June 8, 2000

Edward Beslow, Acting Secretary
Board of Public Utilities
Two Gateway Center
Newark, NJ 07102

Dear Secretary Beslow:

The Division of Ratepayer Advocate ("Ratepayer Advocate") applauds the New Jersey Board of Public Utilities ("Board") for the announcement made on June 1, 2000, in advance of the decision issued and released by the Federal District Court on June 6, 2000 addressing the unbundled network elements ("UNEs") rates set by the Board in the Generic Order, dated December 2, 1997. We also applaud the immediate response of the staff of the Division of Telecommunications ("Staff") to the decision and its support announced at the agenda meeting on June 7, 2000 for a proceeding to address these issues. We look forward to the recommendations that the Board Staff will be making on the scope of the proceeding and issues that should be addressed, which will be presented at the June 22, 2000 Agenda meeting.

The Ratepayer Advocate also supports the Board’s announcement and the recommendations of Board Staff to initiate a proceeding to review the list of unbundled network elements that must be provided to competitive carriers. The Ratepayer Advocate looks forward to participating in that proceeding in order to help fulfill the goals of the Federal Telecommunications Act of 1996.

The Ratepayer Advocate is expressly authorized and directed to, among other things, "assist, advise and cooperate with the [Board] in the exchange of information and ideas in the formulation of long term energy policy and goals which impact all New Jersey ratepayers."¹ We look forward to working with the Board and its technical staff in collaboratively addressing these issues.

In order to advance a competitive environment for telecommunications carriers in New Jersey, the Ratepayer Advocate urges the Board to conduct formal proceedings to resolve issues important for consumers on a variety of matters. First and foremost should be the recurring and non recurring rates for unbundled network elements. Without prices based upon forward looking economic costs for UNEs, meaningful telephone competition will not occur and New Jersey ratepayers will be denied the opportunity to obtain lower prices, more choices and technological innovation in telecommunications services offered to them. In addition, the Ratepayer Advocate recommends to the Board that it consider other significant and important issues which must be resolved if competitive entry is to be fostered. Those issues should include, but not be limited to those remanded by the Federal District Court. At a minimum, the issues to be addressed should include access to and the pricing of dark fiber, subloop unbundling, line sharing and its pricing, and other pro-competition issues. The citizens of New Jersey need a comprehensive and global solution in order to achieve a competitive marketplace for telecommunications services in New Jersey.

As the Board correctly recognized, recent Federal Communications Commission decisions regarding UNEs have a direct relationship to competition, particularly in densely populated industrialized states such as New Jersey. Industry developments and associated issues in New Jersey make the review of UNE rates appropriate. The actions of our neighboring state of Pennsylvania in reducing network element rates to foster a competitive marketplace provide an example for New Jersey to follow. Finally, the Board’s stated and frequently repeated commitment to monitor the marketplace and review all federal decisions and directives as to their applicability to interconnection fully supports the initiation of a proceeding at this time. No one disputes that competition needs to be encouraged and fostered in New Jersey.

The first step towards achieving our mutual goals will be the recommendations of Board Staff to be offered at the Agenda meeting on June 22, 2000 on the timetable and scope of this proceeding. Thereafter, the Ratepayer Advocate urges a collaborative effort between Board Staff, the Ratepayer Advocate and any other interested party to reach a consensus on the scope of the proceeding, the issues to be addressed, the development of a mutually acceptable timetable for consideration and resolution of all issues and timetable for the issuance of the Board’s decision. Such a process inures to the benefit of all consumers of telephone services in New Jersey.

Very truly yours,

_________________

Blossom A. Peretz, Esq.

The Ratepayer Advocate

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Footnote:

1) See Reorganization Plan No. 001-1994, codified under N.J.S.A. 13:1D-1. _Back