infrastructure Footprint Order and all associated ASR
forms. PACIFIC will accept delivery of the Infrastructure Provisioning Forms
through the ASR process.
The customer specific provisioning order will be based upon OBF LSR Forms.
PACIFIC agrees that the information exchange will be forms based using the Local
Service Request Form, End User Information Form, Loop Element Form (formerly
Loop Service form), and Switch Element Form (formerly Port Form) developed by
the OBF. Such customer specific elements include, but are no limited to, the
customer loop, the network interface device, the customer dedicated portion of
the local switch, and any combination thereof.
2.2.2. Initial Systems
PACIFIC will provide CLEC, on the schedule specified in Exhibit 1 attached
hereto, with an Electronic Interface known as the Network Data Mover (NDM) for
transmitting and receiving Service Requests and related information such as
<PAGE> 179
Attachment 11
Appendix C
Page 4
Firm Order Completions (FOC), Jeopardies, Rejects, and Completions. CLEC and
PACIFIC will translate necessary data elements used in their internal processes
into mutually agreeable file formats and record layouts. CLEC and PACIFIC will
develop a mutually agreeable schedule for transmissions throughout the day using
the CONNECT: Direct protocol.
2.2.3 Long Term Systems
As soon as possible after the Effective Date and in no event after the "Detailed
Specifications Agreed To Date" as set forth in Exhibit 1 attached hereto. CLEC
and PACIFIC will use their best efforts to agree to detailed specifications for
upgrading the ordering information exchange mechanism according to the
Telecommunications Industry Forum (TCIF) for Electronic Data Interchange (EDI)
for the Customer Specific Provisioning orders. The information exchange will be
forms based. CLEC and PACIFIC will use a mutually agreeable X.25 or TCP/IP based
transport network for exchange of transactions. CLEC and PACIFIC will translate
ordering and provisioning requests originating in their internal processes into
the agreed upon forms and EDI transactions. Provided that the "Detailed
Specification Agreed To Date" is met and no additional specifications or changes
in specifications are required by law, PACIFIC will use its best efforts to
implement this upgrade by the applicable "Start Date" specified on Exhibit 1
attached hereto.
3. TESTING AND ACCEPTANCE
CLEC and PACIFIC agree that no interface will be represented as either generally
available or as operational until end-to-end functionality testing, as agreed to
in a Joint Implementation Agreement or other mutually acceptable document are
completed to the satisfaction of both Parties. The intent of the end-to-end
functionality testing is to establish, through the submission and processing of
test scenarios, that transactions agreed to by CLEC and PACIFIC will
successfully process, in a timely and accurate manner, through both Parties'
support of OSS as well as the interfaces. CLEC will provide load forecasts by
transaction type. PACIFIC will provide documentation to assure ability to handle
forecasted load, such as system simulation models. The testing will include the
use of mutually agreeable test transactions, designed to represent no less than
95 percent of the transaction types that CLEC expects to send and receive
through the Interface undergoing end-to-end testing. In addition, CLEC and
PACIFIC will establish either a mutually agreeable testing environment or an
audit process sufficient to demonstrate that the interfaces established between
CLEC and PACIFIC have the capability and capacity to exchange busy period
transaction volumes reasonably projected to occur during the forward-looking
twelve month period following implementation of the interface. The test
environment or audit process, whichever is utilized, must validate that PACIFIC
<PAGE> 180
Attachment 11
Appendix C
Page 5
can accept and process the anticipated busy period loan without degradation of
overall end-to-end performance of the information exchange delivered to CLEC
even when other CLEC transactions are simultaneously processed by PACIFIC.
Before testing begins, the Parties will mutually agree upon testing entrance
and exit criteria.
4. JOINT IMPLEMENTATION AGREEMENT DEVELOPMENT
CLEC and PACIFIC recognize that this Attachment is not sufficient to fully
resolve all technical and operational details related to the interfaces
described. Therefore, CLEC and PACIFIC agree to document the additional
technical and operational details in the form of a Joint Implementation
Agreement (JIA). The JIAs for each interface will become a legally binding
addendum to this Attachment. These JIAs may be modified over the course of this
Agreement without subjecting the balance of the Agreement to renegotiation or
modification. Both Parties further agree that any technical, operational or
implementation issues, once identified at the working team level, may be
escalated by the initiative of either Party thirty (30) days after an issue is
identified if no plan for resolution has been agreed. The escalation will
process first to the senior management of each company who will seek to resolve
the issue. If an issue is not resolved within thirty (30) days following
receipt of the issue by senior management, either Party may submit the issue to
the dispute resolution procedures of Attachment 3 for binding resolution. In
addition, CLEC and PACIFIC will document both a topical outline for the JIAs as
well as establish a schedule for identifying, discussing, resolving and
documenting resolution of issues related to each aspect of the JIA topical
outline for each interface discussed in this document. In no case, will either
end-to-end integrity testing or loan testing begin without both Parties
mutually agreeing that each interface JIA documents the intended operation of
the interface scheduled for testing. Any issues identified and subsequently
resolved through either the end-to-end integrity or load testing processes will
be incorporated into the impacted interface JIA within thirty (30) days of
issue resolution.
<PAGE> 181
Attachment 11
Appendix C, Exhibit 1
Page 1
OPERATION SUPPORT SYSTEMS IMPLEMENTATION DATES
<TABLE>
<CAPTION>
PROCESS INITIAL SYSTEMS START DATE
- ------- --------------- ----------
ORDERING:
<S> <C> <C>
Total Service Resale:
Residence Basic RMI/NDM currently available
"As is" RMI/NDM (flowthru)* 5/31/97
"As Specified" RMI/NDM (flowthru)* 5/31/97
Changes, Disconnects, RMI/NDM (flowthru)* 8/15/97
New, Move RMI/NDM (flowthru)* 8/15/97
Business - S/M Line, PBX trunk RMI/NDM* current available
Centrex and ISDN RMI/NDM* 7/10/97++
Directory - stand alone order RMI/NDM* current available
Directory - with Resale order** RMI/NDM 3/31/97
E911 - stand alone order NENA current available
E911 - with Resale order RMI/NDM 3/31/97
NOTE: Product implementation dates include Directory and E911
*NOTE: NDM (CONNECT: Direct) based on locally agreed upon specifications
**NOTE: CLEC will make appropriate parsing changes
++based upon agreement to detailed specifications by 4/10/97
Network Elements
-customer Specific:
local loop NDM 90 days after agreed to
unbundled local switching, standard for each
combined unbundled local unbundled network
switching and local loop. element
-"Footprint" ASR/NDM 90 days after agreed
upon standard
</TABLE>
<PAGE> 182
Attachment 11
Appendix C, Exhibit 1
Page 2
OPERATION SUPPORT SYSTEMS IMPLEMENTATION DATES
<TABLE>
<CAPTION>
DETAILED
SPECIFICATION
LONG TERM AGREED
PROCESS SYSTEM TO DATE START DATE
- ------- --------- ------------- ----------
<S> <C> <C> <C>
ORDERING:
Total Service Resale:
Residence Basic: "As Is: EDI 2/10/97 6/10/97
"As Specified", Changes EDI 2/10/97 6/10/97
Disconnects, New, Move EDI 2/10/97 6/10/97
Business: S/M Line, PBX trunk EDI 2/10/97 6/10/97
Business: Centrex and ISDN EDI 6/10/97 12/10/97
Directory - stand alone order EDI 2/10/97 6/10/97
E911 - stand alone order NENA currently available currently available
NOTE: Product implementation dates include Directory and E911
NETWORK ELEMENTS
-Customer Specific: local loop EDI 2/10/97 10/10/97
unbundled local switching,
combined unbundled local
switching and local loop
-"Footprint" ASR/NDM 2/10/97 6/10/97
</TABLE>
<PAGE> 183
Attachment 11
Appendix C, Exhibit 1
Page 3
OPERATION SUPPORT SYSTEMS IMPLEMENTATION DATES
<TABLE>
<CAPTION>
DETAILED
SPECIFICATION
LONG TERM AGREED
PROCESS SYSTEM TO DATE START DATE
- ------- --------- ------------- ----------
<S> <C> <C> <C>
PRE-ORDERING (ALL RESALE AND NETWORK ELEMENTS)
Feature Availability EDI 2/10/97 8/10/97
RACF Nbr. EDI 2/10/97 8/10/97
CICs EDI 2/10/97 8/10/97
Address Verify EDI 2/10/97 8/10/97
Telephone Number Assign
1-5 Basic Exchange EDI 4/10/97 10/10/97
Single Line ISDN EDI 4/10/97 10/10/97
1-5 COPT Lines EDI 4/10/97 10/10/97
All Other Products EDI 10/10/97 4/10/98
CSRs EDI 4/10/97 2/10/98
Appointments Scheduling EDI 6/10/97 12/10/97
(New connects, basic exchange,
connects basic local loop)
Centrex Facility Availability EDI 6/10/97 12/10/97
Connected Facility Availability EDI 2/10/97 8/10/97
(for basic resale or basic loop)
DID Service Inquiry EDI 2/10/97 8/10/97
</TABLE>
<PAGE> 184
Attachment 11 - Appendix D
Page 1 of 12
JOINT IMPLEMENTATION AGREEMENT (JIA)
EDI ORDERING - NUMBER PORTABILITY
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
1. INTRODUCTION
1.1 Executive Summary ................................................ 3
1.2 Introduction ..................................................... 3
2. PURPOSE
2.1 Purpose .......................................................... 3
2.2 Scope ............................................................ 4
2.3 Term of the JIA .................................................. 4
3. TERMS AND CONDITIONS
3.1 General Terms .................................................... 4
3.2 CLEC Notifications ............................................... 5
3.3 Intercompany Contacts ........................................... 5
3.4 Interface Control Document ....................................... 5
3.5 Interface Testing ............................................... 6
3.6 Change Control Type Process ...................................... 6
3.7 Change Types ..................................................... 6
3.8 Implementation Scheduling ....................................... 7
4. OSS DISPUTE RESOLUTION .................................................. 9
5. SCHEDULE ................................................................ 10
6. AUTHORIZED SIGNATURES ................................................... 11
</TABLE>
<PAGE> 185
<TABLE>
<C> <C> <C>
1. INTRODUCTION
1.1 EXECUTIVE SUMMARY
SECTION TOPIC CONTENTS
1 Introduction Identifies the document content.
2 Purpose Documents the purpose and objectives of the JIA as addendum to
the Interconnection Agreement. Identifies scope of this JIA
relative to ordering and/or pre-ordering application-to-applic-
ation interfaces identified in Section 2.2. Identifies the
technical and operational Interface Control Documents that
the parties use to implement and maintain these interfaces.
3 Terms Outlines the terms and conditions of the JIA.
4 OSS Dispute Resolution Defines how disputes will be resolved.
5 Implementation Schedule Outlines a schedule for developing interface functionality.
6 Authorized Signatures Signatures of parties who agree to terms and conditions of
this document.
</TABLE>
1.2 INTRODUCTION
1.2.1 This document establishes fundamental principles and actions for OSS
interface implementation and maintenance between Pacific Bell (hereafter
known as "Pacific") and CRL Network Services ("CLEC").
1.2.2 Pacific and CLEC agree to jointly test and implement the interfaces
that are outlined in Section 2.2. Scope, pursuant to the terms and
conditions of the Interconnection Agreement between CLEC and Pacific dated
December 19, 1996. Pacific will present project plans to CLEC specifying the
technical, operational and other details regarding each such OSS interface
and the timelines for testing and implementation thereof. CLEC shall have
the opportunity to comment and make recommendations related to each such OSS
interface and Pacific shall fully consider such comments and recommendations
and respond to CLEC in a timely manner. If the parties cannot reach
agreement regarding such OSS interface, the OSS Dispute Resolution process
set forth in Section 4 hereof shall apply. In the event of any disagreement
between the provisions of the Interconnection Agreement regarding OSS and
this JIA, the terms of this Interconnection Agreement shall control.
<PAGE> 186
2. PURPOSE
2.1 PURPOSE AND OBJECTIVE
2.1.1 The purpose of this JIA is to document the principles guiding the
technical and operational work efforts between Pacific and CLEC relative
to the implementation of OSS interfaces referenced in the Interconnection
Agreement and identified in Section 2.2, Scope.
2.1.2 An objective of this JIA is to document the guidelines for
implementation and usage of the electronic interfaces under the terms of
the Interconnection Agreement. To achieve this objective, the parties will
use the documentation and processes referenced in this JIA and focus work
efforts on issues that increase the effectiveness of mechanized interfaces.
2.1.3 This JIA is entered in accordance with Attachment 11 of the
Pacific/CRL Network Services Interconnection Agreement.
2.1.4 To achieve the purpose and objective, the JIA establishes a basis
for work efforts and outlines the responsibilities of the parties. An
important part of this is the Change Control Process. This process is
established for the parties to manage modifications to the interfaces
subject to applicable guidelines developed within the Ordering and Billing
Forum (OBF) and the Telecommunications Industry Forum (TCIF). This Change
Control Process also provides for an escalation process. Supporting
documentation for each interface is maintained separately, outside of this
JIA. Issues and corresponding resolutions will be documented in
correspondence.
2.2 SCOPE
This JIA pertains to the EDI ordering electronic application interface,
specific to Number Portability orders and the latest versions of the
associated interface control documents. A separate JIA will be executed
for the Directory Listings and 911 updates associated with these Orders;
CLEC will use the LI Office Gateways until EDI functionality is available,
tested and implemented.
<PAGE> 187
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
INTERFACE INTERFACE CONTROL DESCRIPTION
DOCUMENT
- --------------------------------------------------------------------------------
<S> <C> <C>
EDI - Ordering 1. LSOR 2.0 1. Local Service Order Request
version 1.3 contains business rules for
(5/11/98) ordering specific products based
on standards established by the
OBF.
2. EDI Technical 2. Contains administrative
Specification requirements and data specific
TCIF 3040 information showing which
(1/21/98) segments and elements will be
used. Included are mapping
matrices that identify fields
specific to Pacific. These fields
indicate how information will be
mapped in EDI. This
documentation is based on
standards developed by the OBF
and TCIF.
- --------------------------------------------------------------------------------
</TABLE>
2.3 TERM OF THE JIA
2.3.1 The JIA shall terminate and be of no further force or effect upon the
termination of Interconnection Agreement. Transition of the process
contained in this JIA to terms of a new interconnection agreement shall be
pursuant to Section 3 of the Main Agreement.
3.0 TERMS AND CONDITIONS
3.1 GENERAL TERMS
3.1.1 This JIA is adopted pursuant to the Interconnection Agreement and
serves as an addendum to the Interconnection Agreement. The following terms
serve as the basis for this document.
a) This document applies to the ordering and/or pre-ordering electronic
application to application interfaces identified in Section 2.2 above.
a) The document is based upon the Interconnection Agreement's terms
for ordering functions that support Number Portability.
b) Pacific and CLEC will work together in good faith to implement
interface functionality in the most effective manner possible.
Changes to be managed by the Change Control Process are those
with direct impact to the interface functionality. These changes
are:
1) releases finalized by OBF and TCIF, to the extent required by
the Interconnection Agreement.
2) Pacific Bell initiated system changes that directly affect
CLEC system requirements.
<PAGE> 188
3.2 CLEC NOTIFICATIONS
3.2.1 CLEC will receive written notification of a change as soon as
reasonably possible after Pacific decides to make the change. Pacific will
develop a timeline for development and distribution of documentation and
resulting implementation efforts. Should the timeline and/or the content
not be acceptable to CLEC, CLEC may escalate the issue for resolution. Any
disputes will be resolved pursuant to Section 4 hereof.
3.2.2 CLEC requests for changes within the scope of implementation will be
communicated in writing from CLEC to its appropriate single point of
contact. The Account Manager will provide CLEC a written assessment of the
request. After CLEC receives Pacific's assessment, the parties will
negotiate in good faith to reach an agreement. If no agreement is reached
within 30 days of receipt of the specifications, the dispute will be
resolved pursuant to Section 4 hereof.
3.3 INTERCOMPANY CONTACTS
The Pacific Account Management Team will serve as the Single Point of
Contact (SPOC) and coordinate all activities under the scope of this JIA
with CLEC's SPOC, as noted below. These individuals will manage the
exchange of information between the two companies.
<TABLE>
PACIFIC SPOC: CLEC SPOC:
----------------------------- -------------------------------
<S> <C>
Dianna Scott, Account Manager Jim Couch
370 Third Street, Room 716 President
San Francisco, CA 94107 One Kearny Street, Suite 1450
Tel: 415 542-7281 San Francisco, CA 94108
Tel: 415 837-5300
Fax: 415 392-9000
</TABLE>
3.4 INTERFACE CONTROL DOCUMENT
3.4.1 The construction and execution of the interface implementation will
be fully documented by Pacific in an Interface Control Document. The
Interface Control Documents for the interfaces are listed in Section 2.2,
Scope.
3.4.2 Interface Control Documents (ICD) identified in Section 2.2, Scope,
serve to formalize the technical requirements and applicable business rules
of functionality that the interface provides.
3.4.3 Draft ICDs will be jointly reviewed and discussed. Once Pacific
issues the final ICD, Pacific will respond to written questions regarding
the ICDs. Any disputes regarding ICDs will be resolved pursuant to Section
4 hereof. Request for changes to the final ICD content will be handled via
the Change Control Process.
3.4.4 Once an ICD has been established and Pacific plans a modification or
new functionality for an Interface, the ICD will be revised and CLEC will
be notified as described above in Section 3.2. Any disputes regarding ICDs
will be resolved pursuant to Section 4 hereof. The modified ICD will be
accompanied by a summary of the changes and identified by the date of
issue.
<PAGE> 189
3.5 INTERFACE TESTING
3.5.1 Pacific and CLEC will perform interface testing as mutually agreed
in the Test Plan. The parties will conduct testing on a set of interface
functions for no longer than the interval specified in the Joint Testing
Plan, unless a longer interval is mutually agreed to by both parties.
Should the parties not agree whether a successful test was obtained
within the specified interval, any disputes will be resolved pursuant to
Section 4 hereof.
3.6 CHANGE CONTROL PROCESS
3.6.1 Changes to the interface that are subject to the OBF and TCIF
guidelines will be handled through the OBF and TCIF processes. Finalized
OBF and TCIF guidelines that require or provide opportunity to change
the interface will be managed as described in this JIA and the Change
Control Process flow detail in Section 3.6.6 below.
3.6.2 For all other changes, Pacific and CLEC SPOCs will serve as the
liaison to receive the request. These requests will be reviewed and
responded to by all parties based upon the guidelines established in
this JIA and the Change Control Process flow detail in Section 3.6.6
below. Any disputes will be resolved pursuant to Section 4 hereof.
3.6.3 At such time that a written change is determined to be
incorporated into the interface implementation, the appropriate ICDs
will be updated to reflect such change or the agreement will be
documented in correspondence. No verbal agreements or discussions will
be construed to be final until this step has been executed. Any disputes
will be resolved pursuant to Section 4 hereof.
3.6.4 Change documentation (e.g. revised system specifications, etc.)
will not be incorporated into the JIA but will be governed by it.
3.6.5 Section 3.7 identifies the types of changes that will be
identified by Pacific and CLEC within this JIA and those changes will
adhere to the Change Control Process flow detail described in Section
3.6.6 below. This process will pertain to changes initiated by Pacific
and changes requested by CLEC within the scope of the implementation of
the interface. Work on the affected interface may proceed, but in no
case will implementation occur before disputes are resolved pursuant to
Section 4 hereof.
3.6.6 in all instances CLEC will receive written notice in order to
evaluate the issue and have the opportunity to discuss it with Pacific.
Any disputes will be resolved pursuant to Section 4 hereof.
Specifically, these actions will follow the Change Control Process flow
detail described in Sections 3.6.6.1 and 3.6.6.2 below.
3.6.6.1 Flow detail for changes required to be made by CLEC to
meet conversion date:
1. As the EDI/LSR issue requirements are being determined at
OBF, they are reviewed by Pacific to determine Pacific's LSR
Usage requirements.
2. A preliminary package of the charges is completed.
<PAGE> 190
4. The Initial Notification of changes will be via an Accessible Letter and
will be supplemented with Account Team correspondence where appropriate.
The letter will be distributed to CLEC, including the CLEC SPOC identified
in Section 3.3 above, and will contain the Pacific plans for issue content
and a proposed date of implementation.
5. CLEC may send a written response through their Pacific Account Manager
within 14 calendar days of the letter date if issues exist or clarification
is requested.
6. The response will specify elements of contention and detail CLEC's
alternative recommendations for implementation where issues exist. These
should be handled through the Pacific Account Manager who will forward them
to the appropriate organization within Pacific.
7. These responses will be reviewed and considered by Pacific and appropriate
action will be taken, including attempting to resolve CLEC's issues.
8. A written response will be forwarded to CLEC through the Account Manager
within 14 calendar days after the cutoff date for all responses (28
calendar days after date of Initial Notification). Any changes that may
occur as a result of the responses will be distributed to CLEC via another
Accessible Letter.
9. Once the LSOG Version and/or EDI Release Package is finalized it will be
reviewed again by Pacific for any alterations that may be necessary.
10. The Final Notification will be sent to CLEC via an Accessible Letter. The
letter will contain the requirements for the new release and the planned
implementation date.
11. Again, CLEC may send a written response within 14 calendar days through
their Account Manager. The response will specify elements of contention and
detail CLEC's alternative recommendations for implementation where issues
exist, including issues with the planned implementation date.
12. A written response will be forwarded to CLEC through the Account Manager
within 14 days after the cutoff date for all CLEC responses (28 calendar
days after date of Final Notification). Any changes that may occur as a
result of the responses will be distributed to CLEC via another Accessible
Letter.
13. Should CLEC elect to dispute any portion of Pacific's response detailed in
11 above, CLEC must initiate such dispute within 10 calendar days of
Pacific's response. This period will allow reasonable time for a Majority
Vote process to be conducted.
14. Testing will be conducted, to the satisfaction of CLEC and Pacific, until
the mutually agreed upon interface testing criteria has been satisfied.
15. If the Parties don't agree that testing has been successfully completed
within the planned time frame, they may utilize the provisions of Section
4, hereof to resolve the issue.
16. The new release or updates are implemented. If a dispute resolution
procedure has been initiated pursuant to item 12 above and Section 4,
implementation will proceed following the provisions of Section 4.
<PAGE> 191
3.6.6.2 Flow detail for changes which may be made at CLEC's option (i.e. does
not impact current order production) on or after Pacific's conversion date:
1. As the EDI/LSR issue requirements are being determined at OBF, they are
reviewed by Pacific to determine Pacific's LSR Usage requirements.
2. A preliminary package of the changes is compiled.
3. Notification will be sent to CLEC, including the CLEC SPOC identified in
Section 3.3 above, via an Accessible Letter and will be supplemented with
Account Team correspondence where appropriate. The letter will contain the
requirements for the new release and the planned implementation date.
4. CLEC may send a written response within 14 calendar days through their
Account Manager. The response should specify elements of contention, detail
why there is programming impact to CLEC and, if appropriate, detail CLEC's
alternative recommendations for implementation, including issues with the
planned implementation date.
5. These responses will be reviewed and considered by Pacific and appropriate
action will be taken, including attempting to resolve CLEC's issues.
6. A written response will be forwarded to CLEC through the Account Manager
within 14 calendar days after the cutoff date for responses (28 calendar
days after date of Notification). Any changes that may occur as a result of
the responses will be distributed to CLEC via another Accessible Letter.
7. Should CLEC elect to dispute any portion of Pacific's response detailed in
6 above, CLEC must initiate such dispute within 10 calendar days of
Pacific's response. This period will allow reasonable time for a Majority
Vote process to be conducted.
8. If CLEC will utilize the optional capability upon the release date, testing
will be conducted, to the satisfaction of CLEC and Pacific, until the
mutually agreed upon interface testing criteria has been satisfied.
9. If the Parties don't agree that testing has been successfully completed
within the planned time frame, they may utilize the provisions of Section
4, hereof to resolve the issue.
10. The new release or updates are implemented. If a dispute resolution
procedure has been initiated pursuant to item 7 above and Section 4,
implementation will proceed after resolution of the dispute.
<PAGE> 192
3.7 CHANGE TYPES
3.7.1 Major Change - Substantial technical process, Business Rule
modification(s) or change(s) to the interfaces that are required
and which will significantly impact the data transactions and system
coding. Major changes including new categories of functionality not
included within the original scope and functionality covered by
this JIA will be incorporated into a new release that will be
subjected to a new JIA.
3.7.2 Minor Change - Minor technical process, Business Rule
modification(s) or change(s) to the interfaces that are required,
but are easily incorporated into data transactions and system
coding. Minor changes may trigger a revision to an existing JIA but
will not require a new release and its corresponding new JIA.
3.8 IMPLEMENTATION SCHEDULING
3.8.1 Section 5, Implementation Schedule, will be included in the initial
JIA for the defined interface. If a subsequent JIA needs to be issued in
connection with making major changes as described above, Pacific will
coordinate with interface users and publish a new Implementation Schedule
as outlined in Section 5 of the new JIA. Any disputes will be resolved
pursuant to Section 4 hereof.
3.8.2 When a minor change is to be implemented but does not necessitate a
revision to this JIA, notification of implementation timelines for the
particular change(s) will be provided in writing to CLEC. Any disputes
will be resolved pursuant to Section 4 hereof.
<PAGE> 193
4. OSS DISPUTE RESOLUTION
4.1 NEGOTIATIONS AND ESCALATION
When the parties are not in agreement on Pacific's proposed business
rules, test plan, implementation, timeline or other aspects of an OSS
interface covered by this JIA, the parties shall promptly commence the
escalation process provided for in Section 4 of Appendix C of Attachment
11 of the Interconnection Agreement. The parties shall act and negotiate
in good faith using their best efforts to reach an agreement on the
disputed interface that is consistent with the needs of the industry (while
recognizing reasonable cost and technical constraints) and that recognizes
that the interface must be made available by Pacific on a
nondiscriminatory basis and at parity to all CLECs and cannot be designed
to advantage or disadvantage any particular CLEC.
4.2 MAJORITY VOTE
If the process described in Section 4.1 above does not resolve a dispute,
CLEC may, in its sole discretion, either accept Pacific's position on the
dispute or elect to seek the vote of other Affected CLECs (as defined in
Section 4.3.1) that Pacific's position on the dispute is not acceptable to
such Affected CLECs. Unless the Majority Vote (as defined in Section 4.3.2)
is in favor of the proposed disputed change, Pacific shall not proceed with
the proposed disputed change. If Pacific fails to garner a Majority Vote in
favor of its position, at Pacific's election, Pacific will commence
negotiations with the Affected CLECs to develop a position that is
supported by a Majority Vote. The ability to appeal to the CPUC Staff for
resolution has not been agreed to by the parties and will be resolved via
Alternate Dispute Resolution.
4.3 DEFINITIONS FOR SECTION 4
4.3.1. "Affected CLECs" shall mean all CLECs which are using a
particular Pacific OSS interface as to which a dispute exists where
resolution of the dispute will impact such Affected CLECs usage of such
interface, all CLECs which are testing or are in the process of
implementing such OSS interface and all CLECs which have indicated a
definite intent to test, implement or use such OSS interface within the
next three months. Pacific shall not be treated as an "Affected CLEC" for
this purpose and shall have no vote. CLECs that are affiliates of each
other shall be considered the same CLEC.
4.3.2. "Majority Vote" shall mean 50% or more of all written statements
submitted by at least a Quorum of Affected CLECs to Pacific and CLEC
indicating that the signing Affected CLECs either (1) object to or (2)
support Pacific's position. Where a number of Affected CLECs join together
in one written statement, the votes of each Affected CLEC joining in the
statement shall be counted as if each had filed an individual statement.
For purposes of this definition, "Quorum" shall constitute two-thirds of
the Affected CLECs. In the event of a tie, the change proposed shall be
implemented by Pacific. In the event that less than two-thirds of Affected
CLECs vote, the proposed change will not have garnered a Majority Vote, the
proposed change will not be implemented, and the dispute will be submitted
to the CPUC staff for resolution.
<PAGE> 194
5. IMPLEMENTATION SCHEDULE
Phase 1: Documentation Released: 12/1/97 Number Portability orders
Phase 2: Joint Test Plan Developed: 5/27/98 Number Portability orders
Phase 3: Joint Testing: 6/1/98 - 6/19/98 Number Portability orders
Phase 4: Implementation: 6/22/98* Number Portability orders
* CLEC implementation date only -- Pacific Bell in production as of
3/1/198
* Based on successful completion of joint testing
<PAGE> 195
6. AUTHORIZED SIGNATURES
Pacific and CLEC have indicated their approval of the terms contained
within this Joint Implementation Agreement by the signatures of their
authorized representatives below.
PACIFIC CLEC
By:___________________ By:___________________________
Title:________________ Title:________________________
Date:_________________ Date:_________________________
<PAGE> 196
ATTACHMENT 12
-------------
MAINTENANCE
-----------
<PAGE> 197
Attachment 12
Page 1
ATTACHMENT 12
MAINTENANCE
1. PACIFIC shall provide repair, maintenance, testing and surveillance for
all Local Services and unbundled Network Elements and Combinations in
accordance with the terms and conditions of the Attachment.
2. PACIFIC and CLEC shall mutually agree on appropriate maintenance
standards for all Local Services and unbundled Network Elements and
Combinations ordered under this Agreement. Such maintenance standards
shall include, without limitation, standards for testing, network
management, call gapping, and notification of upgrades as they become
available. Such maintenance standards shall be set forth in Attachment
17 to this Agreement.
3. Maintenance and Repair Functions
3.1 Initial Electronic Bonding Interface Functions
PACIFIC will have in place by April 10, 1997 a real time electronic
system-to-system interface ("EBI") consistent with ATIS industry
standards, to enable CLEC to perform any necessary maintenance and
repair functions, including the ability to enter a new trouble ticket
into the PACIFIC maintenance system for an CLEC Customer; the ability to
retrieve and track current status on all CLEC Customer repair tickets;
the ability to schedule maintenance appointments by day and time on a
real-time basis and the ability to verify that the trouble has been
resolved by work completed on the Customer's premises to the Minimum
Point of Entry (MPOE) (collectively "EBI Functions"). Prior to
implementation of EBI, PACIFIC will offer CLEC the use, at CLEC's
option, of two interim interfaces for the performance of EBI Functions:
(i) an 800 number and (ii) access to the PBSM system. PACIFIC will
structure these interim interfaces so that CLEC will be able to perform
all EBI Functions on an interim basis using the 800 number and the
majority of the EBI using PBSM.
3.2 Additional Maintenance Functions
Prior to the development of ATIS standards for adding to EBI (a) the
ability to retrieve MLT results, (b) the ability to retrieve "Dispatch
In-Dispatch Out" codes, and (c) the ability to retrieve all applicable
time and material charges at the time of ticket closure (itemized by
customer for each repair incident to
12/12/96
<PAGE> 198
Attachment 12
Page 2
show time spent, nature of trouble, how trouble was resolved, charges for
individual items such as materials, if any, and total charges)
(collectively "Maintenance Functions"), PACIFIC and CLEC will mutually
agree on a process to accomplish CLEC's request for the Maintenance
Functions on an interim, pre-EBI basis, and the cost, if any, to provide
the Maintenance Functions.
4. EBI Implementation
4.1 Maintenance and repair information exchange relating to all Local
Services, Network Elements and Combinations provided under this Agreement
will be transmitted over the same interface according to the same content
definition. CLEC and PACIFIC will, for the purpose of exchanging fault
management information, establish an EBI, based upon ANSI standards
T1.227-1995 and T1.228-1995, and Electronic Communication Implementation
Committee (ECIC) Trouble Report Format Definition (TRFD) Number 1 as
defined in ECIC document ECIC TRA/95-003, and all standards referenced
within those documents. The parties agree to adopt for EBI the functions
currently implemented for reporting access circuit troubles. These
functions include Enter Trouble, Request Trouble Report Status, Add
Trouble Information, Modify Trouble Report Attributes, Trouble Report
Attribute Value Change Notification and Cancel Trouble Report, all of
which are fully explained in clauses 6 and 9 of ANSI T1.228-1995.
4.2 CLEC and PACIFIC will exchange requests over a mutually agreeable X.25
based network or, if both CLEC's and PACIFIC's platforms are capable, a
mutually agreeable TCP/IP based network may be employed. CLEC and PACIFIC
will translate maintenance requests or responses originating in their
internal processes into the agreed upon attributes and elements. Both
parties, agree to complete mutually consistent translations within two (2)
months after the Effective Date of this Agreement and to proceed to
systems readiness testing that will result in a fully operational
interface for local service delivery within four (4) months after the
Effective Date of this Agreement. Changes to Network Operations Forum
(NOF), ECIC or T1M1 standards, to the extent local service maintenance and
repair are affected, will be implemented based upon a mutually agreeable
schedule, but in no case will the time for adoption, including testing of
the changes introduced, extend more than one (1) year beyond the date of
initial closure by the relevant ATIS committee or subcommittee.
5. In the event a PACIFIC employee misses a scheduled repair appointment on
behalf of CLEC, PACIFIC will notify CLEC within one (1) hour of the missed
appointment, either by EBI or by telephone.
6. PACIFIC technicians shall provide repair service to CLEC Customers that is
equal in quality to that provided to PACIFIC customers. Trouble calls from
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<PAGE> 199
Attachment 12
Page 3
CLEC shall receive response time priority that is at least equal to that of
PACIFIC customers and shall be handled on a "first come first served" basis
regardless of whether the customer is an CLEC Customer or a PACIFIC
customer. Prior to EBI, CLEC may ask PACIFIC to reprioritize an CLEC
customer trouble report among CLEC's other customer trouble reports and
PACIFIC will reprioritize CLEC's various customer reports as requested by
CLEC, if possible.
7. PACIFIC shall provide CLEC with the same scheduled and non-scheduled
maintenance, including, without limitation, required and recommended
maintenance intervals and procedures, for all Local Services, Network
Elements and Combinations provided to CLEC under this Agreement that it
currently provides for the maintenance of its own network. PACIFIC shall
provide CLEC at least ten (10) business days advance notice of any
scheduled maintenance activity which may impact CLEC Customers. Scheduled
maintenance shall include, without limitation, such activities as switch
software retrofits, power tests, major equipment replacements and cable
rolls. Plans for scheduled maintenance shall include, at a minimum, the
following information: location and type of facilities, specific work to be
performed, date and time work is scheduled to commence, work schedule to be
followed, date and time work is scheduled to be completed and estimated
number of work-hours for completion.
8. PACIFIC shall advise CLEC of non-scheduled maintenance, testing,
monitoring, and surveillance activity to be performed by PACIFIC on any
Network Element, including, without limitation, any hardware, equipment,
software, or system providing service functionality which may potentially
impact CLEC Customers. PACIFIC shall provide the maximum advance notice of
such non-scheduled maintenance and testing activity possible, under the
circumstances; provided, however, that PACIFIC shall provide emergency
maintenance as promptly as possible to maintain or restore service and
shall advise CLEC promptly of any such actions it takes.
9. PACIFIC shall provide CLEC with a detailed description of any and all
emergency restoration plans and disaster recovery plans, however
denominated, which are in place during the term of this Agreement. Such
plans shall include, at a minimum, the following: (i) procedures for prompt
notification to CLEC of the existence, location, and source of any
emergency network outage potentially affecting an CLEC Customer, via the
EBI to be established pursuant to Sections 3 and 4; (ii) establishment of a
single point of contact responsible for initiating and coordinating the
restoration of all Local Services and Network Elements or Combinations;
(iii) methods and procedures to provide CLEC with real-time access to
information relating to the status of restoration efforts and problem
resolution during the restoration process; (iv) methods and procedures for
reprovisioning of all Local Services
12/12/96
<PAGE> 200
Attachment 12
Page 4
and Network Elements or Combinations after initial restoration; (v)
equal priority, as between CLEC Customers and PACIFIC customers, for
restoration efforts, consistent with FCC Service Restoration
guidelines, including, without limitation, deployment of repair
personnel, and access to spare parts and components; and (vi) a
mutually agreeable process for escalation of maintenance problems,
including a complete, up-to-date list of responsible contacts, each
available twenty-four (24) hours per day, seven (7) days per week.
Said plans shall be modified and up-dated as needed. PACIFIC shall
notify CLEC, within one hour, of all Category I Equipment and/or
facility failures affecting CLEC customer service as itemized in
PACIFIC reference S.I. 131, as amended by PACIFIC from time to time.
A copy of the relevant portion of S.I. 131 in effect on the effective
date of this Agreement is attached to this Attachment as Appendix A.
10. PACIFIC and CLEC shall establish mutually acceptable methods and
procedures for referring callers to the 800/800 number supplied by
the other Party for purposes of receiving misdirected calls from
customers requesting repair.
11. PACIFIC's Interconnection Service Center (ISC) shall conform to the
performance and service quality standards set forth in Attachment 17
when providing repair and maintenance to CLEC and CLEC Customers
under this Agreement.
11.1. If service is provided to CLEC Customers before EBI is established
between CLEC and the PACIFIC, CLEC will transmit its repair calls to
the PACIFIC ISC by telephone.
11.2. ISC, and Electronic Bonding, once deployed, shall be on-line and
operational and the interim interfaces described in Section 3
preceding shall be operational twenty-four (24) hours per day, seven
(7) days per week.
11.3. Progress reports and status of repair efforts shall be available to
CLEC through EBI. On an interim basis before implementation of EBI,
PACIFIC shall provide progress reports and status of repair efforts
to CLEC via an 800 number supplied by PACIFIC or via PBSM, at CLEC's
option.
11.4. Within thirty (30) days after the execution of this Agreement,
PACIFIC shall provide CLEC with written escalation procedures to be
followed if, in CLEC's reasonable judgment, any individual trouble
ticket or tickets are not resolved in a timely manner. Resolution
shall be deemed untimely if delayed beyond PACIFIC's best practices
for resolution of troubles reported by PACIFIC's own customers. The
escalation procedures to be provided hereunder shall include names
and telephone numbers of PACIFIC management personnel who are
responsible for maintenance issues.
<PAGE> 201
Attachment 12
Page 5
11.5. In the event PACIFIC shall fail to conform to the performance
standards in Attachment 17, CLEC may request, and PACIFIC shall
perform an analysis of the reason behind PACIFIC's failure to
conform, and PACIFIC shall correct said cause as soon as reasonably
practical, at its own expense.
11.6. Maintenance charges for premises visits by PACIFIC technicians shall
be billed by CLEC to its Customer, and not by PACIFIC. All forms,
business cards or other materials furnished by PACIFIC technicians to
CLEC Customers will contain no brand. If the CLEC Customer is not at
home when the PACIFIC technician arrives, the PACIFIC technician
shall leave on the premises "not-at-home" cards that are unbranded
but include a contact number for CLEC. The PACIFIC technician will
not leave on the premises a PACIFIC-branded "not-at-home" card".
11.7. Dispatching of PACIFIC technicians to CLEC Customer premises shall be
accomplished by PACIFIC pursuant to a request received from CLEC.
<PAGE> 202
Attachment 12 - Appendix A
Page 1
CATEGORY I EQUIPMENT AND/OR FACILITY FAILURES AFFECTING
CUSTOMER SERVICE.
CATEGORY I BROADBAND
Types of Customer o Frame Relay - A failure of one or more channelized
Service Quality Failure T1 carrier systems or two or more non-channelized T1
Reports and Criteria carrier systems.
o ATM - A failure of one OC3 or two DS3s.
o SMDS - A failure of one DS3 or four T1s.
o Packet Switching - Any failure of an access module
(AM) or resource module (RM).
CATEGORY I NARROWBAND
o 5 T1 carrier systems (120 or more voice grade
channels) failure.
o 500 or more voice grade radio channels failure.
o A community isolation.
o E911
o A transport equipment failure that isolates a
central office from the E911 network. (Local
switch to the tandem e.g. DACS, OC12, DEXCS
failure, etc.)
o A transport equipment failure that isolates a
Public Safety Answering Point (PSAP) from the
E911 tandem.
o A transport equipment failure that results in
the loss of 25% or more of the trunks/circuits
(aggregate) from an E911 tandem to the PSAPs
served by that tandem.
CATEGORY I CABLE
o Local - 200 or more working pairs are affected.
o Toll - 120 or more interoffice trunks are affected.
o Fiber - Any working fiber providing customer
service that fails without protection.
o E911
o A transport cable failure that isolates a
central office from the E911 network. (Local
switch to the E911 tandem)
o A transport cable failure that isolates a PSAP
from the E911 tandem)
o A transport cable failure that results in the
loss of 25% or more of the trunks/circuits
(aggregate from an E911 tandem to the PSAPs
served by that
<PAGE> 203
Attachment 12 - Appendix A
Page 2
tandem.
CATEGORY I SWITCHING MACHINES
* Any switch congestion that results in 40% or more dial tone
delay lasting 15 minutes or longer.
* Complete loss of inward and/or outward call processing
capability from a central office lasting 5 minutes or longer.
* Any service interruption resulting in 50 or more customer
reports.
* A duplex connectivity failure to the SS7 network, e.g.
MSB7/LPP frame, link set, CNI, etc.
* Loss of interoffice calling from more than 10 minutes.
* An FYI report should be filed anytime a central office has
been on battery power (greater than)30 minutes, when it is
not part of a routine test.
* E911
* A central office isolated from the E911 network for 15
minutes or longer.
* Loss of 25% or more of the trunking capability from an
E911 tandem to the PSAPs it serves for 15 minutes or
longer (e.g. translations, trunk frame failure, etc.).
* A PSAP isolation from the E911 network for 15 minutes
or longer (e.g. translations, trunking problem, etc.)
CATEGORY I COMMUNITY ISOLATION
A community isolation occurs when no incoming or outgoing toll
service is available and the community is cut off from the
outside world by rural geography. A central office failure
within a metropolitan area is not considered a community
isolation since the community can more easily reach phone
service in the adjacent central office serving area.
CATEGORY I MEDIA INTEREST
Any interruption or outage that may cause public or news media
attention.
CATEGORY I TANDEM/TOPS
* Failures or potential loss of call completions/processing.
* Failures affecting Operator Service capabilities.
(See page 24 for detailed reporting criteria.)
CATEGORY I SS7
Loss of mated pair of STP or SCP. Any SS7 failure causing
<PAGE> 204
Attachment 12 - Appendix A
Page 3
50 customer reports from a single central office or 100 customer
reports from several central offices within a maintenance
center.
CATEGORY I PUBLIC SAFETY/SERVICE AGENCIES
* Federal Government, equipment or facility affecting 5 or more
military special communications, isolations of FAA location or
air ground facilities.
* State and local agencies interruptions seriously affecting
service to police, fire departments, hospitals, press,
military, and PBSs.
<PAGE> 205
ATTACHMENT 13
CONNECTIVITY BILLING AND RECORDING
<PAGE> 206
Attachment 13
TABLE OF CONTENTS
CONNECTIVITY BILLING AND RECORDING
1. General............................................................. 1
2. Transition to CABS.................................................. 1
3. Billable Information And Charges.................................... 1
4. Meet Point Billing.................................................. 4
5. Collocation......................................................... 6
6. Mutual Compensation................................................. 6
7. Issuance of Connectivity Bills - General............................ 9
8. Electronic Transmissions............................................ 8
9. Tape or Paper Transmissions......................................... 8
10. Testing Requirements................................................ 11
11. Bill Accuracy Certification......................................... 11
12. Additional Requirements............................................. 11
13. Payment Of Charges.................................................. 12
14. Billing Disputes.................................................... 13
15. Late Payment Charges................................................ 14
16. Adjustments......................................................... 14
17. Recording Of Call Information....................................... 14
Appendix A:
Pre-Bill Certification Operating Agreement
Appendix B:
Schedule for Transition to CABS
Schedule For Agreement On Specifications For Electronic Transmission And
Start Date For Implementation Of Transmission Method
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CONNECTIVITY BILLING AND RECORDING
1. GENERAL
This Attachment describes the requirements for PACIFIC to bill and record
all charges CLEC incurs for purchasing Local Services for resale and for
Network Elements and combinations, and describes the requirements for
PACIFIC and CLEC to bill and record all charges incurred to provide Meet
Point Billing and Mutual Compensation. In addition to the terms and
conditions set forth in this Attachment 13, CLEC and PACIFIC will use
their best efforts to complete and sign by November 30, 1996 a Pre-Bill
Certification Operating Agreement, which, when executed by both parties,
will become Appendix A to this Attachment 13. The performance measurements
applicable to Connectivity Billing and Recording are set forth in
Attachment 17.
2. TRANSITION TO CABS
PACIFIC shall use a phased approach to introduce billing through CABS for
Local Services. Network Elements and Combinations provided to CLEC under
this Agreement. PACIFIC agrees to complete the conversion of CABS billing
for Local Services, Network Elements and Combinations provided under this
Agreement in accordance with the schedule set forth in Appendix B to this
Attachment 13.
2.1 Each Party agrees to deliver billing information in the CABS format
mutually agreed to and implemented by the Parties. Each reference to CABS
in this Attachment 13 shall be understood prior to the date of CABS
conversion to refer to the applicable pre-CABS billing system. Each
reference to CABS in this Attachment 13 shall be understood as of the date
of CABS conversion to refer to CABS.
2.2 Notwithstanding any other provisions or language to the contrary in this
Agreement, the Parties agree to cease delivering billing information in
CABS format, and to instead utilize the CRIS format, for resold Local
Services effective May 11, 1998. Until such time as CLEC has developed and
tested a conversion of its resale billing platform for CABS to CRIS, CLEC
agrees to accept a paper CRIS bill beginning May 11 for resold Local
Services. The Parties agree that CLEC's acceptance of a paper CRIS bill
shall constitute conversion from CABS to CRIS."
3. BILLABLE INFORMATION AND CHARGES
3.1 PACIFIC currently uses FABS, CRIS and CABS to bill the Network Elements.
Local Services and Combinations that CLEC plans to purchase. PACIFIC will
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convert billing for all Network Elements, Local Services and Combinations
to a CABS billing format in accordance with the schedule set forth in
Appendix B. References to CABS billing in this Attachment apply to billing
for the specified service following conversion to CABS.
3.2 PACIFIC will bill and record in accordance with this Attachment those
charges CLEC incurs as a result of CLEC purchasing from PACIFIC Network
Elements, Combinations and Local Services, as set forth in this Agreement
(hereinafter "Connectivity Charges"). The Parties agree that, except as
expressly provided in this Attachment, CABS or predecessor billing systems
will comply with OBF standards.
3.3 Each bill for Connectivity Charges (hereinafter "Connectivity Bill") shall
be formatted in accordance with CABS, CRIS or FABS, as appropriate,
pursuant to the CABS Conversion schedule set forth in Appendix B. Each
Element, Combination, or Local Service, purchased by CLEC shall be assigned
a separate and unique billing code in the form agreed to by the Parties and
such code shall be provided to CLEC on each Connectivity Bill in which
charges for such Elements, Combinations, or Local Services appear. Each
such billing code shall enable CLEC to identify the Element(s), or
Combinations and Options as described in Attachment 11 to this Agreement
ordered by CLEC, or Local Services ordered or utilized by CLEC in which
Connectivity Charges apply pursuant to this Agreement. Each Connectivity
Bill shall set forth the quantity and description of each such Element,
Combination, or Local Service provided and billed to CLEC. All Connectivity
Charges billed to CLEC must indicate the state from which such charges were
incurred.
3.4 PACIFIC shall provide CLEC monthly Connectivity Bills that include all
Connectivity Charges incurred by and credits and/or adjustments due to CLEC
for those Elements, Combination thereof, or Local Services ordered,
established, utilized, discontinued or performed pursuant to this
Agreement. Each Connectivity Bill provided by PACIFIC to CLEC shall
include: (1) all non-usage sensitive charges incurred for the period
beginning with the day after the current bill date and extending to, and
including, the next bill date, (2) any known unbilled non-usage sensitive
charges for prior periods, (3) unbilled usage sensitive charges for the
period beginning with the last bill date and extending up to, but not
including, the current bill date, (4) any known unbilled usage sensitive
charges for prior periods, and (5) any known unbilled adjustments.
3.5 The Bill Date, as defined herein, must be present on each bill transmitted
by PACIFIC to CLEC.
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3.6 Subject to Sections 3.6.4 and 3.6.5, PACIFIC shall not provide any
Connectivity Bills to CLEC having a Bill Date any later than the
following dates:
3.6.1. Sixty (60) days following the recording date for all resale usage and
LSNE usage, except for calls requiring data exchange with third party
carriers. e.g. intraLATA 0+ calls made within another state, which
calls are subject to Section 3.6.2.
3.6.2 One hundred twenty (120) days following the recording date for calls
requiring data exchange with third party carriers.
3.6.3 Sixty (60) days following the date the charges are incurred for all
other Network Elements, Combinations, and all non-usage resale or LSNE
charges.
3.6.4 The time limits set forth in Sections 3.6.1 and 3.6.2 are effective
immediately. The time limit set forth in Section 3.6.3 will be
effective six (6) months following the effective date of this
Agreement.
3.6.5 If any billing error is identified, quantified and communicated in
writing by PACIFIC to CLEC within the time periods set forth in Section
3.6.3 above after Connectivity Charges are incurred, Pacific will have
a maximum of one hundred twenty (120) days after the Connectivity
Charges are incurred to render correct Connectivity Bills therefor.
3.6.6 Provided that CLEC continues to participate in the Pre-Bill
Certification Procedures described in Appendix A to this Attachment, no
payment shall be due from CLEC for any Connectivity bill received by
CLEC from PACIFIC that fails to meet the timeliness requirements of
Section 3.6.1 through 3.6.5 of this Attachment.
3.6.7 On each bill where "Jurisdiction" is identified, local and local toll
charges shall be identified as "Local" and not as interstate,
interstate/interLATA, intrastate, or intrastate/intraLATA.
3.7 PACIFIC shall bill CLEC for each Element, Combination thereof, or Local
Service, supplied by PACIFIC to CLEC pursuant to this Agreement at the
rates set forth in Attachment 8. PACIFIC will bill CLEC based on the
actual Connectivity Charges incurred, provided, however, for those
usage-based Connectivity Charges where actual charge information is not
determinable by PACIFIC because the jurisdiction (i.e., interstate,
interstate/interLATA, intrastate, intrastate/intraLATA, local) of the
traffic is unidentifiable, the parties will jointly develop a process
to determine the appropriate charges.
3.8 Each party shall be responsible for (1) all costs and expenses it
incurs in complying with its obligations under this Attachment 13 and
(2) the
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development, modification, technical installation and maintenance of any
systems or other infrastructure which it requires to comply with and to
continue complying with its responsibilities and obligations under this
Attachment 13, except that Pacific may recover the cost to implement the
billing system changes required by this Attachment in a competitively
neutral manner on an industry wide basis.
3.9 Each Party shall provide the other Party at no additional charge a
contact person for the handling of any Connectivity Billing questions or
problems that may arise during the implementation and performance of the
terms and conditions of this Attachment.
4. MEET POINT BILLING
4.1 CLEC and PACIFIC will establish meet-point billing ("MPB") arrangements
for jointly provided switched access to an IEC, in accordance with the
Meet Point Billing guidelines adopted by and contained in the OBF's
MECAB and MECOD documents, except as modified herein. Both parties will
use their best reasonable efforts, individually and collectively, to
maintain provisions in their respective federal and state access
tariffs, and provisions within the National Exchange Carrier Association
("NECA") Tariff No. 4, or any successor tariff to reflect the MPB
arrangements identified in this Agreement, in MECAB and in MECOD.
4.2 CLEC and PACIFIC will implement the "Multiple Bill/Single Tariff" option
in order to bill any interchange carrier ("IXC") for that portion of
the network elements provided by CLEC or PACIFIC. For all traffic
carried over the MPB arrangement, CLEC and PACIFIC shall each bill the
IEC for its own portion of the applicable elements.
4.3 Each Party shall provide the billing name, billing address, and carrier
identification code ("CIC") of the IXCs that may utilize any portion of
CLEC's network in an CLEC/PACIFIC MPB arrangement in order to comply
with the MPB Notification process as outlined in the MECAB document.
Each party will be entitled to reject a record that does not contain a
CIC code. Such information shall be provided by each Party to the other
Party in the format and via the medium that the parties agree.
4.4 The Parties agree to comply with the currently effective MECAB
guidelines as mutually adopted by the Parties from time to time.
4.5 The Parties further agree that in those MPB situations where one Party
subtends the other Party's access tandem, the Party providing the access
tandem is only entitled to bill the access tandem fee and any associated
local transport charges. The Parties also agree that the Party who
provides the
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end office switching is entitled to bill end office switching fees,
local transport charges, RIC and CCL charges, as appropriate, and such
other applicable charges.
4.6 PACIFIC and CLEC will record and transmit MPB information in accordance
with the standards and in the format set forth in this Attachment.
PACIFIC and CLEC will coordinate and exchange the billing account
reference ("BAR") and billing account cross reference ("BACR") numbers
for the MPB arrangements described in this Agreement. Each Party will
notify the other if the level of billing or other BAR/BACR elements
change, resulting in a new BAR/BACR number.
4.7 The secondary billing company will provide to the initial billing
company any necessary AMA records (in standard EMR format) within
fourteen (14) days of the recording date. The Initial billing company
will provide the secondary billing company the necessary summary records
with fourteen (14) days of the initial company's bill date.
4.8 If MPB data is not submitted by either Party within the period set forth
in 4.7, or is not in the proper format as set forth in this Agreement,
and if as a result the other Party is delayed in billing the IXC for the
appropriate charges it incurs, the delaying Party shall pay the other
Party a late MPB data delivery charge which will be the total amount of
the delayed charges times the highest interest rate (in decimal value)
which may be levied by law for commercial transactions, compounded daily
for the number of days from the date the MPB charge information is
actually received.
4.9 Failure of secondary billing company to provide the necessary AMA
records (in standard EMR format) within sixty (60) days of the recording
date or of the initial billing company to provide the necessary summary
records within sixty (60) days of the initial billing company's bill
date, will result in the Party failing to deliver the data to be liable
to the other Party for any charges the other Party is unable to bill the
IEC.
4.10 Errors in MPB data exchanged by the Parties may be discovered by CLEC,
PACIFIC or the billable IXC. Both CLEC and PACIFIC agree to provide the
other Party with notification of any discovered errors within ten (10)
business days of the discovery. The other Party shall correct the error
within twenty (20) business days of notification and resubmit the data.
In the event the errors cannot be corrected within the time period
specified above, the erroneous data shall be considered lost. If either
Party fails to provide MPB data due to loss, uncorrectable errors or
otherwise, the Parties shall follow the procedures set forth in
Attachment 14, Section 6, for compensation of lost,
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damaged or destroyed Recorded Usage data and compensate the other for
the lost MPB billing data.
4.11 Both Parties will provide the other a single point of contact to
handle any MPB questions.
5. COLLOCATION
When CLEC collocates with PACIFIC in LEC's facility as described in
this Agreement, capital expenditures (e.g., costs associated with
building the "cage"), shall not be included in the Connectivity Bill
provided to CLEC pursuant to this Attachment. All such capital
expenses shall be billed through FABS, identified as capital expense
charges and given a unique and consistent Billing Account Number. All
invoices for capital expenses shall be sent to the location specified
by CLEC for payment. All other non-capital recurring collocation
expenses shall be billed to CLEC in accordance with this Agreement.
The CABS Billing Output Specifications ("BOS") documents provide the
guidelines on how to bill the Connectivity Charges associated with
collocation. The bill label for those collocation charges shall be
entitled "Expanded Interconnection Service."
6. MUTUAL COMPENSATION
6.1 The Parties shall bill each other call termination charges for local
exchange traffic, using a CABS like format, in accordance with the
standards set forth in this Agreement for traffic terminated to the
other Party's customer, where both such customers bear NPA-NXX
designations associated with the same LATA or other authorized area
(e.g., extended area service zones in adjacent local calling areas).
Where required, such traffic shall be recorded and transmitted to CLEC
in accordance with this Attachment. Further, the traffic exchanged
pursuant to this Attachment shall be measured in billing minutes of
use and shall be in actual conversation seconds. The total
conversation seconds per chargeable traffic type will be totalled for
the entire monthly billing cycle and then rounded to the next whole
conversation minute. Reciprocal compensation for the termination of
this traffic shall be charged at rates specified in Attachment 18 to
this Agreement.
7. ISSUANCE OF CONNECTIVITY BILLS - GENERAL
7.1 PACIFIC and CLEC will issue all CABS Connectivity Bills in accordance
with the terms and conditions set forth in this Section.
7.2 PACIFIC and CLEC will establish monthly billing dates ("Bill Date")
for each Billing Account Number ("BAN") or Billed Telephone Number
("BTN") (collectively referred to as "Account Number"), as further
defined in the
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CABS documents, which Bill Date shall be the same day month to month.
Each Account Number shall remain constant from month to month, unless
changed as agreed to by the Parties. Each Party shall provide the
other Party at least thirty (30) calendar days written notice prior
to changing, adding or deleting an Account Number. The Parties will
provide one Connectivity Billing invoice associated with each Account
Number.
7.3 All Connectivity Bills must be received by the other Party no later
than ten (10) calendar days from Bill Date and at least twenty (20)
calendar days prior to the payment due date (as described in this
Attachment), whichever is earlier. Any Connectivity Bill received on
a Saturday, Sunday or a day designated as a holiday by the Chase
Manhattan Bank of New York (or such other bank as CLEC shall specify)
will be deemed received the next business day. If either Party fails
to receive Connectivity Billing data and information within the time
period specified above, the payment due date will be extended by the
number of days the Connectivity Bill is late.
7.4 PACIFIC and CLEC shall issue all CABS Connectivity Bills containing
such billing data and information in accordance with CABS Version
26.0, or such later versions of CABS as are published by Bellcore, or
its successor and implemented by PACIFIC or CLEC, except that if the
parties enter into a meet-point billing arrangement, such
Connectivity Billing data and information shall also conform to the
standards set forth in the MECAB document, or such later versions as
are adopted by OBF, or its successor. To the extent that there are no
CABS or MECAB standards governing the formatting of certain data,
such data shall be issued in the format mutually agreed by the
Parties.
7.5 Each Party will provide the other Party written notice of which
Connectivity Bills are to be deemed the official bills to assist the
Parties in resolving any conflicts that may arise between the
official bills and other bills received via a different media which
purportedly contain the same charges as are on the official bill. If
either Party requests an additional copy(ies) of a bill, such Party
shall pay the other Party a reasonable fee per additional bill copy
as set forth in applicable tariffs or as mutually agreed, unless such
copy was requested due to errors, omissions, or corrections or the
failure of the transmission to comply with the specifications set
forth in this Agreement.
7.6 To avoid transmission failures or the receipt of Connectivity Billing
information that cannot be processed, the Parties shall provide each
other with their respective process specifications and edit
requirements. CLEC shall comply with PACIFIC's processing
specifications when CLEC transmits Connectivity Billing data to
PACIFIC. PACIFIC shall comply with CLEC's processing specifications
when PACIFIC transmits Connectivity Billing data to CLEC. CLEC and
PACIFIC shall provide each other reasonable notice if a Connectivity
Billing transmission is received that does not meet such Party's
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specifications or that such Party cannot process. Such transmission
shall be corrected and resubmitted to the other Party, at the
resubmitting Party's sole expense, in a form that can be processed. The
payment due date for such resubmitted transmissions will be twenty (20)
days from the date that the transmission is received in a form that can
be processed and that meets the specifications set forth in this
Attachment.
8. ELECTRONIC TRANSMISSIONS
8.1 PACIFIC and CLEC agree that each party will transmit CABS Connectivity
Billing information and data in the CABS format electronically via
Connect: Direct (formerly known as Network Data Mover) to the other
Party at the location specified by such Party. The Parties agree that a
T1.5 or 56kb circuit to Gateway for Connect: Direct is required. CLEC
data centers will be responsible for originating the calls for data
transmission via switched 56kb or T1.5 lines. If PACIFIC has an
established Connect: Direct link with CLEC, that link can be used for
data transmission if the location and applications are the same for the
existing link. Otherwise, a new link for data transmission must be
established. PACIFIC must provide CLEC/Alpharetta its Connect: Direct
Node ID and corresponding VTAM APPL ID before the first transmission of
data via Connect: Direct. CLEC's Connect: Direct Node ID is "NDMATTA4"
and VTAM APPL ID is "NDMATTA4" and must be included in PACIFIC's
Connect: Direct software. CLEC will supply to PACIFIC its RACF ID and
password before the first transmission of data via Connect: Direct. Any
changes to either party's Connect: Direct Node ID must be sent to the
other party no later than twenty-one (21) calendar days before the
changes take effect.
8.2 The CABS Connectivity Billing information and data will be sent using
the current OBF format implemented by mutual agreement of both Parties.
9. TAPE OR PAPER TRANSMISSIONS
9.1 In the event either Party does not have Connect: Direct capabilities
upon the effective date of this Agreement, such Party agrees to
establish Connect: Direct transmission capabilities with the other Party
within the time period mutually agreed and at the establishing Party's
expense. Until such time, the Parties will transmit billing information
to each other via magnetic tape or paper (as agreed to by CLEC and
PACIFIC). Connectivity billing information and data contained on
magnetic tapes or paper for payment shall be sent to the Parties at the
following locations. The Parties acknowledge that all tapes transmitted
to the other Party via U.S. Mail or Overnight Delivery and which contain
Connectivity Billing data will not be returned to the sending Party.
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TO CLEC:
---------------------------------------------------------------------
Test Tapes, CRL Network Services
Cassettes and Jim Couch, President
Diskettes One Kearny Street, Suite 1450
San Francisco, CA 94108
---------------------------------------------------------------------
Production Tapes CRL Network Services
and Cassettes via Jim Couch, President
Overnight Delivery One Kearny Street, Suite 1450
and U.S. Mail San Francisco, CA 94108
---------------------------------------------------------------------
---------------------------------------------------------------------
Production CRL Network Services
Diskettes & Paper Jim Couch, President
Bills and Paper One Kearny Street, Suite 1450
EAS/AS Bills via San Francisco, CA 94108
U.S. Mail
---------------------------------------------------------------------
Production CRL Network Services
Diskettes & Paper Jim Couch, President
Bills and Paper One Kearny Street, Suite 1450
EAS/AS Bills via San Francisco, CA 94108
Overnight Delivery
Service
---------------------------------------------------------------------
TO PACIFIC:
---------------------------------------------------------------------
Tape To be specified by Pacific Bell
Transmissions when it elects tape transmission
Attn:
---------------------------------------------------------------------
Paper Pacific Bell
Transmissions: CLC Compensation Manager
370 3rd St., Rm. 311
San Francisco, CA 94104
Attn:
---------------------------------------------------------------------
9.2 Each Party will adhere to the tape packaging requirements set forth in
this subsection. Where magnetic tape shipping containers are
transported in freight compartments, adequate magnetic field protection
shall be provided by keeping a typical 6-inch distance from any
magnetic field generating device
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(except a magnetron-tape device). The Parties agree that they will only
use those shipping containers that contain internal insulation to
prevent damage. Each Party will clearly mark on the outside of each
shipping container its name, contact and return address. Each Party
further agrees that it will not ship any Connectivity Billing tapes in
tape canisters.
9.3 All billing data transmitted via tape must be provided on a cartridge
(cassette) tape and must be of high quality, conform to the parties'
record and label standards, 9-track, odd parity, 6250 BPI, group coded
recording mode and extended binary-coded decimal interchange code
("EBCDIC"). Each reel of tape must be 100% tested at 20% or better
"clipping" level with full width certification and permanent error free
at final inspection. CLEC reserves the right to destroy a tape that has
been determined to have unrecoverable errors. CLEC also reserves the
right to replace a tape with one of equal or better quality.
9.4 Billing data tapes shall have the following record and label standards.
The dataset serial number on the first header record of an IBM standard
tape label also shall have the following format.
CABS BOS
Record Length 225 bytes (fixed length)
Blocking Factor 84 records per block
Block size 18,900 bytes per block
Labels Standard IBM
Operating System
9.5 A single 6-digit serial number must appear on the external (flat)
surface of the tape for visual identification. This number shall also
appear in the "dataset serial number field" of the first header record
of the IBM standard tape label. This serial number shall consist of the
character "V" followed by the reporting location's four digit
Originating Company Code and a numeric character chosen by the sending
company. The external and internal label shall be the same. The dataset
name shall appear on the flat side of the reel and also in the "data set
name field" on the first header record of the IBM standard tape label.
PACIFIC's name, address, and contact shall appear on the flat side of
the cartridge or reel.
9.6 All labeling of tapes shall comply with OBF standards.
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10. TESTING REQUIREMENTS
10.1 At least thirty (30) days prior to any billing system change there will
be a thirty day test period to ensure that bills can be processed by the
Parties.
10.2 For CLEC, PACIFIC will send CLEC a mechanized CABS Connectivity Bill
for the first time via electronic transmission, or tape, or at least
thirty (30) days prior to changing mechanized formats (i.e., from CRIS
to CABS), PACIFIC shall send to CLEC Connectivity Bill data in the
appropriate mechanized format for testing to ensure that the bills can
be processed and that the bills comply with the requirements of this
Attachment. PACIFIC shall also provide to CLEC's Company Manager,
located at 500 North Point Parkway, FLOC B1104B, Alpharetta, Georgia
30302, the PACIFIC's originating or state level company code so that it
may be added to CLEC's internal tables at least thirty (30) calendar
days prior to testing or a change in the PACIFIC's originating or state
level company code. CLEC will notify PACIFIC within the time period
agreed to by the parties if Connectivity Billing transmission fails to
meet CLEC's testing specifications. PACIFIC shall make the necessary
corrections within the time period agreed to with CLEC to ensure that
billing transmissions meet CLEC's testing specifications. PACIFIC shall
not send CLEC a mechanized Connectivity Bill (except for testing) until
such bills meet CLEC's testing specifications. If PACIFIC meets CLEC's
testing specifications, PACIFIC may begin sending CLEC mechanized
Connectivity Bills on the next Bill Date, or within ten (10) days,
whichever is later.
10.3 During the testing period, PACIFIC shall transmit to CLEC Connectivity
Billing data and information via paper transmission. Test tapes shall be
sent to CLEC at the following location:
------------------------------------------------
Test Tapes: CRL Network Services
Jim Couch, President
One Kearny Street, Suite 1450
San Francisco, CA 94108
------------------------------------------------
11. BILL ACCURACY CERTIFICATION
The Parties agree that in order to ensure the proper performance and
integrity of the entire Connectivity Billing process, the sending Party
is responsible and accountable for transmitting to the receiving Party
an accurate and current bill. PACIFIC agrees to implement control
mechanisms and procedures to render a bill that accurately reflects the
Network Elements, Combination and Local Services ordered and used by
CLEC. These processes and methodology will be set forth in a Pre-Bill
Certification Operating Agreement and will be attached to this
Attachment 13 as Appendix B.
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12. ADDITIONAL REQUIREMENTS
PACIFIC agrees that if it transmits data to CLEC in a mechanized format,
PACIFIC will also comply with the following specifications which are not
contained in CABS guidelines but which are necessary for CLEC to process
Connectivity Billing information and data:
o The BAN shall not contain embedded spaces or low values.
o The Bill Date shall not contain spaces or non-numeric values.
o Each Connectivity Bill must contain at least one detail record.
o Any "From" Date should be less than the associated "Thru" Date and
neither date can contain spaces.
o The Invoice Number must not have embedded spaces or low values.
13. PAYMENT OF CHARGES
13.1 Subject to the terms of this Agreement and except for bills rendered by
PACIFIC in the CRIS format, CLEC and PACIFIC will pay each other within
thirty (30) calendar days from the Bill Date, or twenty (20) calendar days
from the receipt of the bill, whichever is later. For bills rendered by
PACIFIC in the CRIS format, CLEC will pay PACIFIC within sixty (60)
calendar days from the Bill Date, or fifty (50) calendar days from the
receipt of the bill, whichever is later. If the payment due date is a
Sunday or is a Monday that has been designated a bank holiday by the Chase
Manhattan Bank of New York (or such other bank as CLEC specifies), payment
will be made the next business day. If the payment due date is a Saturday
or is on a Tuesday, Wednesday, Thursday or Friday that has been designated
a bank holiday by the bank as CLEC specifies), payment will be made on the
preceding business day.
13.2 Payments shall be made is U.S. Dollars via electronic funds transfer
("EFT") to the other Party's bank account. At least thirty (30) days prior
to the first transmission of Connectivity Billing data and information for
payment, PACIFIC and CLEC shall provide each other the name and address of
its bank, its account and routing number and to who Connectivity Billing
payments should be made payable. If such banking information changes,
each Party shall provide the other Party at least sixty (60) days written
notice of the change and such notice shall include the new banking
information. The Parties will render payment via EFT. CLEC will provide
PACIFIC with one address to which such payments shall be rendered and
PACIFIC will provide to CLEC with only one address to which such payments
shall be rendered. In the event CLEC receives multiple Connectivity Bills
from PACIFIC which are payable on the same date, CLEC may remit one
payment for the sum of all Connectivity Bills payable to PACIFIC's bank
account specified in this subsection. Each Party shall provide the other
Party with a contact person for the handling of Connectivity Billing
payment questions or problems.
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14. BILLING DISPUTES
14.1 Each Party agrees to notify the other Party upon the discovery of a
billing dispute. In the event of a billing dispute, the Parties will
endeavor to resolve the dispute within sixty (60) calendar days of
the Bill Date on which such disputed charges appear. Resolution of
the dispute is expected to occur at the first level of management
resulting in a recommendation for settlement of the dispute and
closure of a specific billing period. Bill closure procedures agreed
to by the Parties will be set forth in the Pre-bill Certification
Operating Agreement, to be attached to this Attachment as Exhibit A.
Closure of a specific billing period will occur by joint agreement of
the Parties whereby the Parties agree that such billing period is
closed to any further analysis and financial transactions, except
those resulting from an Audit as described in Section 10 of the
General Section of this Agreement. Closure will take place within
three (3) months of the close of the applicable billing period. The
month being closed represents those Connectivity Charges that were
billed or should have been billed by the respective Bill Date. If the
issues are not resolved within the allotted time frame, the following
resolution procedure will begin:
14.1.1 If the dispute is not resolved within sixty (60) days of the Bill
Date, the dispute will be escalated to the second level of management
for each of the respective Parties for resolution.
14.1.2 If the dispute is not resolved within ninety (90) days of the Bill
Date, the dispute will be escalated to the third level of management
for each of the respective Parties for resolution.
14.1.3 If the dispute is not resolved within one hundred and twenty (120)
days of the Bill Date, the dispute will be escalated to the fourth
level of management for each of the respective Parties for resolution.
14.1.4 If the dispute is not resolved within one hundred and twenty (150)
days of the Bill Date, the dispute will be resolved in accordance
with the alternative dispute resolution procedures set forth in
Attachment 3.
14.1.5 If a Party disputes a Connectivity Charge and does not pay such
charge by the payment due date, such charges shall be subject to late
payment charges as set forth in the Late Payment Charges provision of
this Attachment. If a Party disputes Connectivity Charges and the
dispute is resolved in favor of such Party, the other Party shall
credit the Connectivity Bill of the disputing Party for the amount of
the disputed charges along with any late payment charges assessed no
later than the second Bill Date after the resolution of the dispute.
Accordingly, if a Party disputes Connectivity Charges and the dispute
is resolved in favor of the other Party, the disputing Party shall
pay the other Party the amount of the disputed charges and any
associated late payment charges assessed no later than the second
bill payment due date after the
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resolution of the dispute. In no event, however, shall any late payment
charges be assessed on any previously assessed late payment charges.
15. LATE PAYMENT CHARGES
If either Party fails to remit payment for any Connectivity Charges
described in this Attachment by the payment due date, or if a payment or
any portion of a payment is received by either Party after the payment
due date, or if a payment or any portion of a payment is received in
funds which are not immediately available to the other Party, then a
late payment penalty shall be assessed. The late payment charge shall be
calculated based on the applicable tariffs of the billing Party, and the
portion of the payment not received by the payment date times the
highest interest rate (in decimal value) which may be levied by law for
commercial transactions, compounded daily for the number of days from
the payment date to and including the date that payment is actually
made. In no event, however, shall interest be assessed on any previously
assessed late payment charges.
16. ADJUSTMENTS
16.1 Subject to the terms of this Attachment and Attachment 17, PACIFIC will
debit or credit CLEC for incorrect Connectivity Billing charges;
overcharges: Local Services Elements, or any Combination thereof,
ordered or requested but not delivered; interrupted Local Services
associated with any Element, or combination thereof; ordered or
requested Local Services, Elements, or Combination thereof, of poor
quality; and installation problems if caused by PACIFIC, adjustments
will be administered per the applicable tariff or by mutual agreement.
Such reimbursements shall be identified as an adjustment on the
Connectivity Bill.
16.2 Subject to the terms of this Attachment, CLEC will debit or credit
PACIFIC for incorrect charges; overcharges; under charges for mutual
compensation as required or permitted by the applicable tariff or by
mutual agreement. Such reimbursements shall be identified as such on the
Bill.
17. RECORDING OF CALL INFORMATION
17.1 The Parties agree to record call information in accordance with this
subsection. These records shall be provided at a Party's request and
shall be formatted pursuant to Bellcore standards if such standards
exist, and otherwise as agreed by the Parties. These records shall be
transmitted to the other Party daily in EMR format via Connect: Direct,
provided however that if CLEC and PACIFIC do not have Connect: Direct
capabilities, such records shall be transmitted as the Parties agree.
PACIFIC and CLEC agree that they
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will retain, at each Party's sole expense, copies of all AMA records
transmitted to the other party for at least seven (7) calendar days after
transmission to the other Party.
17.2 Pacific shall provide to CLEC the Switched Access Detail Usage Data
(Category 11-00-xx records) via Connect:Direct on a daily basis within
fourteen (14) days of the last day of the billing period. The data will
be in a separate dataset from the usage records associated with the CLEC
Resale access lines. File name and attributes will be specified by CLEC.
17.3 CLEC shall provide to Pacific the Summary Usage Data (Category 11-50-xx
records) via Connect:Direct on a daily basis within fourteen (14) days of
the last day of the billing period. The data will be in a separate
dataset from the usage records associated with the CLEC Resale access
lines. File name and attributes to be specified by Pacific.
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Appendix A
APPENDIX A
PHYSICAL CHARACTERISTICS OF DATA TAPES/CARTRIDGES
Data transported to CLEC by PACIFIC, or to PACIFIC by CLEC, on tape or
cartridge via a courier will have the following physical characteristics:
<TABLE>
<S> <C>
Tape: 9-track, 6250 (or 1600) BPI (Bytes per inch)
Cartridge: 38,000 BPI (Bytes per inch)
LRECL: 2,472 bytes
Parity: Odd
Character Set: Extended Binary Coded Decimal
Interchange Code (EBCDIC)
External labels: Exchange Carrier name, Dataset Name
(DSN) and volume serial number
Internal labels: IBM Industry OS labels will be used. They
consist of a single volume label and two sets
of header and trailer labels.
One file per sending 104 bytes EMR compacted format plus
location with variable modules as applicable.
length records
</TABLE>
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ATTACHMENT 14
PROVISION OF CUSTOMER USAGE DATA
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Attachment 14
Page 1
PROVISION OF CUSTOMER USAGE DATA
1. INTRODUCTION
1.1 This Attachment sets forth the terms and conditions for PACIFIC's
provision of recorded usage data to CLEC. PACIFIC will record and
provide to CLEC unrated usage data when CLEC purchases Unbundled
Switching Elements or Local Service from PACIFIC ("Recorded Usage
Data").
2. GENERAL REQUIREMENTS FOR RECORDED USAGE DATA
2.1 PACIFIC shall provide CLEC with Recorded Usage Data. PACIFIC will
conform to the format, generic contents, and transmission medium for
providing Recorded Usage Data as specified in the Bellcore EMR
standard (Bellcore Practice BR010-200-010), as modified in Appendix I
to this Attachment 14, which shall be updated periodically by mutual
agreement.
2.2 PACIFIC's provision of Recorded Usage Data to CLEC shall be in
accordance with the performance standards set forth in Attachment 17.
Remedies for failure to meet such performance standards are also set
forth in Attachment 17.
2.3 PACIFIC shall retain Recorded Usage Data in accordance with
applicable law and regulation.
3. USAGE DATA SPECIFICATIONS
3.1 Subject to Section 3.4, when CLEC purchases from PACIFIC Local
Service or LSNE, PACIFIC will provide to CLEC all Recorded Usage Data
relating to local and IntraLATA toll calls originating from CLEC
Customers (business and residence), including, but not limited to,
the categories of information listed below. In addition, subject to
Section 3.4, when CLEC purchases from PACIFIC LSNE, PACIFIC will
provide to CLEC all Recorded Usage Data relating to switched access
calls terminating to CLEC Customers (business and residence),
including, but not limited to, the categories of information listed
below.
3.1.1 Data to be supplied both for calls originating from CLEC customers
(business and residence) and for switched access calls terminating to
CLEC customers (business and residence)
3.1.1.1 All available call attempt data
3.1.1.2 Completed Calls
3.1.2 Data to be supplied for calls originating from CLEC Customers
(Business and Residence)
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3.1.2.1 Use Of Class/Lass/Custom Features which are sold on a pay per use
basis
3.1.2.2 MTS portion of IntraLATA 976 Calls To Information Providers Reached
Via PACIFIC Facilities And Contracted By PACIFIC
3.1.2.3 Calls To Directory Assistance Where PACIFIC Provides Such Service To
CLEC's Local Service Customer
3.1.2.4 Calls Completed Via PACIFIC-Provided Operator Services Where PACIFIC
Provides Such Service To CLEC's Local Service Customer
3.1.2.5 For PACIFIC-Provided Centrex Service, Station Level Detail
3.1.3 Data to be supplied for switched access calls terminating to CLEC
Customers
3.1.3.1 Data identifying the CIC of the originating IEC; and
3.1.3.2 Where available, data identifying the calling party number.
3.2 Records Shall Include Complete Call Detail And Complete Timing
Information.
3.3 PACIFIC shall provide to CLEC Recorded Usage Data for CLEC's
customers only. PACIFIC will not submit other carriers' local usage
data as part of the CLEC Recorded Usage Data. Error procedures set
forth in Appendix I to this Attachment, Section IV, paragraph 1.1.4.
shall apply to any data of other carriers sent in error to CLEC.
3.4 Additional Provisions Regarding Call Detail
3.4.1 Local Service
3.4.1.1 PACIFIC represents and warrants that as of the effective date of this
Agreement it does not record local usage for its own flat rate
customers in the ordinary course of business. There are certain
exceptions where special study or call detail analysis is performed,
e.g., in cases where an incident of telephone harassment is under
investigation. If PACIFIC begins recording local usage for its own
flat rate customers in the ordinary course of business at a future
date, PACIFIC will simultaneously begin such recording for CLEC
resold flat rate customers, at no additional charge. If at a future
date PACIFIC begins recording local usage for its own flat rate
customers served by a particular switch, PACIFIC will simultaneously
begin such recording for CLEC resold flat rate customers served by
that switch, at no additional charge.
3.4.1.2 If CLEC asks PACIFIC to develop the capability to provide CLEC local
usage data on resold flat local service, and PACIFIC does not record
local usage for its own flat rate customers in the ordinary course of
business, PACIFIC shall develop such
2
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capability consistent with Sec. 1.6 of Attachment 6. In such event,
PACIFIC shall be entitled to track and recover applicable development
costs as set forth in Attachment 8.
3.4.1.3 As of the effective date of this Agreement, in some PACIFIC switches,
the terminating number for measured local calls may not be recorded
during periods of high volume usage. For all such calls, PACIFIC will
inform CLEC of the minutes of use. If and when the limitation
described in this Section is removed, PACIFIC will provide to CLEC at
no additional cost, the terminating number for all measured local
calls, including calls made during periods of high volume usage.
3.4.2 LSNE
3.4.2.1 When CLEC purchases a LSNE from PACIFIC, that LSNE as provided by
PACIFIC will include all the functions and capabilities of the switch
and the software deployed at that time within the switch relating to
recording of usage data, including the capability to record all local
usage and the terminating number. The charge, if any, for the
recording of usage data shall be included in the charge for the LSNE
set forth in Attachment 8.
4. RECORDED USAGE DATA FORMAT
4.1 PACIFIC will provide Recorded Usage Data in the EMR format and by
category, group and record type, as specified in the CLEC Customer
Usage Data Transfer Requirements, November 1996 ("Data
Requirements"), which is attached hereto and incorporated herein as
Appendix I.
4.2 PACIFIC shall include the Working Telephone Number (WTN) of the call
originator on each EMR call record.
4.3 End user customer usage records and station level detail records
shall be in packs in accordance with EMR standards.
4.4 PACIFIC shall append the recording point identification to each EMR
call record the recording point identification or other mutually
agreed upon code that specifically designates the recording switch.
5. RECORDED USAGE DATA REPORTING REQUIREMENTS
5.1 PACIFIC shall segregate and organize the Recorded Usage Data in a
format mutually agreed by the Parties.
5.2 PACIFIC shall provide segregated Recorded Usage Data to multiple CLEC
biller locations as mutually agreed by the Parties.
3
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5.3 PACIFIC, at no cost to CLEC, shall transmit to CLEC Recorded Usage
Data in Bellcore EMR format, as modified by Appendix I to this
Attachment, via CONNECT: Direct. If CLEC requests Recorded Usage Data
in a format customized for CLEC, PACIFIC may charge CLEC pursuant to
Attachment 8.
5.4 CLEC will test and certify the CONNECT: Direct interface to ensure
the accurate receipt of Recorded Usage Data. PACIFIC shall make any
changes necessary in the CONNECT: Direct interface to meet the
requirements of this Attachment.
5.5 PACIFIC shall provide Recorded Usage Data to CLEC once a day Monday
through Friday, excluding mutually designated holidays. PACIFIC shall
provide to CLEC the Recorded Usage Data for a Local Service within
the time period specified in Attachment 17 to this Agreement.
5.6 Each Party will establish a single point of contact to respond to
CLEC call usage, data error, and record transmission inquiries from
the other Party.
5.7 The Recorded Usage Data EMR format, content, and transmission process
will be tested by CLEC for compliance with industry standards.
6. RECORDING FAILURES
6.1 CLEC Recorded Usage Data determined to have been lost, damaged or
destroyed as a result of an error or omission by PACIFIC in its
performance of the recording function or due to an aberrant switch
overload of limited duration and frequency, shall, upon CLEC's
request, be recovered by PACIFIC at no charge to CLEC. In the event
the data cannot be recovered by PACIFIC, PACIFIC shall estimate the
messages and associated revenue, with assistance from CLEC, based
upon the method described below. This method will be applied on a
consistent basis, subject to modifications agreed to by PACIFIC and
CLEC. This estimate will be used by the Parties to determine any
amounts owed to CLEC. PACIFIC will provide this amount to CLEC via a
check accompanied by a statement that clearly identifies the purpose
of the check.
6.1.1 PARTIAL LOSS PACIFIC shall review its daily controls to determine if
data has been lost. When there has been a partial loss, actual
message and minute volumes shall be reported, if possible. Where
actual data are not available, a full day shall be estimated for the
recording entity, as outlined in Section 6.1.3 following. The amount
of the partial loss is then determined by subtracting the data
actually recorded for such day from the estimated total for such day.
6.1.2 COMPLETE LOSS Estimated message and minute volumes for each loss
consisting of an entire AMA tape or entire data volume due to its
loss prior to or during processing, loss after receipt, degaussed
before processing, receipt of a blank or unreadable tape, or lost for
other causes, shall be reported.
4
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6.1.3 ESTIMATED VOLUMES From message and minute volume reports for the
entity experiencing the loss, PACIFIC shall secure message/minute
counts for the four (4) corresponding days of the weeks preceding
that in which the loss occurred and compute an average of these
volumes.
6.1.4 NET LOSS CALCULATION The amount due to CLEC will be calculated based
on the Average Revenue Per Minute (ARPM) minus the average charge per
minute (ACPM) that CLEC would have paid to PACIFIC, times the
estimated lost minutes. The parties shall agree upon the appropriate
ARPM and ACPM to apply.
EXCEPTIONS:
6.1.4.1 If the day of loss is not a holiday but one (1) (or more) of the
preceding corresponding days is a holiday, use additional preceding
weeks in order to procure volumes for two (2) non-holidays in the
previous two (2) weeks that correspond to the day of the week that is
the day of the loss.
6.1.4.2 If the loss occurs on a weekday that is a holiday (except Christmas),
PACIFIC shall use volumes from the two (2) preceding Sundays.
6.1.4.3 If the loss occurs on Mother's Day, Christmas or the Monday after
Thanksgiving, PACIFIC shall use volumes from that day in the
preceding year.
6.2 CLEC may also request data be provided that has previously been
successfully provided by PACIFIC to CLEC, provided the request is
received within forty-five (45) days of original processing. PACIFIC
reserves the right to bill CLEC for its direct costs of providing
such data if CLEC makes such a request more than 45 days after
original processing.
7. CLEARINGHOUSE PROCEDURES
7.1 The Parties acknowledge that calls will be placed using the local
service of one Party that will be billable to the customer for local
service of another Party. In order to ensure that these calls are
properly accounted for and billed to the appropriate customer, the
parties have established clearinghouse procedures to accomplish these
objectives in a separate agreement entitled Data Exchange Agreement
for the Settlement of CATS messages and non CATS Messages. The
Parties intend to use best efforts to sign that Agreement by November
30, 1996.
7.1.1 CLEC shall identify a CMDS host for transmitting and receiving
in-collect and out-collect local and intralata messages.
7.1.2 In the event CLEC fails to designate a CMDS host, PACIFIC agrees on
an interim basis, if requested by CLEC, to serve as CLEC's CMDS host
for out-collect billing subject to the rates, terms and conditions as
mutually agreed by the Parties.
5
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Attachment 14
Appendix I
Page 1
APPENDIX I
TO
ATTACHMENT 14
CUSTOMER USAGE DATA
TRANSFER REQUIREMENTS
NOVEMBER 1996
<PAGE> 230
Attachment 14
Appendix I
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TABLE OF CONTENTS
SECTION I - SCOPE
1. General
1.1 Usage Summary
1.2 Attachment Content
SECTION II - PACIFIC USAGE TO BE PROVISIONED TO CLEC
1. General
1.1 Usage to be Transferred to CLEC.
1.1.1 CLEC Usage to be Transferred
1.2 CLEC Usage
SECTION III - PACIFIC TO CLEC USAGE FEED
1. General
1.1 Detailed EMR Record Edits
1.2 Duplicate Record Checks
1.3 PACIFIC to CLEC Usage Feed
1.3.1 Usage Data Transport Requirements
1.3.2 Physical Characteristics
1.3.3. Data Delivery Schedules
1.3.4 Resending Data
1.3.5 Pack Rejection
1.3.6 Held Packs and Messages
1.3.7 Data Content Requirements
1.3.8 Packing Requirements
1.3.9 Dataset Naming Convention
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1.3.10 Control Reports
1.4 Message Validation Reports
1.4.1 Message Validation Pack Reject Report (A7287)
1.4.2 Message Validation Pack Accepted Report (A7288)
1.4.3 Message Validation Detail Error Report (A7289)
1.4.4 Control Reports - Distribution
SECTION IV - CLEC PROCESSING REQUIREMENTS
1. General
1.1 CLEC Rating Process
1.1.1. Message Rating
1.1.2. Application of Taxes/Fees/Surcharges
1.1.3. Duplicate Messages
1.1.4. Record Edits
1.1.4.1 CLEC Record Edits
1.1.4.2 PACIFIC Record Edits
1.1.5. CLEC to PACIFIC Message Returns
SECTION V - TEST PLANS AND ACTIVITIES
1. General
1.1 Interface Testing
1.2 Operational Test
1.3 Test File Transport
SECTION VI - POST DEPLOYMENT ACTIVITIES
1. General
1.1 Control Maintenance and Review
3
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1.1.1 Periodic Review
1.1.2 Retention of Records
1.2 PACIFIC Software Changes
1.3 Requested Changes
1.4 CLEC Software Changes
1.5 Post Conversion Test Plan
1.5.1 PACIFIC System Change Description
1.5.2 Change Negotiations
1.5.3 Control Change Analysis
1.5.4 Verification of Changes
1.5.5 Introduction of Changes
SECTION VII - APPENDICES
Summary of Appendices
APPENDIX A
PHYSICAL CHARACTERISTICS OF DATA TAPES/CARTRIDGES
APPENDIX B
MESSAGE VALIDATION PACK REJECT REPORT (A7287)
APPENDIX C
MESSAGE VALIDATION PACK ACCEPTED REPORT (A7288)
APPENDIX D
SPECIAL FEATURES STAR SERVICES
4
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SECTION I
SCOPE
1. GENERAL
This Attachment addresses the transmission by PACIFIC of CLEC usage to CLEC.
1.1 USAGE SUMMARY
Messages will be transmitted, via a direct feed, to CLEC in standard
EMR format.
The following is a list of EMR records that CLEC can expect to
receive from PACIFIC:
Header Record 20-21-01
Trailer Record 20-21-02
Detail Records* 01-01-01, 16, 18, 80, 81,
10-01-01, 16 (when available), 18, 31, 32,
35, 37, 80, 81,
Credit Records 03-01 -XX
Rated Credits 41-01-XX
*Category 01 is usually utilized for Rated Messages; Category 10 is
utilized for Unrated Messages
PACIFIC will provide the above list of detail records as part of its
resale offering. PACIFIC shall make available to CLEC additional
detail records as additional products are added to PACIFIC's resale
offer.
Using the above list as a model, the Parties shall identify by mutual
agreement what detail records shall be provided by PACIFIC to CLEC in
connection with the provision of unbundled elements.
Additional detail records provided by PACIFIC to CLEC in the future,
whether as part of PACIFIC's resale offering or in connection with
the provision of unbundled elements, may have identification numbers
different from those listed above.
In addition, PACIFIC shall provide a 10-01-18 Specialized Service
record to support the Special Features Star Services (see Appendix D
for specific details) if these features are part of PACIFIC's
offering.
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For detailed information regarding EMR, refer to the current version
of the BellCore Practice BRO 10-200-010 Appendix.
1.2 ATTACHMENT CONTENT
This Attachment describes baseline requirements for the transfer of
PACIFIC recorded, unrated usage to CLEC. Testing requirements and the
reports needed to ensure data integrity are also included. Additional
requirements and implementation details may be identified for
conditions unique to PACIFIC. Modifications and/or exceptions to this
Attachment must be negotiated and mutually agreed upon by PACIFIC and
CLEC.
6
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SECTION II
RECORDED USAGE TO BE TRANSMITTED TO CLEC
1. GENERAL
This section addresses the types of usage to be transmitted by PACIFIC to CLEC.
1.1 USAGE TO BE TRANSFERRED TO CLEC
1.1.1 CLEC USAGE TO BE TRANSFERRED
The following messages recorded by PACIFIC are to be transmitted to
CLEC. PACIFIC recorded usage is defined as:
- intraLATA - Local
- intraLATA-Toll
NOTE: Rated incollect messages should be transmitted via the direct
feed and can be intermingled with the unrated messages. No special
packing is needed.
PACIFIC is developing a direct return feed. CLEC may return via
direct return feed, once developed, any of the above mentioned
messages that cannot be rated and/or billed by CLEC, for reasons
specified in the returns process. Returned messages will be sent to
PACIFIC in EMR format. Standard EMR return codes will be utilized.
File transfer specifications are included within Section III.
1.2 CLEC USAGE
The Recorded Usage Data in a local resale environment includes all
intraLATA toll and local usage. PACIFIC will provide CLEC with
unrated EMR records associated with all intraLATA toll and local
usage which PACIFIC records on CLEC's behalf.
Any Category, Group and/or Record types approved in the future for
PACIFIC will be included if they fall within the definition of this
local resale phase. PACIFIC will give CLEC one hundred twenty (120)
days advance notification of PACIFIC's intended implementation of
additional Category, Group and/or Record types.
NOTE: PACIFIC messages will be packed using the packing criteria
outlined in Section VI. PACIFIC shall pack records for rated messages
and non-rated messages in separate packages. Any request by CLEC for
packing in a different arrangement (for example, using CLEC's RAO)
shall be separately negotiated by the parties and shall be at a
reasonable additional charge to CLEC.
7
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SECTION III
PACIFIC TO CLEC USAGE FEED GENERAL
1. GENERAL
This section contains the information required for PACIFIC to
transmit the usage defined in Section II to CLEC. This section
specifically addresses the dataset requirements and processing.
1.1 DETAILED EMR RECORD EDITS
CLEC will perform detailed record edits on the unrated and rated
messages upon receipt from PACIFIC. Messages that fail these edits
may be returned to PACIFIC with mutually agreed upon return codes
designated.
1.2 DUPLICATE RECORD CHECKS
CLEC will perform record checks on the unrated and rated messages to
validate that duplicate messages are not sent by PACIFIC to CLEC,
except where valid duplicate messages are applicable, e.g., ISDN
bonded . PACIFIC shall perform record checks to validate that
duplicate messages are not sent to CLEC in accordance with CMDS
standards.
1.3 PACIFIC TO CLEC USAGE FEED
1.3.1 USAGE DATA TRANSPORT REQUIREMENTS
PACIFIC will provide the transport facility between the PACIFIC
location and the CLEC location. It is CLEC's intent that usage data
be transmitted via CONNECT:Direct whenever possible. In the event
usage transfer cannot be accommodated by CONNECT:Direct because of
extended (one business day or longer) facility outages, or if
facilities do not exist, PACIFIC will contract for a courier service
to transport the data via tape.
PACIFIC will provide CLEC with contacts, Remote Identifiers (IDs),
and expected usage data volumes for each sending location.
CLEC will provide contacts responsible for:
Receiving usage transmitted by PACIFIC.
Receiving usage tapes from a courier service in the event of a
facility outage.
1.3.2 PHYSICAL CHARACTERISTICS
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In the event the electronic system for data transmission
malfunctions, by mutual agreement PACIFIC shall provide the data to
CLEC on tape or cartridge by courier. Such data will have the
physical characteristics indicated in Appendix A. CLEC's intent is
for variable block format (2,476 bytes) with a LRECL of 2472.
1.3.3 DATA DELIVERY SCHEDULES
Data will be delivered to CLEC by PACIFIC daily (Monday through
Friday) or as negotiated. CLEC and/or PACIFIC Data Center holidays
are excluded. PACIFIC and CLEC will exchange schedules of designated
Data Center holidays.
1.3.4 RESENDING DATA
CLEC will notify PACIFIC as promptly as possible upon discovery of
resend requirements if a pack or entire dataset must be replaced due
to pack rejection, damage in transit, dataset name failure, etc.
1.3.5 PACK REJECTION
Critical edit failure on the Pack Header or Pack Trailer records will
result in pack rejection (e.g., detail record count not equal to
grand total included in the pack trailer). Notification of pack
rejection will be made by CLEC within one business day of processing.
Rejected packs will be retransmitted to CLEC by PACIFIC.
1.3.6 HELD PACKS AND MESSAGES
CLEC and PACIFIC will track pack number to control input based upon
invoice sequencing criteria. PACIFIC will be notified of sequence
failures identified by CLEC and resend procedures are to be invoked.
1.3.7 DATA CONTENT REQUIREMENTS
EMR is the format to be used for usage data provided to CLEC.
1.3.8 PACKING REQUIREMENTS
A pack shall contain a minimum of one message record or a maximum of
9,999 message records plus a pack header record and a pack trailer
record. A file transmission contains a maximum of 99 packs. A dataset
shall contain a minimum of one pack. PACIFIC will provide CLEC one
dataset per sending location with the agreed upon OCN populated in
the Header and Trailer records.
Within the Header and Trailer records, the FROM RAO identifies the
location that will be sending usage to CLEC. PACIFIC will populate
the FROM RAO field with the
9
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unique numeric value identifying the location that is sending the
data to CLEC. Also, Pack Header and Trailer will have the OCN
appropriately populated.
The FROM RAO, OCN, and Remote Identifiers will be used by CLEC to
control invoice sequencing and each will have its own invoice
controls. The FROM RAO will also be used to determine where the
message returns file, containing any misdirected and unguidable
usage, will be sent.
The file's Record Format (RECFM) will be Variable Block (VB) Size
2,476 and the Logical Record Length (LRECL) will be 2,472 bytes.
CLEC has no special sort requirements for the packs sent by PACIFIC.
1.3.9 DATASET NAMING CONVENTION
PACIFIC will transmit the usage to CLEC using the following dataset
naming conventions. The dataset name (DSN) will be partitioned into
five nodes, separated by periods as follows:
NODE 1BB03PXNN*
NODE 2.IBMUP
NODE 3 (To be determined during negotiations)
NODE 4.USAGE
NODE 5.GNNNNVNN* (Generational Dataset to be incremented by sender).
*The italicized "N" represents numeric fields determined during
negotiations.
1.3.10 CONTROL REPORTS
CLEC accepts input data provided by PACIFIC in EMR format in
accordance with the requirements and specifications detailed in this
section of the Attachment. In order to ensure the overall integrity
of the usage being transmitted from PACIFIC to CLEC, data transfer
control reports will be required. These reports shall be provided by
CLEC to PACIFIC on a daily or otherwise negotiated basis and reflect
the results of the processing for each pack transmitted by PACIFIC.
1.4 MESSAGE VALIDATION REPORTS
CLEC will provide the following three daily (or otherwise negotiated)
Message Validation reports to the designated PACIFIC System Control
Coordinator. These reports will be provided for all data received
within PACIFIC Local Resale Feed and will
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be transmitted Monday through Friday whether or not there have been
any files transmitted.
1.4.1 MESSAGE VALIDATION PACK REJECT REPORT (A7287)
This report provides information on packs rejected by CLEC. It lists
the header and trailer record of each rejected pack and indicates the
error codes and the associated error message which explains why the
pack was rejected.
An example of the report and a list of Valid Error Codes and
associated error messages are provided in Appendix B.
1.4.2 MESSAGE VALIDATION PACK ACCEPTED REPORT (A7288)
This report provides vital statistics and control totals by Record
ID, Type of Service, Message Counts and Record Counts, for all valid,
rejected and dropped messages. The information is provided in the
following report formats and control levels:
1. PACIFIC Total Messages
2. PACIFIC Total Records
3. RAO Total Messages
4. RAO Total Records
5. Pack Total (Record Counts and Message Counts)
The first four report formats include percentages that indicate the
relationship of the daily input volume by Record ID and Type of
Record to the total input volume provided by an RAO and PACIFIC.
An example of the report is provided in Appendix C.
1.4.3 MESSAGE VALIDATION DETAIL ERROR REPORT (A7289)
An EMR detailed error report is generated for each pack/ invoice that
is received and processed by CLEC. The report lists, in vertical
format, the complete 175 byte EMR record that has failed to pass the
initial edit criteria. It prints this detailed information only for
the first five EMR records that share a common error condition. The
error condition is flagged on the report by one of two possible error
codes preceding the field value. The error codes are:
(C) DENOTES CRITICAL ERRORS
(I) DENOTES INFORMATION ERRORS
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The last two pages of the report for a given pack/invoice provide the
following control totals:
Total Errors for each Field
Total Records Received
Total Records Dropped
Total Records rejected to MIU
Pack Reject Rate
Total Default Count (represents the number of Files on all of the
input records that had to be programmatically altered to meet the EMR
standards and specifications.)
If the entire pack/invoice has been rejected because of a Critical
Error Rate greater than 0.5%, the last page of the report will
display such a statement enclosed in asterisks.
CLEC has provided PACIFIC a sample of this report.
1.4.4 CONTROL REPORTS - DISTRIBUTION
Since PACIFIC is not receiving control reports, dataset names will be
established during detailed negotiations.
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SECTION IV
CLEC PROCESSING REQUIREMENTS GENERAL
1. GENERAL
This section contains requirements for CLEC processing of Recorded
Usage Data that has been transmitted to CLEC for billing.
1.1 CLEC RATING PROCESS
1.1.1 MESSAGE RATING
CLEC will rate any individual messages (as defined in Section II),
that have not already been rated by PACIFIC (information provider
messages will be rated by PACIFIC), prior to transmitting the usage
to a billing environment within CLEC.
1.1.2 APPLICATION OF TAXES/FEES/SURCHARGES
CLEC will apply taxes, fees and surcharges as appropriate for the
individual messages and/or customer accounts. The application of all
taxes, fees and surcharges will be applied on all intralata local and
toll usage received from PACIFIC.
1.1.3 DUPLICATE MESSAGES
CLEC has existing duplicate checks as part of their message
processing or billing functions. CLEC will perform these checks on
the rated/unrated messages sent by PACIFIC duplicate message
disposition procedures and reports will be identified by CLEC during
negotiations.
1.1.4 RECORD EDITS
1.1.4.1 CLEC RECORD EDITS
CLEC will perform detailed record edits on the rated and unrated
messages prior to transmitting them to the billing environment. Rated
& unrated records that do not pass CLEC edits will be returned to
PACIFIC with thirty (30) days of the file date.
1.1.4.2 PACIFIC RECORD EDITS
If PACIFIC has existing detailed record edits for rated and unrated
messages, PACIFIC is to perform these edits.
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Rated and unrated records that do not pass CLEC edits will be
returned to PACIFIC. PACIFIC will attempt to perform error correction
on all records requiring such action as agreed upon through the
detailed negotiations process.
1.1.5 CLEC TO PACIFIC MESSAGE RETURNS
At the discretion of CLEC, messages that have been sent to CLEC by
PACIFIC that cannot be guided to an CLEC billed account or error in
processing due to an error by PACIFIC will be returned to PACIFIC
with the appropriate negotiated return codes.
14
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SECTION V
TEST PLANS AND ACTIVITIES GENERAL
1. GENERAL
This section defines the PACIFIC and CLEC activities which are
required prior to implementation. The tests and activities described
are necessary to ensure a smooth, accurate and well-programmed
conversion. Specific test dates will be identified through the
negotiations process.
1.1 INTERFACE TESTING
The purpose of this test is to ensure that the usage described in
Section II can be sent by PACIFIC to CLEC and can be accepted and
processed by CLEC. PACIFIC will provide a test file to CLEC's
designated Regional Processing Center (RPC) in the format that will
be used for live day-to-day processing. The file will contain one
full day's production usage. The format of the file will conform to
the requirements shown in Section III. CLEC will review the file and
verify that it conforms to its data center requirements. CLEC will
notify PACIFIC in writing whether the format is acceptable. CLEC will
also provide PACIFIC with the agreed-upon control reports as part of
this test.
1.2 OPERATIONAL TEST
The purpose of this test is to ensure that volumes of usage in
consecutive sequence can be extracted, distributed, and processed by
PACIFIC and CLEC.
PACIFIC is required to provide CLEC with PACIFIC recorded, unrated
intraLATA local and toll usage (as defined in Section II) for a
minimum of five (5) consecutive days. CLEC will provide PACIFIC with
the message validation reports associated with test usage.
CLEC will rate and process the unrated intraLATA toll and local
usage. CLEC will process this data to test bills. CLEC may request
that the test usage contain specific usage volumes and
characteristics to ensure a complete test. Specific usage volumes and
characteristics will be discussed during detailed negotiations.
1.3 TEST FILE TRANSPORT
Test data should be transported via CONNECT:Direct whenever possible.
In the event that courier service must be used to transport test
media the physical tape characteristics to be used are described in
Appendix A.
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SECTION VI
POST DEPLOYMENT ACTIVITIES
1. GENERAL
Requirements for ongoing maintenance of the usage feeds between CLEC
and PACIFIC are described in this section. Included am minimal
requirements for day to day control of the regularly scheduled
transfer of PACIFIC unrated and rated usage data and procedures for
introducing and verifying CLEC/PACIFIC System Changes.
1.1 CONTROL MAINTENANCE AND REVIEW
1.1.1 PERIODIC REVIEW
Control procedures for all usage transferred between PACIFIC and CLEC
will require periodic review. This review may be included as part of
an annual audit of PACIFIC by CLEC or as part of the normal
production interface management function. Breakdowns which impact the
flow of usage between PACIFIC and CLEC must be identified and jointly
resolved as they occur. The resolution may include changes to control
procedures, as similar problems would be avoided in the future. Any
changes to control procedures would need to be mutually agreed upon
by CLEC and PACIFIC.
1.1.2 RETENTION OF RECORDS
PACIFIC shall maintain a machine readable back-up copy of the message
detail provided to CLEC for a minimum of forty-five (45) calendar
days. CLEC will maintain the message detail received from PACIFIC for
a minimum period of forty-five (45) calendar days. Designated CLEC
personnel will provide these records to PACIFIC or its authorized
agents upon written request. PACIFIC will also provide any data back
to CLEC upon their written request.
1.2 PACIFIC SOFTWARE CHANGES
When PACIFIC plans to introduce any software changes which impact the
format or content structure of the usage data feed to CLEC,
designated PACIFIC personnel shall notify CLEC of such changes within
any time period specified by the FCC or CPUC for that purpose, and in
any event will use reasonable best efforts to notify CLEC no less
than one hundred twenty (120) calendar days before such changes are
Implemented.
PACIFIC will communicate the projected changes to the appropriate
groups in CLEC so that potential impacts on CLEC processing can be
determined.
CLEC personnel will review the impact of the change or the entire
control structure as described in Section 1.5, Post Conversion Test
Plan. CLEC will negotiate any perceived
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problems with PACIFIC and will arrange to have the data tested
utilizing the modified software.
If it is necessary for PACIFIC to request changes in the schedule,
content or format of usage data transmitted to CLEC, PACIFIC will
notify CLEC.
1.3 REQUESTED CHANGES
If it is necessary for either Party to request changes in the
schedule, content, or format of the usage data transmitted from
PACIFIC, the requesting Party will notify the other Party and the
terms and conditions of the change shall be mutually agreed upon
pursuant to the process set forth in Section 1.5.2. When the
negotiated changes are to be implemented, CLEC and/or PACIFIC will
arrange for testing of the modified data as described in Section 1.5,
Post Conversion Test Plan.
1.4 CLEC SOFTWARE CHANGES
When CLEC plans to introduce any software changes which may impact
the format or content structure of the usage data transmitted from
PACIFIC, CLEC will use reasonable best efforts to notify the
designated PACIFIC personnel, no less than one hundred twenty (120)
calendar days before such changes are implemented.
The CLEC contact will communicate the projected changes to the
appropriate groups in PACIFIC so that potential impacts on PACIFIC
processing can be determined.
CLEC will negotiate any perceived problems with PACIFIC and will
arrange to have the data tested utilizing the modified software.
Altering the one hundred twenty (120) day window for introducing
software changes can be negotiated by both companies, dependent upon
the scope and impact of the change.
1.5 POST-CONVERSION TEST PLAN
The test plan described below is designed to encompass all types of
changes to the usage data transferred by PACIFIC to CLEC and the
methods of transmission for that data.
1.5.1 PACIFIC SYSTEM CHANGE DESCRIPTION
For a PACIFIC system change that would be reasonably likely to impact
CLEC, PACIFIC shall provide CLEC with an overall description of the
change, stating the objective and a brief explanation of the reasons
for the change.
During the initial negotiations regarding the change, PACIFIC shall
provide a list of the specific records and/or systems impacted by the
change to designated CLEC personnel.
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Finally, PACIFIC shall also provide CLEC a detailed description of
the changes to be implemented. It shall include sufficient detail for
designated CLEC personnel to analyze and estimate the effects of the
changes and to design tests to verify the accuracy of the
implementation.
1.5.2 CHANGE NEGOTIATIONS
PACIFIC will notify CLEC in writing of all proposed change
negotiations initiated by PACIFIC. In turn, CLEC will notify PACIFIC
in writing of proposed change negotiations initiated by CLEC.
After formal notification of planned changes, whether originated by
PACIFIC or CLEC, negotiation meetings shall be scheduled between
designated CLEC and PACIFIC personnel. The first meeting should
produce the overall change description (if not previously furnished)
and the list of records and/or systems affected.
In subsequent meetings, the Parties shall jointly develop a detailed
description of changes to be implemented and a detailed test
procedure.
1.5.3 CONTROL CHANGE ANALYSIS
Based on the detailed description of the changes and review thereof
by the parties in negotiation meetings, designated CLEC personnel
will:
1.5.3.1 Determine the impact of the changes on the overall structure.
1.5.3.2 Determine whether any single change has a potential control impact
(i.e., High error rate on individual records that might result in
pack rejection).
1.5.3.3 Determine whether any controls might be adversely affected.
1.5.3.4 Arrange for appropriate control structure changes to meet any of the
above conditions.
1.5.4 VERIFICATION OF CHANGES
Based on the detailed description of changes and review thereof in
negotiation meetings, designated CLEC personnel will:
1.5.4.1 Determine the type of change(s) to be implemented.
1.5.4.2 Develop a comprehensive test plan.
1.5.4.3 Negotiate scheduling and transfer of modified data with PACIFIC.
1.5.4.4 Negotiate testing of modified data with the appropriate CLEC Regional
Processing Center ("RPC").
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1.5.4.5 Negotiate processing of verified data through the CLEC billing system
with the RPC.
1.5.4.6 Arrange for review and verification of testing with appropriate CLEC
groups.
1.5.4.7 Arrange for review of modified controls, if applicable.
1.5.5 INTRODUCTION OF CHANGES
When all the testing requirements have been met and the results
reviewed and accepted, designated CLEC personnel will:
1.5.5.1 Negotiate an implementation schedule.
1.5.5.2 Verify the existence of a contingency plan with the appropriate CLEC
RPC.
1.5.5.3 Arrange for the follow-up review of changes with appropriate CLEC
personnel.
1.5.5.4 Arrange for appropriate changes in control program, if applicable.
1.5.4.5 Arrange for long-term functional review of impact of changes on the
CLEC billing system, i.e., accuracy, timeliness, and completeness.
19
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SECTION VII
APPENDICES
SUMMARY OF APPENDICES
APPENDIX A
PHYSICAL CHARACTERISTICS OF DATA TAPES/CARTRIDGES
APPENDIX B
MESSAGE VALIDATION PACK REJECT REPORT (A7287)
APPENDIX C
MESSAGE VALIDATION PACK ACCEPTED REPORT (A7288)
APPENDIX D
SPECIAL FEATURES STAR SERVICES
<PAGE> 249
APPENDIX B
MESSAGE VALIDATION PACK REJECT REPORT (A7287) MM/DD/YY
HH:MM:SS
RETEN CODE: 01R-00300
- --------------------------------------------------------------------------------
COMPANY XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX REMOTE ID 9999X FROM BSID 999
<TABLE>
HEADER RECORD ID DATE CREATED INVOICE NUMBER BELL CO ID BELL RAO IX CARRIER IND CO ID
- ------ --------- ------------ -------------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
999999 99-99-99 99 99 999 999 9999
</TABLE>
TOTAL REC.
12/12/96
<PAGE> 250
<TABLE>
RECORD ID
TRAILER COUNT DATE CREATED INVOICE NUMBER BELL CO ID BELL RAO IX CARRIER IND CO ID
- ------- --------- ------------ -------------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C> <C> <C>
999999 99-99-99 99 99 999 999 9999
99,999
</TABLE>
<TABLE>
ERRORS ERROR CODE ERROR MESSAGE
- ------ ---------- -------------
<S> <C> <C>
EC99.9
</TABLE>
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
<PAGE> 251
APPENDIX B (CONT'D)
MESSAGE VALIDATION PACK REJECT REPORT (A7287)
<TABLE>
ERROR CODE ERROR MESSAGES
<S> <C>
EC01.2 First record after trailer is not a Pack Header.
EC03.2 From RAO is not numeric.
EC04.3 Invoice number on header invalid.
EC04.5 Company ID not numeric.
EC04.6 Independent company ID is not numeric.
EC04.7 Header Record ID is invalid.
EC04.8 Trailer Record ID is invalid.
EC04.9 Trailer Record ID is invalid.
EC05.0 Duplicate pack.
</TABLE>
<PAGE> 252
<TABLE>
<S> <C>
EC05.1 Old Pack.
EC05.2 RAO not found on table.
EC07.3 Error rate greater than invoice file threshold for RAO
invoice number.
EC012.0 Remote ID in Dataset is not valid.
EC020.0 No detail records in pack.
EC013.0 Invalid status on Pack Header.
EC027.0 Pack exceeds limit of 9,999 detail records.
EC040.9 Pack Header record is missing.
EC041.0 Trailer record is missing.
EC042.0 Trailer message volume is not equal to
accumulated message volume.
EC044.0 Header/Trailer date is invalid.
</TABLE>
<PAGE> 253
<TABLE>
<S> <C>
EC45.0 From RAO on Trailer Record is not equal to the from RAO
on Header Record.
EC48.0 Invoice number on Trailer Record is not equal to the
invoice number on the Header Record.
</TABLE>
<PAGE> 254
APPENDIX C
MESSAGE VALIDATION PACK ACCEPTED REPORT (A7288)
MM/DD/YY-----HH:MM:SS
RETEN CODE: 01R-00300
<TABLE>
- --------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
COMPANY XXXXXXXXXXXXXXXXXXXXXXXXXX FROM RAO INVOICE NO. DATE CREATED
TOTAL RECORDS RECEIVED
- ------------------------------------------999-----------99----------MM/DD/YY----
--------ZZ.ZZ9
----------RECORD
COUNTS-----------------------MESSAGE COUNTS--------------------------------
---
</TABLE>
12/12/96
<PAGE> 255
<TABLE>
<CAPTION>
<S> <C>
RECORD ID TYPE OF RECORDVALID-----REJECTED-----DROPPED-----TOTAL-----VALID-----
REJECTED-----DROPPED-----TOTAL
010102 OUTWATS (NON-SMDR)ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010103 OUTWATS(SMDR)ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010104 800 SERVICEZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
TOTAL WATS/800
010101 MTS ZZ.ZZ9 ZZ.ZZ9
ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010106 NON-DIAL CONFER BRIDGEZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010107 NON-DIAL CONFER LEG RECORDZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
</TABLE>
<PAGE> 256
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
010108 DIAL CONFERENCE BRIDGE ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010111 ALLIANCE (AGTC) ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010116 DIAL-IT SERVICE ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010132 DIRECTORY ASSISTANCE ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010180 MARINE/AIRCRAFT ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010181 RADIO LINK ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010182 MARINE NON-DIAL CONFER BRIDGE ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010183 MARINE NON-DIAL CONFER LEG REC. ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
0101XX OTHER MTS RECORDS ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
12/12/96
</TABLE>
<PAGE> 257
TOTAL NORTH AMERICAN MTS
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
010201 IOTC/IODD MTS ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
0102XX IOTC/IDDD OTHERS ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010301 IOTC BFC MTS ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
0103XX IOTC BFC OTHERS ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010401 IOC MTS ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZ9 ZZ.ZZ9
ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
0104XX IOC OTHERS ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
010501 IOC MTS ZZ.ZZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
12/12/96
</TABLE>
<PAGE> 258
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0105XX IOC OTHERSZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
TOTAL OVERSEAS MTS
015002 OUTWATS LINE SUMMARYZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
015004 800 LINE SUMMARYZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
015004 DIR. ASSISTANCE LINE SUMMARYZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
03XXXX CREDIT REQUESTSZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
51/52 CANCEL REQUESTSZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
12/12/96
</TABLE>
<PAGE> 259
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C>
71/72 CORRECTION REQUESTSZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
INVALID RECORD IDENTIFICATION ZZ.ZZ9 ZZ.ZZZ9
ZZ.ZZZ9 ZZ.ZZZ9
PACK TOTALS ZZ.ZZ9 ZZ.ZZ9ZZ.ZZ9 ZZ.ZZ9 ZZ.ZZZ9 ZZ.ZZZ9 ZZ.ZZZ9
12/12/96
</TABLE>
<PAGE> 260
Appendix D
Page 2
APPENDIX D
SPECIAL FEATURES STAR SERVICES
The following are CLASS subscription or "pay per use" (STAR) Services supported
by these Local Resale requirements to date. When identified, additional services
can be negotiated to be included in this Resale offer.
1) Auto Recall/....................This feature allows a customer to redial a
Call Return number when a Busy signal is encountered.
2) Auto Callback/Repeat Dialing....This feature allows a customer to
automatically return the most recent incoming
call, even if it is not answered.
The following CLASS subscription service is available for Local Resale. CLEC
requires a usage record in order to provide call trace information to law
enforcement authorities.
1) Call Trace......................This feature allows the tracing of
nuisance calls.
The following are CLASS services are only available thru monthly subscription
and are available for Local Resale only on a monthly subscription basis.
1) 3-Way Calling...................This feature allows for three (3) Parties to
communicate on one line.
2) Automatic Redial................This feature allows a customer to
automatically redial the last number dialed.
<PAGE> 261
9/4/98
To provide for the transfer and billing of these features the following
requirements apply:
For the following CLASS subscription and "per use" (STAR) Features the
'Miscellaneous Charge Line Summary Non-Detail Charge' 10-01-18 record should be
used and be populated as follows:
<TABLE>
<CAPTION>
CONNECT TIME POSITIONS 55-60 MUST BE POPULATED
- ------------ --------------- -----------------
<S> <C> <C>
TO PLACE/ST. POSITIONS 135-146 1) AUTO REDIAL/CALL RETURN
FEATURE CODE 32, 62, 60
TO PLACE/ST. POSITIONS 135-146 2) AUTO CALL BACK/REPEAT DIALING
POPULATE WITH FEATURE CODE 33, 61, 63
TO PLACE/ST. POSITIONS 135-146 3) CALL TRACE
POPULATE WITH FEATURE CODE 70
TO PLACE/ST. POSITIONS 135-146 4) 3-WAY CALLING
NOT APPLICABLE
TO PLACE/ST. POSITIONS 135-146 5) AUTOMATIC REDIAL
NOT APPLICABLE
</TABLE>
NOTE: For fields not specifically defined, the standard EMR format for a
10-01-08 record should be used.
<PAGE> 262
Attachment
ATTACHMENT 15
LOCAL NUMBER PORTABILITY AND NUMBER ASSIGNMENT
<PAGE> 263
Attachment 15
Page 1
LOCAL NUMBER PORTABILITY
AND NUMBER ASSIGNMENT
1. PROVISION OF LOCAL NUMBER PORTABILITY
1.1 Each Party shall provide, to the extent technically feasible, service
provider local Number Portability, subject to the Act, regulations
thereunder and relevant FCC and Commission decisions. Until permanent
Number Portability ("PNP") is available, each party shall provide
Interim Number Portability ("INP"), through RCF and LERG reassignment,
as described herein, immediately upon notification that CLEC is
commencing facilities-based local exchange service on CLEC-provided
facilities. Each Party shall provide INP through Flex DID and/or Route
Indexing, as described below, no later than one hundred eighty (180)
days after the effective date of this agreement or immediately upon
CLEC's notification that it is commencing facilities-based local
exchange service on CLEC-provided facilities, which ever occurs later.
Each Party will provide INP with minimum impairment of functionality,
quality, reliability and convenience to the other Party's subscriber.
Each Party will provide PNP as soon as it is technically feasible, in
conformance with FCC rules and the Act.
2. INTERIM NUMBER PORTABILITY (INP)
2.1 INP shall be provided by Remote Call Forwarding ("RCF"), Flexible
Direct Inward Dialing ("Flex DID"), Route Indexing ("RI") or Local
Exchange Routing Guide ("LERG") Reassignment as provided herein. The
Party that operates the switch to which the number is ported
("Ported-to Party") shall specify on a per telephone number or customer
type basis which method is to be employed, and the Party that operates
the switch from which the number is ported ("Porting Party") shall
provide such method to the extent technically feasible. Both Parties
agree to release ported telephone line numbers which were ported using
INP methods other than LERG Reassignment, back to the Porting Party
assigned an NXX in the LERG when the ported telephone line number
"becomes vacant" (i.e., when the ported number is no longer in service
for the customer originally assigned the ported number), and any
applicable referral/intercept period has expired.
2.2 REMOTE CALL FORWARDING (RCF)
2.2.1 When RCF, which PACIFIC refers to as DNCF, is used to provide INP,
calls to the ported number will first route to the Porting Party's
switch. The Porting Party's switch will then forward the call to a
second "shadow" number with an NXX associated with the Ported-to
Party's switch. If necessary to handle multiple simultaneous calls to
the same ported telephone number, the Ported-to Party may order up to
ninety-nine (99) paths for the provisioning of RCF.
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2.2.2 PACIFIC shall provide RCF INP to CLEC pursuant to the terms of
PACIFIC's DNCF tariff (including any modification subsequently adopted
by the Commission) filed by PACIFIC.
2.2.3 DNCF and CLEC's equivalent RCF INP service calls will be delivered over
Local Interconnection Trunk Groups. Each Party's customers will have
the ability to receive collect calls and bill to third party numbers.
Call quality will be equivalent to that which other RCF customers
receive.
2.3 FLEX DID
2.3.1 When Flex DID is used to provide INP, calls to the ported number will
first route to the Porting Party's switch. The Porting Party's switch
will then direct calls to the ported number over direct trunks to the
Ported-to Party's switch. At the option of the Ported-to Party, and
where technically feasible, Flex DID may be used to port either a block
of telephone numbers or an individual telephone number, and Flex DID
may be provisioned to allow a full ten (10) digit telephone number to
be sent to the Ported-to Party's switch.
2.3.2 Flex DID will be delivered over dedicated truck groups using either MF
or SS7 signaling, where technically feasible, at the option of the
Ported-to Party.
2.4 ROUTE INDEXING
2.4.1 Route Indexing (RI) may take two forms: Route Indexing Portability Hub
(RIPH) or Directory Number Route Index (DN-RI).
2.4.2 DN-RI is a form of RI that requires direct trunking between the Porting
Party's switch to which the ported number was originally assigned and
the Ported-to Party's switch to which the number has been ported. The
Porting Party's switch shall send the originally dialed number to the
Ported-to Party's switch without the use of steering digits.
2.4.3 RI-PH will be delivered over Local Interconnection Trunk Groups. DN-RI
will be delivered over dedicated trunks using SS7 signaling
2.4.4 If the tandem switch is not operated by the Porting Party, the Porting
Party will make whatever process and compensation arrangements with the
tandem provider that are necessary to implement the steering digits for
RI-PH.
2.5 LERG REASSIGNMENT
If a customer has an entire NXX code and transfers from the Porting
Party to the Ported-to Party, portability for that customer shall be
provided by utilizing reassignment of the NXX code to the Ported-to
Party through the Local Exchange Routing Guide (LERG). Updates to
translations in the Porting Party's switching office to which the
ported numbers were originally assigned will be made by the Porting
Party prior to the date on
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which LERG changes become effective, in order to redirect calls to the
Ported-to Party's switch via route indexing.
3. OTHER INTERIM PORTABILITY PROVISIONS
3.1 With regard to the division of terminating Switched Access revenues
associated with RCF, Flex DID and RI, the Porting Party shall pay the
Ported-to Party $1.75 per month for each business line and $1.25 per
month for each residence line associated with the INP arrangement.
Determination of the number of lines to which the above payment shall
apply will be made at the time the INP arrangement is established. The
payment shall be made based on the total number of lines included in
the same hunting arrangement as the INP number. Partial months will be
paid on a prorated basis and such payment shall continue until the INP
arrangement is disconnected or PNP is made available for the INP
number, whichever occurs first. Such amount is in consideration of the
Switched Access compensation and reciprocal compensation that would
have been received by each Party if PNP had been in effect.
3.2 With RCF, Flex DID with SS7, DN-RI, or RI-PH, each Party shall exchange
with the other Party, SS7 TCAP messages as required for the
implementation of Custom Local Area Signaling Services (CLASS) or other
features available in each Party's network.
3.3 Each Party shall disclose to the other Party any technical or capacity
limitations that would prevent use of a requested INP implementation in
a particular switching office. Both Parties shall cooperate in the
process of porting numbers to minimize customer out-of-service time,
including updating switch translations where necessary.
3.4 With respect to 911 service associated with ported numbers under INP,
the Porting Party agrees that all ported directory numbers (DN) will
remain in the Public Service Answering Points (PSAP) routing databases.
When RCF INP or other INP methods that use a shadow number are used, it
is the responsibility of the Ported-to Party to provide both the ported
numbers and shadow numbers to the Porting Party to be stored in the
Porting Party's appropriate databases. CLEC will input the ported
number and the shadow number with CLEC's data via the E 911 Management
System (MS) Gateway for storage in the MS. The Ported-to Party shall
have the right to verify the accuracy of the information in the
appropriate databases. CLEC may verify the accuracy of the information
in the E 911 MS via the MS Gateway.
4. PERMANENT NUMBER PORTABILITY (PNP)
4.1 The Parties agree to implement PNP, in compliance with FCC or CPUC
orders, within and between their networks as soon as technically
feasible, but no later than the schedule established by the FCC or
CPUC.
4.2 Each Party shall recover its costs for PNP in accordance with FCC or
CPUC orders.
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4.3 The Parties agree to comply with such industry guidelines as may be
established for the treatment of vacant telephone numbers, including
provisions for number pooling, where available.
4.4 To the extent that a query is performed or required to be performed,
each Party will make arrangements to perform its own queries for PNP
calls.
5. REQUIREMENTS FOR INP AND PNP
5.1 CUT-OVER PROCESS
The Parties shall cooperate in the process of porting numbers from one
carrier to another so as to limit service outage for the ported
subscriber. This may include, but not be limited to, the Porting Party
promptly updating its network element translations following
notification by the industry SMS, or ported-to local service provider,
and deploying such temporary translations as may be required to
minimize service outage, e.g., unconditional triggers. The Parties
agree to comply with such industry guidelines as may be established in
the appropriate subcommittees of the California Local Number
Portability Task Force for the cut-over process.
5.2 TESTING
Both Parties shall cooperate in conducting testing to ensure
interconnectivity between systems. Each Party shall inform the other
Party of any system updates that may affect the other Party's network
and each Party shall, at the other Party's request, perform tests to
validate the operation of the network. Additional testing requirements
may apply as specified by this Agreement.
5.3 NON-GEOGRAPHICAL NUMBERS
Neither Party shall be required to provide Number Portability for
nongeographic services (i.e., 500, 700 and 900 Service Access Codes
(SACs), and 976 NXX and similar services) under this Agreement.
5.4 ENGINEERING AND MAINTENANCE
Both Parties will cooperate to ensure that performance of trunking and
signaling capacity is engineered and managed at levels which are at
least at parity with that provided by the other Party to its
subscribers and to ensure effective maintenance testing through
activities such as routine testing practices, network trouble isolation
processes and review of operational elements for translations, routing
and network fault isolation. Additional specific engineering and
maintenance requirements shall apply as specified in this Agreement.
For subscribers ported by INP using RCF, Flex DID, or RI, the Ported-to
Party shall perform appropriate testing to isolate trouble prior to
referring repair requests to the Porting Party. For subscribers ported
by PNP, trouble shooting by the Porting Party shall generally involve
verification that a proper location routing number has been
<PAGE> 267
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entered into the system, and other trouble shooting as may be
established in industry guidelines.
5.5 RECORDING AND BILLING
5.5.1 The Porting Party shall provide the Ported-to Party with accurate
billing and Customer Account Record Exchange data for the Ported-to
Party's subscribers whose numbers have been ported.
5.5.2 Calls originated from RCF ported numbers in the Porting Party
end-offices and sent to the Ported-to Party interLATA toll network must
signal the shadow number in the Calling Party Number (CgPN) parameter
and ported number in the Charge Number (CN) parameter in the SS7
Initial Address Message.
5.6 Treatment of Telephone Line Number Based Calling Cards
5.6.1 PACIFIC shall remove from its Line Information Data Base (LIDB) all
existing PACIFIC- issued Telephone Line Number (TLN)-based card numbers
issued to a customer, when that customer ports the associated telephone
numbers to CLEC
5.6.2 PACIFIC shall continue to allow CLEC access to its LIDB. Other LIDB
provisions are specified in this Agreement.
6. ASSIGNMENT OF NXX CODES AND TELEPHONE NUMBERS
6.1 The Parties agree, in principle, that the administration and assignment
of Central Office Codes ("NXXs") should be moved from PACIFIC to a
neutral third party. In the interim, where PACIFIC functions as
California Code Administrator, the following provisions apply:
6.1.1 Each Party will comply with Industry Carriers Compatibility Forum
("ICCF") Central Office Code (NXX) Assignment Guidelines, INC
95-0407-008 ("ICCF Guidelines").
6.1.2 Unless the FCC adopts rules that differ from the ICCF Central Office
Code Assignment Guidelines, PACIFIC will assign NXX codes to CLEC
according to those Guidelines in a competitively neutral manner and on
a basis no less favorable than that on which PACIFIC assigns codes to
itself. These Number Administrator functions will be provided without
charge. Number Administrator functions do not include opening NXX
Codes.
6.1.3 It shall be the responsibility of each Party to program and update its
own switches and network systems to recognize and route traffic to the
other Party's assigned NXX codes at all times. Neither PACIFIC nor CLEC
shall charge each other for changes to switch routing software
necessitated by the creation, assignment or reassignment or activation
of NPA or NXX codes, so long as the requirement set forth at page 84 of
Commission Decision 96-03-020 remains in place.
<PAGE> 268
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6.1.4 The Parties will each be responsible for the electronic input of their
respective number assignment information into the Routing Database
System.
6.1.5 The Parties will provide to each other test-line numbers and access to
test lines, including a test-line number that returns answer
supervision in each NPA-NXX opened by a Party.
6.1.6 PACIFIC, in its role as the California Code Administrator, will provide
routine reporting on NXX availability, consistent with the orders of
the Commission.
6.1.7 The Parties agree that any forecasts required to be submitted prior to
establishment of an independent third party administrator will be
considered confidential and proprietary, and will only be made
available to the California Code Administrator for the purposes of code
assignment and administration.
6.2 In those circumstances where CLEC assigns its customers telephone
numbers from an NXX assigned in the LERG to PACIFIC, CLEC shall be able
to obtain and assign telephone numbers from PACIFIC in the same manner
that PACIFIC performs these functions for its own customers.
6.2.1 CLEC can request, review, reserve, exchange and return telephone
numbers for up to five basic exchange or COPT lines or single-line
ISDN, on an electronic, real-time basis to allow assignment during
service negotiation with the CLEC's customer. Such access shall be
provided as described with respect to the Operational Support Services
("OSS") functions set forth in Attachment 11.
6.2.2 Number assignments other than those described in Section 6.2.1. above,
including specialty numbers and complex product assignments, will be
obtained through a telephone call to the unbranded Number Assignment
Center (NAC) in the LISC. This NAC is unbranded to allow CLEC to
include its customer in the call without indication that they are
interacting with PACIFIC.
6.3 CLEC will be provided with electronic access for additional number
products as soon as such access is made available by PACIFIC. Such
access shall be provided as described with respect to other OSS
functions set forth in Attachment 11.
<PAGE> 269
ATTACHMENT 16
SECURITY
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Attachment 16
Page 1
1. PROTECTION OF SERVICE AND PROPERTY
1.1. For the purpose of notice permitted or required by this Attachment,
each Party shall provide the other Party a SPOC available twenty-four
(24) hours a day, seven (7) days a week.
1.2. PACIFIC and CLEC shall each exercise the highest degree of care to
prevent harm or damage to the other Party, its employees, agents or
customers, or their property. Each Party, its employees, agents, or
representatives agree to take reasonable and prudent steps to ensure
the adequate protection of property and services of the other Party.
1.3. Each Party having on its premises any equipment, support equipment,
systems, tools and data of the other Party, or spaces which contain or
house the other Party's equipment or equipment enclosures, shall
restrict access thereto to employees and authorized agents of that
other Party.
1.4. PACIFIC shall use electronic controls to protect all spaces which house
or contain CLEC equipment or equipment enclosures, but if electronic
controls are not available, PACIFIC shall either furnish security
guards at those PACIFIC locations already protected by security guards
on a seven (7) day per week, twenty-four (24) hour a day basis; and if
none, PACIFIC shall permit CLEC to install silent intrusion alarms back
to manned sites. CLEC agrees that PACIFIC shall be the SPOC with all
law enforcement authorities or public agencies with respect to problems
or alarms related to CLEC's equipment or equipment enclosures located
on PACIFIC's premises. In no event will CLEC contact law enforcement
authorities or public agencies as a result of a silent alarm.
1.5. PACIFIC shall furnish to CLEC a current written list of PACIFIC's
employees who PACIFIC authorizes to enter spaces which house or contain
CLEC equipment or equipment enclosures, with samples of the identifying
credentials to be carried by such persons.
1.6. CLEC shall furnish to PACIFIC a current written list of CLEC's
employees or agents who CLEC authorizes to enter PACIFIC's Central
Offices, with samples of identifying credentials to be carried by such
persons.
1.7. With respect to any equipment, support equipment, systems, tools and
data of one Party on the premises of the other Party, or spaces which
contain or house the other Party's equipment or equipment enclosures,
each Party shall comply with the security and safety procedures and
requirements of the Party that owns or controls the premises, including
but not limited to sign-in, identification and escort requirements.
1.8. PACIFIC shall allow CLEC to inspect or observe spaces which house or
contain CLEC equipment or equipment enclosures at any time within
normal business hours and shall furnish CLEC with all keys, entry
codes, lock combinations, or other materials or information which may
be needed to gain entry into any secured CLEC space. In the
<PAGE> 271
Attachment 16
Page 2
event of an emergency, CLEC shall contact a SPOC provided by PACIFIC
for access to spaces which house or contain CLEC equipment or equipment
enclosures. Such PACIFIC SPOC shall available to receive calls from
CLEC twenty-four (24) hours a day, seven (7) days a week and make
access available to CLEC within three (3) hours after receiving a call
from CLEC.
1.9. PACIFIC agrees not to use card access readers and devices that use
cards which are encoded identically, or that use mechanical coded locks
on external doors or on internal doors to spaces which house mission
critical equipment or equipment which supports the mission critical
equipment.
1.10. Keys used in PACIFIC's keying systems for spaces which contain or house
CLEC equipment or equipment enclosures shall be limited to PACIFIC
employees and representatives for emergency access only. CLEC shall
have the right to require PACIFIC to change locks at PACIFIC's expense
where there is evidence of inadequate security. In all other cases,
CLEC may require PACIFIC to change locks at CLEC's expense.
1.11. PACIFIC shall install security studs in the hinge plates of doors
having exposed hinges if such doors lead to spaces which contain or
house CLEC equipment or equipment enclosures.
1.12. PACIFIC shall use reasonable measures to control' unauthorized access
from passenger and freight elevators to spaces which contain or house
CLEC equipment or equipment enclosures.
1.13. PACIFIC shall provide notification within two (2) hours to designated
CLEC personnel to indicate an actual or attempted security breach.
2. ADDITIONAL PROVISIONS APPLICABLE TO COLLOCATION SPACES
2.1. PACIFIC shall be responsible for the security of CLEC's collocation
spaces. Security measures shall meet or exceed CLEC '5 requirements. If
a security issue arises or if CLEC believes that PACIFIC's security
measures fail to meet CLEC's requirements, CLEC shall notify PACIFIC
and the Parties shall work together to address the problem. PACIFIC
shall, at a minimum, do the following:
2.2. PACIFIC shall design collocation cages to prevent unauthorized access.
2.3. PACIFIC shall establish procedures for controlling access to the
collocation areas by employees, security guards and others. Those
procedures shall limit access to the collocation equipment areas to
PACIFIC's employees, agents or invitees having a business need to be in
these areas. PACIFIC shall require all persons entering the collocation
equipment areas to wear identification badges.
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2.4. PACIFIC shall provide card key access to all collocation equipment
areas, along with a positive key control system for each collocator's
cage area.
2.5. CLEC security personal may audit the collocation area at a PACIFIC
location for compliance with security procedures.
3. DISASTER RECOVERY
3.1. PACIFIC shall maintain for CLEC the same level of disaster recovery
capability to be used in the event of a system failure or emergency as
PACIFIC provides for itself. PACIFIC will provide CLEC with a written
summary of such capability within 30 days after the effective date of
this Agreement, subject to the non-disclosure provisions of this
Agreement.
4. DATA PROTECTION
4.1. Each Party shall install controls in any of its data bases to which the
other Party has access:
4.1.1. to deny access to data base users after a pre-determined period of
inactivity; and
4.1.2. to protect the other Party's proprietary information and the other
Party's customer proprietary information.
4.2. PACIFIC shall maintain controls over databases used by CLEC to protect
both ongoing operational and update integrity, at parity with control
features that PACIFIC provides to itself.
4.3. Each party shall assure that all approved system and modem access is
secured through security servers. Access to or connection with a
network element shall be established through a secure network or
security gateway.
4.4. With respect to access to the network or gateway of the other Party,
each party will comply with the other Party's corporate security
instructions for computer and network security.
5. NETWORK FRAUD CONTROL
5.1. PACIFIC shall make available to CLEC for use with any services provided
by PACIFIC to CLEC under this Agreement all present and future fraud
control features, including prevention, detection, or control
functionality utilized in PACIFIC's network. At present these features
include (1) disallowance of call forwarding to international locations,
(ii) coin originating ANI II digits, and (iii) dial tone reorigination
patches, (iv) terminating blocking of 800 and (v) 900/976 blocking.
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5.2. In addition, subject to section 5.3.3 below and Section 1.6 of
Attachment 6, PACIFIC shall provide partitioned access within pertinent
Operations Support Systems ("OSS") for fraud control.
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5.3. Rates:
5.3.1. Terminating blocking of 800 and 900/976 blocking are available as Local
Services, at the rates specified in Attachment 8.
5.3.2. Disallowance of call forwarding to international locations, coin
originating ANI II digits, and dial tone reorigination patches, are
available with Local Services, basic exchange service or LSNE, at no
additional charge.
5.3.3. Future fraud control features and functionalities will be available at
rates, if any, subject to the Act, regulations thereunder and relevant
FCC and Commission decisions.
6. LAW ENFORCEMENT INTERFACE
6.1. Each Party shall provide the other Party with a single point of contact
to interface on a twenty-four (24) hour, seven (7) day a week basis on
law enforcement and service annoyance issues, including, without
limitation, call traces, wiretaps and traps.
6.2. PACIFIC will provide necessary assistance to law enforcement personnel
to facilitate the execution of court orders addressed to PACIFIC that
authorize wiretaps and dialed number recorders relating to services and
facilities of CLEC customers. PACIFIC will notify law enforcement
personnel that the court order applies to an CLEC circuit, not a
PACIFIC circuit. PACIFIC will bill the appropriate law enforcement
agency for these services under its customary practices.
6.3. When requested by CLEC for security purposes, PACIFIC shall use
reasonable best efforts to provide CLEC with Recorded Usage Data within
two hours of the call completion but in any event shall provide such
data not later than twenty-four hours of call completion. The Data may
be provided in AMA format.
6.4. To the extent required by law, PACIFIC shall provide soft dial tone to
allow only the completion of calls to final termination points required
by law.
<PAGE> 275
ATTACHMENT 17
SERVICE PERFORMANCE MEASURES AND
LIQUIDATED DAMAGES
<PAGE> 276
SERVICE PERFORMANCE MEASURES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
SECTION PAGE
- ------- ----
<S> <C>
A. Performance Index and Measurements:
A.1. Provisioning 2
A.2. Maintenance 8
A.3. Wholesale Billing 10
A.4. Customer Usage Data 11
B. Performance Remedies (Liquidated Damages) 16
</TABLE>
<PAGE> 277
ATTACHMENT 17
Page 1
INTRODUCTION
I. Pursuant to Section 12 of this Agreement, Section A of this Attachment
17 sets forth the service standards, measurements, and performance
applicable to Local Services, Network Elements or Combinations provided
under this Agreement.
Section B of this Attachment 17 sets forth liquidated damages to be paid
in the event that specified failures of performance occur.
As experience is acquired under this Agreement with the new business
processes established, the Parties expect to learn which measurements
set forth in Section A are more or less useful than others. The Parties
also expect that experience will show whether new measurements are
needed or whether certain existing measurements are not needed.
Accordingly, while this Agreement is in effect, either Party may, from
time to time, request the addition, deletion or modification of the
measures set forth in Section A. In the event the Parties cannot agree
on such addition, deletion or modification they will submit such dispute
for resolution to an Inter-Company Review Board, as identified in
Section 3.1 of Attachment 3 to this Agreement provided, however, that
other provisions of Attachment 3 shall not apply.
Unless otherwise stated, PACIFIC shall make monthly reports to CLEC for
all performance measures. Should a dispute arise concerning the accuracy
of any of PACIFIC's measurements, CLEC may audit them under procedures
set out in Section 11.9 of the Umbrella Agreement.
II. "Parity" Defined: PACIFIC shall provide services to CLEC that, for any
relevant period of measurement, have substantially the same
characteristics of timeliness and performance as PACIFIC provides at
retail and, for such purpose, those services shall be deemed to have
substantially the same characteristics for any population of thirty (30)
or more observations if it has the same statistical distribution at the
90% confidence interval. Service Parity is achieved when PACIFIC's
service performance, as defined by the designated comparable measures,
is within 1.65 standard deviations (90% confidence level) of the average
retail performance for the equivalent retail product or service, subject
to the definitions contained within this Attachment 17. The calculation
of 1.65 standard deviations will be based on the most recent two full
calendar quarters of actual performance and revised quarterly. As used
in the preceding sentence, PACIFIC's "average retail performance for the
equivalent retail product or service" shall be calculated using all
available observations of PACIFIC performance, rather than any form of
sampling. "PACIFIC's service performance" for CLEC shall, similarly, be
calculated using all available observations. Average performance will be
measured and reported monthly for each comparable measure. Liquidated
damages will apply when performance is not al parity.
Service Parity applies to the comparable measures only. Other agreed to
performance measures will be based on specified service standards and
liquidated damages will apply as defined in this Attachment 17.
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ATTACHMENT 17
Page 2
SECTION A
A.1. PROVISIONING SERVICE PERFORMANCE MEASURES
1. % INSTALLATION APPOINTMENTS COMMITMENT MET
Definition:
This measures the percent of service orders where the completion date
matches the committed due date. (e.g., The due date is 4/01/96 am,
service is installed and the order is completed 4/01/96 am).
Method of Calculation:
As a Measurement of Comparable Service, this metric will be in parity
with PACIFIC's comparable services. This measure excludes disconnect
orders. This measure will be calculated separately for each PACIFIC
region. These regions are Los Angeles, Bay, North and South.
Measurements will be calculated by Business (Single and Multi-line,
Centrex, PBX Trunks), Residence, LINK, and ISDN.
TOTAL NUMBER OF ORDERS COMPLETED ON TIME
----------------------------------------
TOTAL NUMBER OF ORDERS COMPLETED X 100
Reporting Period:
Monthly, and sorted by Business (Single and Multi-line, Centrex, PBX
Trunks), Residence, LINK, and ISDN.
2. % INSTALLATION REPORTS
Definition:
This measures the number of trouble reports that occur within the first
thirty (30) days of service installation (e.g., Service is installed on
4/01/96, a trouble is reported on 4/05/96).
Method of Calculation:
As a Measurement of Comparable Service, this metric will be in parity
with PACIFIC's comparable services. This measure will be calculated
separately for each PACIFIC region. These regions are Los Angeles, Bay,
North and South. This measure only includes PACIFIC Network Troubles.
Measurements will be calculated by Business (Single and Multi-line,
Centrex, PBX Trunks), Residence, LINK, and ISDN.
TOTAL NUMBER OF INSTALLATIONS WITH TROUBLE
REPORTED WITHIN 30 DAYS FROM COMPLETION.
------------------------------------------
TOTAL NUMBER OF SERVICE ORDERS COMPLETED X 100
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Reporting Period:
Monthly, and sorted by Business (Single and Multi-line, Centrex, PBX
Trunks) Residence LINK, and ISDN.
3. FIRM ORDER CONFIRMATION (FOC) RECEIVED IN <4 HOURS
Definition:
Measures percent of Firm Order Confirmations sent to the CLEC within 4
hours of receipt of the Basic Exchange order, Centrex line or PBX trunk.
This measurement applies to less than 20 Basic Exchange lines or Links
on one order and less than 6 Centrex lines, 6 PBX trunks, or 6 ISDN
lines on one order.
Method of Calculation:
As a measurement of Performance Standards, this metric will comply with
the specific performance level shown below. Measurements will be
calculated by Business (Single and Multi-line, Centrex, PBX Trunks),
Residence, LINK, and ISDN.
TOTAL NUMBER OF FOC'S RETURNED IN <4 HOURS
------------------------------------------
TOTAL NUMBER OF FOC'S TO BE RETURNED X 100 = 95%
Report Period:
Monthly, and sorted by Business (Single and Multi-line, Centrex, PBX
Trunks) ISDN, Residence, LINK
4. FIRM ORDER CONFIRMATION QUALITY - % ACCURATE AND COMPLETE
Definition:
Measures percent of Firm Order Confirmations that are accurate and
complete.
Method of Calculation:
As a measurement of Performance Standards, this metric will comply with
the specific performance level shown below. Measurements will be
calculated by Business (Single and Multi-line, Centrex, PBX Trunks),
Residence, LINK, and ISDN.
TOTAL NUMBER OF FOC'S RETURNED ACCURATE AND COMPLETE
----------------------------------------------------
TOTAL NUMBER OF FOC'S TO BE RETURNED FOR THE MONTH X 100 = 95%
Reporting Period:
Monthly, and sorted by Business (Single and Multi-line, Centrex, PBX
Trunks) ISDN. Residence, LINK.
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Page 4
5. CLEC TO CLEC MIGRATION NOTIFICATION - % ON TIME
Definition:
Measures the percent of migration notifications sent to the outgoing
CLEC within 48 hours of receipt of the migration order.
Method of Calculation:
As a measurement of Performance Standards, this metric will comply with
the specific performance level shown below. Measurements will be
calculated by Business (Single and Multi-line, Centrex, PBX Trunks),
Residence, LINK, and ISDN.
TOTAL NUMBER OF MIGRATION NOTIFICATIONS RETURNED < 48 HOURS
-----------------------------------------------------------
TOTAL NUMBER OF MIGRATION NOTIFICATIONS
RETURNED FOR THE MONTH X 100 = 95%
Reporting Period:
Monthly, and sorted by Business (Single and Multi-line, Centrex, PBX
Trunks), ISDN, Residence.
6. REQUESTS FOR CUSTOMER SERVICE RECORDS (CSR)
Definition:
Measures the percent of Customer Service Records sent to CLEC within 4
hours of receiving the request and appropriate LOA. This measurement
applies to less than twenty (20) Basic Exchange lines billed under one
number and less than six (6) Centrex lines or six (6) PBX trunks, or six
(6) ISDN lines, billed under one number. Measurements will be calculated
by Business (Single and Multi-line, Centrex, PBX Trunks), Residence,
LINK, and ISDN.
Method of Calculation:
As a measurement of Performance Standards, this metric will comply with
the specific performance level shown below.
NUMBER OF CSRS RECEIVED <4 HOURS
--------------------------------
TOTAL NUMBER OF REQUEST FOR CSR X 100 = 95%
Reporting Period:
Monthly, and sorted by Business (Single and Multi-line, Centrex, PBX
Trunks) ISDN.
Residence
7. LOCAL PIC CHANGE - % ON TIME
Definition:
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Page 5
Measures the percent of local PIC changes initiated by the CLEC that are
processed within twenty-four (24) hours of receipt of the order. This
interval will stay in parity with interLATA PICs.
Method of Calculation:
As a measurement of Performance Standards, this metric will comply with
the specific performance level shown below. Measurements will be
calculated by Business (Single and Multi-line Centrex, PBX Trunks),
Residence, LINK, and ISDN.
TOTAL NUMBER OF PIC CHANGES COMPLETED WITHIN 24 HOURS
-----------------------------------------------------
TOTAL NUMBER OF PIC CHANGE REQUESTS X 100 = 95%
Reporting Period:
- Monthly, and sorted by Business (Single and Multi-line, Centrex,
PBX Trunks) ISDN, Residence.
8. SERVICE ORDER DISCREPANCY
Definition:
Measures percent of Orders initiated by CLEC that result in a
discrepancy. The discrepancy is a result of CLEC issuance. An order will
be considered to be discrepant if at any time after receipt of the order
PACIFIC has to either reject the order or request a supplement of the
order from the CLEC as a result of incomplete or inaccurate information,
as defined in PACIFIC's Resale Access Line Request Forms Instruction
Guide (GUIDE), Version 4, dated April 8, 1996. If CLEC service orders
conform to the Guide, rejects or requests to supplement such service
orders will be excluded from this measurement and will not incur
Liquidated Damages, as defined in Section B of this Attachment. CLEC and
PACIFIC will mutually agree on revisions to the Guide that effect
service order form or content. If they are unable to agree, they will
take the dispute to the Inter-company review Board as set forth in the
Section I of the Introduction to this Attachment.
Method of Calculation:
As a measurement of Performance Standards, this metric will comply with
the specific performance level shown below. Measurements will be
calculated by Business (Single and Multi-line, Centrex, PBX Trunks),
Residence, LINK, and ISDN.
TOTAL NUMBER OF ORDERS ISSUED WITHOUT DISCREPANCY
-------------------------------------------------
TOTAL NUMBER OF ORDERS ISSUED X 100 = 90%
<PAGE> 282
ATTACHMENT 17
Page 6
Reporting Period:
Monthly, and sorted by Business (Single and Multi-line, Centrex, PBX
Trunks) ISDN, Residence, LINK.
9. TRUNK ORDERS INSTALLED ON TIME
Definition:
Measures the percent of local interconnection trunks that are completed
on or before the due date. The comparative performance measure is Future
Group B & D Switched Access.
Method of Calculation:
As a Measurement of Comparable Service, this metric will be in parity
with PACIFIC's comparable services. The comparative measure is Feature
Group B & D switched access.
TOTAL NUMBER OF ORDERS COMPLETED ON TIME
----------------------------------------
TOTAL NUMBER OF ORDERS COMPLETED X 100
Reporting Period:
Monthly
10. TRUNK FIRM ORDER CONFIRMATION TIMELINESS
Definition:
Measures percent FOC sent to CLEC within the specified time (equivalent
to Feature Group B & D Switched Access.)
Method of Calculation:
As a Measurement of Comparable Service, this metric will be in parity
with PACIFIC's comparable services. The comparative measure is Feature
Group B & D Switched Access.
Reporting Period:
Monthly
11. TRUNK SERVICE ORDER DISCREPANCY
Definition:
Measures percent of Interconnection Service Request (ISR) initiated by
CLEC that result in a discrepancy. The discrepancy is a result of CLEC
issuance. An order will be considered to be discrepant if at any time
after receipt of the order PACIFIC has to either reject the order or
request a supplement of the order from CLEC as a result of incomplete or
inaccurate information, as defined in PACIFIC's Resale Access Line
Request Forms Instruction Guide (GUIDE),
<PAGE> 283
ATTACHMENT 17
Page 7
Version 4, dated April 8, 1996. If CLEC service orders conform to the
Guide, rejects or requests to supplement such service orders will be
excluded from this measurement and will not incur Liquidated Damages, as
defined in Section B of this Attachment. CLEC and PACIFIC will mutually
agree on revisions to the Guide that effect service order form or
content. If they are unable to agree, they will take the dispute to the
Inter-company review Board as set forth in the Section 1 of the
Introduction to this Attachment
Method of Calculation:
As a measurement of Performance Standards, this metric will comply with
the specific performance level shown below
TOTAL NUMBER OF ORDERS ISSUED WITHOUT DISCREPANCY
-------------------------------------------------
TOTAL NUMBER OF ORDERS ISSUED X 100 = 90%
Reporting Period:
Monthly
12. FORECASTING
Definition:
Measures the accuracy of forecasted volumes of LINK or Residence,
Business (Single and Multi-line, Centrex, PBX Trunks), ISDN resale
service orders.
Method of Calculation:
Forecasts are accurate within 20% +/- in any calendar month of the
forecast period (measurement excludes Interconnection Trunks)
Reporting Period:
Monthly
13. AVERAGE DELAY DAYS
Definition:
Measures the average number of days a service order is delayed due to an
appointment being missed.
Method of Calculation:
As a measurement of Comparable Service, this metric will be in parity
with PACIFIC's comparable services. Measurements will be calculated by
Business (Single and Multi-line. Centrex, PBX Trunks), Residence, LINK,
and ISDN.
Total delayed days
Total orders missed
<PAGE> 284
ATTACHMENT 17
Page 8
A.2 MAINTENANCE SERVICE PERFORMANCE MEASURES
1. % MAINTENANCE APPOINTMENTS MET
Definition:
This measures the number of troubles that are cleared on or before the
committed date and time.
Method of Calculation:
As a Measurement of Comparable Service, this method will be in parity
with PACIFIC's comparable services. This measure includes PACIFIC
network Troubles only. This measure will be calculated separately for
each PACIFIC region. These regions are Los Angeles, Bay, North and
South. Measurements will be calculated by Business (Single and
Multi-line, Centrex, PBX Trunks), Residence, LINK, and ISDN.
NUMBER OF TROUBLE REPORTS WITH APPOINTMENTS MET
-----------------------------------------------
NUMBER OF TROUBLE REPORTS COMPLETED X 100
Reporting Period:
Monthly, and sorted by Business (Single and Multi-line, Centrex, PBX
Trunks), Residence, LINK, and ISDN.
2. % REPEAT TROUBLES WITHIN 30 DAYS
Definition:
This Measures the percent of trouble report on the same telephone line
where there was a previous trouble within the last thirty days.
Method of Calculation:
As a Measurement of Comparable Service, this metric will be in parity
with PACIFIC's comparable services. This measure includes PACIFIC
Network troubles only. This measure will be calculated separately for
each PACIFIC region. These regions are Los Angeles, Bay, North and
South. Measurements will be calculated by Business (Single and
Multi-line, Centrex, PBX Trunks), Residence, LINK, and ISDN.
NUMBER OF REPEAT TROUBLE REPORTS
--------------------------------
NUMBER OF TROUBLE REPORTS COMPLETED
Reporting Period:
Monthly, and sorted by Business (Single and Multi-line, Centrex, PBX
Trunks) Residence LINK, and ISDN.
<PAGE> 285
ATTACHMENT 17
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3. REPORT RATE
Definition:
The metric measures the number of troubles per one hundred (100) lines
in service per month.
Method of Calculation:
As a Measurement of Comparable Service, this metric will be in parity
with PACIFIC's comparable services. This measure includes PACIFIC
Network troubles only. This measure will be calculated separately for
each PACIFIC region. These regions are Los Angeles, Bay, North and
South. Measurements will be calculated by Business (Single and
Multi-line, Centrex, PBX Trunks), Residence, LINK, and ISDN.
NUMBER OF TROUBLE REPORTS PER MONTH
-----------------------------------
NUMBER OF LINES
Reporting Period:
Monthly, and sorted by Business (Single and Multi-line, Centrex, PBX
Trunks), Residence, LINK, and ISDN.
4. RECEIPT TO CLEAR DURATION
Definition:
Measures the average duration in hours and minutes of all trouble
reports from receipt to clear.
Method of Calculation:
As a Measurement of Comparable Service, this metric will be in parity
with PACIFIC's comparable services. This measure includes PACIFIC
Network troubles only. This measure will be calculated separately for
each PACIFIC region. These regions are Los Angeles, Bay, North and
South. Measurements will be calculated by Business (Single and
Multi-line, Centrex, PBX Trunks), Residence, LINK, and ISDN.
TOTAL NUMBER OF TROUBLE HOURS AND MINUTES
-----------------------------------------
TOTAL NUMBER OF TROUBLE REPORTS
Reporting Period:
Monthly, and sorted by Business (Single and Multi-line, Centrex, PBX
Trunks) Residence, LINK, and ISDN.
<PAGE> 286
ATTACHMENT 17
Page 10
A.3 LOCAL WHOLESALE BILLING
1. TIMELINESS OF MECHANIZED LOCAL BILL DELIVERY
Definition:
Measures the number of days from bill date to delivery.
Method of Calculation:
NUMBER OF MECHANIZED CABS BILLS ON TIME
---------------------------------------
TOTAL NUMBER OF BILLS RECEIVED X 100
2. TIMELINESS OF LOCAL SERVICE ORDER BILLING
Definition:
Measures the number of Local Service Orders billed within the current
bill cycle.
Calculation:
Will be based on a statistically valid sample of billed orders.
NUMBER OF LOCAL ORDERS BILLED IN THE CORRECT BILL PERIOD
--------------------------------------------------------
TOTAL SERVICE ORDERS X 100
3. ACCURACY OF MECHANIZED CABS BILL FORMAT
Definition:
Measures the number of bills that pass agreed upon validation edits
(format) the first time.
Calculation:
NUMBER OF ACCURATELY FORMATTED CABS MECHANIZED BILLS
----------------------------------------------------
TOTAL NUMBER OF CABS MECHANIZED BILLS X 100
4. FINANCIAL ACCURACY OF LOCAL OTHER CHARGES AND CREDITS
Definition:
Measures the accuracy of the OC&C Local Charges
Calculation:
Will be based on a statistically valid sample of OC&C Charges
<PAGE> 287
ATTACHMENT 17
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100 - (TOTAL ESTIMATED NET CONSEQUENCES OF $ REC &
--------------------------------------------------
NRC OC&C TOTAL NET OC&C BILLED $ X 100
5. TIMELINESS OF CORRECTION/ADJUSTMENT DOLLARS
Definition:
Measures the number of adjustments corrected within the agreed upon time
frames
Calculation:
NUMBER OF ERRORS CORRECTED IN AGREED TIME FRAME
-----------------------------------------------
TOTAL NUMBER OF ERRORS X 100
6. BILL PERIOD CLOSURE
Definition:
Measures the review of each bill within agreed upon time frames.
No Calculation Required
A.4 USAGE DATA TRANSFER PERFORMANCE MEASURES
GENERAL DESCRIPTION:
PACIFIC will provide Local Usage Information detail in an accurate
timely manner. The format and content is described in the Bellcore
EXCHANGE MESSAGE RECORD (EMR) document in effect as of the Effective
Date of this Agreement and the CLEC Local Resale Data Transfer
Requirements.
Because these processes are new, CLEC and PACIFIC agree to jointly
review and revise these performance standards as Local Resale is fully
implemented to ensure that:
- the processes are stabilized and that agreed upon in-service
volumes are met.
- comparative measures of parity with PACIFIC's retail processes are
established, where appropriate
- the standards reflect elements required by CLEC to bill end users,
- an accurate baseline using some historical data for resale is in
place.
1. FILE TRANSFER
Definition:
PACIFIC will initiate and transmit files that are error free and without
loss of signal.
<PAGE> 288
ATTACHMENT 17
Page 12
Method of Calculation:
NUMBER OF FILES RECEIVED
------------------------
NUMBER OF FILES SENT X 100 = > 95%
-
Note: All measurements will be on a calendar month. Joint review of
performance and value for this standard will be done after six months
from Effective Date. No comparative measure applies
Reporting Period:
Monthly
2. % TIMELINESS
Definition:
PACIFIC will mechanically transmit, via CONNECT: Direct, all available
usage records to CLEC's Message Processing Center once a day, Monday
through Friday, or as negotiated. CLEC and/or PACIFIC's Data Center
Holidays are excluded. CLEC and PACIFIC will exchange schedules of
designated holidays.
By January 1, 1997, PACIFIC and CLEC will jointly audit, review, and
agree on comparative measures of timeliness; i.e. a measure of parity
between the methods used to provide usage data to PACIFIC's retail
billing and the methods used to process CLEC's usage data to CLEC.
In-service thresholds will be determined using accepted statistical
algorithms.
In the interim, a joint analysis of the timeliness based on cooperative
test accounts will be conducted to ensure common definitions and scope
and to create a baseline for comparison. The following are interim
benchmarks for timeliness:
Sept. - Nov. 1996: 90% of all messages delivered within 5 days from when
message recorded.
Dec. - Jan. 1997: 95% of all messages delivered within 5 days from when
message recorded.
Jan. - June 1997: 99% of all messages delivered within 10 days from when
message recorded;
100% of all messages delivered within 30 days from when
message recorded; or demonstrate parity of performance
with PACIFIC Retail Business standard, as defined by
benchmark audit and analysis.
Note: The audit and analysis of performance during the above time frames is
intended to validate the parity of performance standards. Therefore, the above
time frames and measurements are exempt from Performance Credits / Liquidated
Damages as specified in Section B of this Attachment.
June 1997: Specified Performance Standard:
End of Agreement 95% of all messages delivered within 5 days from when
message recorded.
Jan. - June 1997: 99% of all messages delivered within 10 days from when
message recorded;
100% of all messages delivered within 30 days from when
message recorded;
<PAGE> 289
ATTACHMENT 17
Page 13
or;
Parity of Performance:
The above Specified Performance Standard is subject to
change upon PACIFIC's ability to demonstrate Parity of
Performance with its Retail Business standard, as defined
by benchmark audit and analysis.
Note: The above time frame and measurement is not exempt from
Performance Credits / Liquidated Damages as specified in Section B of
this Attachment.
Reporting Period:
Monthly
3. % RECORDED USAGE DATA COMPLETE (A SELF-REPORTING MEASUREMENT)
Definition:
PACIFIC will provide all required Recorded Usage Data and ensure that it
is processed and transmitted within time periods established in
Attachment 13.
By January, 1997, in-service volume thresholds will be determined using
accepted statistical algorithms to provide a basis for comparison with
PACIFIC's retail performance. Because messages that are held in
PACIFIC's error file are usually not uniquely identified, CLEC and
PACIFIC agree to invoke auditing procedures, as defined in Section 11.1
of the Agreement, to ensure that the rate of unbillable messages is in
parity with the rate of unbillable messages experienced in PACIFIC's
retail business.
Method of Calculation:
TOTAL NUMBER OF RECORDED USAGE DATA RECORDS DELIVERED
DURING CURRENT MONTH MINUS NUMBER OF USAGE CALL RECORDS HELD
IN ERROR FILE AT END OF MONTH
------------------------------------------------------------
TOTAL NUMBER OF RECORDED USAGE DATA RECORDS DELIVERED X 100 = 99.98%
4. % ACCURACY
Definition:
PACIFIC will provide Recorded Usage Data in the format and with the
content as defined in the Bellcore document. These measures relate only
to Unbillable unrated local and local toll messages due to critical edit
failures (format errors).
Method of Calculation:
TOTAL NUMBER OF UNRATED LOCAL MESSAGES TRANSMITTED CORRECTLY
------------------------------------------------------------
TOTAL NUMBER OF UNRATED LOCAL MESSAGES TRANSMITTED 100=> 98%
Note: No comparative measure applies.
<PAGE> 290
ATTACHMENT 17
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Reporting Period:
Monthly
5. % ERROR FREE DATA PACKS
Definition:
PACIFIC will initiate and transmit all packs that are error free in the
format agreed, as defined in the CLEC Local Resale Requirements.
Method of Calculation:
NUMBER OF FILE RECEIVED
-----------------------
NUMBER OF FILES SENT X 100 = 95%
Note: Joint review of performance and value for this standard will be
done after six months from the Effective Date.
Reporting Period:
Monthly
6. % RECORDED USAGE DATA ERROR RESOLVED
Definition:
PACIFIC will ensure that the Recorded Usage Data is transmitted to CLEC
error free, the level of detail includes but not limited to: detail
required to Rating the call, Duration, Correct Originating/Terminating
information, etc. The error is reported to PACIFIC as a Modification
Request (MR). Performance is measure at two levels--Severity 1 or
Severity 2.
Method of Calculation:
SEVERITY 1: INCLUDES MESSAGES THAT ARE BILL AFFECTING AND REPRESENTS 1%
OF THE CURRENT CUSTOMER BASE. CONTACT TO BE MADE BY TELEPHONE.
NUMBER OF SEVERITY 1 MR'S FIXED > 24 HOURS
------------------------------------------
NUMBER OF SEVERITY 1 MR'S X 100 = > 90%
-
100% OF ALL SEVERITY 1 MR TO BE FIXED WITHIN FIVE (5) DAYS
SEVERITY 2: NON-BILL AFFECTING ERRORS. CONTACT MAY BE BY PHONE, FAX,
E-MAIL, ETC.
NUMBER OF SEVERITY 2 MR'S FIXED > 3 DAYS
----------------------------------------
NUMBER OF SEVERITY 2 MR'S X 100 = < 90%
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ATTACHMENT 17
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100% OF ALL SEVERITY 2 MR TO BE FIXED WITHIN TEN (10) DAYS
7. % INQUIRIES RESPONSIVENESS
Definition:
PACIFIC will respond to all usage inquires within twenty-four (24) hours
of CLEC request for information, Monday through Friday. Severity 1 MR
will be responded to on a seven (7) day a week basis. CLEC will receive
continuous status reports until the request for information is
satisfied.
Method of Calculation:
NUMBER OF BILLING INQUIRIES RESPONDED TO 24 HOURS
-------------------------------------------------
NUMBER OF BILLING INQUIRIES X 100 = 98%
<PAGE> 292
ATTACHMENT 17
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SECTION B LIQUIDATED DAMAGES
For certain delays or failures of either Party under this Agreement effective
July 1 1997 and there are at least thirty (30) occurrences per month per
Functional Activity, and on a Region Basis, as appropriate, the non-performing
Party shall pay the other Party the amounts calculated as provided below.
Average Non-Recurring Charges -
The Average Non-Recurring Charge is the sum of all non-recurring charges applied
to service orders issued by CLEC and for which there were performance defects (
e.g., Installation Appointment Missed, Late CSR, Service Order Discrepancy,
etc.) divided by the total number of defects within the measurement period.
These calculations will be made by Functional Activity and product
(Business-Single/Multi-line, Centrex, PBX Trunks), Residence, LINK, and ISDN.
Average Recurring Charges -
The Average Recurring Charge is the sum of all recurring charges applied to
service orders issued by CLEC and for which there were performance defects (
e.g. Maintenance Appointment Missed, Repeat Trouble, etc.) divided by the total
number of defects within the measurement period. These calculations will be made
by Functional Activity and product (Business-Single/Multi-line, Centrex, PBX
Trunks), Residence, LINK, and ISDN.
Below are listed selected functional activities which are critical to customer
satisfaction and the remedy payable by the non-performing Party for specific
lack of performance as described in the following table:
<TABLE>
<CAPTION>
FUNCTIONAL ACTIVITY THRESHOLD LIQUIDATED DAMAGE
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
1) % Installation Appointment When results fall below parity Waiver of an average nonrecurring installation
Met. (A.1.1) charge for the number of lines ordered and not
installed on time OR orders found to have
2) % Installation Reports. a PACIFIC trouble within 30 days after
(A. 1.2) installation. The waiver would be for
the amount of orders below the comparable
measurement in retail.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 293
ATTACHMENT 17
Page 17
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
1) % Maintenance Appointments When results fall below parity One month's average recurring charges per line
Met. out of service that falls below parity. The
2) % Repeat Troubles within 30 waiver would be for the amount of lines out of
days. service below the comparable measurements in
3) Report Rate. retail within the described (4) PACIFIC
4) Receipt To Clear Duration. Regions.
Note: If our maintenance performance for a
given month fails to meet two or more
assurance measures as described in Section A,
PACIFIC will be liable for the category
liquidated damages that results in the highest
amount.
- ---------------------------------------------------------------------------------------------------------------------
FOC Complete and Accurate Less than 85% of FOCs 20% of an Average Non-Recurring charge.
returned are complete/accurate
- ---------------------------------------------------------------------------------------------------------------------
FOC Timeliness Less than 85% of FOCs 10% of an Average Non-Recurring charge.
returned within 4 hours
- ---------------------------------------------------------------------------------------------------------------------
Migration Notification Less than 85% of Migration Credit PlC Change Charge.
Notifications sent in 48 hours.
- ---------------------------------------------------------------------------------------------------------------------
CLEC PIC Change Less than 85% of CLEC PIC Credit PlC Change Charge.
changes completed within 24
hours.
- ---------------------------------------------------------------------------------------------------------------------
Service Order Discrepancy Less than 80% of orders 20% of a Average Non-Recurring charge
submitted without material (Paid by CLEC).
errors.
- ---------------------------------------------------------------------------------------------------------------------
Customer Service Record Less than 85% of CSRs are 5% of a Average Non-Recurring charge for each
sent within 4 hours. CSR for which there is a subsequent service
order issued.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 294
ATTACHMENT 17
Page 18
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
Trunk Orders Completed on When results fall below 100% of the total non-recurring charges for
Time parity. equivalent products (FG B or D trunks), as
specified in CPUC 175-T, Section 6.
- ---------------------------------------------------------------------------------------------------------------------
Trunk Firm Order Confirmation When results fall below 20% of the total non-recurring charges for
Delivered on Time parity. equivalent products (FG B or D trunks), as
specified in CPUC 175-T, Section 6.
- ---------------------------------------------------------------------------------------------------------------------
Trunk Service Order Discrepancy Less than 80% of orders are 20% of the total non-recurring charges for
submitted without material equivalent products (FG B or D trunks), as
errors. specified in CPUC 175-T, Section 6.
- ---------------------------------------------------------------------------------------------------------------------
Forecasting (Excludes When product volumes exceeds $10.00 per line or trunk for the amount
Interconnection Trunks) or falls below the +/- 20% of ordered between 20% and 30% under the
the forecast amount. forecast. $20.00 per line or trunk for the
amount ordered between 31% and 40% under the
forecast. $35.00 per line or trunk for the
amount ordered between 41% or more under the
forecast. When volumes for products exceed the
forecast by 20%, all remedies associated with
preordering, ordering, provisioning and
maintenance will not apply.
- ---------------------------------------------------------------------------------------------------------------------
Recorded Usage Data (AKA Usage Each instance delivery of Annual interest rate of 8% compounded daily
Data Transfer as described Recorded Usage Data exceeds: will be applied on net revenues for 50% of all
in Section A.5) messages delayed to CLEC beyond the then
a) A specified performance prevailing performance standard and until
standard of: Recorded Usage Data is delivered, or sixty
95% within 5 days; days from when message(s) was recorded,
99% within 10 days; whichever comes first. Said
100% within 30 days.
OR,
b) Parity of performance
standard as defined in the
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 295
ATTACHMENT 17
Page 19
<TABLE>
<S> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
benchmark audit and analysis interest shall be applied on net revenues
which, once defined, shall for 100% of all messages for which CLEC
prevail over a) above. demonstrates actual delayed billing occurred as
a result of late receipt of Recorded Usage
Data.
- ---------------------------------------------------------------------------------------------------------------------
PACIFIC will absorb all costs and not charge
CLEC for any Recorded Usage Data not delivered
to CLEC within sixty days from when the data
was recorded by PACIFIC.
Conditions that will be exempt from the above
Credit application will be identified during
the benchmark audit and analysis.
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE> 296
Attachment 18
ATTACHMENT 18
INTERCONNECTION
<PAGE> 297
Attachment 18
I. LOCAL INTERCONNECTION TRUNK ARRANGEMENTS
GENERAL
The Parties will establish Local Interconnection Trunks to exchange
local and intraLATA toll traffic. Neither Party shall terminate Switched
Access traffic over Local Interconnection Trunks. Separate two-way Meet
Point Trunks will be established for the joint provisioning of Switched
Access traffic. Local Interconnection will be provided via two-way
trunks unless both Parties agree to implement one-way trunks on a
case-by-case basis.
A. Interconnection Within Each LATA.
1. Each Party will establish a Local Interconnection Trunk
Group with each Access Tandem in the LATA(s) in which it
originates or terminates local and/or toll traffic with
the other Party, unless CLEC orders LATA-Wide
Terminating Access from PACIFIC. The Parties may not
route Local Interconnection traffic to an Access Tandem
destined for an NXX that subtends another Tandem, except
as specified in Sections l.A.2 and II below. The Parties
agree that direct trunking to an end office from either
Party's end office or Access Tandem is permitted under
the terms of this section.
2. LATA-Wide Terminating Access
The Parties agree that CLEC may select a LATA-Wide
terminating arrangement. When CLEC selects such an
arrangement, interconnection is established at a single
tandem designated by PACIFIC for termination of all
Local Interconnection Traffic destined for any office in
that LATA.
3. Tandem-Level Terminating Access
Interconnection at PACIFIC tandems within each LATA:
CLEC will interconnect with all PACIFIC Access Tandems
in each of the LATA(s) in which it originates traffic
and interconnects with PACIFIC, unless CLEC selects the
LATA-Wide Terminating Option.
4. In addition to the tandem interconnection described
above, either Party may establish end office-to-end
office or end office-to-tandem or tandem-to-tandem trunk
groups. In the case of host-remote end offices, such
interconnection shall occur at the location of the host
or remote, at the option of the Party deploying the
host-remote end office.
5. CLEC and PACIFIC agree to interconnect their networks
through existing and/or new facilities between CLEC End
Offices and/or Access Tandem
2
<PAGE> 298
Switches and the corresponding PACIFIC End Office and/or
Access Tandems set forth in Appendix A. The Parties will
establish logical trunk groups referencing the
appropriate CLEC Routing Point and PACIFIC Central
Office. In addition, where necessary, and as mutually
agreed to, the Parties will define facilities between
their networks to permit trunk group(s) to be
established between the points listed in Appendix A.
While Appendix A is unpopulated at the time of execution
of this Agreement, CLEC shall initially populate
Appendix A; PACIFIC may populate Appendix A further,
under paragraph 6 below.
6. Nothing in the foregoing restricts either Party from
ordering and establishing CLEC and/or PACIFIC Local
Interconnection trunk groups in addition to the initial
combinations described above. Amendments to Appendix A
may be made by either Party, upon 30 days written notice
and acceptance by the other Party. Acceptance will not
be unreasonably withheld. Such amendments may be made
without the need to renegotiate the terms of the rest of
this Attachment.
B. Single P01 Model.
1. For each interconnection between the Parties for the
exchange of local, intraLATA toll, and meet-point
Switched Access traffic, the Parties agree that CLEC
will designate a single Point Of Interconnection between
any two switching entities.
C. Sizing and Structure of Interconnection Facilities.
1. The Parties will mutually agree on the appropriate
sizing for facilities based interconnection, based on
the standards set forth below. The capacity of
interconnection facilities provided by each Party will
be based on mutual forecasts and sound engineering
practice, as mutually agreed to by the Parties during
planning and forecasting meetings. The interconnection
facilities provided by each Party shall be formatted
using either Alternate Mark Inversion Line Code or
Superframe Format Framing. D53 facilities will be
optioned for C-bit Parity.
2. When interconnecting at PACIFIC's tandems, the Parties
agree to establish Bipolar 8 Zero Substitution Extended
Super Frame ("B8ZS ESF") two-way trunks where
technically feasible for the sole purpose of
transmitting 64k CCC data calls. In no case will these
trunks be used for calls for which the User Service
Information parameter (also referred to as "Bearer
Capability") is set for "speech" unless all available
non 64K CCC circuits are busy. If all such circuits are
busy, CLEC and PACIFIC agree to use Network Management
Controls (including inter alia, re-routing to 64K CCC
trunk groups) pursuant to Section XII of this Attachment
to relieve
3
<PAGE> 299
Attachment 18
network congestion temporarily. Where additional
equipment is required, such equipment would be obtained,
engineered, and installed on the same basis and with the
same intervals as any similar growth job for IXC, CLC,
or PACIFIC internal customer demand for 64K CCC trunks.
3. When interconnecting at PACIFIC's digital End Offices,
the Parties have a preference for use of BBZS ESF
two-way trunks for all traffic between their networks.
Where available, such trunk equipment will be used for
these Local Interconnection Trunk Groups and Meet Point
Trunk Groups. Where AMI trunks are used, either Party
may request upgrade to B8ZS ESF when such equipment is
available.
D. Combination Interconnection Trunks.
1. The Parties agree to work cooperatively to combine all
functionalities of Local Interconnection Trunk Groups
and Meet Point Trunk Groups on a single Combination
Interconnection Trunk Group at any feasible Point Of
Interconnection where either Party desires, except in
connection with the LATA-Wide terminating option.
2. The Parties agree to make the initial decision as to
whether the use of Combination Interconnection Trunk
Groups is feasible, including a determination of
switched software compatibility, ordering procedures and
billing procedures, no later than six months from the
effective date of this Agreement.
3. If the Parties find the use of Combination
Interconnection Trunk Groups not to be feasible at that
time, the Parties will undertake a review of such
feasibility and a further decision on the use of
Combination Interconnection Trunk Groups at six month
intervals, at either Party's option, through the term of
the Agreement.
4. Until the Parties find Combination Interconnection Trunk
Groups to be feasible, Local Interconnection will be
provided via one-way and/or two-way trunks.
5. Whenever the use of Combination Interconnection Trunk
Groups is determined to be feasible, and ordering and
billing procedures have been established:
a) Any new trunk groups may be ordered using the
Combination Interconnection Trunk Group option;
and
b) The Parties will work together in good faith to
complete the conversion from the use of separate
Local Interconnection Trunk
4
<PAGE> 300
Attachment 18
Groups and Meet Point Trunk Groups to the use of
Combination Interconnection Trunk Groups within
six months from that time.
E. Signaling Protocol. The Parties will interconnect their networks
using SS7 signaling as defined in GR-317 and GR-394, including
ISDN User Part ("IS UP") for trunk signaling and Transaction
Capabilities Application Part ("TCAP") for CCS-based features in
the interconnection of their networks. Either Party may
establish CCS interconnections either directly and/or through a
third party. CCS interconnection, whether direct or by third
party shall be pursuant to PUB L-780023-PB/NB and in accordance
with the rates, terms and conditions of the Parties' respective
tariffs. The Parties will cooperate in the exchange of TCAP
messages to facilitate full interoperability of CCS-based
features between their respective networks, including all CLASS
features and functions, to the extent each carrier offers such
features and functions to its own end users. The Parties will
provide all CCS signaling parameters, including CPN, and will
honor all privacy indicators.
F. Transit Signaling: CLEC may choose to route SS7 signaling
information (~, ISUP, TCAP) from CLEC's signaling network to
another CLC's signaling network via PACIFIC's signaling network
for the purpose of signaling call processing and network
information between CLEC and the other CLC's network, whether or
not PACIFIC has a direct-traffic trunk to the terminating
address, provided that CLEC furnishes PACIFIC with:
1. the destination point codes of all the CLC switches to
which it wishes to send transit signaling;
2. the identity of the STPs in PACIFIC's network in which
each DPC will be translated;
3. the identity of the STPs in the other signaling network
to which such transit signaling will be sent; and
4. a letter from the other party authorizing PACIFIC to
send such signaling messages.
CLEC agrees to pay the rates for Transit Signaling as specified in
Attachment 8.
G. Either Party may opt at any time to terminate (i.e., overflow)
to the other Party some or all local exchange traffic and
intraLATA toll traffic originating on its network, together with
Switched Access traffic, via Feature Group D or Feature Group B
Switched Access Service. Either Party may otherwise purchase
these Switched Access Services from the other Party subject to
the rates, terms and conditions specified in its standard
intrastate access tariffs.
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Attachment 18
H. When the Tandem-Level Terminating option is chosen, each Party
shall deliver to the other Party over the Local Interconnection
Trunk Group(s) only such traffic which is destined for those
publicly dialable NPA NXX codes served by end offices that
directly subtend the Access Tandem or to those LECs, CLCs and
Wireless Service Providers that directly subtend the Access
Tandem. When a LATA-Wide Terminating Access option is chosen,
CLEC may route Local Interconnection traffic to a PACIFIC Access
Tandem destined for any NXX in the LATA.
I. Unless otherwise agreed to, each Party shall deliver all traffic
destined to terminate at either Party's end office or tandem in
accordance with the serving arrangements defined in the Local
Exchange Routing Guide ("LERG").
J. Where the Parties deliver over the Local Interconnection Trunk
Group miscellaneous calls (i.e., time, weather, NPA-555,
California 900, Mass Calling Codes) destined for each other,
the'! shall deliver such traffic in accordance with the serving
arrangements defined in the LERG.
K. Nil codes (e.g., 411, 611 and 911) shall not be sent between
CLEC's and PACIFIC's network over the Local Interconnection
Trunk Groups.
L. Maintenance of Service.
1. A Maintenance of Service charge, as specified below
(N.3], applies whenever either Party requests the
dispatch of the other Party's personnel for the purpose
of performing maintenance activity on the
interconnection trunks, and any of the following
conditions exist:
a) No trouble is found :n the interconnection
trunks; or
b) The trouble condition results from equipment,
facilities or systems not provided by the Party
whose personnel were dispatched; or
c) Trouble clearance did not otherwise require a
dispatch and, upon dispatch requested for repair
verification, the interconnection trunk does not
exceed Maintenance Limits.
2. If a Maintenance of Service initial charge has been
applied and trouble is subsequently found in the
facilities of the Party whose personnel were dispatched,
the charge will be canceled.
3. Billing for Maintenance of Service is based on each
half-hour or fraction thereof expended to perform the
work requested. The time worked is categorized and
billed at one of the following three rates:
a) basic time;
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Attachment 18
b) overtime; or
c) premium time
As defined for billing by PACIFIC in PACIFIC's revised
Schedule Cal. P.U.C. Tariff No. 175-T, Section 13 and in
CLEC's Exchange tariff.
II. THIRD-PARTY TRAFFIC
A. PACIFIC shall terminate traffic from third-party LECs, CLCs, or
wireless service providers ("WSPs") delivered to PACIFIC's
network through an CLEC tandem. Prior to the routing of such
traffic, the Parties agree to negotiate the issues of network
capacity and forecasting caused by such terminations. The
Parties shall conduct such negotiations in good faith and shall
not unreasonably withhold consent to the routing of such
traffic.
B. PACIFIC shall complete traffic delivered from CLEC destined to
third-party LECs, CLCs or WSPs in the LATA. PACIFIC shall have
no responsibility to ensure that any third-party LEC, CLC or WSP
will accept such traffic.
C. PACIFIC shall accept, from any third-party LEC, CLC, or WSP in
the LATA, traffic destined for an CLEC end office subtending the
relevant PACIFIC tandem, or a LEC, CLC or WSP subtending CLEC's
central office if PACIFIC has a provision in ~n interconnection
agreement with such LEC, CLC or WSP permitting such an
arrangement.
III. COMPENSATION FOR CALL TERMINATION
A. In all cases, resale lines (whether purchased by CLEC or a third
party) in PACIFIC's switches will be treated in the same manner
as PACIFIC's end user customers for the purposes of call
termination charges.
B. For calls that originate from or terminate to an CLEC LSNE,
bound for or terminated from a third party LEC, the Parties
agree that PACIFIC shall make arrangements directly with that
third party for any compensation owed in connection with such
calls on CLEC's behalf.
C. PACIFIC agrees to bill any facilities-based third party referred
to in B, above, unless, after thirty (30) days' notice in
writing to PACIFIC, CLEC requests otherwise. To compensate
PACIFIC for this service, CLEC agrees to pay $.005 (one-half
cent) per message.
D. For calls that originate from a facilities-based third party and
terminate to an CLEC LSNE, PACIFIC will compensate CLEC on
behalf of that third party. For calls that terminate to a
facilities-based third party from an CLEC LSNE,
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<PAGE> 303
Attachment 18
PACIFIC has agreed to charge CLEC as if the call terminated in
PACIFIC's network, using PACIFIC's rates as described below. In
the event CLEC elects not to use PACIFIC's billing service
described in C, above, CLEC shall deal directly with third
parties regarding compensation for call termination.
E. The following compensation terms shall apply in all cases where
CLEC purchases PACIFIC's LSNE:
1) For Local intra-switch calls where CLEC has purchased
PACIFIC's LSNE, the Parties agree to impose no call
termination charges on each other. Where the call is:
(a) Originated by CLEC's end user customer and
completed to a PACIFIC customer:
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
(b) Originated by CLEC's end user customer and
completed to the customer of a third party
carrier (not affiliated with CLEC) using
PACIFIC's LSNE:
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
(c) Originated by CLEC's end user customer and
completed to another of CLEC's end user
customers using PACIFIC's LSNE.
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
(d) Originated by a PACIFIC customer and terminated
to CLEC's LSNE.
- No Local Switching Capacity charge will
apply.
(e) Originated by the customer of a third party
carrier (not affiliated with CLEC) using
PACIFIC's LSNE and terminated to CLEC's LSNE.
- No Local Switching Capacity charge will
apply to CLEC. The Local Switching
Capacity charge on the originating end
will be imposed on the third-party
carrier.
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Attachment 18
2. For Local inter-switch calls where CLEC has purchased
PACIFIC's LSNE, the Parties agree to impose no call
termination charges on each other.
Unless otherwise specified, PACIFIC's charges will apply
to CLEC as described below where the call is:
(a) Originated from CLEC's LSNE and completed to a
PACIFIC end user.
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
- A mileage-based transport charge will
apply when CLEC uses PACIFIC's
transport.
(b) Originated from CLEC's LSNE and completed to the
LSNE of a third party carrier (not affiliated
with CLEC).
- For use of the local switch:) Local
Switching Capacity charge at the
originating office.
- A mileage-based transport charge will
apply when CLEC uses PACIFIC's
transport.
(c) Originated from CLEC's LSNE and completed to the
interconnected network of a third party carrier
(not affiliated with CLEC).
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
- A mileage-based transport charge will
apply when CLEC uses PACIFIC's
transport, and mileage shall be measured
between the originating office and the
P01 with the third party's network.
For call termination:
- Tandem Transit Switching rate
- Local Switching Capacity charge at the
terminating office.
(d) Originated from CLEC's LSNE and completed to
CLEC's LSNE.
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
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Attachment 18
- A mileage-based transport charge will
apply when CLEC uses PACIFIC's
transport.
- (For use of the local switch:) Local
Switching Capacity charge at the
terminating office.
(e) Originated by a PACIFIC end user customer and
terminated to CLEC's LSNE.
- (For use of the local switch:) Local
Switching Capacity Charge at the
terminating office.
(f) Originated by a customer of a third-party
carrier (not affiliated with CLEC) using
PACIFIC's LSNE and terminated to CLEC's LSNE.
- (For use of the local switch:) Local
Switching Capacity charge at the
terminating office.
(g) Originated by an end-user customer on the
interconnected network of a third-party carrier
(not affiliated with CLEC) and terminated to
CLEC's LSNE.
- (For use of the local switch:) Local
Switching Capacity charge at the
terminating office.
- (For call termination:) CLEC charges to
Pacific, PACIFIC's Local Switching
Capacity charge at the terminating
office.
3. For intraLATA toll calls where CLEC has purchased
PACIFIC's LSNE, charges per Attachment 8 shall apply as
follows:
(a) Originated by CLEC's end-user customer and
completed to a PACIFIC end user customer.
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
- A mileage-based transport charge between
the two offices will apply when CLEC
uses PACIFIC's transport.
Switched access charges, per PACIFIC'S Schedule
Cal. P.U.C. Tariff No. 175-T ("Switched Access
Charges"), shall apply as follows:
- NIC
For call termination: at the terminating office
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Attachment 18
- Local Switching
- NIC
(b) Originated by CLEC's end-user customer and
completed to the customer of a third-party
carrier (not affiliated with CLEC) using
PACIFIC's LSNE in a distant end office.
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
- A mileage-based transport charge between
the two offices will apply when CLEC
uses PACIFIC's transport.
- NIC at the originating office
- (For call termination:) Local Switching
Capacity charge at the terminating
office per Attachment 8.
(c) Originated by CLEC's end-user customer and
completed to the network of third-party carrier
(not affiliated with CLEC) interconnected with
PACIFIC's network.
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
- A mileage-based transport charge will
apply when CLEC uses PACIFIC's
transport, and mileage shall be measured
between the originating office and the
P01 with the third party's network.
- Tandem Transit Rate
Switched Access charges apply as follows:
- NIC at the originating office
- (For call termination: Switched Access
Charges:
- Local Switching
- NIC at the terminating office
- Tandem Switching (if charged by the
third party)]
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<PAGE> 307
Attachment 18
(d) Originated by CLEC's end-user customer and
completed to another of CLEC's customers being
served through PACIFIC's LSNE in a distant
office.
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
- A mileage-based transport charge between
the two offices will apply when CLEC
uses PACIFIC's transport.
- NIC at the originating office
- NIC at the terminating office
- Local Switching Capacity charge at the
terminating office.
(e) Originated by a PACIFIC customer and terminated
to CLEC's end-user customer.
- (For use of the local switch:) Local
Switching Capacity charge at the
terminating office.
- NIC at the terminating office
- (For call termination: ) CLEC charges to
PACIFIC, PACIFIC's Switched Access
Charges at the terminating office.
- Local switching
- NIC
(f) Originated by the customer of a third-party
carrier (not affiliated with CLEC) using
PACIFIC's LSNE in a distant end office and
terminated to CLEC's LSNE.
- (For use of the local switch:) Local
Switching Capacity charge at the
terminating office.
- NIC at the terminating office
- (For call termination:) CLEC will charge
PACIFIC Local Switching Capacity per
Attachment 8 at the terminating office.
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Attachment 18
(g) Originated by a customer on the network of a
third-party carrier (not affiliated with CLEC)
interconnected with PACIFIC's network and
terminated to CLEC's LSNE.
- (For use of the local switch:) Local
Switching Capacity charge at the
terminating office.
- NIC at the terminating office
- (For call termination): CLEC will charge
to Pacific, PACIFIC's Switched Access
Charges:
- Local Switching
- NIC at the terminating office
4. For intrastate Switched Access calls where CLEC is using
PACIFIC's LSNE for calls originated from or terminated
to an IXC for completion:
(a) For calls originated from CLEC's end-user
customer to CLEC's own IXC switch (or that of an
affiliate) for completion.
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
- PACIFIC and CLEC will charge CLEC's IXC
affiliate appropriate Switched Access
elements on a meet point basis per
Attachment 13.
(b) For calls originated from CLEC's end-user
customer to an IXC's switch not affiliated with
CLEC.
For use of the local switch: Local Switching
Capacity charge at the originating office.
- PACIFIC and CLEC shall charge the I?(C
for originating Switched Access on a
meet-point basis per Attachment 13 of
this Agreement.
- NIC at the originating office
(c) For calls terminating to CLEC's end-user
customer from CLEC's own IXC switch (or that of
an affiliate) for completion.
- (For use of the local switch:) Local
Switching Capacity charge at the
terminating office.
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Attachment 18
- PACIFIC and CLEC shall charge CLEC's IXC
(affiliate) appropriate Switched Access
elements on a meet point basis per
Attachment 13 of this Agreement.
- NIC at the terminating office
(d) For calls terminating to CLEC's end-user
customer from an IXC switch not affiliated with
CLEC.
- (For use of the local switch:) Local
Switching Capacity charge at the
terminating office.
- PACIFIC and CLEC shall charge the IXC
terminating Switched Access elements on
a meet point basis per Attachment 13 of
this Agreement.
- NIC at the terminating office
5. For interstate Switched Access calls where CLEC is using
PACIFIC's LSNE for calls originated from or terminated
to an IXC for completion:
(a) For calls originated from CLEC's end-user
customer to CLEC's own IXC switch (or that of an
affiliate) for completion.
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
- PACIFIC and CLEC shall charge CLEC's IXC
(affiliate) appropriate Switched Access
elements on a meet-point basis per
Attachment 13 of this Agreement.
- Carrier Common Line Charge ("CCLC") at
the originating office
- RIC at the originating office
(b) For calls originated from CLEC's end-user
customer to an IXC's switch not affiliated with
CLEC.
- (For use of the local switch:) Local
Switching Capacity charge at the
originating office.
- PACIFIC and CLEC shall charge the IXC
for originating Switched Access on a
meet-point basis per Attachment 13 of
this Agreement.
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<PAGE> 310
Attachment 18
- Carrier Common Line Charge ("CCLC") at
the originating office
- RIC at the originating office
(c) For calls terminating to CLEC's end-user
customer from CLEC's own IXC switch (or that of
an affiliate) for completion.
- (For use of the local switch:) Local
Switching Capacity charge at the
terminating office.
- PACIFIC and CLEC shall charge the CLEC's
IXC (affiliate) appropriate Switched
Access elements on a meet point basis
per Attachment 13.
- Carrier Common Line Charge ("CCLC") at
the terminating office
- RIC at the terminating office
(d) For calls terminating to CLEC's end-user
customer from an IXC switch not affiliated with
CLEC.
- For use of the local switch:) Local
Switching Capacity charge at the
terminating office.
- PACIFIC and CLEC shall charge the IXC
for terminating Switched Access on a
meet-point basis per Attachment 13 of
this Agreement.
- Carrier Common Line Charge ("CCLC") at
the terminating office
- RIC at the terminating office
F. The following terms apply where CLEC and PACIFIC interconnect
using their own networks, pursuant to Section I of this
Attachment.
1. The following call termination rates shall apply for
intraLATA traffic terminated from CLEC to PACIFIC or
from PACIFIC to CLEC. CLEC and PACIFIC agree to the
mutual exchange of Local Calls without explicit
compensation ("bill and keep") where traffic flows
between CLEC and PACIFIC are in balance, as defined in
(a), below. Where such traffic is not in balance, CLEC
and PACIFIC agree to call termination at the rates set
out in (c), below, for that portion of the traffic that
is out of balance.
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Attachment 18
(a) The Parties will measure Local Call traffic
between them and will use such measures to
determine the balance of traffic between them
and the compensation due, if any. The Parties
will make measurements and report the results to
each other on a calendar-quarter basis (i.e.,
January-March, April-June, July-September,
October-December). Each Party will be
responsible for the measurement of its
originating traffic transmitted to the other.
The Parties will undertake traffic measurements
on a LATA-Wide basis in each LATA where the
Parties interconnect. The Parties will report
measurements to each other no later than the end
of the month following the completion of the
quarter. The provisions of this Section and of
(b) and (c), below, will not apply until the
first full calendar quarter after the effective
date of this Agreement. The reported
measurements will determine the requirement for
payments, if any, for the subsequent full
calendar quarter. In determining whether any
amount for call terminations owing under this
section, neither Party shall be obliged to pay
the other unless, on a LATA-Wide basis, the net
usage differential (i.e., the difference between
the respective Parties' usage levels, calculated
by subtracting the lower total number of minutes
of use in a quarter from the higher total
number) exceeds the following percentages of the
total volume of local traffic exchanged between
the Parties in the LATA:
(i) The applicable percentage for 0 to
2,000,000 minutes of use will be 10%;
(ii) The applicable percentage for 2,000,001
through 5,000,000 minutes of use will be
5%;
(iii) The applicable percentage for greater
than 5,000,000 minutes of use will be
2%.
(b) The Parties agree that any calculation of net
usage differential for local traffic volumes
less than the percentages set out immediately
above shall demonstrate the Parties' traffic to
be in balance for purposes of this Section, The
Parties will base calculation under this Section
on AMA recordings, which shall be made, where
possible, in both the originating and
terminating Parties' network. The Parties agree
to report to each other on a monthly and
quarterly basis the total monthly local minutes
of use each terminates to the other Party.
(c) Where the Parties' traffic is not in balance, as
determined in the immediately preceding Section,
the Party terminating the greater
16
<PAGE> 312
Attachment 18
amount of ~ traffic to the other (the
"out-of-balance Party") will pay the other
Party, for all minutes of use in excess of the
number of minutes terminated to it by the other
Party, call termination rates based on the
following rate elements, per minute of use. The
out-of-balance Party will continue to make such
payments through the end of the quarter in which
it is determined that its traffic is no longer
out of balance. Upon such a determination, the
payments shall cease until the Parties' traffic
is again determined to be out of balance. When
traffic exchanged is out of balance, the
out-of-balance Party shall pay
(i) Local Switching Capacity,
(ii) Tandem Switching (where used), and
(iii) Common Transport (where used).
(d) Once the Commission has established rates for
Local Call transport and termination in its Open
Access and Network Architecture Development
("OANAD") proceeding, those rates shall apply in
lieu of the above-specified rate elements.
2. For Local and intraLATA Toll traffic originated by CLEC
(or CLCs subtending its network) to PACIFIC, CLEC agrees
to pay PACIFIC the following:
(a) Local calls: Bill and Keep (applicable to all
local Zone Usage Measurement ("ZUM") Zone 1,
Zone 2 and Zone 3, and Extended Area Service
traffic) shall apply unless the Parties' traffic
is out of balance per subsection 1(a) of this
Section, above. In the latter event, the
provisions of Subsection 1(c) of this Section
shall apply.
(b) Toll calls: The following rate elements are
applicable to intraLATA toll calls, based on the
rates in Attachment 8.
(1) The following rate elements from
PACIFIC's Tariff Cal. PUC 1 75-T will
apply when a Toll Call routes over Local
Interconnection Trunk Groups:
(a) For common switched transport: where
PACIFIC's tandem is used:
(i) Fixed - per minute of use.
(ii) Variable - per mile per minute of
use. Mileage shall be calculated
based on the
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<PAGE> 313
Attachment 18
airline miles between the
Vertical and Horizontal ("V&H")
coordinates of the P01, and the
PACIFIC end office or CLC routing
point.
(iii) Tandem Switching.
(b) Local switching
(c) NIC
(2) CLEC will pay two times the Tandem
Switching rate as specified in
Attachment 8 if whenever CLEC elects the
LATA-Wide Terminating Option.
3. For Local and intraLATA Toll traffic originated from
PACIFIC to CLEC, PACIFIC agrees to pay CLEC the following:
(a) Local calls: Bill and Keep: (applicable to all
local Zone Usage Measurement ("ZUM") Zone 1, Zone 2
and Zone 3, and Extended Area Service traffic)
shall apply unless the Parties' traffic is out of
balance per Section Fl(a), above. In the latter
event, the provisions of Section F1(c) shall apply.
(b) Toll calls: The following rate elements from
PACIFIC's Tariff Cal. PUC 175-T will apply when a
toll call routes over Local Interconnection Trunk
Groups:
(1) For common switched transport:
where CLEC's tandem is used:
(i) Fixed - per minute of use.
(ii) Variable - per mile per minute of
use. Mileage shall be calculated
based on the airline miles between
the Vertical and Horizontal ("V&H")
coordinates of the P01, and the CLEC
end office or CLC/CLEC routing
point.
(2) Tandem Switching
(3) Local switching
(4) NIC
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Attachment 18
G. Tandem Transit Switching rate: Tandem Transit Switching rate
shall be equal to the Tandem Switching rate plus two times the
Common Transport Fixed rate element as specified in Attachment
8.
1. The transit rate provides for Access Tandem switching
when either Party uses the other Party's Access Tandem
to originate a CLC call to a third party such as another
LEC, CLC, or Wireless Service Provider.
2. If either Party receives a call through the other
Party's Access Tandem that originates from another LEC,
CLC or wireless service Provider, the Party receiving
the transited call will not charge the other Party any
rate element for this call regardless of whether the
call is local or toll. The Parties will establish
appropriate billing relationships directly with the
Wireless Service Provider, other CLC or LEC.
H. For intraLATA Toll Free Service calls where such service is
provided by one of the Parties, the compensation set forth in
Section III. above, shall be charged by the Party originating
the call, rather than the Party terminating the call. This
includes originating charges listed in Section III as well as a
database query charge as specified in PACIFIC's intrastate
access tariff or CLEC's local exchange tariff.
I. Each Party will calculate terminating interconnection minutes of
use based on standard Automatic Message Accounting ("AMA")
recordings made within each Party's network. These recordings
are the basis for each Party to generate bills to the other
Party. Either Party may request the exchange of originating EMR
records in order to bill the other Party terminating minutes of
use. The Parties agree to cooperate in the exchange of the
records if so requested.
J. Measurement of minutes of use over Local Interconnection Trunk
Groups shall be in actual conversation seconds. The total
conversation seconds over each individual Local Interconnection
Trunk Group will be totaled for the entire monthly bill and then
rounded to the next whole minute.
K. Each Party will provide the other, within fifteen (15) calendar
days after the end of each calendar quarter, a usage report with
the following information regarding traffic it sent to (i.e.,
terminated over) the Local Interconnection Trunk arrangements:
1. Total traffic volume described in terms of minutes and
messages and by call type (local, toll and other)
terminated to each other over the Local Interconnection
Trunk Groups; and
2. Percent Local Usage (PLU)
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Attachment 18
L. CLEC will pay the rates for SS7 CCS interconnection as specified
in Attachment 8. The Parties will exchange TCAP messages to
facilitate full interoperability of CCS-based features and
functions, to the extent each carrier offers such features and
functions to its own end users. All CCS signaling parameters
will be provided, including CPN. All privacy indicators will be
honored.
M. For 976 or California 900 calls (those 900 NXXs shown in the
LERG as PACIFIC's 900 NXXs), CLEC shall deliver calls originated
over CLEC-provided exchange services to the Local
Interconnection Trunk Groups. The Parties have separately
reached agreement on the rating and billing of such calls.
IV. COMPENSATION FOR USE OF LOCAL INTERCONNECTION FACILITIES
A. Interconnection facilities include the facilities that connect
the Parties' respective switching networks.
B. The Parties agree that each has an equal obligation to
interconnect its network infrastructure to the other's network.
The Parties may decide to own the interconnection facility
jointly or to provide facilities to deliver traffic to the
other. If the Parties agree to build the interconnection
facilities, they will agree on desired capacity and performance
characteristics and then may bid to install the facilities. The
Party with the lowest bid will construct the facilities and bill
the other Party 50% of the construction costs. The constructing
Party will charge a monthly maintenance charge for maintaining
the facilities. This charge will be based upon the TELRIC of
maintaining the facility. (Solely for the purpose of this
paragraph, TELRIC shall be defined as did the FCC in the First
Interconnection Order.) !f the Parties decide not to build and
operate the interconnecting facility jointly, they may choose
from options 1 or 2 below.
C. The Parties agree to the following terms based on consideration
of the generally balanced use of the Parties' respective
facilities for interconnection. Such consideration is based on
relative facility length the capacity provided to each other,
determined by the comparison of facility deployment behind the
POIs associated with CLEC collocation arrangements and PACIFIC's
network. This compensation is contingent on a balanced facility
interconnection being defined in Appendix A.
1. Where the P01 for the Local Interconnection Trunk Group
is located other than in the same PACIFIC Wire Center as
the PACIFIC switch where the Local Interconnection Trunk
Group terminates, CLEC will pay a monthly charge for the
PACIFIC-provided facility according to PACIFIC's
intrastate access tariff, in addition to any usage rate
elements in Section III above. CLEC may, at its option,
choose to pay PACIFIC either the applicable PACIFIC
tariffed unbundled transport or unbundled interoffice
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<PAGE> 316
Attachment 18
facility rates for DS-1 rates for those DS-1(s) used for
Local Interconnection Trunks in a DS-3 facility, or pay
the applicable tariffed or unbundled interoffice
facility rates for DS-3 for each DS-3 facility, used for
Local Interconnection Trunks between the Parties.
2. Where the P01 for the Local Interconnection Trunk Group
is at a collocation arrangement in the same PACIFIC Wire
Center as the PACIFIC switch where the Local
Interconnection Trunk Group terminates, PACIFIC will pay
CLEC a monthly charge for the facility and cross connect
equal to one Point Of Termination at DS-1 rates (per
DS-1(s) used for Local Interconnection Trunks) or DS-3
rates (per DS-3 used for Local Interconnection Trunks)
according to Pacific's intrastate access tariff, in
addition to any usage rate elements, if any, above.
PACIFIC may, at its option, choose to pay either the
applicable tariffed DS-1 rates for those DS-1(s) used
for Local Interconnection Trunks in a DS-3 facility, or
pay the applicable tariffed DS-3 rates for each DS-3
facility used for Local Interconnection Trunks between
the Parties.
3. Where the P01 for the Local Interconnection Trunk Group
is at a Mid Span Meet, there shall be no compensation
between the Parties for the Local Interconnection
facilities used.
V. MEET-POINT TRUNKING ARRANGEMENTS
A. Two-way trunks will be established to enable CLEC and PACIFIC
jointly to provide Feature Group B and D ("FGB and FGD")
Switched Access Services via PACIFIC's Access Tandem switch.
B. CLEC may use Meet-Point Trunks to send and receive FGB and FGD
calls from Switched Access customers connected to PACIFIC's
Access Tandem.
C. The Parties will use separate facilities and separate two-way
trunk groups to each and every PACIFIC Access Tandem under which
CLEC's NXXs home using DS-1 or DS-3 facilities other than the
facilities used for Local Interconnection Trunk Groups. Neither
Party will charge the other any amount for any meet-point
facilities.
D. In the case of Switched Access Services provided through
PACIFIC's Access Tandem, PACIFIC will not offer blocking
capability for Switched Access customer traffic delivered to
PACIFIC's tandem for completion on CLEC's network. The Parties
understand and agree that Meet-Point Trunking arrangements are
available and functional only to or from Switched Access
customers who directly connect with PACIFIC's tandems that CLEC
subtends in each LATA. In no event will PACIFIC be required to
route such traffic through more than one tandem for connection
to or from Switched Access customers.
21
<PAGE> 317
Attachment 18
PACIFIC shall have no responsibility to ensure that any Switched
Access customer will accept traffic that CLEC directs to the
Switched Access customer. PACIFIC also agrees to furnish CLEC a
list of those IXCs which also interconnect with PACIFIC's
tandems.
E. The Parties will provide CCS to one another, where and as
available, in conjunction with meet-point two-way trunk groups.
CLEC may establish CCS interconnections (either directly or
through a third party), provided such third-party is
interconnected with PACIFIC pursuant to inter- and intra-state
access tariffs. The Parties will exchange TCAP messages to
facilitate full inter-operability of CCS-based features between
their respective networks, including all CLASS features and
functions, to the extent each carrier offers such features and
functions to its own end users. CLEC will provide all CCS
signaling including, without limitation, Charge Number and
originating line information ("OLI"). For terminating FGD,
PACIFIC will pass all CCS signaling including, without
limitation, CPN if it receives CPN from FGD carriers. All
privacy indicators will be honored. Where available, network
signaling information such as Transit Network Selection ("TNS")
parameter, Carrier Identification Codes ("CIC"), (CCS platform)
and CICIOZZ information (non-CCS environment) will be provided
by CLEC wherever such information is needed for call routing or
billing. The Parties will follow all OBF adopted standards
pertaining to TNS and CIC/OZZ codes.
F. The Parties shall use CCS in conjunction with Meet-Point Trunks,
provided that they must use multifrequency ("MF") signaling on a
separate Meet Point Trunk group for originating FGD access to
Switched Access customers that use MF FGD signaling protocols
and may use such signaling due to equipment constraints. The
Parties shall not provide MF and CCS trunk within a DS-1
facility. They must use a separate DS-1 facility for each
signaling type.
G. CLEC shall deliver all originating Toll Free Service calls for
which it requests that PACIFIC perform the Service Switching
Point ("SSP") function (e.g., performs the database query) using
GR-394 format over the Meet-Point Trunk group. CLEC shall use
Carrier Code "0110" and Circuit Code of "08" for all such calls.
H. When CLEC performs the SSP function for Toll Free service calls,
and if such calls are destined for an IEC, if CLEC delivers such
calls to PACIFIC it shall do so over Meet Point Trunk Groups
using GR-394 format. When CLEC performs the SSP function for
Toll Free service calls, and if such calls are destined for NXXs
within the LATA, if CLEC delivers such calls to PACIFIC, it
shall do so over the Local Interconnection Trunk Group using
GR-317 format.
22
<PAGE> 318
Attachment 18
I. Originating Feature Group B calls delivered to PACIFIC's tandem
shall use GR-317 signaling format unless the associated FGB
carrier employs GR-394 signaling for its FGB traffic at the
serving Access Tandem.
VI. RESPONSIBILITIES OF THE PARTIES
A. CLEC and PACIFIC agree to exchange such reports and/or data as
provided in this Attachment to facilitate the proper billing of
traffic. Either Party may request an audit of such usage reports
on no fewer than ten (10) business days written notice and any
audit shall be accomplished during normal business hours at the
office of the Party being audited (which shall be San Francisco
for CLEC and San Francisco for PACIFIC). Such audit must be
performed by a mutually agreed-to auditor paid for by the Party
requesting the audit. Such audits shall be requested within six
months of having received the PLU factor and usage reports from
the other Party and may not be requested more than twice per
year.
B. CLEC and PACIFIC will review engineering requirements on a
semi-annual basis and establish guidelines for forecasts of
trunk and facilities utilization provided under this Attachment.
C. CLEC and PACIFIC shall share responsibility for all Control
Office functions for Local Interconnection Trunks and Trunk
Groups, and both Parties shall share the overall coordination,
installation, and maintenance responsibilities for these trunks
and trunk groups.
D. CLEC is responsible for all Control Office functions for Meet
Point Trunks and Trunk Groups, and shall be responsible for the
overall coordination, installation, and maintenance
responsibilities for these trunks and trunk groups.
E. CLEC and PACIFIC shall:
1. Provide trained personnel with adequate and compatible
test equipment to work with each others' technicians.
2. Notify each other when there is any change affecting the
service requested, including the due date.
3. Coordinate and schedule testing activities of their own
personnel, and others as applicable, to ensure its
interconnection trunks/trunk groups are installed per
the interconnection order, meet agreed upon acceptance
test requirements, and are placed in service by the due
date.
4. Perform sectionalization to determine if a trouble is
located in its facility or its portion of the
interconnection trunks prior to referring the trouble to
each other.
23
<PAGE> 319
Attachment 18
5. Advise each other's Control Office if there is an
equipment failure that may affect the interconnection
trunks.
6. Provide each other with a trouble reporting number that
is readily accessible and available 24 hours/7 days a
week.
7. Provide to each other test-line numbers and access to
test lines, including a test-line number that returns
answer supervision in each NPA-NXX opened by a Party.
F. CLEC and PACIFIC will provide their respective billing contact
numbers to one another on a reciprocal basis
G. The Parties will conduct cooperative testing for the proper
recording of AMA records in each carrier switch(es) before
establishing service.
H. Prior to the time of interconnection, CLEC will provide to
PACIFIC CLEC's references or internal standards governing each
topic in the Bilateral Agreement Template/Worksheet attached as
Appendix B, for which there is a corresponding PACIFIC
reference.
VII. INSTALLATION OF TRUNKS
Due dates for the installation of Local Interconnection Trunk Groups and
Meet Point Trunks covered by this Agreement shall be equal to PACIFIC's
Switched Access intervals.
VIII. TRUNK FORECASTING
A. The Parties shall work towards the development of joint
forecasting responsibilities for traffic utilization over trunk
groups. Orders for trunks that exceed forecasted quantities for
forecasted locations will be accommodated as facilities and/or
equipment becomes available. The Parties must provide forecast
information to each other twice a year. The forecasting Service
Performance Measures and Liquidated Damages (Attachment 17 to
this Agreement) shall not apply to the following forecasts. The
semi-annual forecasts shall include:
1. Yearly forecasted trunk quantities (which include
measurements that reflect actual tandem Local
Interconnection and Meet Point Trunk Groups and end office
equivalent trunking requirements, whether or not tandem
subtending) for a minimum of three (current and plus-i and
plus-2) years;
2. The use of Common Language Location Identifier, described
in Bellcore documents BR 795-100-100 and BR 795400-100
and;
24
<PAGE> 320
Attachment 18
3. A description of major network projects anticipated for
the following six months. Major network projects include
trunking or network rearrangements, shifts in anticipated
traffic patterns, or other activities that are reflected
by a significant increase or decrease in trunking demand
for the following forecasting period.
B. If differences in semi-annual forecasts of the Parties vary by
more than 48 additional DSO two-way trunks for each Local
Interconnection Trunk Group, the Parties shall meet to reconcile
the forecast to within 48 DSO trunks.
C. If a trunk group is under 75 percent (75%) of centum call seconds
capacity on a monthly average basis for each month of any
six-month period, either Party may request the issuance of an
order to resize the trunk group, which shall be left with not
less than 25% excess capacity. In all cases, grade-of-service
objectives identified in Section IX, following, shall be
maintained.
D. Each Party shall provide a specified point of contact for
planning, forecasting and trunk servicing purposes.
IX. GRADE OF SERVICE
A blocking standard of one half of one percent (.005) during the average
busy hour, for final trunk groups between the Parties' networks carrying
Meet-Point traffic shall be maintained. All other final trunk groups
shall be engineered with a blocking standard of one percent (.01)
X. LOCAL INTERCONNECTION TRUNK SERVICING
A. Orders between the Parties to establish, add, change or
disconnect trunks shall be processed by use of an
Interconnection Service Request ("ISR") for CLEC orders to
PACIFIC or an Access Service Request "ASR" for PACIFIC orders to
CLEC.
B. The Parties will jointly manage the capacity of Local
Interconnection Trunk Groups. PACIFIC's Circuit Provisioning
Assignment Center ("CPAC") and CLEC's equivalent center will
send a Trunk Group Service Request ("TGSR") to the other Party
to trigger changes to the Local Interconnection Trunk Groups
based on capacity assessment. Either Party upon receipt of the
TGSR will issue an ISRIASR to the other Party:
1. Within 10 business days after receipt of the TGSR; or
2. At any time as a result of either Party's own capacity
management assessment, in order to begin the
provisioning process.
C. Orders that comprise a major project shall be submitted at the
same time, and their implementation shall be jointly planned and
coordinated. Major projects are those
25
<PAGE> 321
Attachment 18
that require the coordination and execution of multiple orders or
related activities between and among PACIFIC and CLEC work groups
including, but not limited to, the initial establishment of Local
Interconnection or Meet Point Trunk Groups and service in an area, NXX
code moves, re-homes, facility grooming, or network rearrangements.
D. The Parties will cooperate to establish separate high-volume
trunk groups for the completion of calls to high volume
customers, such as radio contest lines.
E. CLEC will be responsible for engineering its network on its side
of the P01. PACIFIC will be responsible for engineering its
network on its side of the P01.
XI. TROUBLE REPORTS
CLEC and PACIFIC will cooperatively plan and implement coordinated
repair procedures for the Meet Point and Local Interconnection Trunks
and facilities to ensure that trouble reports are resolved in a timely
and appropriate manner consistent with procedures referenced in Section
VI of this Attachment.
XII. NETWORK MANAGEMENT
A. Protective Controls Either Party may use protective network
traffic management controls, such as 7-digit and 10-digit code
gaps, on traffic toward each other's network, when required to
protect the public switched network from congestion due to
facility failures, switch congestion or failure, or focused
overload. CLEC and PACIFIC will immediately notify each other of
any protective control action planned or executed.
B. Expansive Controls Where the capability exists, either Party may
implement originating or terminating traffic reroutes to relieve
network congestion temporarily due to failures or abnormal
calling patterns. Reroutes will not be used to circumvent normal
trunk servicing. Expansive controls will only be used when the
Parties mutually agree.
C. Mass Calling CLEC and PACIFIC shall cooperate and share
pre-planning information regarding cross-network call-ins
expected to generate large or focused temporary increases in
call volumes.
26
<PAGE> 322
ATTACHMENT 18/APPENDIX A: POI CHART
CRL NETWORK SERVICES, INC.
<TABLE>
<CAPTION>
CLEC Access Tandem/ End CLEC Routing Point POI Pacific Access Tandem
Office End Office
<S> <C> <C> <C>
SNFCCA86DS0 SNFCCA86W05 SNFCCA2143T
</TABLE>
<PAGE> 323
ATTACHMENT 18
APPENDIX B
BILATERAL AGREEMENT TEMPLATE/WORKSHEET
<PAGE> 324
ATTACHMENT 18 - APPENDIX B
Page 2
Worksheet Current As Of:
<TABLE>
<CAPTION>
Topic Pacific Bell Reference(s) CLEC Reference(s) Notes / Status
- --------- ---------------------------------- -------------------------------- ------------------------ ------------------------
<S> <C> <C> <C> <C>
1 Internetwork provisioning CLC Handbook ("HB"), Section
information and guidelines. 16.5, Provisions of LISA.
CLC Handbook, Appendix F1, CLC
ISR Users' Guide.
Interconnection Agreement
between ____________ and
Pacific,
_______ 1996
2 SS7 & other critical CLC Operations Handbook-SS7,
internetwork compatibility Section 16.7.3.2 & .3,
testing. Pre-service & Protocol Testing.
CCS Network Interface, Section
6.3, Protocol Compatibility
Testing.
NOF Handbook, Section III, 3G, SS7
Compatibility Testing.
3 Special Protocol CCS Network Interface, Section
implementation 2.3, Interface Protocol
agreements. Messages.
TR-246, T1.114 (SCCP) & T1.116
(SCCP); GR-317 and GR-394.
CCS Questionnaire, Section IV, D- 2
Switch Parameters.
</TABLE>
<PAGE> 325
ATTACHMENT 18 - APPENDIX B
Page 3
BILATERAL AGREEMENT TEMPLATE/WORKSHEET
<TABLE>
<CAPTION>
Topic Pacific Bell Reference(s) CLEC Reference(s) Notes / Status
- --------- ---------------------------------- -------------------------------- ----------------------------- ----------------------
<S> <C> <C> <C> <C>
4 Diversity Requirements CCS Network Interface, Section
4.1, Diversity Definition.
NOF Handbook, Section III, 2D,
Link Responsibilities -
Diversity.
5 Installation, maintenance CLC Operations Handbook-LISA,
guidelines and Section 16.6.2,
responsibilities. Responsibilities.
CLC Operations Handbook-SS7,
Section 16.7.2,
Responsibilities
6 Network security CLC Operations Handbook-LISA,
requirements. Section 16.6.11 & .12; i
(Emergency & Fraud).
7 Performance standards LISA Interface Specification,
and service level Section 4, Performance.
agreements.
8 Specific versions/issues of CCS Network Interface, Section
protocol or interface 1.4, Related Documents.
specification.
9 Maintenance procedures, CLC Operations Handbook-LISA,
including trouble reporting, Section 16.6.4, Maintenance
status, etc.
CLC Operations Handbook-SS7,
Section 16.7.4, Maintenance
</TABLE>
<PAGE> 326
ATTACHMENT 18 - APPENDIX B
Page 4
BILATERAL AGREEMENT TEMPLATE/WORKSHEET
<TABLE>
<CAPTION>
Topic Pacific Bell Reference(s) CLEC Reference(s) Notes / Status
- --------- ---------------------------------- -------------------------------- ------------------- ------------------
<S> <C> <C> <C> <C>
10 Internetwork trouble CLC Operations HB-LISA, Section
resolution and escalation 16.6.4 & .6, Sectionalization;
procedures. Escalations.
CLC Operations HB-557, Section
16.7.4 & .6, Sectionalization;
Escalations.
Interconnection Agreement between
____________ and Pacific, _______
1996.
11 In-depth root cause SI. 131 - Customer Service Quality
analysis of significant Failure Report (Analysis).
failures.
12 Explicit forecasting CLC HB, Appendix C,
information re: direct and Interconnection Forecasts.
subtending traffic.
13 Explicit expectations CLC Operations Handbook-557,
regarding interoperability Section 16.7.3.3 & .4,
testing. Protocol/Acceptance Tests.
CCS Network Interface, Section
6.3, Protocol Compatibility
Testing.
CLC Operations Handbook-LISA,
Section 16.6.3.3 Acceptance
Tests.
</TABLE>
<PAGE> 327
ATTACHMENT 18 - APPENDIX B
Page 5
BILATERAL AGREEMENT TEMPLATE/WORKSHEET
<TABLE>
<CAPTION>
Topic Pacific Bell Reference(s) CLEC Reference(s) Notes / Status
- --------- ---------------------------------- -------------------------------- ------------------- --------------
<S> <C> <C> <C> <C>
14 Network management CLC Operations HB-LISA, Section
16.6.2.5, Network Management
Guidelines.
NOF Handbook, Section VI,
Network Management Guidelines.
Interconnection Agreement
between _________ and Pacific,
_________ 1996
15 CLC Operations Handbook - LISA
(all sections).
CLC Operations Handbook - SS7 (all
sections).
16 Routing and screening LISA Interface Specification,
administration. Section 2.2, Routing &
Screening.
CCS Network Interface, Section
2.2, Routing & Screening
(MTP/SCCP).
Interconnection Agreement between
____________ and Pacific, ______
1996.
17 Synchronization design CLC Operations Handbook-SS7,
and company-wide Section 16.7.3.5, Synchronization.
coordinator(s).
</TABLE>
<PAGE> 328
ATTACHMENT 18 - APPENDIX B
Page 6
BILATERAL AGREEMENT TEMPLATE/WORKSHEET
<TABLE>
<CAPTION>
Topic Pacific Bell Reference(s) CLEC Reference(s) Notes / Status
- --------- ---------------------------------- -------------------------------- ------------------------- --------------
<S> <C> <C> <C> <C>
18 Performance LISA Interface Specification,
requirements. Section 4, Performance.
CCS Network Interface,
Section 5, Performance.
19 Responsibility assignment CLC Operations Handbook - LISA
(testing, control, etc.). (throughout)
CLC Operations Handbook - SS7
(throughout)
Interconnection Agreement between
____________ and Pacific, _______
1996.
20 Information sharing for CLC Oprs HB-LISA, Section
analysis and problem 16.6.4.3 & 16.6.5 Sectionalization
identification. & Intercarrier Testing.
NOF Handbook, Section VII,
Information Sharing.
</TABLE>
<PAGE> 329
ATTACHMENT 18 - APPENDIX B
Page 7
BILATERAL AGREEMENT TEMPLATE/WORKSHEET
<TABLE>
<CAPTION>
Topic Pacific Bell Reference(s) CLEC Reference(s) Notes / Status
- --------- ---------------------------------- -------------------------------- --------------------- ------------------
<S> <C> <C> <C> <C>
21 Network transition and CLC Operations Handbook-LISA,
service rearrangement Section 16.6.3.7, Rearrangements.
management.
CLC Operations HB-SS7, Section
16.7.3.9, Signaling Link
Rearrangements.
CCS Questionnaire, Section
III, 2
Trunk Conversion
Considerations.
22 Calling Party Number CLC HB-LISA, Section 16.5.6,
privacy management. Prerequisites, Limitations &
Restrictions.
Interconnection Agreement between
____________ and Pacific, _______
1996.
23 Traffic engineering design Interconnection Agreement between
criteria and capacity ____________ and Pacific, _______
management 1996.
</TABLE>
<PAGE> 330
ATTACHMENT 18 - APPENDIX B
Page 8
BILATERAL AGREEMENT TEMPLATE/WORKSHEET
<TABLE>
<CAPTION>
Topic Pacific Bell Reference(s) CLEC Reference(s) Notes / Status
- --------- ---------------------------------- -------------------------------- ---------------------- ---------------
<S> <C> <C> <C> <C>
24 Tones and CLC Operations HB-LISA, Section
announcements for 16.6.9.4, Tones and
unsuccessful call Announcements.
attempts.
CCS Network Interface, Section
3.4, Tones and Announcements.
NOF Handbook, Section III,
Pg 17, Tones and Announcements
25 Mutual aid agreements(s). CLC Handbook, Section 48,
Emergency Preparedness.
Agreement between BCCs for
Nat'I Security Emergency
Preparedness.
Mutual Aid Agreement Among IEC
and LEC Carriers in California.
26 Emergency Emergency preparedness &
communications plan. Response Program, Tab 4,
Communications
NOF Handbook, Section III, Pg 16,
Emergency Communications.
27 Billing records data
exchange
</TABLE>
<PAGE> 331
ATTACHMENT 18 - APPENDIX B
Page 9
BILATERAL AGREEMENT TEMPLATE/WORKSHEET
<TABLE>
<CAPTION>
Topic Pacific Bell Reference(s) CLEC Reference(s) Notes / Status
- --------- ---------------------------------- -------------------------------- ----------------------- ---------------
<S> <C> <C> <C> <C>
28 Pre-cutover internetwork CCS Network Interface, Section
trunk testing. 6.3, Protocol Compatibility
Testing.
CLC Operations HB-LISA, Section
16.6.3.2 & .3,
Pre-Service/Acceptance Tests.
CLC Operations HB-SS7, Section
16.7.3.4 & .5,
Protocol/Acceptance Tests
</TABLE>
<PAGE> 1
EXHIBIT 10.13
MASTER SERVICES AGREEMENT
This AGREEMENT is made this day of between GST - TELECOM CALIFORNIA Inc.
(GST - TELECOM CALIFORNIA) and the undersigned person.
WHEREAS, GST - TELECOM CALIFORNIA provides telecommunications services which
Customer desires to purchase as set forth herein.
Now therefore it is agreed as follows:
1. TARIFFS - GST - TELECOM CALIFORNIA Tariff No 1 (governing interstate
Services) on file with the Federal Communications Commission, and Tariff
Decision No. 94-04-001 (governing intrastate services) on file with the
California Public Utility are hereby incorporated into this Agreement by this
reference. Any conflict between the terms and conditions detailed in this
Agreement and those detailed in the appropriate tariff shall be resolved in
favor of the tariff.
2. SERVICES - during the term of this Agreement. GST -TELECOM CALIFORNIA will
provide Customer with the specific services as identified on the service
order(s) attached hereto and made a part hereof. GST - TELECOM CALIFORNIA shall
provide customer with capacity on a "take or pay basis, i.e. regardless of use
by customer.
3. TERM - the term of this Agreement shall begin as of the date first set forth
above end shall terminate upon the termination of the latest Service Order
issued under the Agreement. However, GST - TELECOM CALIFORNIA may terminate this
agreement or suspend services hereunder at any time upon: (a) any failure of
Customer to pay any amounts as provided in this Agreement, (b) any breach by
Customer of any material provision of this Agreement or any law, rule, or
regulation governing the services provided hereunder, (c) any insolvency.
bankruptcy, assignment for the benefit of creditors. appointment of trustee or
receiver of similar event with respect to Customer; (d) any governmental
prohibition or required alteration of the services to be provided hereunder. Any
termination shall not relieve Customer of obligation to pay any charges incurred
hereunder prior to such termination.
4. CUSTOMER CANCELLATION - If Customer cancels the service before the term of
the Agreement is complete, and for reasons other than non-performance or
Customer's lack of appropriation of funds for services by the appropriate state
authority noted in attached Service Order(s), then Customer is responsible for
maximum termination charges up to the remaining balance of the contract.
5. PAYMENTS - During the term, Customer shall pay GST -TELECOM CALIFORNIA for
the services as set forth In the attached Service Order(s). GST - TELECOM
CALIFORNIA shall not increase such amounts for payments during any given Service
Order period for those services included in that particular Service Order. but
thereafter GST - TELECOM CALIFORNIA may Increase such amounts upon 30 day's
prior written notice. All taxes, fees, and governmental charges Imposed on the
service provided hereunder shall be paid by Customer in addition to any other
amounts owing. Normal service charges shall be invoiced monthly in advance. All
amounts owed by Customer hereunder shall be paid within 30 days of invoice date.
GST - TELECOM CALIFORNIA reserves the right to charge interest on all
outstanding balances over 30 days at 1.5% per month.
6. SERVICE CALL CHARGES - GST - TELECOM CALIFORNIA may change Customer for
service calls (except as necessitated by a failure of GST TELECOM CALIFORNIA) at
the rates generally charged by GST -TELECOM CALIFORNIA to its customers. If
requested by Customer. GST - TELECOM CALIFORNIA will provide up to two (2)
flours per service agreement of free consultation and on site troubleshooting
service to Customers subscribing to service at, speeds. between 1.544 Mbps and
46 Mbps end up to four (4) hours of free consultation and on site
troubleshooting services to Customers subscribing to service at speeds at or
greater than 45 Mbps. Additional consultation services are available at GST -
TELECOM CALIFORNIA'S prevailing rates.
- ----------------
Certain portions of this document in the price information in service orders
have been omitted and filed separately with the Securities and Exchange
Commission based on a request for confidential treatment with respect to the
omitted portions.
<PAGE> 2
7. EQUIPMENT CHANGES - GST - TELECOM CALIFORNIA may substitute, change, or
rearrange any equipment, facility or system used in providing Services at any
time and from time to time, but shall not thereby alter the technical parameters
of the service provided hereunder.
8. WRITTEN CONSENT FOR EQUIPMENT CHANGES - Customer shall not cause or allow any
facility or equipment of GST - TELECOM CALIFORNIA'S to be rearranged. moved.
disconnected. or repaired without GST - TELECOM CALIFORNIA's prior written
consent. Customer shell not create or allow any liens or other encumbrances to
be placed on any GST - TELECOM CALIFORNIA equipment, facility, or system arising
from any act, transaction or circumstances relating to Customer.
9. SERVICE RELOCATION - If Customer elects to relocate or otherwise change the
place of services alter commencement of the installation of facilities, Customer
shall pay any additional installation charges for both the original and new
location.
10. SERVICE INTERRUPTION - GST - TELECOM CALIFORNIA will grant credit allowance
for service Interruption calculated and credited in 15-minute increments. A
service interruption will be deemed to have occurred only if service becomes
unusable to Customer as a result of failure of GST - TELECOM CALIFORNIA's
facility, equipment or personnel used to provide the service in question, and
only where the interruption is not the result of: (I) the negligent or
intentional acts of Customer or its agents; (II) the failure or malfunction of
non GST - TELECOM CALIFORNIA equipment or systems; (III) a service interruption
caused by service maintenance, alteration or implementation requested by the
Customer. Such credits will be granted only if: (a) Customer affords GST -
TELECOM CALIFORNIA full and free access to Customer's premises to make
appropriate repairs, maintenance, testing, etc.; and (b) Customer does not
continue to use the service on an impaired basis. The foregoing states
Customer's sole remedy for service interruption under the Agreement and in no
event shall GST- TELECOM CALIFORNIA be liable for any direct, indirect,
incidental, consequential punitive or special damages to Customer as result of
any GST - TELECOM CALIFORNIA service, equipment, facilities, person or system
provided or utilized under this agreement.
11. WARRANTY - Other than as expressed in this agreement, there are no
warranties, representations or agreements, expressed or implied either in fact
or by operation of law, statutory or otherwise, including warranties of
merchantibility of fitness for a particular purpose, except those expressly set
forth herein.
12. ACCESS - Customer shall allow GST - TELECOM CALIFORNIA continuous access and
right-of-way to Customer's premises to the extent reasonably determined by GST -
TELECOM CALIFORNIA to be appropriate to the provision and maintenance of
services, equipment, facilities and Systems hereunder. Customer shall furnish
GST -TELECOM CALIFORNIA, at no charge, such equipment space and electrical power
as is reasonably determined by GST - TELECOM CALIFORNIA to be required and
suitable to render services hereunder.
13. EQUIPMENT DAMAGE - Customer shall be liable for any damage to GST - TELECOM
CALIFORNIA equipment, facility, and system which is caused by: (a) negligent or
willful acts or omissions of Customer, or (b) malfunction or failure of any
equipment or facility provided by Customer or its agents, employees or
suppliers.
14. ASSIGNMENT - Neither party may assign this Agreement without the written
consent of the other party, except that GST - TELECOM CALIFORNIA or Customer may
assign its rights and/or obligations hereunder; (a) to any subsidiary, parent
company or affiliate of GST - TELECOM CALIFORNIA or Customer, (b) pursuant to
any sale or transfer of substantially all the business of GST - PACIFIC
LIGHTWAVE or Customer, (c) pursuant to any financing, merger or reorganization
of GST - TELECOM CALIFORNIA or Customer.
15. LICENSE - No licenses, express or implied, is granted by GST - TELECOM
CALIFORNIA pursuant to this Agreement.
16. STATE GOVERNANCE - This Agreement shall be governed by the state of
California.
2
<PAGE> 3
17. PROPRIETARY INFORMATION - Each party agrees to maintain in strict confidence
all plans. designs, drawings, trade secrets, and other proprietary information
of other party which is disclosed pursuant to this Agreement.
18. MULTIPLE CUSTOMERS - If this Agreement is entered into by more than one
Customer, each is jointly, and severally liable for all agreements. convenants,
and obligations herein.
CUSTOMER RESPONSIBILITIES
19. DISCONNECTION OF EXISTING SERVICE - If appropriate, Customer must arrange
the disconnection of this existing access service. The requested date of
disconnection will be determined by the new service Installation date. Customer
will receive a firm order commitment date from GST - TELECOM CALIFORNIA. It is
recommended that the disconnection date be scheduled 3 days or more after the
firm order commitment date.
20. LONG DISTANCE PORTION - As a provider of special access service, GST -
TELECOM CALIFORNIA will meet its obligation to provide Customer with the
requested service when it is requested, GST - TELECOM CALIFORNIA will coordinate
service with the long distance provider. However, Customer is responsible for
notifying the long distance carrier of its intention to obtain service from GST
- -TELECOM CALIFORNIA and placing any required orders with them. If requested, GST
- - TELECOM CALIFORNIA will coordinate the service for the Customer for a charge
which will be billed to Customer at GST - TELECOM CALIFORNIA's prevailing rate.
21. TELEPHONE EQUIPMENT PREP - To ensure a timely and error-free installation,
GST - TELECOM CALIFORNIA will perform a site survey to visually inspect the
physical location where GST - TELECOM CALIFORNIA will interconnect with
Customer's phone equipment. If this is a co-location and GST - TELECOM
CALIFORNIA places equipment at Customer's premise, GST - TELECOM CALIFORNIA will
locate it where customer requires it. GST- TELECOM CALIFORNIA is responsible at
Customers sole expense for wiring to a mutually agreed Network interface. If GST
- - TELECOM CALIFORNIA already has a presence in Customer's building, GST -
TELECOM CALIFORNIA will cable to the Network interface Customer designates. GST
- -TELECOM CALIFORNIA will coordinate and acquire any necessary conduit runs in
support of this application. Customer will provide necessary technical
information such as signaling, levels, and any special conditions.
22. CREDIT POLICY - GST - TELECOM CALIFORNIA may conduct a credit verification
of a new Customer. If GST -TELECOM CALIFORNIA is unable to obtain the necessary
information through normal channels, GST - TELECOM CALIFORNIA may request a
financial statement or a service deposit from Customer prior to processing the
order. If Customer's credit history is listed under a parent or other company
name, please specify: _____________. Customer must provide acceptable credit
Information to GST -TELECOM CALIFORNIA or a deposit may be required.
23. INSTALLATION DAY - GST - TELECOM CALIFORNIA terminal tests the quality of
every service before it is accepted. On installation day, a Customer technician
responsible for telephone equipment and/or transmission links must be available.
The Customer's technician should notify GST - TELECOM CALIFORNIA upon arrival
and remain at the location until necessary hook-ups and test calls are
completed. A Customer representative must verity completion of this work.
24. BILLING - GST - TELECOM CALIFORNIA generates invoices every month that
reflect the charge for service in advance. All invoices are issued on or about
the first day of the month. The first invoice shows the monthly charges
pro-rated for the first month of service. The pro-rated invoice is sent
approximately one week from activation date. It will also show the applicable
installation charge(s) and fees. If Customer cancels order prior to
installation, there will be an administrative charge reflecting the costs
already incurred by GST - TELECOM CALIFORNIA to process Customer's order. Other
charges may include a physical move charge which is applicable when either the
origination or termination end of the circuit is moved. This change applies only
to the relocated end.
3
<PAGE> 4
----------
25. ENTIRE AGREEMENT - This agreement together with the attached Service Order,
all public tariffs incorporated hereunto by reference sets forth the full
agreement of the parties with respect to the subject matter hereof, and
supersedes any prior agreement or understanding. If any provision hereof is held
by a Court to be invalid, void, or unenforceable, the remainder of this
Agreement shall nevertheless remain unimpaired and in effect. To the extent of a
conflict between any provision of this agreement and the attached Service Order,
the provision of this Agreement shall control.
/s/ Philip Burkhart/VP
- -------------------------------------
Customer Signature/Title
CRL Network Services
- -------------------------------------
Company Name
- -------------------------------------
GST - TELECOM CALIFORNIA Signature/Title
- -------------------------------------
Date
COMPLETE THE FOLLOWING ONLY IF CUSTOMER OWNS OR CONTROLS THE BUILDING IN WHICH
SERVICE IS TO BE PROVIDED:
__________________________________ represents that it is the owner of the
building described as _________________, and hereby grants Greenstar
Telecommunications a license to reasonably use these premises for the
installation, operation, removal, repair end maintenance of the facilities
required to serve _________________ and other tenants according to this
Agreement. GST - TELECOM CALIFORNIA shall have the right to (1) install grid
work for cable attachment; (2) use openings passing through the building zone or
horizontally above the ceilings and hallways where space is available; (3) bore
through the floors of the building in the vertical riser spaces, electrical or
phone closets to install, operate, maintain, remove, replace, and repair wires,
cable, conduit, waveguides and related equipment and material inside the riser
spaces. In and through the building through the telephone cable entrance; (4)
access the cable vault and those cables, conduits or openings exiting the
building to the street or alley vault.; (5) take whatever reasonable actions are
necessary to maintain continuity of services to ________________
____________________ also agrees to assist GST - TELECOM CALIFORNIA in the
location of riser space and obtaining consent from other tenants, if necessary.
The parties hereby agree to be bound by this additional term.
- -------------------------------------
Customer Signature/Title
- -------------------------------------
Company Name
- -------------------------------------
GST - TELECOM CALIFORNIA Signature/Title
- -------------------------------------
Date
4
<PAGE> 5
[GST TELECOM LOGO] FiberLinx Private Line Service Order
<TABLE>
<CAPTION>
Order Date Desired Due Date Facility type Order Tracking # Work Order # Circuit Type
<S> <C> <C> <C> <C> <C>
Existing GST Fiber (DS-3)
(Type 1)
</TABLE>
CUSTOMER INFORMATION
Company Name
CRL Network Services
- -------------------------------------------------------------
Street Number Direction Building Name
1
- -------------------------------------------------------------
Street Name Room Floor
Kearney
- -------------------------------------------------------------
City State Zip
San Francisco CA 94108
- -------------------------------------------------------------
Grantor Title
- -------------------------------------------------------------
Telephone Fax
- -------------------------------------------------------------
E-mail Address Alternate Contact
- -------------------------------------------------------------
Type of Customer
End User
------------------------------
- -------------------------------------------------------------
BILLING INFORMATION
Bill To
CRL Network Services
- ------------------------------------------------------------------
Address Building Name
1 Kearny Street
- ------------------------------------------------------------------
Address Room Floor
- ------------------------------------------------------------------
City State Zip
San Francisco CA 94108
- ------------------------------------------------------------------
Billing Contact Title
- ------------------------------------------------------------------
Telephone Fax
- ------------------------------------------------------------------
Lead Sources
[ ] ACM [ ] Inside Sales
- ------------------------------------------------------------------
Main Billing Telephone # Deposit Amount (if received):
- ------------------------------------------------------------------
Type of Circuit Intrastate
----------------
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
GST CHARGES MRC NRC
DESCRIPTION PRICE QTY TOTAL PRICE QTY TOTAL
- --------------------------------------------- ------------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
FiberLinx 45 (DS-3) $[**] 1 $[**] $ -- 1 $ --
- --------------------------------------------- ------------------------------- -------------------------------
$ $
- --------------------------------------------- ------------------------------- -------------------------------
$ -- $ --
- --------------------------------------------- ------------------------------- -------------------------------
$ -- $ --
- --------------------------------------------- ------------------------------- -------------------------------
$ -- $ --
- --------------------------------------------- ------------------------------- -------------------------------
Options
- ---------------------------------------------
TOTAL CHARGES $ [**] $
</TABLE>
LOCATION SUMMARY
Service for:
<TABLE>
COMPANY NAME CITY STATE
<S> <C> <C> <C>
Location 1 CRL San Francisco CA 100 CALIFORNIA, SUITE B6
Location 2 CRL Los Angeles CA 624 S. GRAND, SUITE 1710
</TABLE>
- --------------------------------------------------------------------------------
By signing below, you, the customer, understand and agree that the services
listed above will be provided by GST pursuant to the rates, terms and
conditions in GST's applicable tariffs/price lists on file with the FCC or
state commission, as may be amended from time to time. The provisions of the
applicable tariffs/price lists, including limitations on GST's liabilities,
shall exclusively govern your and GST's obligations and liabilities with
respect to the service and options you have selected. Any terms or applicable
tariffs/price lists shall have no binding effect. Consistent with GST's
applicable tariffs/price lists, charges may apply if you cancel, modify or
defer an order.
- --------------------------------------------------------------------------------
*For customers ordering services for which no tariff or price list applies:
the GST Master Service Agreement (MSA) governs the terms and conditions under
which GST provides the services you have selected. This Service Order will not
become effective unless and until you have signed the MSA.
<TABLE>
<S> <C> <C>
5 Years PHILIP BURKHART
- -------------------------------------- ----------------------- ----------------------------
GST General Sales Manager's Signature Contract Term - Years Customer Signature
Philip Burkhart
- -------------------------------------- ----------------------- ----------------------------
Printed Name Signature Date for MSA Printed Name
VP 8/31/98
- -------------------------------------- ----------------------------
Title & Date Title & Date
- -------------------------------------- -----------------------
Account Executive Telephone
----------------------------------- ---------------------------------
</TABLE>
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
<PAGE> 6
[GST TELECOM LOGO] FiberLinx Private Line Service Order
<TABLE>
<CAPTION>
Order Date Desired Due Date Facility type Order Tracking # Work Order # Circuit Type
<S> <C> <C> <C> <C> <C>
Existing GST Fiber (DS-3)
(Type 1)
</TABLE>
CUSTOMER INFORMATION
Company Name
CRL Network Services
- -------------------------------------------------------------
Street Number Direction Building Name
1 Kearney Street
- -------------------------------------------------------------
Street Name Room Floor
Kearney
- -------------------------------------------------------------
City State Zip
San Francisco CA 94108
- -------------------------------------------------------------
Grantor Title
- -------------------------------------------------------------
Telephone Fax
- -------------------------------------------------------------
E-mail Address Alternate Contact
- -------------------------------------------------------------
Type of Customer
End User
------------------------------
- -------------------------------------------------------------
BILLING INFORMATION
Bill To
CRL Network Services
- ------------------------------------------------------------------
Address Building Name
1 Kearny Street
- ------------------------------------------------------------------
Address Room Floor
- ------------------------------------------------------------------
City State Zip
San Francisco CA 94108
- ------------------------------------------------------------------
Billing Contact Title
- ------------------------------------------------------------------
Telephone Fax
- ------------------------------------------------------------------
Lead Sources
[ ] ACM [ ] Inside Sales
- ------------------------------------------------------------------
Main Billing Telephone # Deposit Amount (if received)
- ------------------------------------------------------------------
Type of Circuit Intrastate
----------------
- ------------------------------------------------------------------
<TABLE>
<CAPTION>
GST CHARGES MRC NRC
DESCRIPTION PRICE QTY TOTAL PRICE QTY TOTAL
- --------------------------------------------- ------------------------------- -------------------------------
<S> <C> <C> <C> <C> <C> <C>
FiberLinx 45 (DS-3) $[**] 1 $[**] $ -- 1 $ --
- --------------------------------------------- ------------------------------- -------------------------------
$ $
- --------------------------------------------- ------------------------------- -------------------------------
$ -- $ --
- --------------------------------------------- ------------------------------- -------------------------------
$ -- $ --
- --------------------------------------------- ------------------------------- -------------------------------
$ -- $ --
- --------------------------------------------- ------------------------------- -------------------------------
Options
- ---------------------------------------------
TOTAL CHARGES $ [**] $ --
</TABLE>
LOCATION SUMMARY
Service for:
<TABLE>
COMPANY NAME CITY STATE
<S> <C> <C> <C>
Location 1 CRL Los Angeles CA 624 S. Grand, Suite 1710
Location 2 CRL Phoenix AZ 2600 N. Central, Suite 920
</TABLE>
- --------------------------------------------------------------------------------
By signing below, you, the customer, understand and agree that the services
listed above will be provided by GST pursuant to the rates, terms and
conditions in GST's applicable tariffs/price lists on file with the FCC or
state commission, as may be amended from time to time. The provisions of the
applicable tariffs/price lists, including limitations on GST's liabilities,
shall exclusively govern your and GST's obligations and liabilities with
respect to the service and options you have selected. Any terms or applicable
tariffs/price lists shall have no binding effect. Consistent with GST's
applicable tariffs/price lists, charges may apply if you cancel, modify or
defer an order.
- --------------------------------------------------------------------------------
*For customers ordering services for which no tariff or price list applies:
the GST Master Services Agreement (MSA) governs the terms and conditions under
which GST provides the services you have selected. This Service Order will not
become effective unless and until you have signed the MSA.
<TABLE>
<S> <C> <C>
5 Years PHILIP BURKHART
- -------------------------------------- ----------------------- ----------------------------
GST General Sales Manager's Signature Contract Term - Years Customer Signature
Philip Burkhart
- -------------------------------------- ----------------------- ----------------------------
Printed Name Signature Date for MSA Printed Name
VP 8/31/98
- -------------------------------------- ----------------------------
Title & Date Title & Date
- -------------------------------------- -----------------------
Account Executive Telephone
----------------------------------- ---------------------------------
</TABLE>
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
<PAGE> 1
EXHIBIT 10.15
REIMBURSABLE SPACE ACT AGREEMENT
BETWEEN
THE NATIONAL AERONAUTICS AND
SPACE ADMINISTRATION
AMES RESEARCH CENTER
AND CRL NETWORK SERVICES, INC.
FOR THE PURPOSE OF CONNECTING TO THE AMES INTERNET EXCHANGE
Certain portions of this document in the price information in Section 8.1 have
been omitted and filed separately with the Securities and Exchange Commission
based on a request for confidential treatment with respect to the omitted
portions.
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<S> <C> <C>
1.0 AUTHORITY.....................................................................1
2.0 PURPOSE.......................................................................1
3.0 RESPONSIBILITIES..............................................................2
3.1 PARTICIPANT RESPONSIBILITIES...........................................2
3.2 NASA RESPONSIBILITIES..................................................3
4.0 SCHEDULE AND MILESTONES.......................................................5
5.0 KEY PERSONNEL.................................................................6
6.0 DATA RIGHTS...................................................................6
6.1 Definitions............................................................6
6.2 General................................................................7
6.3 Participant Produced Data..............................................7
6.4 Data First Produced by NASA............................................7
6.5 Data Disclosing an Invention...........................................8
6.6 Copyright..............................................................8
6.7 Oral and Visual Information............................................8
6.8 Disclaimer of Liability................................................9
6.9 Computer Software......................................................9
6.10 Publications...........................................................9
7.0 PATENT AND INVENTION RIGHTS..................................................10
7.1 Definition............................................................10
7.2 General...............................................................10
7.3 NASA Inventions.......................................................10
7.4 NASA Contractor Inventions............................................10
7.5 Joint Inventions with Participant.....................................10
7.6 Licenses to be Reserved in Participant's License
(March-in-Rights).....................................................11
7.7 Protection of Reported Inventions.....................................11
7.8 Patent Filing Responsibilities and Costs..............................11
8.0 ADDITIONAL PROVISIONS........................................................12
8.1 FINANCIAL OBLIGATIONS.................................................12
8.2 NO PARTNERSHIP........................................................13
8.3 GOVERNING LAW.........................................................13
8.4 LIABILITY AND RISK OF LOSS............................................13
8.5 INDEPENDENCE OF CONTRACTS.............................................14
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C> <C>
8.6 ASSIGNMENT/AMENDMENT..................................................14
8.7 USE OF NASA NAME AND INITIALS.........................................14
8.8 METRICS...............................................................14
8.9 RELOCATION............................................................15
8.10 TERM OF AGREEMENT AND RIGHT TO TERMINATION............................15
9.0 REFERENCES...................................................................16
10.0 SIGNATURES...................................................................16
</TABLE>
ii
<PAGE> 4
REIMBURSABLE SPACE ACT AGREEMENT
BETWEEN
THE NATIONAL AERONAUTICS AND SPACE ADMINISTRATION
AMES RESEARCH CENTER
AND CRL NETWORK SERVICES, INC.
FOR THE PURPOSE OF CONNECTING TO THE AMES INTERNET EXCHANGE
1.0 AUTHORITY
This Reimbursable Space Act Agreement (RSAA) is entered into by CRL
Network Services, Inc. (hereinafter referred t6 as the Participant) with a place
of business at San Francisco, CA, and the NATIONAL AERONAUTICS AND SPACE
ADMINISTRATION, Ames Research Center located at Moffett Field, California
94035-1000 ("NASA"). The legal authority for NASA to enter into this agreement
is found in sections 203(c)(5) and (6) of the Space Act of 1958, 42 USC
Section 2473(c).
2.0 PURPOSE
This RSAA shall be effected for the purpose of:
(a) adding Participant to a unique collocated network
interconnect in vivo testbed in which Participants
exchange data among their client networks as well as with
NASA networks and other cooperating commercial and Federal
networks that are similarly attached at this testbed which
is known as MAE-West (Metropolitan Area Exchange - West
Coast) which is part of the Ames Internet Exchange;
(b) facilitating (1) the metering and analysis of internet
traffic flows, (2) the study of new algorithms for caching
internetwork flows, and (3) the development of new
approaches to traffic moderation by aggregating
Participants on a common testbed to share in the resulting
costs and benefits;
(c) providing new technology transmission facilities, either
terrestrial or satellite, that stimulate competition and
cost moderation as new network capabilities are introduced
by Participants; use of such new technology is essential
to efficient operation of NASA and other Federal networks;
The foregoing statements of purpose (a) to (c) support NASA-Ames
Research Centers role as NASA lead center for Information Systems Technology.
This interconnect testbed shall be located at NASA Ames Research Center
along with associated collocated equipment required to establish network
connectivity. This RSAA will benefit NASA by enhancing the ability of the
NASA-Ames Research Center to meet its
1
<PAGE> 5
responsibility to provide for a logical extension to the existing Federal
Interconnect Exchange - West Coast facility (FD( - West) that is managed by NASA
Ames Research Center Information Services Division and is also part of
the Ames Internet Exchange. In attaining this objective, it will ensure that all
costs to the government are offset by fees paid by those Participants connecting
to MAE-West.
This agreement is for both the network connecting the Participants to
the Internet at MAE-West, a unique collocated interconnect facility located at
NASA-Ames, and for operating a satellite terminal collocated near MAE-West. No
agreement expressed or implied, is hereby made to order or provide communication
services to NASA or the U.S. Government. Both parties will use reasonable
efforts to meet performance provisions under this RSAA.
3.0 RESPONSIBILITIES
3.1 PARTICIPANT RESPONSIBILITIES
The Participant will provide the following materials, effort and
information to NASA:
1. The Participant shall provide all equipment required to properly
attach its network facilities to the facilities at MAE-West, such as routers,
CSU/DSU's, etc. including all required cabling, and shall provide up to date
configuration drawings to NASA to insure that adequate information is available
for trouble shooting requirements. The Participant shall provide for reasonable
maintenance and support agreements for any of its equipment located at NASA Ames
Research Center and shall ensure that any third party personnel requiring access
to their equipment are cognizant of all terms and conditions in this Agreement,
including the requirement of U.S. citizenship.
2. The Participant shall provide required telecommunications
transmission services such as DS-3 leased lines, ATM facilities, etc. and shall
provide NASA with copies of any related orders for such services when they
occur, to assure coordinated delivery and installation of such services by
NASA's Resident Staff.
3. The Participant shall provide out-of-band (OOB) network
management for all active devices such as routers, CSU/DSU's, etc. to minimize
the support required from NASA for emergency trouble shooting of equipment. The
Participant shall provide all required telecommunications links (such as
switched analog voice lines for dialup modems, etc.) to support this OOB
management.
4. The Participant shall provide a detailed implementation plan
including configuration, installation, and operation of equipment that is to be
attached to MAE-West, within 30 days of the signature of this Agreement, and the
RSAA must be approved by NASA before any work commences unless waived in writing
by NASA. If the Participant enters separate agreements between itself and
Network Service Providers (peering agreements), Participant shall designate the
names of such Network Service Providers (NSPs) to NASA as part of the
implementation plan.
2
<PAGE> 6
5. The Participant shall provide for the decaling (all Participant
property must be decaled) and initial installation of equipment at least one
business week ahead of the scheduled work period. Any subsequent modification by
the Participant at MAE-West shall be requested in writing and scheduled with
NASA at least one business week ahead of the scheduled work period.
6. The Participant agrees to comply with all NASA safety and
security requirements, including network alerts and other written advisories,
all required environmental regulations, and the provisions of NASA-Ames Standard
Operating Procedures' as defined in Reference A (see Section 9).
7. This agreement may be amended and updated periodically consistent
with the authority listed in Section 8.6 of this document.
3.2 NASA RESPONSIBILITIES
NASA will provide the following effort and information to the
Participant:
1. NASA will provide the following supplies and services:
(a) seismic-braced equipment racks in which to collocate up to
M.5 inches (18 rack units) of Participant owned and
provided telecommunication equipment, such as a router,
CSU/DSU, cabling, modem, etc.; additional rack space must
be requested in writing and a new cost recovery agreement
must be established and approved; NASA is not committed to
providing additional space if it not currently available
in building N254;
(b) controlled and monitored access to the equipment racks;
(c) reliable filtered 110 VAC electric power, dedicated to
each rack, with generator backup Uninterruptible Power
Supply (UPS); UPS may be taken off the line for short
periods for maintenance in which case only commercial
power or generator power is available;
(d) reliable air conditioning system to insure that collocated
equipment operates in a hospitable environment;
(e) loan of tools, monitors, and test equipment incidental to
trouble shooting;
(f) remote monitoring of critical facility systems, e.g.,
power, HWAC, security, fire;
(g) limited technical support for new installations and
configuration changes;
(h) arrangement of services by certified electrical contractor
to perform necessary power, conduit and seismic brace
installation when required of Participant;
3
<PAGE> 7
(i) maintenance of an inventory of Participant's decaled
equipment and support of their property management system.
2. NASA will provide access to related telecommunications carrier
facilities (e.g. Pacific Bell, Metropolitan Fiber Systems, etc.) that are
collocated in the same facility as MAE-West for termination of Participant
provided telecommunications services (e.g., DS-3 leased line facilities, FDDI
fiberoptics, etc.). However, NASA is not responsible for providing said services
themselves nor is it responsible for setting costs for such services except such
costs as accrue to the government.
3. NASA will provide access to the MAE-West facilities, currently an
FDDI Ring, and future access to one port on new technology switch when it is
acquired and installed. This switched facility (e.g., a DEC GIGAswitch) will be
operated and managed by NASA 24 hours per day, seven (7) days per week, 52 weeks
per year (24x7x52), and provide reliable, high performance transport of network
traffic between the Participant's equipment and other NSPs that are attached
directly to MAE-West NASA will maintain this configuration and ensure that
changes are adequately coordinated with Participants.
4. NASA will provide access to designated staff of the Participant
or their designees for maintenance and trouble shooting of Participant's
equipment Emergency access to equipment located at MAE-West will be provided by
NASA within a two (2) hour period after a request has been made, including
off-hours. NASA will also provide Resident Technician emergency support for
trouble shooting problems with Participant equipment, such as power cycling or
physical resetting of equipment within two (2) hours of a request being made, in
case normal OOB management capabilities cannot provide equivalent functionality.
Note the existence of access restrictions: all Participant staff,
including third party staff with whom Participant may contract for services,
e.g., maintenance, that are allowed on-site access must be U.S. citizens and
they must obtain prior written consent by NASA to visit the site, either
on-shift or off-shift; no foreign nationals are allowed on-site access. NASA
will escort approved Participant staff or their designees while work is being
performed on-site at NASA Ames Research Center, and will insure proper
identification, documentation and authentication as well as in/out logging.
Off-shift access to Moffett Field will require escort by NASA Resident Staff
through the Main Gate. On-shift access is Monday through Friday, 0700 to 1615
hours.
5. NASA will provide monthly traffic statistics of data exchanged
among MAE-West participants only with written consent from NSPs. NASA may
monitor network layer traffic for purposes of Research and Development
consistent with its mission. NASA reserves the right to monitor end user data of
Government agency networks attached to MAE-West to insure appropriate use of
Government network facilities involved with MAE-West.
6. NASA will perform the installation and cabling of all of the
Participant's equipment as per the layout that is included in the Participant's
implementation plan. Installation will be performed in accordance with current
standards as set forth in paragraph 9.0 Reference A of this agreement
4
<PAGE> 8
7. NASA will provide one business week's notice for normal
maintenance of facility systems.
8. NASA will, at its discretion, provide information other than
traffic statistics on NSPs that are connected to FIX-West or MAE-West NASA shall
not accept requests for non-disclosure for any data that are not traffic
statistics or designated as Participant Produced Data in paragraph 6.3 of this
agreement NASA is not responsible for peering agreements among Participants but
will facilitate such agreements whenever it can do so.
4.0 SCHEDULE AND MILESTONES
The scheduled major milestones are as follows:
A. Formal request by Participant
B. Reimbursable Space Act Agreement (RSAA) template issued to Participant
for markup
C. Negotiated RSAA completed for approvals
D. RSAA approved by NASA
F RSAA approved by Participant
F. Initial funding (i.e. initial charge plus installment for the first six
months) as indicated in Section 8.1 of this Agreement transferred to
NASA
(30 days after the agreement has been signed by the Participant)
G. Equipment deployed to Ames for installation
(5 days after initial funding is transferred to NASA by Participant)
H Connection to MAE-West established, cost recovery begins
(5 days after initial funding is transferred to NASA by Participant)
I. Final semiannual installment for second six months due and payable to
NASA (6 calendar months after initial funding is transferred to NASA by
Participant)
J. Semiannual installment for first six months of second year due and
payable to NASA
(12 calendar months after initial funding is transferred to NASA by
Participant)
K. Annual report and fee adjustment up or down
(12 calendar months after initial funding is transferred to NASA by
Participant)
5
<PAGE> 9
The schedule and milestones for the performance of this Agreement will
be subsequently determined by the parties.
The above schedule and milestones are estimated based upon the parties'
current understanding of the projected use of facilities and equipment by
Participant, NASA, and other Participants and Federal Agencies. In the event of
changes in NASA's projected usage, the Participant shall be given reasonable
notice of that change, so that the schedule and milestones may be adjusted
accordingly. The parties agree that NASA usage of the exchange facilities and
equipment shall have priority over the usage planned in this Agreement. Should
conflict arise, NASA in its sole discretion shall determine whether to exercise
that priority'.
5.0 KEY PERSONNEL
The following personnel are designated as the key officials for their
respective party. These key officials are the principal points of contact
between parties in the performance of this Agreement.
<TABLE>
<CAPTION>
NASA Ames CRL Network Services, Inc.
<S> <C> <C> <C>
Name: William P. Jones Name: James Couch
Title: External Interface Manager Title: President
Address: M/S 233-17 Address: CRL Network Services, Inc.
NASA Ames Research Center One Kearny Street
Moffett Field, CA 94035-1000 San Francisco, CA 94108
Tel. No.: (650) 604-6482 Tel. No.: (415) 837-5300
Fax No.: (650) 604-6999 Fax No.: (415) 392-9000
</TABLE>
6.0 DATA RIGHTS
6.1 DEFINITIONS
The term "Participant," as used herein, means any non-Government entity
that is a party to this Agreement The rights in data set forth herein are
applicable to any employees, contractors or subcontractors, or other entities
having a fiduciary or contractual relationship with Participant that are
assigned, tasked, or contracted with to perform specified Participant activities
under this Agreement.
The term "NASA," as used herein, means NASA civil servant employees as
well as contractors, subcontractors, or other entities having a fiduciary or
contractual relationship with NASA that are assigned, tasked, or contracted with
to perform specified NASA activities under this Agreement.
The term "data," as used herein, means recorded information, regardless
of form, the media on which it may be recorded, or the method of recording. The
term includes, but is not limited to, data of a scientific or technical nature,
computer software and data comprising commercial and financial information.
6
<PAGE> 10
6.2 GENERAL
Data exchanged between Government and Participant under this Agreement
shall be exchanged without restriction as to its disclosure, use, or duplication
except as otherwise provided below in this provision.
6.3 PARTICIPANT PRODUCED DATA
In the event it is necessary for the Participant to furnish NASA with
data which either existed prior to, was produced outside of, or is first
produced by Participant in carrying out Participant's responsibilities under
this Agreement, and such provided data embodies trade secrets or comprises
commercial or financial information which is privileged or confidential and such
data are so identified with a suitable notice or legend, the data will be
maintained in confidence and disclosed and used by NASA and its contractors
(under suitable protective conditions) only for the purpose of carrying out
NASA's responsibilities under this Agreement. Upon completion of activities
under this Agreement, such data will be disposed of as requested by the
Participant.
The parties agree that the following are Participant Produced data:
(a) list of NSPs at Participant's location, including
technical point of contact, telephone numbers and email
addresses;
(b) list of physical and logical addresses for their portion
on MAE-West;
(c) customer privacy-protected information such as customers'
traffic, lists of customers, or personal information about
client employees;
(d) implementation plan, and
(e) configuration change requirements.
6.4 DATA FIRST PRODUCED BY NASA
As to data first produced by NASA (or NASA contractors) in carrying out
NASA's responsibilities under this Agreement and data which would embody trade
secrets or would comprise commercial or financial information that is privileged
or confidential if obtained from the Participant, such data will, to the extent
permitted by law, be maintained in confidence and be disclosed and used by NASA,
its contractors and the Participant (under suitable protective conditions) only
for the purpose of carrying out NASA's responsibilities under this Agreement.
Upon completion of activities under this Agreement, Participant shall dispose of
such data as requested by NASA.
The parties agree that the following are data first produced by NASA:
(a) list of NSPs at NASA location, including technical point
of contact, telephone numbers and email addresses;
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<PAGE> 11
(b) list of physical and logical addresses on their portion of
MAE-West;
(c) copies of any reports, charts, graphs, or diagrams which
were produced as a result of this Agreement and that
reference NASA's name or logo, or EMAIL to NSPs attaching
to MAE-West at NASA's location but not customer
privacy-protected information such as customer's traffic,
lists of customers, or personal information about client
employees;
6.5 DATA DISCLOSING AN INVENTION
In the event data exchanged between NASA and the Participant disclose an
invention for which patent protection is being considered and the furnishing
party specifically identifies such data, the receiving party agrees to withhold
such data from public disclosure for a reasonable time (presumed to be one year
unless mutually agreed otherwise) in order for patent protection to be obtained.
6.6 COPYRIGHT
In the event data are exchanged with a notice indicating that the data
are protected under copyright as published, copyrighted work, the following
paid-up license rights shall inure to the receiving party:
(a) If it is indicated on the data that the data existed prior
to, or was produced outside of, this Agreement, the
receiving party and others acting on its behalf, may
reproduce, distribute, and prepare derivative works for
the purpose of carrying out the receiving party's
responsibilities under this Agreement; and
(b) If the furnished data does not contain the indication of
(a) above, it will be assumed that the data were produced
under this Agreement, and the receiving party and others
acting on its behalf, may reproduce, distribute, and
prepare derivative works for any of its purposes
whatsoever.
6.7 ORAL AND VISUAL INFORMATION
If information which the Participant considers to embody trade secrets
or to comprise commercial or financial information which is privileged or
confidential is disclosed orally or visually to NASA, such information must be
reduced to tangible, recorded form (i.e., converted into data as defined
herein), identified and marked with a suitable notice or legend as required by
paragraphs 6.3 and 6.4 above and furnished to NASA within 10 days after such
oral or visual disclosure, or NASA shall have no duty to limit or restrict, and
shall not incur any liability for, any disclosure and use of such information.
If information which NASA considers to embody trade secrets or to
comprise commercial or financial information which is privileged or confidential
is disclosed orally or visually to the Participant, such information must be
reduced to tangible, recorded form (i.e., converted into
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<PAGE> 12
data as defined herein), identified and marked with a suitable notice or legend
as required by paragraphs 6.3 and 6.4 above and furnished to the Participant
within 10 days after such oral or visual disclosure, or the Participant shall
have no duty to limit or restrict, and shall not incur any liability for, any
disclosure and use of such information.
Not withstanding the above, CRL Network Services, Inc. or the
Government's liability in the event of breach of paragraphs 6.3 through 6.5 will
be limited to the lesser of proven damages or $5,000,000.
6.8 DISCLAIMER OF LIABILITY
Notwithstanding the above, neither NASA nor CRL Network Services, Inc.
shall be restricted in, or incur any liability for, the disclosure and use of:
(a) data not identified with a suitable notice or legend as
set forth in paragraph 6.3 above; nor
(b) information contained in any data for which disclosure
and use is restricted under paragraphs 6.3 and 6.4
above, if such information is or becomes generally known
without breach of the above, is known to or is generated
by CRL Network Services, Inc. or NASA independently of
carrying out CRL Network Services Inc's or NASA's
responsibilities under this Agreement, is rightfully
received from a third party without restriction, or is
included in data which the Participant has, or is
required to furnish to the U.S. Government without
restriction on disclosure and use.
6.9 COMPUTER SOFTWARE
If the Government provides the Participant any Government computer
software pursuant to this Agreement, the Participant agrees not to disclose the
computer software to any third party, to use the computer software for no other
purpose than carrying out the responsibilities of this Agreement, and to return
the computer software and all copies thereof to the Government when the
Agreement is terminated or completed, whichever comes first
6.10 PUBLICATIONS
The parties agree to provide each other with an advance information copy
of any manuscript to be released in a journal article, symposium presentation,
or under the NASA scientific and technical report series (described in NMI NHB
2200.2, NASA Scientific and Technical Information Handbook) when the manuscript
utilizes data derived from this Agreement. The information copy shall be sent
sufficiently in advance to afford the recipient(s) time to review the manuscript
and comment thereon before the manuscript is published or presented at a
symposium.
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<PAGE> 13
7.0 PATENT AND INVENTION RIGHTS
7.1 DEFINITION
The term "Participant," as used herein, means any non-Government entity
that is a party to this Agreement. The patent and invention rights set forth
herein are applicable to any employees, contractors or subcontractors, or other
entities having a fiduciary or contractual relationship with Participant that
are assigned, tasked, or contracted with to perform specified Participant
activities under this Agreement.
7.2 GENERAL
Title to inventions made (or conceived or first actually reduced to
practice) as a consequence of, or in direct relation to, the performance of
activities under this Agreement will remain with the respective inventing
parties (Participant or NASA), and no patent or invention rights are exchanged
between or granted by such parties under this Agreement except as provided
herein.
7.3 NASA INVENTIONS
NASA will use reasonable efforts to report inventions made by NASA
employees as a consequence of, or which bear a direct relation to, the
performance of specified NASA activities under this Agreement and, upon timely
request, will grant the Participant first option to acquire either an exclusive
or partially exclusive, revocable, royalty-bearing license, on terms to be
subsequently negotiated, for any patent application and patents covering such
inventions, and subject to the license reserved in paragraph 7.6 (a) below.
7.4 NASA CONTRACTOR INVENTIONS
In the event NASA contractors are tasked to perform work in support of
specified NASA activities under this Agreement and inventions are made by
contractor employees or jointly between NASA employees and contractor employees,
and NASA has the right to acquire or has acquired title to such inventions, NASA
will use reasonable efforts to report such inventions and, upon timely request,
will grant the Participant first option to acquire either an exclusive or
partially exclusive, revocable, royalty-bearing license, on terms to be
subsequently negotiated, for any patent application and patents covering such
inventions, and subject to the license reserved in paragraph 7.6 (b) below.
7.5 JOINT INVENTIONS WITH PARTICIPANT
NASA and the Participant will use reasonable efforts to identify and
report to each other inventions made jointly between NASA employees (opound
sterling employees of NASA contractors) and employees of the Participant and,
upon timely request, NASA will grant the Participant first option to acquire
either an exclusive or partially exclusive, revocable, royalty-bearing license
in any undivided interest NASA has the right to acquire or has acquired in such
invention, upon terms to be subsequently negotiated, for any patent application
and patents covering such
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<PAGE> 14
inventions; or NASA may agree to refrain from exercising its undivided interest
in a manner inconsistent with the Participant's commercial interests and to
cooperate with the Participant in obtaining patent protection on its undivided
interest. Either alternative will be subject to the applicable license or
licenses reserved in paragraph 7.6 below.
7.6 LICENSES TO BE RESERVED IN PARTICIPANT'S LICENSE
(MARCH-IN-RIGHTS)
Any license granted to the Participant pursuant to paragraphs 7.3, 7.4
or 7.5 above will be subject to the reservation of the following licenses:
(a) as to inventions made solely by, or jointly with, NASA
employees, the irrevocable, royalty-free right of the
Government of the United States to practice and have
practiced the invention on behalf of the United States and
on behalf of any foreign Government or international
organization pursuant to any existing or future treaty or
agreement with the United States; and
(b) as to inventions made solely by, or jointly with, NASA
contractors, rights in the Government of the United States
as set forth in (a) above, as well as the revocable,
non-exclusive, royalty-free license in the contractor as
set forth in 14 CFR 1245.108.
7.7 PROTECTION OF REPORTED INVENTIONS
When an invention is reported and disclosed between the parties in
accordance with the provisions of this clause, the receiving party agrees to
withhold such report or disclosure from public access for a reasonable time
(presumed to be one year unless mutually agreed otherwise) in order for a patent
application to be filed.
7.8 PATENT FILING RESPONSIBILITIES AND COSTS
The invention and patent rights set forth herein shall apply to any
patent applications filed and patents obtained in any country, and each party is
responsible for its own costs of preparing, prosecuting, issuing and maintaining
patents covering sole inventions in any country; except that NASA and the
Participant may, upon the reporting of any invention (sole or joint) or in any
license option granted, mutually agree otherwise for any country as to patent
application costs, and maintenance responsibilities and costs. As to any
invention made jointly between NASA employees (or employees of a NASA
contractor) and employees of the Participant and for which the Participant files
a patent application, the Participant agrees to include the following statement
therein:
The invention described herein may be manufactured and used by or for
the United States Government for United States Government purposes without the
payment of royalties thereon or therefor.
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<PAGE> 15
8.0 ADDITIONAL PROVISIONS
8.1 FINANCIAL OBLIGATIONS
There will be a transfer of funds or other financial obligation from the
Participant, CRL Network Services, Inc. to NASA in connection with this
Agreement. The terms, conditions, and schedule of payment are as follows:
CRL Network Services, Inc. shall reimburse NASA promptly for use of its
facilities and staff in support of Participant's access to MAE-West:
one connection to the FDDI Ring with a reserved port on the
switch at the recurring rate of [**] per month, with an initial
charge of [**], to cover initial equipment and installation
support, and to cover initial procurement and deployment of the
transmission facility in FY 98;
CRL Network Services, Inc. shall submit to:
NASA Ames Research Center
Collection Agent
MS 203-18 (CRL Network Services, Inc.)
Moffett Field, CA 94035
payment in the form of a check to be written payable to the National Aeronautics
and Space Administration. The initial charge of [**] and the installment for
the first six months (total of [**]) shall be submitted within 30 days of the
date of this Agreement The remaining installments of [**] each are due and
payable at the beginning of each six month period. A schedule of payments will
be determined upon execution of this Agreement. Participant acknowledges its
obligation and ability to satisfy the foregoing schedule of payments.
A fee adjustment to cost recovery related to 8.1 shall be made annually
by NASA in writing to each Participant, near the close of each year's operation.
This adjustment may be up or down, reflecting actual costs, and is to apply to
the subsequent year 5 cost recovery requirement for each Participant attached to
MAE-West The adjustment, if an increase, shall not exceed 10% of the prior month
charge.
Special activities in support of access to MAE-West that may be required
as a result of future amendments to this Agreement or of the CRL Network
Services, Inc. implementation plan shall not exceed an annual cost of [**] and a
total cost under this Agreement of [**].
All activities under or pursuant to this Agreement are subject to the
availability of appropriated funds. Nothing in this Agreement commits the United
States Congress to appropriate funds for this effort, and no provision herein
shall be interpreted to require obligation
- ----------------
[**] Pursuant to a request for confidential treatment, price information in this
document has been omitted and separately filed with the Securities and
Exchange Commission.
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<PAGE> 16
or payment of funds in violation of the Anti-Deficiency Act, 31 USC 1341. If
funds are not available, this Agreement may be terminated by NASA, as provided
in paragraph 8.10(b) below.
8.2 NO PARTNERSHIP
This Agreement is not intended to constitute, create, give effect to or
otherwise recognize a joint venture, partnership, formal business organization,
or agency agreement of any kind, and the rights and obligations of the parties
shall be only those expressly set forth herein. Both parties will remain
independent contractors, each responsible for its own employees, costs, risks,
liabilities, and expenses incurred in the performance of this Agreement Each
party bears the cost of discharging its own responsibilities except as expressly
set forth in this agreement
8.3 GOVERNING LAW
NASA will perform this Agreement consistent with obligations, laws,
published policy, and regulations of the United States. This Agreement shall be
governed by the federal laws of the United States.
8.4 LIABILITY AND RISK OF LOSS
Neither NASA nor the Participant will make any claim against the other:
(a) with respect to injury or death of its own, its
contractors' or its subcontractors employees,
(b) with respect to damage to its own, its contractors' or
its subcontractors' property
arising out of or connected with the performance of this Agreement, whether such
injury, death or damage arises through negligence or otherwise.
Limitation of Liability to Direct Damages
To the extent that a risk of damages or loss is not dealt with expressly
in this Agreement, such party's liability to the other party, whether or not
arising as the result of alleged breach of this Agreement, shall be limited to
direct damages only, and shall not include any loss of revenue or profits or
other indirect or consequential damages.
As operator of MAE-West and FIX-West which form the interconnecting
testbed for the various Participants, NASA reserves the right to notify
Participant by electronic means, by FAX or by telephone of any action to be
taken to disconnect the Participant's equipment Such action will be taken if
said equipment is known to be causing interference of data flows between other
connected Participants. The equipment will be reconnected only after appropriate
repairs are made or after mutually agreeable alternative routing of traffic is
effected. This action by NASA will be carried out without liability for direct
damages, or for any loss of revenue or profits or other consequential damages
which result NASA will make a good faith effort to assist the Participant in
restoring its services in an expeditious manner.
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<PAGE> 17
8.5 INDEPENDENCE OF CONTRACTS
The parties agree that this Agreement is independent of any other
contract between the United States Government and the Participant By
participating in this Agreement, NASA makes no assurances to the Participant or
others as to the performance of the objects tested in NASA facilities or other
test objects, and relieves the Participant of none of its obligations under any
other contract with the Government This Agreement does not constitute NASA's
endorsement of any test results, resulting designs, hardware, or other matters.
8.6 ASSIGNMENT/AMENDMENT
(a) This Agreement may be modified at any time by a written
document signed by the officials authorized to bind the
parties.
(b) Neither this Agreement nor any interest arising under it
will be assigned by either party without the express
written consent of the officials authorized to bind the
parties.
8.7 USE OF NASA NAME AND INITIALS
The Participant agrees to submit all promotional and advertising
material which uses the NASA name or initials to NASA for its approval prior to
publication including any reference that is contained in internet work
information servers currently known as world wide web servers or the like.
Approval by NASA shall be based on applicable law (e.g., 42 USC Sections
2459(b), 2472(a) and 2473(c)(1); and 14 CFR Section 1221.100 et seq.) and policy
governing the use of the words "National Aeronautics and Space Administration"
and the letters "NASA."
NASA agrees to submit to CRL Network Services, Inc. for its approval all
promotional and advertising material which uses the CRL Network Services, Inc.
name or initials prior to publication, including any reference that is contained
in internet work information servers currently known as world wide web servers
or similar.
8.8 METRICS
The Participant will supply quarterly data to the Ames Commercial
Technology Office on: jobs created, jobs retained, net sales increases, new
products or services, productivity gains, patents, royalties, and licenses
arising from the activities under this Agreement NASA Ames Research Center
recognizes the sensitive nature of these data and will protect them consistent
with the provisions found in this document. Proprietary data will remain
proprietary to the Participant and are exempt from release to the extent
permissible under the Freedom of Information Act (FOIA).
Point of Contact for Commercial Metrics Reporting is:
Commercial Metrics Program Leader
NASA-Ames Research Center
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<PAGE> 18
Commercial Technology Office, Code DK
Mailstop 202A-3
Moffett Field, CA 93035-1000
(650) 604-1919
(650) 604-1592 FAX
8.9 RELOCATION
NASA reserves the right to relocate the functions associated within
building N254 to another area of Moffett Field (i.e. rehoming); only relocation
costs of NASA equipment and facilities will be born by NASA. All costs
associated with rehoming of the Participant's circuits and relocation of
Participant's equipment and facilities will be born by the Participant
Abandonment of lands by Participant must include removal of all equipment and
facilities including buried or below-surface structures and conduits, as well as
removal of any toxic waste or hazardous materials. Notice of the requirement to
relocate functions within building N254 will be given at least one year prior to
such action by NASA.
8.10 TERM OF AGREEMENT AND RIGHT TO TERMINATION
(a) This Agreement becomes effective on the date of the
latest signature of the parties. The term of this RSAA
will be two (2) years beginning on the date of the last
signature appearing below, or as provided for in
paragraph 8.10(b) below. This Agreement may be extended
for an additional one year period by modification, as
provided for in paragraph 8.6 (a) above.
(b) Either party may terminate this Agreement at any time
before the date provided in paragraph 8.10(a) above by
written notice to the other party sixty (60) days before
the desired date of termination. The terminating party
will not incur any liability to the other party for
terminating this Agreement under any provision of
paragraph 8.10. NASA shall refund any money paid by CRL
Network Services, Inc. for months beyond the termination
date of this Agreement.
(c) All parties will use reasonable efforts to participate
in the efforts stated in this Agreement NASA's ability
to participate in this Agreement is subject to the
availability of appropriated funds. If appropriated
funds are not available, NASA may terminate this RSAA as
provided in paragraph 8.10 (b).
9.0 REFERENCES
A ARC External Interface Standard operating Procedures as modified June
1998. A copy of this document may be obtained from the External
Interface Manager.
B Ames Safety Manual, chapters 1, 2, 4, 5, 6, 11, 18, 19, 20, 24, 25, 27;
homepage address - http:/dq.arc.nasa.gov/.
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<PAGE> 19
C Ames Environmental Handbook, AHB 8800.3, chapter 1; homepage address
-http:/dq.arc.nasa.gov/.
Ames Management Instruction 8800.4; homepage address
- -http:/dq.arc.nasa.gov/.
NASA Environmental Management, NPD 8800.16; homepage address
- -http:/dq.arc.nasa.gov
10.0 SIGNATURES
IN WITNESS WHEREOF, each party has caused this Agreement to be executed
in duplicate originals by its duly authorized representative on the dates
indicated below.
NATIONAL AERONAUTICS AND CRL NETWORK SERVICES, INC. SPACE ADMINISTRATION
BY: BY: /S/ Phillip Burkhart
---------------------------------------- ---------------------------
Henry McDonald, Director Phillip Burkhart
Ames Research Center Vice President
MOFFETT FIELD, CA 94035-1000 One Kearny Street
Tel. No. (650) 604-5411 San Francisco, CA 94108
Tel. No. (415) 837-5300
DATE: DATE: July 16, 1998
--------------------------------------
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<PAGE> 1
EXHIBIT 10.16
SERVICE AGREEMENT
This Agreement is made as of April 22, 1996 between IXC Carrier, Inc.,
formerly known as "Communications Transmission Group, Inc.", a Nevada
corporation ("Lessor"), 5000 Plaza on the Lake, Suite 200, Austin, Texas 78746,
and CRL Network Services, a California Corporation ("Lessee"), One Kearny
Street, Suite 1450, San Francisco, California 94108.
BACKGROUND
This Agreement is made with reference to the following facts:
A. Lessee and IXC are parties to that Certain Digital Service Agreement
dated as of July 13, 1994.
B. The parties desire to terminate the Prior Agreement pursuant to the
terms set forth below and include the existing service and corresponding
termination liabilities into this Agreement.
1. SCOPE AND RATES.
(a) Lessor shall use its best efforts (considering the needs of
its other customers) to provide Service for which a Purchase Order has been
accepted. The rates for Service are set forth in Exhibit D, unless otherwise
specified in the applicable Purchase Order. Lessee may also order the services
listed in Exhibit B, subject to availability.
(b) Lessee may reconfigure on-net DS-1's into a on-net DS-3 with
no penalty and a new one (1) year term starts upon completion of
reconfiguration. if reconfiguration results in a revenue reduction, such
reduction will be billed as "Undesignated Billing" until replaced. Upon
conversion to a full DS-3, Lessee agrees that the DS-3 hand off in both cities
will be at the 45 Mbps level. The hand off in either city may be at the
individual DS-l level through a Multiplex provided by Lessor at the rates in
Exhibit B hereunder or such multiplex may be provided by Lessee in a rack space
provided by Lessor at rates in Exhibit B hereunder. Lessee may also reconfigure
on-net DS-1's or DS-3's after three (3) months as long as one of the original
cities remains the same, and the monthly billing is equal to or greater than
that of the reconfigured service. If the monthly billing is not equal to or
greater than the reconfigured service, the difference will be billed as
"Undesignated Billing" until replaced. Costs for reconfiguration are listed in
Exhibit B hereunder.
_________________
Certain portions of this document in the price information in (i) Section 1(c)
and 1(d), (ii) List of Exhibits, (iii) Exhibit B, (iv) Exhibit D, (v) Exhibit
D-1, (vi) Exhibit D-2 and (vii) Exhibit E have been omitted and filed separately
with the Securities and Exchange Commission based on a request for confidential
treatment with respect to the omitted portions.
<PAGE> 2
(c) Lessee and Lessor also agree that Lessee shall be entitled to
certain advance discounts for attainment of the [**] level ("Discount"). In
order to facilitate the computation of such Discount the total amounts shown on
each monthly invoice shall be stated as a Discounted and as an Undiscounted
amount for each service for which a discount is applicable. The rates listed on
Exhibit D are the rates after allowing for such discount. The rates listed on
Exhibit D-l are the Undiscounted rates ("Undiscounted"). If Lessee reaches the
[**] Attainment Level within twenty-four (24) months, Lessee may pay the
Discounted amounts as long as Lessee is in the process of reaching or has
reached the [**] billing level during the first twenty-four (24) months from the
date of this Agreement. Should Lessee fail to reach the [**] Attainment Level
within twenty-four (24) months, Lessee must pay the Undiscounted amounts from
the twenty-fifth (25th) month forward until the [**] billing level is attained
or 2 years, whichever occurs first. Upon attainment of the [**] billing level
Lessor will notify Lessee that the rates on Exhibit D-1 apply and that the [**]
revenue level has a new one (1) year term.
(d) If Lessee attains the [**] billing level for all services,
all new and renewal service shall be rated at the rates listed on Exhibit D-2.
2. PAYMENTS.
(a) Lessee shall pay Lessor each month within 30 days of the date
of invoice: (i) the monthly lease rate (prorated for any partial month) for each
Available Circuit; and (ii) the charges for other services received. The first
invoice shall be for the first two months; each invoice thereafter shall be for
the following month. If any invoice is not paid when due: (i) a late charge
shall accrue equal to 1-1/2% (or the maximum legal rate, if less) of the unpaid
balance per month; and (ii) Lessor may suspend or terminate the Service.
3. TERM.
(a) The term hereof shall continue through the end of the Circuit
Lease Term which is last to expire, if Service continues thereafter, the
applicable rates will be equal to 120% of the rates hereunder and Service may be
terminated by either party upon 30 days' notice. Lessor shall notify Lessee of
impending Circuit Term Date and Lessee shall have sixty (60) days after the
notification of Term Date to renew before the 120% applies Lessee may terminate
any Circuit upon 90 days' notice; provided that if termination occurs: (i) prior
to the Activation Date, Lessee shall reimburse Lessor for all costs of the
implementation of such Circuit; and (ii) on or after such date, Lessee shall
pay: (A) all charges for Service previously rendered; and (B) the amount due
through the end of the applicable Circuit Lease Term (Lessor shall try to
re-lease such Circuit for such term, refunding to Lessee the amount so
collected, if any). If Lessor: (i) fails to provide Service within six months of
the Requested Service Date; or (ii) fails to cure a
[**]Pursuant to a request for confidential treatment, price information in this
document has been omitted and separately filed with the Securities and
Exchange Commission.
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<PAGE> 3
material breach hereof within 45 days of notice from Lessee, Lessee may, as its
only remedy, terminate the affected Circuit.
(b) Revenue for service is committed for the term of the
contract, but service may be reconfigured after three (3) months as reflected in
Section 1(b) of this Agreement.
4. LIMITS OF LIABILITY. Lessor shall not be liable for any direct,
indirect, reliance, or consequential damages, whether foreseeable or not, or for
any damage to property, loss of profits cost of replacement services, or claims
of customers for service problems caused by any defect, delay in availability,
or failure the Service or by any other cause. In no event shall Lessor be liable
in excess of the aggregate amount it has collected from Lessee hereunder. Lessor
shall give Lessee a credit in accordance with its then current outage policy for
periods in which any Circuit loses continuity and fails to comply with
applicable specifications. Such credit shall be Lessee's sole remedy with
respect to such an event; provided, however, that no such credits shall be
allowed and Lessor shall not be liable for any Service defect from causes
outside its control, including accidents, cable cuts, fires, floods,
emergencies, government regulation, wars, or acts of God. LESSOR DISCLAIMS ALL
EXPRESS AND IMPLIED WARRANTIES RELATING TO SERVICE, INCLUDING BUT NOT LIMITED
TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE. LESSEE
HAS NOT RELIED ON ANY REPRESENTATION NOT SET FORTH HEREIN. LESSEE SHALL
INDEMNIFY LESSOR FROM ANY CLAIMS MADE BY ANY LESSEE CUSTOMER.
5. GENERAL TERMS. This Agreement shall be construed under the laws of
Texas. All notices shall be in writing and shall be deemed given as of the date
of delivery to the addresses set forth above. The waiver of a breach hereof
shall not be construed to be a waiver of any subsequent breach. Lessor may
terminate this Agreement without liability if Lessee becomes bankrupt or
insolvent. Each party may refer any dispute relating hereto to arbitration in
Austin, Texas under the rules of the American Arbitration Association. If any
term hereof is held to be invalid or unenforceable, this Agreement shall be
construed without such invalid or unenforceable term. This Agreement is the
entire agreement between the parties pertaining to the Circuits. This Agreement
may only be modified by an instrument in writing executed by each party. Neither
party may assign this Agreement without the written consent of the other party;
provided, however, that a security interest in this Agreement may be granted by
Lessor to its lenders. The rates hereunder do not include any sales, use or
utility taxes. Lessee shall pay to Lessor any such taxes that Lessor may be
required to collect or pay.
6. DEFINITIONS. For purposes hereof: "Available" means all necessary
equipment for a Circuit has been installed. "Activation Date" means the date a
Circuit is first made Available to Lessee. "Circuit" means a DS-0, DS-l or DS-3.
"Circuit Lease Term" means the term of a Circuit specified in the applicable
Purchase Order. "Circuit Mileage" means the length of a Circuit specified in the
applicable Purchase Order. "DS-0" means a circuit complying with TR-TSY-000333
"Switched and Special Access Services -Transmission Parameter Limits and
Interface Combinations" Issue 1, July 1990. "DS-1" means a circuit complying
with AT&T Tech. Ref. Pub. 62411, December 1990, with Addendum 1, March 1991, and
Bellcore TR-MWT-000499, Issue 5, December 1993. "DS-3" shall mean a circuit
meeting the specifications
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<PAGE> 4
set forth in AT&T Technical Reference Pub. 54014 Addendum 1, November 1992 and
Bellcore TB-NWT-608499, Issue 5, December 1993. "Purchase Order" means any
Lessee purchase order accepted by Lessor. "Requested Service Date" means the
date Service on a Circuit is requested to commence specified in the applicable
Purchase Order. "Service" means transmission service provided between North
American DSX standard cross-connect panels located in Lessor's terminal
locations. "CFA" shall mean Cable Facility Assignment for access to the local
exchange.
7. Lessor agrees to provide "CFA" to Lessee in three (3) business days
for service provided On-net and in five (5) business days for service provided
Off-net. Lessor has agreed to provide Lessee with up to 20 CFA's at no cost to
Lessee.
8. Lessor agrees to allow Lessee access to Lessee's choice of local
service providers so long as such local service providers are already in Lessors
Point of Presence (POP) or will make provisions with Lessor, under Lessor's
contractual terms and conditions, to provide service in Lessor's Point of
Presence (POP).
9. Lessor agrees that when Lessee installs more than one (1) inter-city
service in Lessor's POP at the same time, the installation charge will be the
cost of installing one (1) inter-city service.
To confirm their agreement to be bound hereby, the parties have executed
this agreement below:
IXC Carrier, Inc. CRL Network Services
5000 Plaza on the Lake, Suite 200 One Kearny Street. Suite 1450
Austin, Texas 78746-1050 San Francisco, California 94108
Attention: Vice President of Sales & Marketing Attention: Mr. Jim Couch
Telephone No.: (512)328-1112 Telephone No.: (415)837-5300
Facsimile No.: (512) 328-7902 Facsimile No.: (415)392-9000
By: By: /s/ J. Couch
-------------------------------------- -------------------------------
J. Couch Pres.
-------------------------------------- -------------------------------
(Please Print - Name and Title) (Please Print - Name and Title)
4
<PAGE> 5
LIST OF EXHIBITS
Exhibit A Form of Purchase Order
Exhibit B Maintenance and other Additional Services.
Exhibit C List of On-net Cities
Exhibit D Discounted Rates
Exhibit D-1 Undiscounted Rates
Exhibit D-2 List of Rates for Service at the [**] Attainment Level or above
Exhibit E Existing Circuits
- --------
[**]Pursuant to a request for confidential treatment, price information in this
document has been omitted and separately filed with the Securities and
Exchange Commission.
5
<PAGE> 6
EXHIBIT "A" FORM
[Form of Purchase Order]
1
<PAGE> 7
EXHIBIT B
CUSTOMER MAINTENANCE SUPPORT
IXC Carrier, Inc.'s (hereinafter referred to as IXC) standard fees for
customer maintenance support services are as follows (unless set by precedence
in a service contract):
Maintenance services shall be defined as all work performed by IXC on
equipment provided by or on behalf of the Customer, or supervision of the
Customer's work within IXC's terminate facilities. Maintenance Service charges
are not billed for troubles found within that portion of a circuit provided by
IXC. The following billing rates apply for these services:
A. [**] per hour (4 hour minimum-if dispatch is required)
Monday through Friday during the business hours of 8:00 a.m. - 5:00 p.m. local
time, exclusive of the following holidays:
New Years Day
President's Day
Memorial Day
Independence Day
Labor Day
Thanksgiving Day and the day after Thanksgiving
Christmas Day
B. [**] per hour (4 hour minimum) for overtime work done after
business hours (defined above) and/or on holidays (defined above) and/or all day
on Saturdays and Sundays.
C. As requests for maintenance services are typically made via
telephone, IXC must be advised, in writing as to the person(s) who are
authorized to request service. It is the Customers responsibility to keep IXC
apprised of any changes to its list of representative(s).
D. To request technical assistance and help under the maintenance
services, a call must be made to our Network Control Center at 1-800-526-2488.
This number should be used for IXC technical assistance, troubleshooting or
testing of circuits, not for service impairment or outages. The person calling
in must be on the authorized list in order to commit for charges for this
technical assistance. If that person is not on the list, the request cannot be
accommodated.
- --------
[**]Pursuant to a request for confidential treatment, price information in this
document has been omitted and separately filed with the Securities and
Exchange Commission.
1
<PAGE> 8
1. The Network Control Center personnel will take the
call, record the caller's name and phone number along with facts
concerning the assistance and support needed. The caller will then be
given the number of the "Assistance Ticket."
2. Upon completion of work, this "Assistance Ticket" will
be given to IXC's Accounting Department, and the customer will
subsequently be billed based upon the information on that ticket. A copy
will be attached to the invoice.
E. Except for emergencies, IXC technicians cannot be dispatched
unless requests are made in accordance with the above call-out procedure.
2
<PAGE> 9
ANCILLARY PRICING SCHEDULE FOR ON-NET SERVICE
<TABLE>
<CAPTION>
NON-RECURRING CHARGES DS-1 DS-3
- --------------------- ---- ----
<S> <C> <C>
New Order Installation (On-Net) $[**] $[**]
New Order Installation (Off-Net) ICB ICB
Order Change (less than 5 business $[**] $[**]
days)
Order Cancellation (less than 5 $[**] $[**]
business days)
ASR (new or disconnect) (Special $[**] $[**]
Access Only)
ASR Supplement $[**] $[**]
Order Expedite $[**] $[**]
Reconfiguration Same as install Same as install
Ramped DS-3 Installation Per DS-1 $[**] N/A
Distributed DS-3 Installation Per DS-1 $[**] N/A
First 20 CFA's/DS-1 long haul $[**] N/A
Additional CFA's over 20/DS-1 $[**] N/A
long haul
<CAPTION>
MONTHLY RECURRING CHARGES DS-1 DS-3
- ------------------------- ---- ----
<S> <C> <C>
Minimum circuit charge (IXC portion) $[**] $[**]
Cross-connect charge $[**] $[**]
Other long haul carrier connected
to Lessor local access or bypass
facility (Lessor long haul not
involved - Lessor's POP used as
transition point) Local bypass
charge $[**] $[**]
Lessor POP to Lessor POP in same
city, with no Lessor long haul
attached at either Lessor POP.
</TABLE>
<TABLE>
<CAPTION>
MISCELLANEOUS RECURRING NON-RECURRING
- ------------- --------- -------------
<S> <C> <C>
M13 1 yr Term $[**]/mo $[**]
2+ yr Term $[**]/mo $[**]
3+ yr Term $[**]/mo $[**]
ECHO CANCELLER (per circuit end) $[**]/mo $[**]
SECOND END LOOP (Ex: for ADPCM) $[**]/mo $[**]
DEMAND MAINTENANCE $[**]/hr 8 a.m. - 5 p.m. M-F. 4 hour minimum if dispatch
is required; $[**]/hr after hours with 4 hour minimum.
RACK SPACE ICB - subject to availability.
</TABLE>
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
3
<PAGE> 10
<TABLE>
<S> <C> <C>
SHELF SPACE $[**]/ea/mo ICB install
DC POWER $[**]/amp/mo (5 amp minimum; 5 amp increments)
CIF AC/DC POWER ICB
ALL OTHER SERVICES See Note (2)
</TABLE>
(1) All of the above charges are subject to change with a 30-day notice.
(2) Services not described above will be considered special handling and
charges will be assessed on an individual basis.
DSO ANCILLARY PRICING
<TABLE>
<S> <C>
New Order Installation [**]
Order Cancellation Prior to Turn up [**]
Order Expedite [**]
Reconfiguration [**]
(City Pairs the Same)
DACS Charge [**]
(Switching Only)
DSP DACS Port Charge [**]
DS1 DACS Port [**]
Minimum Charge per DS-0 [**]
</TABLE>
Notes:
1. All of the above charges are subject to change with a 30 day notice.
2. Services not described above will be considered special handling and charges
will be assessed on an individual basis.
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
4
<PAGE> 11
EXHIBIT C
ON-NET DS-1 AND DS-3 CITIES
<TABLE>
<S> <C> <C>
ARIZONA
Phoenix LATA 666 Tucson LATA 668
Phelps-Dodge Twr. Ste 1702 Arizona Bank Bldg.
2600 N. Central (602) 279 33 N. Stone, Suite 1610
(520) 792
CALIFORNIA
Bakersfield LATA 734 Fresno LATA 728 Fresno Ter
1430 Truxton Ave. Ste 730 4605 E. Vine Guarantee Savings
(805) 327 (209) 486 B1171 Fulton Mall, Ste. 1201
(209) 268
Los Angeles LATA 730 San Diego LATA 732 San Francisco LATA 722
One Wilshire 8933 Complex Dr. Metropolitan Life Bldg.
624 S. Grand, Suite 1615 (619) 569 425 Market St., Ste 3800C
(213) 689 (415) 543
Sunnyvale LATA 722
111 Uranium
(408) 739
COLORADO
Colorado Springs LATA 658 Denver LATA 656
102 S. Tejon, Suite 780 Bell Building
(719) 471 931 14th Street, Ste. 622
(303) 572
DISTRICT OF COLUMBIA
Washington, D.C. LATA 236
1828 L Street N.W., Ste. 260
(202) 833
ILLINOIS
Chicago LATA 358
Prudential Building
130 E. Randolph, Suite 4001
(312) 637
INDIANA
Indianapolis LATA 336 Southbend LATA 332
Merchants Bank Bldg. 211 West Washington St.
11 S. Meridian 19th Floor
Suite 1798/1799 (219) 233
(317) 637
MARYLAND
Baltimore LATA 238
1220 S. Howard
(301) 752
</TABLE>
1
<PAGE> 12
<TABLE>
<S> <C> <C>
MICHIGAN
Ann Arbor Battle Creek Bay City
1615 Plymouth Rd. Arizona Bank Bldg. 100 E. Hart
(313) 994 33 N. Stone, Suite 1610 (517) 667
(520) 792
Detroit LATA 340 Detroit Flint
Book Bldg, Suite 2609 1860 Gratiot Ave. 2001 S. Grand Traverse
1249 Washington Blvd. (313) 259 (313) 767
(313) 961
Grand Rapids Jackson Kalamazoo
209 Graham, S.W. 170 W. North Street 303 Mills St.
(616) 235 (517) 783 (616) 385
Lansing Midland Pontiac
230 South St. 1000 Jefferson 324 S. Saginaw
(517) 631 (517) 631 (313) 338
Royal Oak Saginaw
3100 W. 14 Mile Rd. 315 Meredith
(313) 435 (517) 771
MISSOURI
Kansas City LATA 524 St. Louis LATA 520
Bank of Kansas City 900 Walnut, Suite 220
1125 Grand Ave., Suite 1704 (314) 231
(816) 283
NEVADA
*Las Vegas LATA 821
Centel Bldg., Ste. 400
125 S. Las Vegas Blvd.
(702) 388
NEW JERSEY
Newark LATA 224
744 Broad Street, 3rd Floor
(201) 824
NEW MEXICO
Albuquerque LATA 664
200 Lomas Blvd., N.W.
13th Floor
(505) 247
NEW YORK
New York LATA 132
60 Hudson St., Ste. 206
(212) 285
OHIO
Akron LATA 325 Cincinnati LATA 922 Cleveland LATA 320
1 Cascade Plaza, Suite 1950 2300 Carew Tower R.F. Keith Bldg., Suite 2117
Main & Bowery Suite 4701 1621 Euclid Ave.
(216) 535 441 Vine St. (513) 651 (216) 771
Columbus LATA 324 Dayton LATA 328 Toledo LATA 326
Borden Bldg., Level 2B 1 National Bank Bldg. 319 Madison Ave., Ste. 29017
180 E. Broad St. Suite 2220 (419) 242
614(469) 130 W. Second (513) 461
OKLAHOMA
Oklahoma City LATA 536 Tulsa LATA 538
</TABLE>
<PAGE> 13
<TABLE>
<S> <C> <C>
Liberty Tower Lookout Mountain
100 N. Broadway, Ste. 3020 3500 S. 26th West Avenue
(405) 232 (918) 584
(918) 446
PENNSYLVANIA
Philadelphia LATA 228 Pittsburgh LATA 234
2401 Locust St., 2nd Floor Oliver Building
(215) 564 535 Smithfield St., Ste.
2650
(412) 281
TEXAS
Abilene LATA 550 Amarillo LATA 546 Austin LATA 558
1049 N. Third, Suite 500 Amarillo Petroleum Bldg. 621 Pleasant Valley Road
(915) 675(216) 535 203 W. 8th, Suite 607/608 (512) 389
(806) 373
Corpus Christi LATA 564 Dallas LATA 552 El Paso LATA 540
606 N. Carancahua, Ste 816 Tower of the Americas El Paso National Bank Bldg.
Wilson Plaza 2323 Bryan, Suite 380 201 E. Main, Suite 1702
(512) 882 Electra (915) 533
2223 Houston St.
(214) 954 (214) 969
Fort Worth LATA 552 Harlingen LATA 568 Houston LATA 560
WT Waggiber Blvd. 513 E. Jackson 293 N. Main Street
810 Houston Suite 1705 Matz Building (713) 224
(817) 870 (210) 425
Lubbock LATA 544 McAllen LATA 568 Midland LATA 542
1220 Broadway, #1901 200 S. 10th Street, Suite KMID - TV Studio
(806) 762 704 La Force Blvd. &
(210) 687 Air Terminal
(915) 561
San Angelo LATA 961 San Antonio LATA 566 Waco LATA 556
36 E. Twohig, 15th Floor 660 S. Santa Rosa 100 S. 26th Street
(915) 653 (210) 225 (817) 750
</TABLE>
*Price on an Individual Case Basis (ICB)
3
<PAGE> 14
INSTALLED DS-0 CITIES MARCH, 1996
<TABLE>
<S> <C>
NPA/NNX
ARIZONA
Phoenix 602-279
CALIFORNIA
Los Angeles 213-622
San Diego 619-419
Stockton 209-463
DISTRICT OF COLUMBIA
Washington, DC 202-245
ILLINOIS
Chicago 312-861
MARYLAND
Baltimore 410-752
MICHIGAN
Birmingham 313-435
MISSOURI
Kansas City 816-221
St. Louis 314-231
NEW MEXICO
Albuquerque 505-247
NEW YORK
New York City 212-285
OHIO
Dayton 513-252
OKLAHOMA
Oklahoma City 405-232
Tulsa 918-582
PENNSYLVANIA
Philadelphia 215-988
TEXAS NPA/NNX
Austin 512-389
Corpus Christi 512-883
Dallas 214-741
El Paso 915-533
Fort Worth 817-777
Harlingen 210-425
Houston 713-224
San Antonio 210-222
McAllen 210-632
VIRGINIA
Norfolk 804-622
</TABLE>
Total DS-0 Cities 26
All Cities are equipped for DSO services
Additional cities will be added if cost is justified
4
<PAGE> 15
EXHIBIT D
(DISCOUNTED RATES)
List of Rates for Service
On-Net Service
Attainment Level $ [**]
<TABLE>
<S> <C> <C>
DS-0 Service I.C.B
DS-1 Service
Miles
0-999 [**] per DS-0 V&H Mile
1000 + [**] per DS-0 V&H Mile
DS-3 Service
Miles
0-249 [**] per DS-0 V&H Mile
250-999 [**] per DS-0 V&H Mile
1000 + [**] per DS-0 V&H Mile
</TABLE>
Service is for a one (1) year term for On-Net.
Off-Net Service
<TABLE>
<S> <C> <C>
DS-0 Service I.C.B
DS-1 Service
Miles
0-250 [**] per DS-0 V&H Mile
251-999 [**] per DS-0 V&H Mile
1000 + [**] Per DS-0 V&H Mile
DS-3 Service I.C.B.
</TABLE>
Service is for a one (1) year term of the Underlying Carrier, whichever
is greater. If the term of the Underlying Carrier is longer than one (1) year,
Lessor will notify Lessee on the Marketing Service Order (MSO) before Lessee's
execution of the same.
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
1
<PAGE> 16
EXHIBIT D-1
(UNDISCOUNTED RATES)
List of Rates for Service
On-Net Service
Billing Level Below $ [**]
<TABLE>
<S> <C> <C>
DS-0 Service I.C.B
DS-1 Service
Miles
0-999 [**] per DS-0 V&H Mile
1000 + [**] per DS-0 V&H Mile
DS-3 Service
Miles
0-250 [**] per DS-0 V&H Mile
251-999 [**] per DS-0 V&H Mile
1000 + [**] Per DS-0 V&H Mile
</TABLE>
Service is for a one (1) year term for On-Net.
Off-Net Service
<TABLE>
<S> <C> <C>
DS-0 Service I.C.B
DS-1 Service
Miles
0-250 [**] per DS-0 V&H Mile
251-999 [**] per DS-0 V&H Mile
1000 + [**] Per DS-0 V&H Mile
DS-3 Service I.C.B.
</TABLE>
Service is for a one (1) year term of the Underlying Carrier, whichever is
greater. If the term of the Underlying Carrier is longer than one (1) year,
Lessor will notify Lessee on the Marketing Service Order (MSO) before Lessee's
execution of the same.
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
2
<PAGE> 17
EXHIBIT D-2
(RATES FOR $ [**] AND ABOVE)
List of Rates for Service
On-Net Service
Attainment Level $ [**]
<TABLE>
<S> <C> <C>
DS-0 Service I.C.B
DS-1 Service
Miles
0-999 [**] per DS-0 V&H Mile
1000 + [**] per DS-0 V&H Mile
DS-3 Service
Miles
0-250 [**] per DS-0 V&H Mile
251-999 [**] per DS-0 V&H Mile
1000 + [**] per DS-0 V&H Mile
</TABLE>
Service is for a one (1) year term for On-Net.
Off-Net Service
<TABLE>
<S> <C> <C>
DS-0 Service I.C.B
DS-1 Service
Miles
0-250 [**] per DS-0 V&H Mile
251-999 [**] per DS-0 V&H Mile
1000 + [**] Per DS-0 V&H Mile
DS-3 Service I.C.B.
</TABLE>
Service is for a one (1) year term of the Underlying Carrier, whichever is
greater. If the term of the Underlying Carrier is longer than one (1) year,
Lessor will notify Lessee on the Marketing Service Order (MSO) before Lessee's
execution of the same.
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
3
<PAGE> 18
EXHIBIT E
Existing Circuits
<TABLE>
<CAPTION>
City Pairs Circuit ID
- ---------- ----------
<S> <C>
Monthly Revenue
San Francisco - Bakersfield CRL 015214 ramp-up DS-1
[**]/month
CRL015215 ramp-up 2 DS-0's
CRL015216
Los Angeles - Bakersfield CRL008812 DS-3
[**]/month
Los Angeles - Phoenix CRL012294 ramp-up DS-1
[**/month]
CRL012294 roll into DS-1
*Full DS-1 Charge should be $751.80 CRL012706 roll into DS-1
at the signing of this Agreement CRL012705 roll into DS-1
CRL013184 roll into DS-1
San Francisco - Los Angeles CRL 010322 ramp-up DS-1
[**]/month
CRL010322 ramp-up 4 DS-0's
*Full DS-1 Charge should be $735.00 CRL013123 roll into DS-1
at the signing of this Agreement CRL013193 roll into DS-1
CRL013194 roll into DS-1
San Francisco - Sacramento CRL010323 DS-0
[**]/month
</TABLE>
* A one (1) year term will begin on these circuits at the signing of this
Agreement.
[**] Pursuant to a request for confidential treatment, price information in this
document has been omitted and separately filed with the Securities and
Exchange Commission.
1
<PAGE> 1
EXHIBIT 10.17
AMENDMENT NO. 1
SERVICE AGREEMENT
This Amendment No. 1 to Service Agreement (this "Amendment") is made as
of April 16, 1997 (the "Amendment Effective Date") by and among IXC CARRIER,
INC., a Nevada corporation ("Lessor") and CRL NETWORK SERVICES, a California
corporation ("Lessee").
BACKGROUND
This Amendment is made with reference to the following facts:
A. Lessee and Lessor are parties to that certain Service Agreement dated
as of April 22, 1996 (the "Agreement").
B. The parties desire to amend the Agreement pursuant to the terms set
forth below.
TERMS OF AMENDMENT
Accordingly, in consideration of the mutual promises set forth below,
the parties hereto hereby agree as follows:
1 Exhibit F attached to this Amendment is hereby added as Exhibit F to
the Agreement.
2. This Amendment is effective as of the Amendment Effective Date-
3. All other terms and conditions of the Agreement not specifically
amended herein shall remain in full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment.
IXC CARRIER, INC. CRL NETWORK SERVICES
By: /s/ John R. Fleming By: /s/ J. Couch
Name: John R. Fleming Name: J Couch
Title: Executive Vice President Title: President
- ------------
Certain portions of this document in the price information in Schedule B to
Exhibit F of Amendment 1 have been omitted and filed separately with the
Securities and Exchange Commission based on a request for confidential treatment
with respect to the omitted portions.
<PAGE> 2
EXHIBIT F
BROADBAND SERVICE ADDENDUM
This Broadband Service Addendum (this "Addendum") dated as of April 16,
1997 is attached to and made a part of that certain Service Agreement (the
"Agreement ) entered into by and between IXC CARRIER, INC. ("Lessor") and CRL
NETWORK SERVICES ("Lessee"), dated as of April 22, 1996.
1. Scope and Rates. Lessor, or an affiliate of Lessor, shall use
reasonable efforts (considering the needs of its other customers) to start the
provisioning of interstate data network service ("Broadband Service") described
in Schedule A attached to this Addendum to Lessee for which a written service
order ("Service Order") has been accepted. A form of Service Order is attached
hereto as Schedule B attached to this Addendum. The rates for the Broadband
Service are set forth in Schedule B, attached to this Addendum, unless otherwise
specified in the applicable Service Order.
2. Payments. Lessee shall pay Lessor each month within 30 days of
the date of invoice without demand or set off by Lessee: (i) the monthly charges
prorated for any partial month) based on the applicable rates set forth in the
applicable Service Order; and (ii) the charges for other services received. The
first invoice shall be for the first two months; each invoice thereafter shall
be for the following month. If any invoice is not paid when due: (i) a late
charge shall accrue equal to 1-1/2% (or the maximum legal rate, if less) of the
unpaid balance per month; and (ii) Lessor may suspend or terminate the Broadband
Service.
3. Term. The term hereof shall begin as of the date of this Addendum
and shall remain in force and effect until the date one (1) year from the date
of this Addendum, unless extended or earlier terminated pursuant to its terms.
If Broadband Service continues thereafter, the applicable rates will be equal to
120% of the rates hereunder and Broadband Service may be terminated by either
party upon 30 days' notice. Lessee may terminate any Broadband Service upon 90
days' notice; provided that if termination occurs: (i) prior to the date any
Broadband Service has been first made available to Lessee, Lessee shall
reimburse Lessor for all costs of the implementation of such Broadband Service;
and (ii) on or after such date, Lessee shall pay: (A) all charges for any
Broadband Service previously rendered; and (B) the amount due through the end of
the applicable monthly charges during the term for such Broadband Service
(Lessor shall try to re-lease such services for such term, refunding to Lessee
the amount so collected' if any). If Lessor: (i) fails to provide Broadband
Service within six months of the date requested by Lessee in the applicable
Service Order; or (ii) fails to cure a material breach hereof within 45 days of
notice from Lessee, Lessee may, as its only remedy, terminate the affected
service. To be effective, such written notice to Lessor must prominently contain
the following sentences in capital letters: "THIS IS FORMAL NOTICE OF A BREACH
OF CONTRACT. FAILURE TO CURE SUCH BREACH WILL HAVE SIGNIFICANT LEGAL
CONSEQUENCES." Notwithstanding anything herein to the contrary, no termination
of this Agreement or any affected Broadband Service shall affect or reduce
Lessee's obligation to make the take-or-pay commitment payments required by
Section 1 above.
2
<PAGE> 3
4. Limits of Liability. Lessor shall not be liable for any direct,
indirect, reliance or consequential damages, whether foreseeable or not, or for
any damage to property, loss of profits, cost of replacement services, or claims
of customers for service problems caused by any defect, delay in availability,
or failure in the Broadband Service or by any other cause. In no event shall
Lessor be liable in excess of the aggregate amount it has collected from Lessee
hereunder. Lessor shall give Lessee a credit in accordance with its then-current
outage policy for periods in which any Broadband Service loses continuity and
fails to comply with applicable specifications. Such credit shall be Lessee's
sole remedy with respect to such an event; provided, however, that no such
credits shall be allowed and Lessor shall not be liable for any Broadband
Service defect from causes outside its control, including accidents, cable cuts,
fires, floods, emergencies, government regulation, wars, or acts of God. LESSOR
DISCLAIMS ALL EXPRESS AND IMPLIED WARRANTIES RELATING TO SERVICE, INCLUDING BUT
NOT LIMITED TO, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR
PURPOSE. LESSEE HAS NOT RELIED ON ANY REPRESENT NOT SET FORTH HEREIN. LESSEE
SHALL INDEMNIFY LESSOR FROM ANY CLAIMS MADE BY ANY OF LESSEE'S CUSTOMERS.
5. All other terms and conditions of the Agreement not specifically
referred to in this Addendum shall apply to this Addendum.
To confirm their agreement to be bound hereby, the parties hereto have
executed this Addendum below:
IXC CARRIER, INC. CRL NETWORK SERVICES
By: /s/ John R. Fleming By: /s/ John R. Fleming
--------------------------- ----------------------------
Name: John R. Fleming Name: John R. Fleming
-------------------------- -------------------------
Title: Executive Vice-President Title: President
------------------------- -------------------------
3
<PAGE> 4
SCHEDULE A
BROADBAND SERVICES PRODUCTS
Company will provide ATM DS-3 Service with a Sustained Cell Rate Virtual Circuit
(SCR/VC) of 1 MHz and a Peak Cell Rate (PCR) of 10 Mb to CRL Network Services as
covered within this Agreement and reflected in the pricing in Schedule B. The
ATM DS-3 Service Trial is for a 60 day period after which Customer may elect
pursuant to Service Trial Agreement to retain Service at rates listed in
Schedule B. Furthermore, please see accompanying topology drawing for
clarification of design.
**Please be advised that any and all CUSTOMER PREMISE EQUIPMENT AND LOCAL
ACCESS facilities and charges are the Participant/Customer's responsibility.
<PAGE> 5
SCHEDULE B
CRL
ATM PRICING SUMMARY
<TABLE>
WHOLESALE PRICING WITH 45mbps (ATM-UNI) PORT CONNECTIONS AND 15mbps (VBR) VIRTUAL CHANNEL
- -----------------------------------------------------------------------------------------
TOTAL TOTAL
DESCRIPTION RECURRING NON-RECURRING
- -----------------------------------------------------------------------------------------
<S> <C> <C>
SAN FRANCISCO
45mbps(DS3) ATM-UNI Port Connection [**] [**]
DALLAS, TX
45mbps(DS3) ATM-UNI Port Connection [**] [**]
15mbps (VBR) Virtual Channel DLLS-SNFC [**] [**]
WASHINGTON, DC
45mbps (DS3) ATM-UNI Port Connection [**] [**]
15mbps (VBR) Virtual Channel WASHDC-SNFC [**] [**]
- ----------------------------------------------------------------------------------------
TOTAL NETWORK [**] [**]
-----------------------------------------------
WHOLESALE PRICING WITH 45mbps (ATM-UNI) PORT CONNECTIONS AND 10mbps (VBR) VIRTUAL CHANNEL
- -----------------------------------------------------------------------------------------
TOTAL TOTAL
DESCRIPTION RECURRING NON-RECURRING
- -----------------------------------------------------------------------------------------
<S> <C> <C>
SAN FRANCISCO
45mbps(DS3) ATM-UNI Port Connection [**] [**]
DALLAS, TX
45mbps(DS3) ATM-UNI Port Connection [**] [**]
10mbps (VBR) Virtual Channel DLLS-SNFC [**] [**]
WASHINGTON, DC
45mbps (DS3) ATM-UNI Port Connection [**] [**]
10mbps (VBR) Virtual Channel WASHDC-SNFC [**] [**]
- ----------------------------------------------------------------------------------------
TOTAL NETWORK [**] [**]
-----------------------------------------------
WHOLESALE PRICING WITH 45mbps (ATM-UNI) PORT CONNECTIONS AND 5mbps (VBR) VIRTUAL CHANNEL
- -----------------------------------------------------------------------------------------
TOTAL TOTAL
DESCRIPTION RECURRING NON-RECURRING
- -----------------------------------------------------------------------------------------
<S> <C> <C>
SAN FRANCISCO
45mbps(DS3) ATM-UNI Port Connection [**] [**]
DALLAS, TX
45mbps(DS3) ATM-UNI Port Connection [**] [**]
5mbps (VBR) Virtual Channel DLLS-SNFC [**] [**]
WASHINGTON, DC
45mbps (DS3) ATM-UNI Port Connection [**] [**]
5mbps (VBR) Virtual Channel WASHDC-SNFC [**] [**]
- ----------------------------------------------------------------------------------------
TOTAL NETWORK [**] [**]
-----------------------------------------------
</TABLE>
NOTE:
1. All calls transmitted on greater than the standard call rate (VBR) will
have the Call Loss Priority (CLP) bit set to one (1) and the delivery
of such calls is not guaranteed.
2. All virtual circuits will have a Peak Call Rate set at 200% of the
Sustained Call Rate.
3. Prices do not include any local loop charges that may apply.
[**] Pursuant to a request for confidential treatment, price information in this
document has been omitted and separately filed with the Securities and
Exchange Commission.
<PAGE> 1
EXHIBIT 10.18
[SPRINT LOGO]
SPRINT NETWORK ACCESS POINT (NAP)
TERMS AND CONDITIONS
The following terms and conditions govern Sprint's provision of network
connectivity Products and Services ("Products and Services") to CRL NETWORK
SERVICES ("Customer"). Products and Services include equipment, facilities,
programming or software provided by Sprint, but do not include certain third
party access lines which may be utilized with the Products and Services. If
Products and Services are or become subject to a tariff filed with the Federal
Communications Commission or any other regulatory institution ("Tariff"), the
terms and conditions of such Tariff, including rates, shall govern Customer's
use of the Products and Services.
Sprint will provide a Type 1 connection to Sprint's Network Access Point
("NAP") in conjunction with NSF Cooperative Agreement No. NCR-9321072. See
Attachment A for definitions of Sprint NAP Access Types.
To be eligible for connection to the Sprint NAP, the Customer must have the
following:
- at least one bilateral peering (routing) agreement with another ISP/NSP
currently peering at the NAP
- 24 x 7 network operations center
- the capability to dispatch a customer provided technician to install or
replace failed components
- a WAN connection into the NAP with an aggregate bandwidth no less than 45
Mbps (DS3)
1. TERM
The initial one year term ("Initial Term") for Products and Services shall
begin on the first day of the month following the date of Sprint's notice of
service availability. Upon expiration, the Initial Term shall be automatically
extended for successive one (1) year periods ("Term"), unless thirty (30) days
prior to the end of the Initial Term or each such extension, either (a)
Customer or Sprint provides written notice to the other that it does not want
such extension, or (b) Customer executes a new Agreement for Products and
Services with a term longer than one (1) year.
2. RATES
Rates for Products and Services provided hereunder are set forth in Attachment
B. Rates are fixed for 90 days after the first day of the Initial Term.
Thereafter Sprint will provide sixty (60) days advance written notice of
increased rates. In the event of such changes to rates, Customer may terminate
the Agreement without termination liability by providing written notice to
Sprint no later than thirty (30) days prior to the effective date of such
change. Otherwise, Customer will be billed according to the new rates beginning
on the effective date of such new rates.
3. PAYMENT
Customer agrees to pay all charges incurred beginning on the date of service
availability. Recurring charges shall be invoiced monthly in advance and payment
in U.S. currency shall be due upon receipt. Interest charges of 1-3/4 percent
per month or the highest rate permitted by law, whichever is less, will accrue
daily on all amounts not paid within thirty (30) days of the date of the
invoice. Customer will pay all sales and use taxes, as well as duties or levies,
on Products and Services. The Agreement is subject to Sprint's policies and
procedures.
- ----------
Certain portions of this document in the price information in Attachment B have
been omitted and filed separately with the Securities and Exchange Commission
based on a request for confidential treatment with respect to the omitted
portions.
- --------------------------------------------------------------------------------
SPRINT COMMUNICATIONS COMPANY 1
<PAGE> 2
Version Dated 5/16/97 [SPRINT LOGO]
4. TERMINATION
To terminate Products and Services, Customer must provide Sprint with thirty
(30) days prior written notice. In the event of early termination of any
Agreement, Customer will pay a lump sum Termination Charge equal to: (a) one
hundred percent (100%) of the monthly price for each Product and Service
terminated multiplied by the number of months remaining in the Term. In
addition to this Termination Charge, Customer shall pay a pro-rata amount of any
waived installation charges based on the number of months remaining in the
Initial Term. Customer will not be liable for the Termination Charge if another
Sprint product and service of the same or greater monthly price with a term no
less than the remaining months in the Term is ordered at the same time as the
notice of termination is received.
5. RIGHTS AND OBLIGATIONS OF CUSTOMER
A. Customer shall: (i) at its own expense provide all necessary preparations
required to comply with Sprint's installation and maintenance specifications,
(ii) be responsible for the costs of relocation of Products and Services once
installed, and (iii) provide to Sprint and to suppliers of communications lines
reasonable access to Customer's premises to perform any acts required by the
Agreement. The Customer shall conform to the Sprint's requirements set forth in
Attachment C (Collocated Equipment).
B. Customer shall properly use equipment provided by Sprint and shall
surrender such equipment to Sprint upon expiration or termination of the
Agreement. Customer shall be liable for any and all damages to Products and
Services located on Customer's premises excluding reasonable wear and tear, and
damages caused by Sprint.
C. Customer shall not nor shall it permit or assist others to: (i) use
Products and Services for any purpose other than that for which they are
intended, (ii) fail to maintain a suitable environment as specified by Sprint,
or (iii) alter, tamper with, adjust or repair the Products and Services. Upon
the occurrence of any of the above, Sprint shall be completely released from any
liability or obligation (including any warranty or indemnity obligation) to
Customer relative to the Products and Services; and Customer shall be liable to
Sprint for costs or damages incurred by Sprint resulting therefrom.
D. Customer shall not nor shall it permit or assist others to abuse or
fraudulently use Products and Services, including but not limited to the
following:
1. Obtaining or attempting to obtain service by any means or device
with intent to avoid payment; or
2. Unauthorized access, alteration, destruction, or any attempt
thereof, of any information of another Sprint customer by any
means or device; or
3. Using Products and Services in violation of the law or in aid of
any unlawful act; or
4. Using Products and Services so as to interfere with the use of
the Sprint network by other customers or authorized users or in
a manner which, in the sole opinion of Sprint, is not in
accordance with generally accepted standards of Internet access
and use; or
5. Resell or redistribute any portion of the IP address space
associated with the NAP.
Upon the occurrence of any of the above, Sprint may suspend its performance
and/or terminate the Agreement with no further obligation to Customer.
- --------------------------------------------------------------------------------
Sprint Communications Company 2
<PAGE> 3
Version Dated 5/16/97 [SPRINT LOGO]
6. EQUIPMENT OR SOFTWARE NOT PROVIDED BY SPRINT
A. Sprint shall not be responsible for the installation, operation, or
maintenance of equipment or software not provided by Sprint; nor shall Sprint
be responsible for the transmission or reception of information by such
equipment or software.
B. Customer shall be responsible for the selection, use and compatibility of
equipment or software not provided by Sprint. In the event that such equipment
or software impairs Customer's use of the Products and Services, Customer shall
nonetheless be liable for payment for Products and Services. Upon notice from
Sprint that the equipment or software not provided by Sprint is causing or is
likely to cause hazard, interference, or service obstruction Customer shall
eliminate such hazard, interference, or service obstruction. Sprint reserves
the right to disconnect the Products and Services until such hazard,
interference, or service obstruction is corrected. If requested by Customer,
Sprint may, at its then-current rates, troubleshoot difficulties caused by
equipment or software not provided by Sprint.
C. Sprint shall not be responsible if any changes in Products and Services
cause equipment or software not provided by Sprint to become obsolete, require
modification or alteration, or otherwise affect performance of such equipment
or software.
D. If Customer provides its own router to interface with the Products and
Services, then (i) Customer is fully responsible for the installation,
maintenance, and configuration of such Customer-provided router; (ii) Sprint
must approve in advance the make, model and/or software revision of a Customer
provided router and any supporting equipment; and (iii) Sprint shall have the
right, in cooperation with Customer, to set the initial software configuration
for the router's interface into the Products and Services.
7. RIGHTS AND OBLIGATIONS OF SPRINT
A. Sprint shall install, operate and maintain the Products and Services as
required herein.
B. Sprint warrants that Products and Services will be in good working order
and will conform to the Sprint's Specifications set forth in Attachment C
(Collocated Equipment). Customer's sole remedy for performance or
non-performance of Products and Services shall be repair or replacement of the
Products and Services.
THE FOREGOING WARRANTIES ARE IN LIEU OF ALL OTHER WARRANTIES, EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO THE IMPLIED WARRANTIES OF MERCHANTABILITY
AND FITNESS FOR A PARTICULAR PURPOSE.
C. In no event shall Sprint be liable, either in contract or in tort, for
protection from unauthorized access of Customer's transmission facilities or
Customer premise equipment; or for unauthorized access to or alteration, theft,
or destruction of Customer's data files, programs, procedure, or information
through accident, fraudulent means or devices, or any other method, even if
Sprint has assisted Customer with access management functionality including,
but not limited to, access lists and firewalls.
D. Except to the extent caused by the negligence of Sprint, Sprint shall not
be liable for claims or damages resulting from or caused by: (i) Customer's
fault, negligence or failure to perform Customer's responsibilities; (ii)
claims against Customer by any other party (except for claims of copyright or
patent infringement as specified herein); (iii) any act or omission of any
other party; or (iv) equipment or services furnished by a third party.
E. For any claim arising under or related to this Agreement, Customer's
damages, if any, shall be limited to those actually proven as directly
attributable to Sprint, subject to the following limitation: Sprint will not be
liable under any circumstances for any lost profits or other consequential
damages.
________________________________________________________________________________
Sprint Communications Company 3
<PAGE> 4
[Sprint Logo]
even if Sprint has been advised of the possibility of such damages. Sprint's
liability for damages to Customer for any cause whatsoever, regardless of the
form of action, and whether in contract or in tort, including negligence, shall
be limited to the lesser of $100,000 or the monthly charges paid for the
affected Products and Services during the preceding twelve (12) months.
F. Upon default by Customer, Sprint may terminate and retake possession of
Products and Services (before, during, or after other actions to recover sums
hereunder), in which case Customer shall provide Sprint full and free access to
Products and Services for this purpose. Sprint's actions above shall not waive
Customer's obligation to pay for all charges due Sprint hereunder as well as
any other damages Sprint may have sustained because of Customer's default.
"Default" shall mean where Customer becomes subject of a voluntary or
involuntary bankruptcy, insolvency, reorganization or liquidation proceeding;
makes an assignment for the benefit of creditors, admits in writing its
inability to pay debts when due; or fails within fourteen (14) days after
written notice to remedy any breach of these terms and conditions.
8. PROPRIETY RIGHTS AND INFORMATION PROTECTION
A. Sprint grants to Customer a non-exclusive and non-transferable license to
use programming or software which may be provided with or included in the
Products and Services for the sole purpose of enabling Customer to use such
Products and Services.
B. Title and property rights to Products and Services are and shall remain
with Sprint, whether or not embedded in or attached to realty.
C. Customer recognizes that Products and Services provided hereunder
constitute valuable trade secrets of Sprint or its suppliers. Customer shall
protect and keep confidential any programming and software used by Customer
which is provided with or included in the Products and Services, and shall make
no attempt to examine, copy, alter, reverse engineer, tamper with, or otherwise
misuse such programming and software.
D. Information that is identified as proprietary to either party which is
delivered or disclosed to the other party shall, for a period ending one (1)
year from the expiration or termination date of the Agreement, (i) be held in
confidence by the receiving party; (ii) be disclosed only to those employees or
authorized representatives on a need-to-know basis, and (iii) be used only in
fulfillment of the receiving party's obligations under the Agreement. Neither
party shall be liable for the disclosure or use of such data or proprietary
information which: (a) is, or becomes, publicly known, other than by breach of
this Agreement; (b) is obtained by the receiving party from a third party
without restriction; (c) is previously known by the receiving party; (d) is, at
any time, developed by the receiving party completely independent of any
disclosures hereunder; or (e) is required to be released by law.
9. INDEMNITIES
A. If promptly notified of any action brought against Customer based on a
claim that Sprint provided Products and Services used by Customer infringe a
United States patent or copyright, Sprint will defend such action at its
expense and will pay any and all fees, costs, or damages that may be finally
awarded in such action or resulting settlement. In the event that a final
injunction is obtained against Customer prohibiting use of Products and
Services by reason of infringement of a United States patent or copyright,
Sprint will at its option either:
1. At its expense, procure the right for Customer to continue using the
Products and Services; or
2. Procure the alternative Products and Services which furnish equivalent
functionality; or
- --------------------------------------------------------------------------------
Sprint Communications Company 4
<PAGE> 5
VERSION DATED 5/16/97 [SPRINT LOGO]
3. Direct Customer to return such Products and Services to Sprint.
The agreement relating to such returned Products and Services shall
terminate.
B. Sprint will be indemnified and saved harmless by customer from and against
all loss, liability, damage and expense, including reasonable counsel fees,
caused by:
1. Negligent acts or omissions of officers, employees, agents, or
contractors of Customer which arise out of or are caused by the
construction, installation, maintenance, presence, use or removal of
equipment or software not provided by Sprint which are connected or are
to be connected to the Products and Services; and which result in
claims and demands for damages to property or for injury or death to
persons, including payments made under any Worker's Compensation Law or
under any plan for employee's disability or death benefits;
2. Any claims arising from information, data, or messages transmitted over
the network by Customer including, but not limited to, claims for
libel, slander, invasion of privacy, infringement of copyright, and
invasion and/or alteration of private records or data; and
3. Claims for infringement of patents arising from the use of equipment
and software nor provided by Sprint in connection with Products and
Services.
10 GENERAL
A. Customer shall not assign or transfer the Agreement without the prior
written consent of sprint. Sprint may, however, assign the Agreement to its
parent company or an affiliate with thirty (30) days notice.
B. Sprint will not be responsible for performance of its obligations
hereunder where delayed or hindered by war, riots, embargoes, strikes (whether
of Sprint or others), casualties, accidents, or other concurrences beyond
Sprint's control. Sprint shall notify Customer in the event of any of the
foregoing occurrences. Should such occurrence continue for more than sixty (60)
days, Sprint or Customer may cancel the affected Products and Services with no
further liability.
C. The provision of Products and Services hereunder is subject to Sprint's
continuing approval of Customer's credit-worthiness. Customer shall furnish
financial information as Sprint may from time to time reasonably request to
determine Customer's credit-worthiness.
D. Any disputes or claims arising out of or related to the Agreement shall be
brought within one (1) year of the occurrence.
E. These terms and conditions may not be modified except by written amendment
by the parties. No agent, employee, or representative of Sprint or Customer has
authority to bind the parties to any representation or warranty unless such is
specifically included in these terms and conditions, the Agreement, or written
amendments thereto.
F. Notice to the parties of disputes arising under the Agreement shall be sent
by registered mail to the parties to the address shown on the most recent
Agreement. All other notices may be sent by regular mail.
- -------------------------------------------------------------------------------
Sprint Communications Company 5
<PAGE> 6
[SPRINT LOGO]
Notice to Sprint shall be to:
Sprint
13221 Woodland Park Road
Hendon, VA 20171
Attn: Elaine Sario, VAHRN A0602
G. The parties shall attempt to resolve all disputes arising out of or related
to this Agreement through good faith negotiations. In the event that the parties
cannot reach an agreement, any dispute arising out of or relating to this
Agreement will be finally settled by arbitration in accordance with the rules of
the American Arbitration Association. The arbitration will be governed by the
United States Arbitration Act. 9 U.S.C. Sec. 1, et seq., and judgment upon the
award rendered by the arbitrator(s) may be entered by any court with
jurisdiction. The arbitration will be held in the Kansas City, MO metropolitan
area.
H. The Agreement including these terms and conditions, shall be executed and
enforced in accordance with and the validity and performance hereof shall be
governed by, the laws of the state of Kansas.
- --------------------------------------------------------------------------------
Before signing the agreement, please provide the following information:
1. Type of connection you are requesting (i.e. Type 1, Type 2, or Cisco 7507):
Type 1
2. Service Type you are requesting (ATM or Non ATM) Non ATM
3. Quantity: 1
4. Check one: Circuit to be provided by Sprint __
Circuit to be provided by other carrier [X]
5. Tax Exempt: Yes ___ No [X] (If yes, please provide evidence such as
state tax exemption certificate or you will be charged the appropriate
state tax.)
- --------------------------------------------------------------------------------
IN WITNESS WHEREOF, the parties hereto, each by a duly authorized officer, have
caused this Agreement to be executed as of the last date written below.
<TABLE>
<CAPTION>
CUSTOMER: SPRINT COMMUNICATIONS COMPANY
LIMITED PARTNERSHIP:
<S> <C>
/s/ PHILIP BURKHART /s/ FLORENCE GAIL MOORE
- ---------------------------- ---------------------------------
Customer Signature Sprint Signature
/s/ PHILIP BURKHART /s/ FLORENCE GAIL MOORE
- ---------------------------- ---------------------------------
Customer Printed Name Sprint Printed Name
CRL NETWORK SERVICES SENIOR CONTRACT ADMINISTRATOR
- ---------------------------- ---------------------------------
Company Name Sprint Title
11/11/97 1/6/98
- ---------------------------- ---------------------------------
Date Date
</TABLE>
This agreement may be mailed to the address above or faxed to Elaine Sario at
703-904-2588
- --------------------------------------------------------------------------------
Sprint Communications Company 6
<PAGE> 7
[Sprint LOGO]
ATTACHMENT A
SPRINT NAP ACCESS TYPES
To promote a variety of access methods Sprint has established two options for
customer connectivity to the NAP. These are outlined below.
Type I
The NSP terminates a DS3 or OC-3 circuit to an NSP-provided router collocated
at the Sprint NAP. This connection type allows the placement of a
customer-owned router at the NAP with direct attachment to FDDI ports on the
NAP. The IXC service provider is of the NSP's selection. The minimum
transmission rate is DS3.
Customer must provide the DS3 CSU/DSU and router HSSI cable. Sprint will
provide the FDDI multimode fiber cabling to connect the customer's router to
the NAP.
[Collocated Equipment Diagram]
Figure 1. Type I NAP Access Method
Note: For reasons of space planning and configuration control, each collocated
router is permitted to terminate a maximum of three (3) DS3s or one (1)
OC-3 circuit from the NSP's backbone.
- --------------------------------------------------------------------------------
7
<PAGE> 8
Version Dated 5/16/97 [SPRINT LOGO]
TYPE II
- -------
The NSP-provided router terminates an ATM network DS3 or OC-3 circuit using
Sprint's ATM User-to-Network Interface (UNI) at the Sprint NAP. This connection
type allows the placement of a customer-owned router at the NAP with direct
attachment to FDDI ports on the NAP. The minimum transmission rate is DS3.
Sprint will provide the FDDI multimode fiber cabling to connect the customer's
router to the NAP.
[GRAPHIC]
FIGURE 2. TYPE II NAP ACCESS METHOD
Note: For reasons of space planning and configuration control, each collocated
router is permitted to terminate a maximum of three (3) DS3s or one (1)
OC-3 circuit from the NSP's backbone.
- --------------------------------------------------------------------------------
Sprint Communications Company 8
<PAGE> 9
[SPRINT LOGO]
ATTACHMENT B
PRODUCTS, SERVICES AND PRICES
Except where designated, all charges below are monthly fees. The physical
connection can be provided by Sprint or another carrier.
SPRINT NAP COLLOCATION AND CONNECTION PRICING SCHEDULE
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
(1)DS-3 (2)DS-3s (3)DS-3s (1)DC-3c
- ------------------------------------------------------------------------------------------------------------
Connection Service Type Sprint Other Sprint Other Sprint Other Sprint Other
Type Access Access Access Access Access Access Access Access
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Type-I Non-ATM
- ------------------------------------------------------------------------------------------------------------
Type-II ATM [**]
- ------------------------------------------------------------------------------------------------------------
Cisco 7507 --
- ------------------------------------------------------------------------------------------------------------
</TABLE>
NOTES:
1. Customers will be limited to a Cisco 7505, 7507, or other router with
similar I/O slot capacity.
2. Customers will be limited to a maximum of three (3) DS-3s or one (1) OC-3c
circuit per router.
3. Monthly recurring cost includes Central Office Connection (COC) fee and
applies to all carrier provided access.
4. Customers will incur a non-recurring installation charge of $5,000 per
router.
5. Customers may collocate as many routers as needed, but will be charged a
monthly NAP collocation and connection fee for each based on the router
model and the quantity of circuits it terminates.
6. Customers who wish to add circuits to an existing router must agree to
these new NAP Terms and Conditions.
- --------------------------------------------------------------------------------
Sprint Communications Company
9
- -----------
[**] Pursuant to a request for confidential information, price in this document
has been omitted and separately filed with the Securities and Exchange
Commission.
<PAGE> 10
[SPRINT LOGO]
ATTACHMENT C
NAP COLLOCATED EQUIPMENT
1. INSTALLATION SPECIFICATIONS
The Customer is responsible for installing and maintaining their equipment at
the Sprint NAP in accordance with the following specifications:
- Equipment must be UL approved
- Equipment must support 120Vac power (see note)
- Rackmount shelves must have rack-mount ears for flush mounting to
rack standoffs
- Rackmount shelves must have manufacturer-supplied cable management
brackets
- Rackmount shelf width must be no more than 17.72 inches
- No open shelf slots are permitted (e.g., vacant slots must be
covered)
Note: Redundant 48Vdc power is available for Cisco 7507 or similar sized
router. Consult with Spring NAP Engineering for details.
In addition, the Customer is responsible for ensuring that the standards by
which the equipment is installed are consistent with industry standards and
practices.
2. FACILITY ACCESS
The Customer will be granted access into the Sprint NAP facility during normal
business hours. Access for emergency repairs only on a 24 x 7 basis is also
available. In both cases, prior arrangements must be made by contacting NAP
Engineering. NAP Engineering will coordinate customer technician access into
the Sprint facility. Sprint will endeavor to accommodate requests for after
hours or weekend upgrades to existing equipment. No installation, maintenance
or non-emergency repair of equipment after hours or on weekends/holidays will be
allowed without prior arrangements having been made. Installation of new
equipment requires a minimum of two (2) business days confirmed advance notice.
3. SPECIFICATIONS OF CUSTOMER COLLOCATED EQUIPMENT
The customer is required to submit his desired equipment configuration to the
NAP Engineering and receive approval before collocation can proceed. Equipment
specifications such as rackmount shelf dimensions, power requirements, heat
dissipation and other pertinent information are required by NAP Engineering so
as to determine customer equipment rack mounting configuration and bay mounting
assignments. NAP Engineering will provide customer with an installation
specification document prior to the scheduled installation date at the NAP.
4. RACK MOUNTING
Sprint will provide standard open 19-inch relay racks. EIA-drilled, with 5-inch
rack standoffs. Shelf dimensions must not exceed 17.72" in width. Sprint will
provide UPS-protected 120Vac power for the customer's equipment.
===============================================================================
Sprint Communications Company 10
<PAGE> 11
[SPRINT LOGO]
5. MANAGEMENT PORT ACCESS
If the Customer requires out-of-band dialup access to their equipment, they
will need to supply the necessary equipment and order the necessary business
lines from the Bell Atlantic Business Office. The Customer will be
responsible for all expenses associated with the use of the business lines.
The customer must obtain a bay assignment from NAP Engineering before the
order can be placed with Bell Atlantic.
For other remote management requirements, such as private network links,
Spring will cooperate with the Customer. All costs will be born by the
Customer. The installed equipment will need to meet the same requirements as
those set out here for similar equipment.
6. IP ADDRESS ASSIGNMENT
The customer shall receive his IP address assignment(s) from Sprint. Any
address(es) provided by Sprint shall remain the property of Sprint and must
be relinquished upon customer disconnect of NAP services. Sprint shall also
assign with each customer's NAP IP address a DNS name from the
SPRINTNAP.NET domain.
7. SECURITY
While Sprint makes no requirements in the area of security management for
NAP clients, it recommends that the Customer develop a policy that addresses
the traditional information system security issues of acceptable use,
accountability, and incident handling and recovery for their equipment.
===============================================================================
Sprint Communications Company 11
<PAGE> 1
EXHIBIT 10.19
QCC Standard Private Line
QWEST COMMUNICATIONS CORPORATION
PRIVATE LINE SERVICES AGREEMENT
This Private Line Services Agreement, having Service Agreement No.
PL-0000346-9710-01-01 is entered into as of October 10, 1997 (the "EFFECTIVE
DATE"), by and between Qwest Communications Corporation, a Delaware corporation
("QWEST"), and CRL Network Services. Inc., a California corporation
("CUSTOMER").
1. INCORPORATION OF DOCUMENTS AND CONTROLLING PROVISIONS:
1.1 This Service Agreement, together with (a) Service Orders (as defined in
Section 2.1 of this Service Agreement) accepted by Qwest pursuant to the
terms hereof, and (b) schedules and exhibits incorporated herein by
reference ("EXHIBITS"), shall be referred to collectively herein as this
"AGREEMENT." In the event of any conflict between the provisions of this
Service Agreement and the terms of any Service Order(s) and/or
Exhibit(s), the conflict shall be resolved by reference to said
documents in the following order of priority of interpretation (except
as is otherwise specifically provided in this Service Agreement or in
any Exhibits): (a) any Service Order(s); (b) any Exhibit(s), with
reference to the same in order of attachment to this Service Agreement;
and (c) this Service Agreement. Notwithstanding the foregoing, no
provision or term of any Service Order or Exhibit shall be a part of
this Agreement or binding on Qwest unless and until such Service Order
or document has been executed by an authorized representative of Qwest.
1.2 If any provision of this Agreement conflicts with any statute, rule or
order of any governmental unit or regulatory body, or tariff filed by
Qwest, then, if required by law, this Agreement shall remain in effect
but shall be automatically modified by such conflicting law, statute,
rule, order or tariff, subject to the termination rights granted herein.
2. SERVICES TO BE PROVIDED BY QWEST:
2.1 Telecommunications capacity, and related ancillary services (the
"FACILITY" or "FACILITIES") available from Qwest are identified in the
Service and Pricing Exhibit attached hereto as EXHIBIT "A," which is
incorporated by this reference (the "SERVICE AND PRICING EXHIBIT").
Facilities requested by Customer shall be requested on Qwest's service
order forms in effect from time to time (hereafter, any such order is a
"SERVICE ORDER(S)"). Each Service Order shall reference this Agreement
by Service Agreement Number and shall become a part of this Service
Agreement when executed by a duly authorized representative of Qwest.
Qwest reserves the right to reject any Service Order.
2.2 Upon acceptance by Qwest of a duly executed Service Order during the
Term (as defined in Section 4.3 of this Service Agreement) of this
Agreement, Qwest shall provide to Customer those Facilities identified
in the Service Order.
- ----------
Certain portions of this document in the price information of Section 3.1 of
Exhibit A (Service and Pricing Exhibit) and the price information in the
service orders have been omitted and filed separately with the Securities and
Exchange Commission based on a request for confidential treatment with respect
to the omitted portions.
Qwest Communications
1
<PAGE> 2
QCC Standard Private Line
3. OBLIGATIONS OF CUSTOMER:
3.1 Customer shall perform those duties outlined in the Service and Pricing
Exhibit in addition to those described herein and in any Service
Order(s).
3.2 Customer shall have sole responsibility for installation, testing and
operation of the Interconnection Facilities (as defined in Section 1.4
of the Service and Pricing Exhibit), and any services and equipment
other than those Facilities specifically provided by Qwest under this
Agreement.
3.3 Customer shall fully comply with all laws, regulations and authorities
including, but not limited to, those outlined in Section 9 of this
Service Agreement.
4. TERM:
4.1 This Agreement shall be effective between the parties as of the date
first written hereon. The initial term (the "INITIAL TERM") of this
Agreement shall expire three (3) years from the date of execution
hereof, unless either party earlier terminates this Agreement in the
manner provided herein.
4.2 Upon the expiration of the Initial Term, if Customer is not then in
default hereunder, the term of this Agreement shall be renewed
automatically on a month-to-month basis (hereafter, the "RENEWAL TERM")
unless and until an Amendment is executed by both parties extending the
Renewal Term, or either party terminates this Agreement in the manner
provided herein.
4.3 The Initial Term and Renewal Term are sometimes referred to together
herein as the "TERM."
4.4 Notwithstanding anything to the contrary in this Section 4, if the
Facility Minimum Service Term (as set forth in Section 4.3 of the
Service and Pricing Exhibit) for a Facility or Facilities extends beyond
the expiration of the Term of this Agreement, then this Agreement shall
continue in effect until the expiration or termination of the applicable
Facility Minimum Service Term, but only as to the Facility or Facilities
so affected, and subject to the termination rights of Qwest and Customer
under Section 8 of this Service Agreement.
5. CHARGES AND PAYMENT:
5.1 Charges for the Facilities shall be determined according to the Service
and Pricing Exhibit except as is otherwise specifically provided in this
Agreement.
5.2 Recurring charges shall be invoiced by Qwest on a monthly basis in
advance and non-recurring charges shall be invoiced in arrears. If the
Start of Service Date (as defined in Section 2.1 of the Service and
Pricing Exhibit) for any Facility falls on other than the first day of
any month, the first invoice to Customer shall consist of: (1) the
pro-rata portion of
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the applicable monthly charge covering the period from the Start of
Service Date to the first day of the subsequent month, and (2) the
monthly charge for the following month. Qwest may, in its sole
discretion, prior to delivering the first invoice to Customer, elect to
require that Customer make a security deposit amount equal to one (1)
month's recurring charges for the Facility or Facilities. If a deposit
is made, it shall be held by Qwest until termination of this Agreement,
at which time Qwest may apply the deposit, at its option, either against
the last month of charges due hereunder prior to termination of this
Agreement, or against any other amounts owing to Qwest under this
Agreement.
5.3 Customer shall make all payments due hereunder within thirty (30) days
after the date of Qwest's invoice. If any amount due under this
Agreement is not received by the due date, in addition to its other
remedies available hereunder, Qwest may in its sole discretion: (a)
impose a late payment charge of the lower of 1.5% per month or the
highest rate legally permissible (such late charge shall be payable upon
demand by Qwest); and/or (b) require the prepayment of up to two (2)
months of recurring charges as a condition of the continued availability
of the Facilities, which prepayment shall be held and applied against
the last two (2) months of charges hereunder prior to termination of
this Agreement. Notwithstanding anything in this Agreement to the
contrary, no payment due hereunder is subject to reduction, set-off or
adjustment of any nature by Customer, except as is specifically provided
in Section 5 of the Service and Pricing Exhibit regarding Outage
Credits. In no event shall the malfunction or non-operation of
Customer's Interconnection Facilities (including local access when
Customer is responsible there for) relieve Customer of its obligation to
pay for the Facilities.
5.4 All disputes or requests for billing adjustments must be submitted in
writing and submitted with payment of undisputed amounts due. Any
amounts which are determined by Qwest to be in error or not in
compliance with this Agreement shall be adjusted on the next month's
invoice. Any disputed amounts which are deemed by Qwest to be correct as
billed and in compliance with this Service Agreement, shall be due and
payable by Customer, upon notification and demand by Qwest, along with
any late payment charges which Qwest may impose pursuant to Section 5.3
above. Disputes shall not be cause for Customer to delay payment of the
undisputed balance to Qwest according to the terms outlined in Section
5.3 above.
5.5 Invoices submitted to Customer by Qwest shall conform to Qwest's
standard billing format and content, as modified by Qwest from time to
time.
5.6 Any applicable federal, state, or local taxes, and all use, sales,
commercial, gross receipts, privilege or other similar taxes or license
fees, whether charged to or against Qwest or Customer, with respect to
the Facilities provided by Qwest, as well as any other imposition by any
governmental authority which has the effect of increasing Qwest's cost
of providing the Facilities, shall be payable by Customer in addition to
the other charges set forth in this Agreement.
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QCC Standard Private Line
6. EVENTS OF DEFAULT:
6.1 A "DEFAULT" shall occur if: (a) Customer fails to make any payment
required to be made by it under this Agreement and any such failure
remains uncorrected for five (5) business days after the date such
payment was due; (b) either party fails to perform or observe any
material term or obligation (other than making payment) contained in
this Agreement, and any such failure remains uncorrected for thirty (30)
calendar days after written notice from the non-defaulting party
informing the defaulting party of such failure (except for a Default by
Customer under Section 9.2 of this Service Agreement, which shall
require no advance written notice); (c) Customer breaches its
obligations to Qwest in any other agreement, including but not limited
to, agreements for switched access services, Media Express services or
any collocation agreements; or (d) there is an Adverse Material Change
(as defined in Section 6.2 of this Service Agreement) in Customer's
creditworthiness.
6.2 For purposes of Section 6.1 of this Service Agreement, an Adverse
Material Change in Customer's creditworthiness shall include, but not be
limited to: (a) failure of Customer to make full payment of charges due
hereunder on or before the date due on three (3) or more occasions
during any period of twelve (12) months, or Customer's failure to make
such payment on or before the date due in any two (2) consecutive
months; (b) acquisition of Customer (whether in whole or by majority or
controlling interest) by an entity which is insolvent, which is subject
to bankruptcy or insolvency proceedings, which owes past due amounts to
Qwest or any entity affiliated with Qwest, or which presents a
materially greater credit risk than Customer; or (c) Customer's being
subject to or having filed for bankruptcy or insolvency proceedings, or
the legal insolvency of Customer.
6.3 Notwithstanding Section 6.1 of this Service Agreement, the failure of
any particular circuit or number of circuits to comply with the
Specifications (as that term is defined in Section 2.1 of the Service
and Pricing Exhibit) shall not be deemed a Default by Qwest, but may
obligate Qwest to provide Customer with Outage Credits, as provided in
Section 5 of the Service and Pricing Exhibit.
7. REMEDIES FOLLOWING DEFAULT:
7.1 If Customer is in Default, Qwest may, in addition to any other remedies
it has under this Agreement or under the law: (a) suspend its
performance under this Agreement without the requirement of any further
notice to Customer, until Customer has remedied all breaches of this
Agreement and paid in full all charges then due, including any late fees
specified herein plus, at Qwest's option, the prepayment of up to two
(2) months recurring charges, as is specified in Section 5.3 of this
Service Agreement; (b) condition provision of Facilities or acceptance
of a Service Order on Customer's assurance of payment and compliance
with this Agreement, which may be in the form of a deposit or such other
means as is required by Qwest to establish assurance of payment and
compliance: or
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QCC Standard Private Line
(c) terminate this Agreement by providing written notice to Customer in
the manner provided in Section 8.2 of this Service Agreement.
7.2 If Qwest is in Default, Customer may, in addition to any other remedies
it has under this Agreement or under the law, terminate this Agreement
in the manner provided for in Section 8.1 of this Service Agreement, but
may not withhold or suspend its own performance.
8. TERMINATION:
8.1 Customer may terminate this Agreement: (a) effective upon written notice
to Qwest, if Qwest is in Default (as provided in Section 7.2 of this
Service Agreement); (b) effective upon thirty (30) calendar days prior
written notice. if any material rate or term contained herein and
relevant to the affected Facilities is materially changed by order of
the highest court of competent jurisdiction to which the matter is
appealed, the Federal Communications Commission, or other local, state
or federal government authority; or (c) effective upon thirty (30)
calendar days prior written notice, with or without cause, following the
expiration of the Initial Term.
8.2 Qwest may terminate this Agreement: (a) effective upon written notice to
Customer, if Customer is in Default (as provided in Section 7.1 of this
Service Agreement); (b) effective upon thirty (30) days prior written
notice, with or without cause, following the expiration of the Initial
Term; or (c) effective immediately and without any advance written
notice, if Qwest does not maintain or loses any required regulatory or
other governmental authorizations to provide the Facilities, as
described in Section 9.1 of this Service Agreement; following a Default
by Customer under Section 9.2 of this Service Agreement; or if Customer
makes an unauthorized Transfer under Section 12.1 of this Service
Agreement.
8.3 Customer may terminate the affected portion or portions of a Service
Order or Service Orders: (a) upon ten (10) calendar days prior written
notice following failure of performance, in the manner and subject to
Section 10.2 of this Service Agreement or Section 1.2 of the Service and
Pricing Exhibit; or (b) following thirty (30) calendar days prior
written notice, following an increase in prices by Qwest as to a
particular Facility or Facilities, in the manner and subject to Section
3.2 of the Service and Pricing Exhibit. Any termination of a Service
Order of Service Orders shall not affect any remaining Service Orders,
and shall not constitute a termination of this Agreement.
9. GOVERNMENTAL AUTHORITY:
9.1 Customer acknowledges that the obligation of Qwest to provide the
Facilities to Customer is subject to the receipt by Qwest of any
required regulatory or other governmental authorizations. This Agreement
may be superseded by a tariff filed with the appropriate regulatory
agency, which tariff may contain such modifications of the provisions of
this Agreement as Qwest deems appropriate, all of which shall become
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QCC Standard Private Line
automatically binding on Customer. Qwest reserves the right to terminate
this Agreement pursuant to Section 8.2 of this Service Agreement if at
any time Qwest does not have or loses the required regulatory or other
governmental authorizations to provide the Facilities.
9.2 Customer represents and warrants that: (a) Customer has received all
necessary permits, licenses, approvals, grants, and charters of
whatsoever kind necessary to carry out the business in which Customer is
engaged; and (b) Customer has complied and does comply with all laws,
regulations, orders, and statutes which may be applicable to Customer,
whether local, State or Federal. From the date of this Agreement until
the termination hereof, Customer agrees to operate in accordance with
and to maintain current all such certifications, permits, licenses,
approvals, grants, charters, and to comply with all applicable laws,
regulations, orders and statutes, whether local, State or Federal. A
breach by Customer of any of the representations, warranties or
covenants of this Section 9.2 shall be deemed a Default hereunder, and
shall allow Qwest to terminate this Agreement in the manner described in
Section 8.2 of this Service Agreement.
10. FORCE MAJEURE:
10.1 Except as is provided in Section 10.2 below, Qwest shall not be liable
for any failure of performance hereunder due to causes beyond its
reasonable control, including, but not limited to: acts of God, fire,
explosion, vandalism, fiber optic cable cut, storm, extreme temperatures
or other similar catastrophes; any law, order, regulation, direction,
action or request of the United States government, or of any other
government, including state and local governments having jurisdiction
over either of the parties, or of any department, agency, commission,
court, bureau, corporation or other instrumentality of any one or more
said governments, or of any civil or military authority; national
emergencies, insurrections, riots, wars, or strikes, lock-outs, work
stoppages or other labor difficulties: actions or inactions of a third
party provider or operator of facilities employed in provision of the
Facilities; or any other conditions or circumstances beyond the
reasonable control of Qwest which impede or affect the Facilities or the
transmission of telecommunications services.
10.2 If any failure of performance on the part of Qwest described in Section
10.1 of this Service Agreement shall be: (a) for twenty-four (24) hours
or less, then this Agreement shall remain in effect, but Customer shall
be relieved of its obligation to pay for that portion of the Facilities
affected for the period of such failure of performance; or (b) for more
than forty-eight (48) hours, then Customer may terminate only that
portion of any Service Order or Service Orders related to the Facilities
so affected, by written notice to Qwest, in accordance with Section 8.3
of this Service Agreement.
10.3 If the Facilities are unavailable to Customer as a result of any events
described in Section 10.1, Customer may be entitled to an Outage Credit
under Section 5 of the Service and Pricing Exhibit.
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11. INDEMNIFICATION:
11.1 Customer shall indemnify and hold harmless Qwest (and Qwest's
affiliates, officers, directors and employees; hereafter, "QWEST'S
AFFILIATES"), and any third party provider or operator of services
employed by Qwest and/or Qwest's Affiliates in the provision of the
Facilities, from and against, and shall reimburse Qwest and/or Qwest's
Affiliates for, any and all losses, liabilities, deficiencies, claims
and expenses (including, but not limited to, costs of defense and
reasonable attorneys fees) incurred by Qwest and/or Qwest's Affiliates
and arising from or in connection with: (a) any breach of any covenant
or agreement of Customer contained in this Agreement; (b) any
misrepresentation or breach of any of the representations and warranties
of Customer contained in this Agreement; or (c) any claims which may be
asserted by parties other than Customer who have use of or access to the
Facilities through Customer.
12. ASSIGNMENT:
12.1 Neither this Agreement nor any of Customer's rights or obligations
hereunder may be sold, assigned, sublet, encumbered or transferred by
operation of law or otherwise (hereafter, a "TRANSFER"), without the
prior written consent of Qwest. Any Transfer by Customer without Qwest's
prior written consent shall entitle Qwest, at its option, to: (a)
consider the Transfer void; (b) consent to the Transfer, and hold the
Customer and any transferee(s) liable hereunder; or (c) terminate this
Agreement upon delivering written notice to Customer. Subject to the
foregoing, this Agreement shall be binding upon and inure to the benefit
of the parties hereto and their respective successors or assigns. Qwest
may transfer, assign, or otherwise in any manner encumber this Agreement
and its rights and obligations hereunder without the need to obtain
Customer's prior consent.
13. TITLE:
13.1 Customer expressly disclaims any right, title, perpetual right of use or
any other interest in or to any equipment or property used or supplied
by Qwest under this Agreement.
14. WARRANTIES AND LIMITATION OF LIABILITY:
14.1 Qwest warrants that the Facilities shall be provided to Customer and
shall operate in accordance with prevailing telecommunications industry
standards (hereinafter the "TECHNICAL STANDARDS"). If Qwest determines
that the Facilities are not being provided in accordance with the
Technical Standards (hereinafter, a "DEFECT" or "DEFECTS"), Qwest shall
use reasonable efforts under the circumstances to conform the Facilities
to the Technical Standards.
14.2 THE WARRANTIES CONTAINED IN SECTION 14.1 OF THIS SERVICE AGREEMENT ARE
EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, WHETHER EXPRESS, IMPLIED
OR STATUTORY, INCLUDING WITHOUT
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LIMITATION IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A
PARTICULAR PURPOSE. QWEST HEREBY SPECIFICALLY DISCLAIMS ANY LIABILITY TO
CUSTOMER FOR INTERRUPTIONS AFFECTING THE FACILITIES FURNISHED HEREUNDER
WHICH ARE ATTRIBUTABLE TO CUSTOMER'S INTERCONNECTION FACILITIES (AS
DEFINED IN SECTION 1.4 OF THE SERVICE AND PRICING EXHIBIT) OR TO
CUSTOMER'S EQUIPMENT FAILURES, OR TO CUSTOMER'S BREACH OF THIS
AGREEMENT.
14.3 IN NO EVENT SHALL QWEST OR ANY OF ITS AFFILIATES BE LIABLE TO CUSTOMER
OR ANY OF ITS AFFILIATES OR EMPLOYEES OR TO ANY THIRD PARTY FOR: (a) ANY
LOSS OF PROFIT OR REVENUE, OR FOR ANY INDIRECT, CONSEQUENTIAL,
INCIDENTAL, PUNITIVE OR SIMILAR OR ADDITIONAL DAMAGES, WHETHER INCURRED
OR SUFFERED AS A RESULT OF UNAVAILABILITY OF FACILITIES, PERFORMANCE,
NON-PERFORMANCE, TERMINATION, BREACH, OR OTHER ACTION OR INACTION UNDER
THIS AGREEMENT, OR FOR ANY OTHER REASON, EVEN IF CUSTOMER ADVISES QWEST
OF THE POSSIBILITY OF SUCH LOSS OR DAMAGE; OR (b) FOR ANY OUTAGE OR
INCORRECT OR DEFECTIVE TRANSMISSIONS, OR ANY DIRECT OR INDIRECT
CONSEQUENCES THEREOF, EXCEPT AS IS SPECIFICALLY PROVIDED IN SECTION 5 OF
THE SERVICE AND PRICING EXHIBIT REGARDING OUTAGE CREDITS.
14.4 NOTWITHSTANDING ANYTHING IN THIS AGREEMENT TO THE CONTRARY: (a) CUSTOMER
AGREES THAT ITS SOLE REMEDY IN THE EVENT OF ANY BREACH OF THE WARRANTIES
DESCRIBED IN SECTION 14.1 OF THIS SERVICE AGREEMENT SHALL BE THE OUTAGE
CREDITS DESCRIBED IN SECTION 5 OF THE SERVICE AND PRICING EXHIBIT; AND,
(b) IN NO EVENT SHALL THE CUMULATIVE LIABILITY OF QWEST UNDER THIS
AGREEMENT, INCLUDING ANY OUTAGE CREDITS, EXCEED THE TOTAL PAYMENTS PAID
BY CUSTOMER TO QWEST HEREUNDER.
14.5 Customer acknowledges that Qwest has no ability to independently test or
maintain Facilities between two off net cities. Consequently, if Qwest
provides such Facilities, then notwithstanding anything in this
Agreement to the contrary, Qwest's entire duty with respect to such
Facilities shall be to use its best efforts to test and maintain such
Facilities in accordance with Qwest's Specifications.
15. NON-DISCLOSURE AND PUBLICITY:
15.1 Neither party shall disclose to any third party' the terms and
conditions of this Agreement without the prior written consent of the
other, except that Customer may disclose the terms and conditions of
this Agreement to potential investors in Customer, and Qwest may
disclose the terms and conditions of this Agreement to potential
investors in Qwest. Neither party shall use the other's name in
publicity or press releases without obtaining prior written approval,
which shall not be unreasonably withheld.
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QCC Standard Private Line
16. ARBITRATION:
16.1 All disputes which involve amounts reasonably anticipated to be in
excess of Twenty-Five Thousand Dollars ($25,000.00) arising out of or
related to this Service Agreement, shall be determined and resolved by
arbitration in Denver, Colorado, in accordance with the rules of the
American Arbitration Association ("AAA"). The arbitrators shall be
appointed in accordance with the rules then prevailing of the AAA.
16.2 The award rendered by the arbitrator(s) shall be final and binding upon
the parties hereto. Neither party shall have the right to further appeal
or redress the matters arbitrated except for the purposes of obtaining
the judgment rendered by the arbitrator(s). Judgment upon any
arbitration award may be entered and enforced in any court of competent
jurisdiction.
16.3 The parties hereto agree that a prevailing party shall be entitled to
recover all reasonable costs and expenses (including all reasonable
attorney's fees and disbursements) of such arbitration proceeding, as
well as all cost for said proceeding. Such prevailing party shall also
be entitled to reasonable attorney's fees and costs incurred in
enforcing a judgment of the arbitrators separately from and in addition
to any other amount included in such judgment. This Section 16.3 shall
be severable from the other provisions of this Service Agreement and
shall survive and not be merged into any such judgment.
17. USE OF FACILITIES:
17.1 Qwest's obligation to provide the Facilities specified herein is
conditioned upon Customer not allowing the Facilities to be used for any
unlawful purpose: or in violation of any governmental regulations or
authorizations as outlined in Section 8 of this Service Agreement.
18. MISCELLANEOUS:
18.1 Customer shall execute such other documents, provide such information
and cooperate with Qwest, all as may be reasonably required by Qwest in
connection with providing the Facilities.
18.2 Neither this Agreement, nor the provision of Facilities hereunder, shall
create a partnership or joint venture between the parties or result in a
joint communications service offering to any third parties.
18.3 The failure of either party to give notice of default or to enforce or
insist upon compliance with any of the terms or conditions of this
Agreement shall not constitute a waiver of any term or condition of this
Agreement.
18.4 Subject to Section 16 of this Service Agreement, in the event suit is
brought or an attorney is retained by either party to enforce the terms
of this Agreement or to collect any moneys due hereunder or to collect
money damages for breach hereof, the prevailing party shall be entitled
to recover, in addition to any other remedy, reimbursement for
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reasonable attorneys' fees, court costs, costs of investigation and
other related expenses incurred in connection therewith.
18.5 Customer acknowledges that at least part of the Facilities are or will
be provided through a Qwest "NETWORK MANAGEMENT CENTER" located in
Denver, Colorado. Accordingly, this Agreement shall be construed under
the laws of the State of Colorado without regard to choice of law
principles. Except as is provided in Section 16 of this Service
Agreement, venue and jurisdiction shall lie exclusively with the
District Court in the City and County of Denver.
18.6 No subsequent agreement concerning the Facilities or modification to
this Agreement shall be binding upon the parties unless it is made in
writing by an authorized representative of Customer and an authorized
Representative of Qwest Communications at its headquarters in Denver,
Colorado.
18.7 If any part of any provision of this Agreement shall be invalid or
unenforceable under applicable law, said part shall be ineffective to
the extent of such invalidity only, without in any way affecting the
remaining parts of said provision or the remaining provisions of this
Agreement, and the Customer and Qwest agrees to negotiate with respect
to any such invalid or unenforceable part to the extent necessary to
render such part valid and enforceable.
18.8 The terms and provisions contained in this Agreement that by their sense
and context are intended to survive the performance thereof by the
parties hereto shall survive the completion of performance and
termination of this Agreement, including, without limitation, the making
of any and all payments due hereunder.
18.9 Words having well-known technical or trade meanings shall be so
construed.
18.10 All notices, requests, demands and other communications required or
permitted hereunder shall be in writing and shall be given by: (a) hand
delivery; (b) first-class registered or certified mail with postage
prepaid; (c) overnight receipted courier service; or (d) telephonically
confirmed facsimile transmission, which notice is addressed to the party
at the address set forth below, or such other address as may hereafter
be designated in writing by the party. Notices given in accordance with
this Section shall be effective upon receipt or when receipt is refused.
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All notices to Qwest shall be addressed to:
Qwest Communications Corporation
555 17th Street, Suite 1000
Denver, Colorado 80202
Facsimile: (303)291-1724
Phone: (303)291-1400
Attn.: Carrier Contracts Admin.
All notices to Customer shall be addressed to:
CRL Network Services, Inc.
1 Kearny St., Suite 1450
San Francisco CA 94108
Facsimile: 415-392-9000
Phone: 415-837-5300
Attn.: Jim Couch
The addresses set forth may be changed by appropriate notice to the
other party.
18.11 This Agreement comprises the complete and exclusive statement of the
agreement of the parties concerning the subject matter hereof, and
supersede all previous statements, representations, and agreements
concerning the subject matter hereof.
DATED as of the first date above written.
CRL NETWORK SERVICES, INC.:
By: /s/ JIM COUCH
--------------------------------
Name: Jim Couch
Title: President / CEO
Date: October 10, 1997
QWEST COMMUNICATIONS CORPORATION:
By: /s/ GREG CASEY
--------------------------------
Name: Greg Casey
Title: Sr. Vice President,
Carrier Markets
Date: October 10, 1997
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QCC Standard Private Line
EXHIBITS
Exhibit A: Service and Pricing Exhibit to Qwest Private Line Services
Agreement consisting of seven (7) pages, dated October 10, 1997
as well as the following Schedules attached thereto:
<TABLE>
<CAPTION>
Schedule to Exhibit A Pages
--------------------- -----
<S> <C>
"A-1" Circuit Listing 1
"A-2" Interval Guidelines 1
"A-3" Technical Specifications 2
</TABLE>
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QCC Standard Private Line
EXHIBIT "A"
TO
QWEST COMMUNICATIONS
PRIVATE LINE SERVICES AGREEMENT
SERVICE AND PRICING EXHIBIT
This Service and Pricing Exhibit (this "Service and Pricing Exhibit") is
made as of October 10, 1997 with respect to Service Agreement No.
PL-0000346-9710-01-01 (the "SERVICE AGREEMENT") by and between Qwest
Communications Corporation, a Delaware corporation ("Qwest"), and CRL Network
Services, Inc., a California corporation ("CUSTOMER").
1. QWEST SERVICES:
1.1 During the Term of the Agreement, Qwest will provide to Customer
the Facility or Facilities requested by Customer in a Service
Order accepted by Qwest.
1.2 Upon acceptance of a Service Order, Qwest shall notify Customer
of its target date for the delivery of each Facility (the
"ESTIMATED AVAILABILITY DATE"). Any Estimated Availability Date
given by Qwest to Customer shall be subject to Qwest's standard
and expedited interval guidelines, as amended by Qwest from time
to time (the "INTERVAL GUIDELINES"). A copy of Qwest's current
Interval Guidelines are attached hereto as EXHIBIT "A-2" Qwest
shall use reasonable efforts to install each such Facility on or
before the Estimated Availability Date, but the inability of
Qwest to deliver a Facility by such date shall not be a Default
under this Agreement. If Qwest fails to make any DS-1 or DS-3
Facility available within sixty (60) days after acceptance by
Qwest of the Service Order with respect to such Facility (or such
greater time as is set forth in the Interval Guidelines), or if
Qwest fails to make any Optical Circuit Facility available within
ninety (90) days after acceptance by Qwest of the Service Order
with respect to such Facility (or such greater time as is set
forth in the Interval Guidelines), Customer's sole remedy shall
be to cancel the Service Order which pertains to such Facility by
ten (10) calendar days prior written notice to Qwest, as is set
forth in Section 8.3 of the Service Agreement.
1.3 At each end of the city pairs (the "CITY PAIRS") on which
Customer orders Facilities, Qwest shall provide appropriate
equipment in its terminal locations necessary to connect the
Facilities to Customer's Interconnection Facilities (as defined
in Section 1.4 of this Service and Pricing Exhibit). If Customer
desires to install its own equipment in one or more of Qwest's
terminals, and Qwest, in its sole discretion, agrees to such
installation, the parties shall execute the Collocation
Agreement.
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1.4 Customer agrees that Customer's Interconnection Facilities shall
connect to the Facilities provided by Qwest hereunder at the
network interface points located in the Qwest terminals and
defined in the Specifications (as defined in Section 2.1 of this
Service and Pricing Exhibit). As used herein, the term
"Interconnection Facilities" shall mean transmission capacity
provided by Customer or its third party supplier to extend the
Facilities provided by Qwest from a Qwest terminal to any other
location (e.g., a local access telephone service provided by a
local telephone company).
1.5 Qwest shall use reasonable efforts to order Interconnection
Facilities on behalf of Customer from Customer's designated
supplier, provided that Customer furnishes Qwest with an
acceptable letter of agency. Customer shall be billed directly by
the supplier of such Interconnection Facilities, and shall hold
harmless and indemnify Qwest from any loss or liability incurred
by Qwest as a result of Qwest's ordering Interconnection
Facilities from any third party. Customer may, at its election,
but subject to Qwest's prior written approval, order its own
Interconnection Facilities. If any party other than Qwest
provides Interconnection Facilities, then unavailability,
incompatibility, delay in installation, or other impairment of
Interconnection Facilities shall not excuse Customer's obligation
to pay Qwest all Rates or charges applicable to the Facilities,
whether or not such Facilities are useable by Customer.
2. START OF SERVICES:
2.1 Start of service for each Facility (the "Start of Service Date")
shall begin on the date on which Customer accepts delivery of
such Facility. If Customer fails to give written notice that the
Facility is in material non-compliance with the applicable
standard Qwest network specifications, as modified from time to
time by Qwest (the "SPECIFICATIONS") within five (5) business
days after notification to Customer by Qwest that the Facility is
available, Customer shall be deemed to have accepted such
Facility, and the Start of Service Date shall commence as of the
fifth day following such notification by Qwest. Following notice
by Customer of material non-compliance as set forth above, Qwest
shall promptly take such reasonable action as is necessary to
correct any such non-compliance in the Facility and shall, upon
correction, notify Customer of a new Start of Service Date.
2.2 Notwithstanding anything in Section 2.1 of this Service and
Pricing Exhibit to the contrary, Customer may delay the Start of
Service Date for any Facility for up to thirty (30) days from
Qwest's Estimated Availability Date by written notice to Qwest at
least seventy-two (72) hours prior to any applicable Estimated
Availability Date.
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3. RATES:
3.1 Qwest shall provide the Facilities at the rates (the "RATES") set
forth in this Section 3 (exclusive of all sales, use, commercial
or other taxes or license fees) and as shown on the Circuit
Listing attached as Schedule "A-I" to this Service and Pricing
Exhibit. The Rates for each Facility also include certain Monthly
Recurring and Non-Recurring charges, all as defined in this
Section 3. Finally, the Rates vary depending on whether the
Facilities are DS-1 or DS-3. Rates do not include local access
connectivity. The Rates shall be as follows:
ON-NET SERVICE
<TABLE>
<CAPTION>
FACILITY TYPE: V & H MILES: RATE PER DS-0 V & H MILES:
<S> <C> <C>
DS-1 0-199 $[**]
200+ $[**]
DS-3 0-199 $[**]
200+ $[**]
</TABLE>
OFF-NET SERVICE
Individual Case Basis (ICB)
(a) DS-1 FACILITIES RATES FOR IXC:
(i) DS-1 MONTHLY RECURRING CHARGES:
Minimum charge per DS-1 per month: $[**]
(ii) DS-1 NON-RECURRING CHARGES:
$[**] installation charge per DS-1.
(b) DS-3 FACILITIES RATES FOR IXC:
(i) BASE IXC RATES: To be determined by Qwest on a case-by-case
basis, subject to availability from Qwest.
(ii) DS-3 MONTHLY RECURRING CHARGES: Minimum charges per DS-3 per
month: $[**]
(iii) DS-3 NON-RECURRING CHARGES:
[**] Pursuant to a request for confidential treatment, price information in this
document has been omitted and separately filed with the Securities and
Exchange Commission.
Qwest Communications
3
<PAGE> 16
QCC Standard Private Line
$[**] installation charge per DS-3 for all services and
equipment, or $[**] for 1 year term, or waived for 2 year
term.
(c) OTHER CHARGES:
In addition to the foregoing Facilities Rates for DS-1 and DS-3
Facilities for IXC, Customer shall pay to Qwest the following additional
charges, as applicable, including any and all recurring charges imposed
on Qwest for the handling of calls under this agreement:
(i) OTHER MONTHLY RECURRING CHARGES:
- Mux charges: DS-3 MUX $[**] each
- Channel Bank: each $[**] per month
- DS-1 cross-connect charges: each $[**] month plus any
pass-through charges.
- DS-3 cross-connect charges: each $[**]
- Cross-connect charges: to another CAPS provider
$[**] each
- LTR charges: charges incurred by LECs
will be passed through to
customer to be paid by
customer.
(ii) OTHER NON-RECURRING CHARGES:
- Expedited Order Charges: $[**] each.
- Mux charges: $[**] per DS3 mux.
- DACs rearrangements: each $[**] per DS-1
- Channel Bank: each $[**] installation
- DS-1 cross-connect charges: each $[**] installation
plus any pass-through charges
- Change of order
cross-connect charges: $[**] each DS-3, $[**]
each DS-1
- Pre-engineering cancellation
cross-connect: $[**] each DS-3, $[**]
each DS-1
- Post-engineering
cancellation of cross-connect: $[**] each DS-3, $[**]
each DS-1
[**] Pursuant to a request for confidential treatment, price information in this
document has been omitted and separately filed with the Securities and
Exchange Commission.
Qwest Communications
4
<PAGE> 17
QCC Standard Private Line
3.2 (INTENTIONALLY DELETED)
4. FACILITY MINIMUM SERVICE TERM:
4.1 Customer acknowledges that the Rates and charges described in
Section 3 of this Service and Pricing Exhibit are based on the
commitment of Customer to utilize the Facilities for a specified
minimum period of time. Therefore, notwithstanding anything in
this Agreement to the contrary, Customer shall be liable for and
shall pay to Qwest all Rates, fees and charges which accrue under
this Agreement for each Facility for the entire Facility Minimum
Service Term (as defined in Section 4.2 of this Service and
Pricing Exhibit) applicable to each such Facility, regardless of
whether or not Customer utilizes all or any part of such Facility
during all or any part of the Facility Minimum Service Term
applicable to such Facility, except as is set forth in Section
4.3 of this Service and Pricing Exhibit.
4.2 The "FACILITY MINIMUM SERVICE TERM" for each Facility, is
defined as follows:
(a) Twelve (12) months from Start of Service Date for
DS-1 Facilities.
(b) Twelve (12) months from Start of Service Date for
DS-3 Facilities.
4.3 Notwithstanding anything in this Agreement to the contrary,
Customer's obligation to pay all Rates, fees and charges which
accrue under this Agreement for each Facility for the entire
Facility Minimum Service Term applicable to each such Facility
shall terminate, as each such Facility, if this Agreement is
terminated during the Minimum Service Term which pertains to each
such Facility: (a) by Customer, pursuant to Sections 8.1(a) or
(b) of the Service Agreement, following a Default by Qwest or an
increase in prices; or (b) by Qwest, pursuant to Section 3.2(b)
of the Service Agreement, if termination by Qwest during the
Minimum Service Term as to the Facility occurs other than because
of a Default by Customer, or 8.2(c) of the Service Agreement, if
Qwest terminates this Agreement because Qwest loses any required
permits. Upon termination of this Agreement for any other reason-
the total of all charges referred to in this Section 4 shall be
at once due and payable, regardless of whether or not all of the
Facilities Minimum Service Terms have expired and may be
collected by Qwest from Customer as a single amount.
5 OUTAGE CREDITS:
5.1 Customer acknowledges the possibility of an unscheduled,
continuous and/or interrupted period of time when a Facility or
Facilities are "UNAVAILABLE" (as
Qwest Communications
5
<PAGE> 18
QCC Standard Private Line
defined in the Specifications) (hereafter an "OUTAGE"). In the
event of an Outage, Customer shall be entitled to a credit (the
"OUTAGE CREDIT") determined according to the following formula:
<TABLE>
<S> <C>
OUTAGE CREDIT = HOURS OF OUTAGE - 2 HOURS X TOTAL MONTHLY CHARGE OF AFFECTED FACILITY
---------------
720 HOURS
</TABLE>
5.2 The Outage Credit shall apply to the charges for the total
mileage between end terminals of any Facility affected by an
Outage; provided, however, that if any portion of the affected
Facility remains beneficially used or useable by Customer between
any intermediate terminals (where Customer has installed drop and
insert capability) or end terminals, the Outage Credit shall not
apply to that pro-rata portion of the mileage. The length of each
Outage shall be calculated in hours and shall include fractional
portions thereof. An Outage shall be deemed to have commenced
upon verifiable notification thereof by Customer to Qwest, or,
when indicated by network control information actually known to
Qwest network personnel, whichever is earlier. Each Outage shall
be deemed to terminate upon restoration of the affected Facility
as evidenced by appropriate network tests by Qwest. Qwest shall
give notice to Customer of any scheduled outage as early as is
practicable, and a scheduled outage shall under no circumstance
be viewed as an Outage hereunder.
5.3 Outage Credits shall not be granted if the malfunction of any
end-to-end circuit is due to an Outage or other Defect occurring
in Customer's Interconnection Facilities.
5.4 All Outage Credits shall be credited on the next monthly invoice
for the affected Facility after receipt of Customer's request for
credit. The total of all Outage Credits applicable to or accruing
in any given month shall not exceed the amount payable by
Customer to Qwest for that same month for such Facility.
5.5 The Outage Credit described in this Section 5 of this Service and
Pricing Exhibit shall be the sole and exclusive remedy of
Customer in the event of any Outage, and under no circumstance
shall an outage be deemed a Default under this Agreement.
Qwest Communications
6
<PAGE> 19
QCC Standard Private Line
DATED AS OF the first date above-written.
CRL NETWORK SERVICES, INC.:
By:
---------------------------------------
Name: Jim Couch
Title: President / CEO
Date:
----------------------------------
QWEST COMMUNICATIONS CORPORATION:
By: /s/ GREG CASEY
---------------------------------------
Name: Greg Casey
Title: Sr. Vice President,
Carrier Markets
Date: 10/16/97
----------------------------------
Qwest Communications
7
<PAGE> 20
QCC Standard Private Line
SCHEDULE "A-1"
CIRCUIT LISTING
(SEE ATTACHED EXHIBIT REPORT OR SERVICE ORDER)
(IF THE ABOVE IS NOT PRESENT, WAITING ON CUSTOMER TO SEND SERVICE ORDER.)
1
<PAGE> 21
QCC Standard Private Line
SCHEDULE "A-2" TO EXHIBIT A
- --------------------------------------------------------------------------------
STANDARD & EXPEDITE INTERVAL GUIDELINES
- --------------------------------------------------------------------------------
These are the standard order intervals for Qwest's domestic services. If
you have any questions regarding the interval process, please contact your Sales
Director.
<TABLE>
<CAPTION>
TOTAL SERVICE INTERVAL
IN CALENDAR DAYS
-----------------------------
SERVICE TYPE STANDARD EXPEDITE
- ------------ -------- --------
<S> <C> <C>
OPTICAL:
POP TO POP (OC-3) 28 ICB
POP TO POP (ALL OTHERS) ICB ICB
LOA PROVIDER ICB ICB
LEC TO LEC ICB ICB
CAP TO CAP ICB ICB
CAP TO LEC ICB ICB
CROSS CONNECTS ICB ICB
DS-3:
POP TO POP 24 ICB
LOA PROVIDED 30 ICB
LEC TO LEC 30 ICB
CAP TO CAP 30 ICB
CAP TO LEC 30 ICB
CROSS CONNECTS 14 ICB
DS-1:
POP TO POP 21 ICB
LOA PROVIDED 25 ICB
LEC TO LEC 28 ICB
CAP TO CAP 28 ICB
CAP TO LEC 28 ICB
CROSS CONNECTS 14 ICB
</TABLE>
ALL INTERVALS ARE SUBJECT TO NETWORK CAPACITY AND LEC FACILITY AVAILABILITY.
"ICB" means "Individual Case Basis"
"POP TO POP" means Qwest controls CFA.
CAP's: No optical interface anywhere except with MFS & TCG in Los Angeles.
Equipment Plug-ins: Add 2 days.
- --------------------------------------------------------------------------------
1
<PAGE> 22
QCC Standard Private Line
SCHEDULE A-3 TO EXHIBIT A
TO
QWEST COMMUNICATIONS PRIVATE LINE SERVICE AGREEMENT
TECHNICAL SPECIFICATIONS
1. INTERCONNECT SPECIFICATIONS:
1.1 The customer interconnection point of DS-1 & DS-3 signals at the
Qwest (SPT) location will be at an industry standard (DSX-1) &
(DSX-3) digital cross-connect panels and will be referred to as
Qwest Network Interface in this document.
1.2 The DS-1 & DS-3 signals terminating at the Qwest digital
cross-connect panels will meet the electrical specifications as
defined in AT&T Compatibility Bulletin (CB) No. 119, Issue 3,
October, 1979.
1.3 The Qwest Digital Network will be compatible with the Bell
System hierarchical clock synchronization methods and stratum
levels as described in Bellcore Technical Advisory
(TA-NPL-000436).
1.4 Customer equipment must also meet the interconnect
specifications listed above and shall comply with jitter
requirements of AT&T Technical Reference PUB 63411.
2. PERFORMANCE OBJECTIVES:
2.1 DS-1 and DS-3 circuit performance will be measured using two
parameters: Availability and Error-Free Seconds.
2.2 Availability is a measure of the relative amount of time during
which the circuit is available for use. According to CCITT and
ANSI definitions, unavailability begins when the Bit Error Ratio
(BER) in each second is worse than 1.0 E-3 for a period of 10
consecutive seconds.
2.3 The availability objective for DS-1 and DS-3 circuits between
Qwest Network Interface points specified above is to provide a
performance level of 99.85% over a 12 month period. This
excludes any customer provided access links to the Qwest digital
network.
2.4 Outages attributable to incidental damage to or severage of
outside fiber optic cable plant, or scheduled maintenance is
excluded from the performance objective stated above.
2.5 Error-Free Seconds (EFS) and Error Seconds (ES) are the primary
measure of error performance. An Error-Free Second is defined as
any second in which no
1
<PAGE> 23
QCC Standard Private Line
bit errors are received Conversely, an Error Second is any
second in which one or more bit errors are received.
3. ACCEPTANCE CRITERIA
The acceptance criteria for DS-1 and DS-3 circuits between Qwest Network
Interface points is to provide the performance levels shown below during a 60
minute test period. If no errors are observed during the first 15 minutes of the
test, the facility may be considered acceptable. Access connections to customer
location will be tested in accordance with Bell Publication 62508.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------
ONE-WAY CIRCUIT DS-3 DS-1
MILEAGE EFS EFS BER
<S> <C> <C> <C> <C>
0 - 250 99% 99.7% 6 x 10 (-10)
250 - 1000 98% 99.5% 5 x 10 (-10)
1000 - 4000 96% 99.0% 1 x 10 (-10)
-------------------------------------------------------------------------------
</TABLE>
4. OTHER SERVICE OFFERINGS:
4.1 MULTIPOINT-64, 56 KBPS AND FRACTIONAL DS-1 SERVICES are based on
standard 64 Kbps PCM coding and are designed to meet the DS-1
performance objectives above.
4.2 VOICEPAK AND MULTIPOINT-32 service deploy ADPCM transcoders
which transform standard DS-1 signals into compressed format utilizing 32 Kbps
instead of 64 Kbps PCM coding techniques. These systems are not suitable for
data applications.
2
<PAGE> 24
[QWEST LOGO} CARRIER SERVICES
PRIVATE LINE -- SERVICE ORDER
Customer Order Number
-----------------
Order Date: Requested Due Date: Sales Person: Keith Collins
------- ------ ------------------
BILLING INFORMATION
Function Code: [ ] New [ ] Change [ ] Revision [ ] Supplement [ ] Disconnect
Expedite: [ ] Yes [ ] No Charge ** per circuit Approval - Customer Initial
--
EXPEDITE FEE WILL NOT BE WAIVED.
Contract Term: [X] 12M [ ] 24M [ ] 36M [ ] 48M [ ] 60M
Customer Name: CRL Network Service Cust. #:
----------------------------------- ---------------------
Billing Address:
----------------------------------------------------------------
City: State: Zip:
-------------------------- ----------------- -----------------
Billing Contact: Phone: Fax:
--------------- ----------------- -----------------
Order Contact: Phone: Fax:
----------------- ----------------- -----------------
<TABLE>
<CAPTION>
SERVICE INFORMATION
Service City City
Type V&H Originating Terminating Qty. Unit MRC Total MRC Unit NRC Total NRC
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DS-3 944 SFO DEN 1 ** ** ** **
- ------------------------------------------------------------------------------------------------------------------------
DS-3 794 DEN STL 1 ** ** ** **
- ------------------------------------------------------------------------------------------------------------------------
DS-3 260 STL CHI 1 ** ** ** **
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
ORIGINATING ACCESS TYPE TERMINATING ACCESS TYPE
Access: [ ] Cust. Ordered (CFA/LOA) Access: [ ] Cust. Ordered (CFA/LOA)
[ ] QCC Ordered [ ] QCC Ordered
Site: Site:
------------------------------------------------ ------------------------------------------------
Address: Address:
--------------------------------------------- ---------------------------------------------
City: State: Zip: City: State: Zip:
--------------- -------- ----------- --------------- -------- -----------
Ops. Contact: Phone: Ops. Contact: Phone:
---------------------- ---------- ---------------------- ----------
Alternate: Phone: Alternate: Phone:
--------------- -------------------- --------------- --------------------
ACCESS PROVIDER: ACCESS PROVIDER:
---------------- ----------------
QCC REQUIRES 5 WORKING DAYS FROM RECEIPT OF QCC REQUIRES 5 WORKING DAYS FROM RECEIPT OF
DLR TO COMPLETE CIRCUIT INSTALLATION. DLR TO COMPLETE CIRCUIT INSTALLATION.
Special Remarks/Comments: 90 day take or pay contract Special Remarks/Comments: Due Dates: SFO-DEN due 3 weeks
begins 1st day of billing - billing begins with after receipt of order. DEN-STL 5/15/98; STL-CHI 7/5/98.
installation of last circuit - ** days free service
for each day circuit install delayed by Qwest.
</TABLE>
SIGNATURE/APPROVAL
This Service Order is subject to and governed by the terms and conditions set
forth in Customer's Private Line Service Agreement. Your signature acknowledges
that you have read, understand and accept such terms and conditions and that
you are duly authorized to execute and deliver this Service Order. This Service
Order shall not become a valid and binding obligation of Qwest until this
Service Order has been executed by an authorized representative of Qwest.
<TABLE>
<S> <C>
For Customer By: James Couch For Qwest By:
--------------- --------------------------
Signature: /s/ JAMES COUCH Signature:
--------------------- -----------------------------
Title: Pres. Title:
------------------------- ---------------------------------
</TABLE>
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
<PAGE> 25
[QWEST LOGO} CARRIER SERVICES
PRIVATE LINE -- SERVICE ORDER
Customer Order Number
-----------------
Order Date: 3/30/98 Requested Due Date: Sales Person: Keith Collins
------- ------ ------------------
BILLING INFORMATION
Function Code: [ ] New [ ] Change [ ] Revision [ ] Supplement [ ] Disconnect
Expedite: [ ] Yes [ ] No Charge ** per circuit Approval - Customer Initial
--
EXPEDITE FEE WILL NOT BE WAIVED.
Contract Term: [X] 12M [ ] 24M [ ] 36M [ ] 48M [ ] 60M
Customer Name: CRL Network Services Cust. #:
----------------------------------- ---------------------
Billing Address:
----------------------------------------------------------------
City: State: Zip:
-------------------------- ----------------- -----------------
Billing Contact: Phone: Fax:
--------------- ----------------- -----------------
Order Contact: Phone: Fax:
----------------- ----------------- -----------------
<TABLE>
<CAPTION>
SERVICE INFORMATION
Service City City
Type V&H Originating Terminating Qty. Unit MRC Total MRC Unit NRC Total NRC
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DS-3 593 CHI DCA 1 ** ** ** **
- ------------------------------------------------------------------------------------------------------------------------
DS-3 544 STL DAL 1 ** ** ** **
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
ORIGINATING ACCESS TYPE TERMINATING ACCESS TYPE
Access: [ ] Cust. Ordered (CFA/LOA) Access: [ ] Cust. Ordered (CFA/LOA)
[ ] QCC Ordered [ ] QCC Ordered
Site: Site:
------------------------------------------------ ------------------------------------------------
Address: Address:
--------------------------------------------- ---------------------------------------------
City: State: Zip: City: State: Zip:
--------------- -------- ----------- --------------- -------- -----------
Ops. Contact: Phone: Ops. Contact: Phone:
---------------------- ---------- ---------------------- ----------
Alternate: Phone: Alternate: Phone:
--------------- -------------------- --------------- --------------------
ACCESS PROVIDER: ACCESS PROVIDER:
---------------- ----------------
QCC REQUIRES 5 WORKING DAYS FROM RECEIPT OF QCC REQUIRES 5 WORKING DAYS FROM RECEIPT OF
DLR TO COMPLETE CIRCUIT INSTALLATION. DLR TO COMPLETE CIRCUIT INSTALLATION.
Special Remarks/Comments: 90 day take or pay contract Special Remarks/Comments: Due Dates: CHI-DCA 7/5/98;
begins 1st day of billing - billing begins with STL-DAL 5/15/98
installation of last circuit - ** days free service for
each day circuit install delayed by Qwest.
</TABLE>
SIGNATURE/APPROVAL
This Service Order is subject to and governed by the terms and conditions set
forth in Customer's Private Line Service Agreement. Your signature acknowledges
that you have read, understand and accept such terms and conditions and that
you are duly authorized to execute and deliver this Service Order. This Service
Order shall not become a valid and binding obligation of Qwest until this
Service Order has been executed by an authorized representative of Qwest.
<TABLE>
<S> <C>
For Customer By: James Couch For Qwest By:
--------------- --------------------------
Signature: /s/ JAMES COUCH Signature:
--------------------- -----------------------------
Title: Pres. Title:
------------------------- ---------------------------------
</TABLE>
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
<PAGE> 26
[QWEST LOGO} CARRIER SERVICES
PRIVATE LINE -- SERVICE ORDER
Customer Order Number
-----------------
Order Date: Requested Due Date: Sales Person:
------- ------ ------------------
BILLING INFORMATION
Function Code: [ ] New [ ] Change [ ] Revision [ ] Supplement [ ] Disconnect
Expedite: [ ] Yes [ ] No Charge ** per circuit Approval - Customer Initial
--
EXPEDITE FEE WILL NOT BE WAIVED.
Contract Term: [ ] 12M [ ] 24M [ ] 36M [ ] 48M [ ] 60M
Customer Name: Cust. #:
----------------------------------- ---------------------
Billing Address:
----------------------------------------------------------------
City: State: Zip:
-------------------------- ----------------- -----------------
Billing Contact: Phone: Fax:
--------------- ----------------- -----------------
Order Contact: Phone: Fax:
----------------- ----------------- -----------------
<TABLE>
<CAPTION>
SERVICE INFORMATION
Service City City
Type V&H Originating Terminating Qty. Unit MRC Total MRC Unit NRC Total NRC
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DS-3 89 SJO SAC 1 ** ** ** **
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
ORIGINATING ACCESS TYPE TERMINATING ACCESS TYPE
Access: [ ] Cust. Ordered (CFA/LOA) Access: [ ] Cust. Ordered (CFA/LOA)
[ ] QCC Ordered [ ] QCC Ordered
Site: Site:
------------------------------------------------ ------------------------------------------------
Address: Address:
--------------------------------------------- ---------------------------------------------
City: State: Zip: City: State: Zip:
--------------- -------- ----------- --------------- -------- -----------
Ops. Contact: Phone: Ops. Contact: Phone:
---------------------- ---------- ---------------------- ----------
Alternate: Phone: Alternate: Phone:
--------------- -------------------- --------------- --------------------
ACCESS PROVIDER: ACCESS PROVIDER:
---------------- ----------------
QCC REQUIRES 5 WORKING DAYS FROM RECEIPT OF QCC REQUIRES 5 WORKING DAYS FROM RECEIPT OF
DLR TO COMPLETE CIRCUIT INSTALLATION. DLR TO COMPLETE CIRCUIT INSTALLATION.
Special Remarks/Comments: Billing will not start until Special Remarks/Comments: Credit ** days service for
pending DS-3 network installed by Qwest. This order is each day circuit installed delayed.
ordered under terms agreed to for DS-3 Backbone dated
6/9/98.
</TABLE>
SIGNATURE/APPROVAL
This Service Order is subject to and governed by the terms and conditions set
forth in Customer's Private Line Service Agreement. Your signature acknowledges
that you have read, understand and accept such terms and conditions and that
you are duly authorized to execute and deliver this Service Order. This Service
Order shall not become a valid and binding obligation of Qwest until this
Service Order has been executed by an authorized representative of Qwest.
<TABLE>
<S> <C>
For Customer By: Philip Burkhart For Qwest By:
--------------- --------------------------
Signature: /s/ PHILIP BURKHART Signature:
--------------------- -----------------------------
Title: V.P./G.M. Title:
------------------------- ---------------------------------
</TABLE>
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
<PAGE> 27
[QWEST LOGO} CARRIER SERVICES
PRIVATE LINE -- SERVICE ORDER
Customer Order Number
-----------------
Order Date: 6/9/98 Requested Due Date: ASAP Sales Person: Collins
------ ------ ------------------
BILLING INFORMATION
Function Code: [X] New [ ] Change [ ] Revision [ ] Supplement [ ] Disconnect
Expedite: [ ] Yes [ ] No Charge ** per circuit Approval - Customer Initial
--
EXPEDITE FEE WILL NOT BE WAIVED.
Contract Term: [X] 12M [ ] 24M [ ] 36M [ ] 48M [ ] 60M
Customer Name CRL Network Services Cust. #: 346
----------------------------------- ---------------------
Billing Address One Kearny St. Ste 1450
----------------------------------------------------------------
City: San Francisco State: CA Zip: 94108
-------------------------- ----------------- -----------------
Billing Contact: Robyn Raschke Phone: 415-837-5300 Fax: 415-392-9000
--------------- ----------------- -----------------
Order Contact: Chris Phone: 510-728-7000 Fax: 510-728-7001
----------------- ----------------- -----------------
<TABLE>
<CAPTION>
SERVICE INFORMATION
Service City City
Type V&H Originating Terminating Qty. Unit MRC Total MRC Unit NRC Total NRC
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DS-3 798 DLS CHI 1 ** ** ** **
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
ORIGINATING ACCESS TYPE TERMINATING ACCESS TYPE
Access: [ ] Cust. Ordered (CFA/LOA) Access: [X] Cust. Ordered (CFA/LOA)
[ ] QCC Ordered [ ] QCC Ordered
Site: QCC Dallas Site: QCC Chicago
------------------------------------------------ ------------------------------------------------
Address: 2323 Bryan Street Address: 20 North Wacker Ste. 656 & 614
--------------------------------------------- ---------------------------------------------
City: Dallas State: TX Zip: 75201 City: Chicago State: IL Zip:
--------------- -------- ----------- --------------- -------- -----------
Ops. Contact: Phone: Ops. Contact: Phone:
---------------------- ---------- ---------------------- ---------
Alternate: Phone: Alternate: Phone:
--------------- -------------------- --------------- --------------------
ACCESS PROVIDER: ACCESS PROVIDER: MFS
---------------- ----------------
QCC REQUIRES 5 WORKING DAYS FROM RECEIPT OF QCC REQUIRES 5 WORKING DAYS FROM RECEIPT OF
DLR TO COMPLETE CIRCUIT INSTALLATION. DLR TO COMPLETE CIRCUIT INSTALLATION.
Special Remarks/Comments: Use existing CRL COAX next Special Remarks/Comments: Please provide MFS CFA for
pair available. customer to order IXC cross connect
</TABLE>
SIGNATURE/APPROVAL
This Service Order is subject to and governed by the terms and conditions set
forth in Customer's Private Line Service Agreement. Your signature acknowledges
that you have read, understand and accept such terms and conditions and that
you are duly authorized to execute and deliver this Service Order. This Service
Order shall not become a valid and binding obligation of Qwest until this
Service Order has been executed by an authorized representative of Qwest.
<TABLE>
<S> <C>
For Customer By: Philip Burkhart For Qwest By:
--------------- --------------------------
Signature: /s/ PHILIP BURKHART Signature:
--------------------- -----------------------------
Title: V.P./G.M. Title:
------------------------- ---------------------------------
</TABLE>
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
<PAGE> 28
[QWEST LOGO} CARRIER SERVICES
PRIVATE LINE -- SERVICE ORDER
Customer Order Number
-----------------
Order Date: 6/9/98 Requested Due Date: ASAP Sales Person: Collins
------- ------ ------------------
BILLING INFORMATION
Function Code: [X] New [ ] Change [ ] Revision [ ] Supplement [ ] Disconnect
Expedite: [ ] Yes [ ] No Charge ** per circuit Approval - Customer Initial
--
EXPEDITE FEE WILL NOT BE WAIVED.
Contract Term: [X] 12M [ ] 24M [ ] 36M [ ] 48M [ ] 60M
Customer Name CRL Network Services Cust. #:
----------------------------------- ---------------------
Billing Address One Kearny St. Ste. 1450
----------------------------------------------------------------
City: San Francisco State: CA Zip: 94108
-------------------------- ----------------- -----------------
Billing Contact: Robyn Raschke Phone: 415-837-5300 Fax: 415-392-9000
--------------- ----------------- -----------------
Order Contact: Chris Phone: 510-728-7000 Fax: 510-728-7001
----------------- ----------------- -----------------
<TABLE>
<CAPTION>
SERVICE INFORMATION
Service City City
Type V&H Originating Terminating Qty. Unit MRC Total MRC Unit NRC Total NRC
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
DS-3 659 DEN DLS 1 ** ** ** **
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<S> <C>
ORIGINATING ACCESS TYPE TERMINATING ACCESS TYPE
Access: [ ] Cust. Ordered (CFA/LOA) Access: [ ] Cust. Ordered (CFA/LOA)
[ ] QCC Ordered [ ] QCC Ordered
Site: QCC Denver Site: QCC Dallas
------------------------------------------------ ------------------------------------------------
Address: 910 15th Street Ste. 200 Address: 2323 Bryan Street
--------------------------------------------- ---------------------------------------------
City: Denver State: CO Zip: 80202 City: Dallas State: TX Zip: 75201
--------------- -------- ----------- --------------- -------- -----------
Ops. Contact: Phone: Ops. Contact: Phone:
---------------------- ---------- ---------------------- ----------
Alternate: Phone: Alternate: Phone:
--------------- -------------------- --------------- --------------------
ACCESS PROVIDER: ACCESS PROVIDER:
---------------- ----------------
QCC REQUIRES 5 WORKING DAYS FROM RECEIPT OF QCC REQUIRES 5 WORKING DAYS FROM RECEIPT OF
DLR TO COMPLETE CIRCUIT INSTALLATION. DLR TO COMPLETE CIRCUIT INSTALLATION.
Special Remarks/Comments: Use existing CRL COAX next Special Remarks/Comments: Use existing CRL COAX next
pair available. pair available.
6/9/98.
</TABLE>
SIGNATURE/APPROVAL
This Service Order is subject to and governed by the terms and conditions set
forth in Customer's Private Line Service Agreement. Your signature acknowledges
that you have read, understand and accept such terms and conditions and that
you are duly authorized to execute and deliver this Service Order. This Service
Order shall not become a valid and binding obligation of Qwest until this
Service Order has been executed by an authorized representative of Qwest.
<TABLE>
<S> <C>
For Customer By: Philip Burkhart For Qwest By:
--------------- --------------------------
Signature: /s/ PHILIP BURKHART Signature:
--------------------- -----------------------------
Title: V.P./G.M. Title:
------------------------- ---------------------------------
</TABLE>
[**] Pursuant to a request for confidential treatment, price information in
this document has been omitted and separately filed with the Securities
and Exchange Commission.
<PAGE> 1
EXHIBIT 23.2
INDEPENDENT AUDITORS' CONSENT
We consent to the use in this Amendment No. 4 to Registration Statement
No. 333-74793 of CRL Network Services, Inc. of our report dated March 18, 1999
(April 28, 1999 as to the last paragraph in Note 12), appearing in the
Prospectus, which is part of such Registration Statement, and to the reference
to us under the headings "Selected Consolidated Financial Data" and "Experts"
in such Prospectus.
/s/ Deloitte & Touche LLP
San Francisco, California
May 18, 1999
<PAGE> 1
EXHIBIT 23.7
CRL NETWORK SERVICES, INC.
CONSENT TO BE NAMED AND TO SERVE
In connection with the preparation of the Registration Statement on Form
S-1 for CRL Network Services, Inc. (the "Company"), it is necessary that we
obtain from you written verification of certain information and consent to serve
and be named as a director as required to be disclosed by the Securities Act of
1933, as amended, and the rules, regulations and schedules promulgated
thereunder.
It is requested that you fill in the answers to the following questions,
sign and date the Consent, and return one signed copy by facsimile to Gibson,
Dunn & Crutcher, Attn: Patrick Wong, facsimile number 415-986-5309 as soon as
possible. You should also keep a copy for your files.
I consent to be a nominee to serve as a director of the Company, and if
elected, to serve in the capacity of director of the Company.
Yes X No
----- -----
I consent to be named as a nominee for director of the Company, and if
elected, a director of the Company, as appropriate, in the Company's
Registration Statement on Form S-1.
Yes X No
----- -----
DATED: March 19, 1999
/s/ STEPHEN CRAIG MOTT
-----------------------------
(SIGNATURE)
