Cox disputes Commission staff report, accusations

Cox Arizona Telcom, LLC, the state's largest cable provider and second largest telephone service provider will learn the fate of its settlement with Qwest Communications about the company's use of existing Qwest wiring in apartments, condominiums and townhouses through out the state this Friday.

But the fire brewing behind the landmark agreement has come to a head.

One week before the Arizona Corporation Commission rules on the settlement between both sides, Cox has ramped up its defense that company technicians did not knowingly cut into telephone boxes at multiple tenant environments (MTEs) and attach Cox wires to Qwest wires. According to a previous interconnection agreement, Cox is allowed to use existing Qwest wiring when deploying its telephone service, but must contact Qwest when doing so and pay a usage fee.

In testimony to the ACC on April 18, Douglas Garrett, Cox Communications Inc. Western region regulatory affairs vice president, strongly questioned the previous testimony by commission staff analyst Armando Fimbres that called for further penalties beyond the scope of the settlement. Among Fimbres' suggestions were more fines.

"Staffs (sic) assertions that Cox 'violated' the Subloop Amendment and acted in a 'willful and deliberate' manner - upon which Staff bases its recommendation that Cox be fined some undetermined amount - are merely that, assertions, and based solely on Qwest’s unsupported allegations and Staffs (sic) incorrect assumptions about the facts," Garrett testified.

He went on to say Fimbres and other ACC staff have not seen all the facts of the case because Cox and Qwest settled the matter outside the ACC jurisdiction. To recommend further penalties placed on Cox are, "procedurally improper, unsupported by the evidence, lacking in any public interest rationale, and contrary to the public policy favoring settlements," Garrett said.

In 2006, Qwest accused Cox of tapping into existing wiring owned by Qwest at more than 5,000 telephone terminals at multiple tenant environments like apartments and townhouses in order to deploy their telephone service. Since then, the two sides have battled in and out of the ACC hearing rooms, eventually settling the issue in January 2008.

Both Qwest and Cox officials have stated previously the settlement amount should be kept private while Administrative Law Judge Dwight Nodes, who is presiding over the case, has asked it be made public. The amount, speculated by some to be in the "multiples of millions", has been redacted from court filings obtained by Az Tech News.

"This is a business dispute, with the settlement amount going to the issue of Qwest’s alleged damages relating to a business matter," Garrett testified. "There is no need for the sum to be publicly disclosed."

Both sides have said they agree with their settlement and do not think the ACC should have the final say on the matter.

In his testimony to the ACC on April 7, Fimbres said Cox's actions were "willful and deliberate." Garrett took exception to those comments in his testimony.

"Simply because Cox was openly accessing terminals at MTEs for years does not
support an allegation that Cox engaged in a “willful and deliberate” breach of the Subloop Amendment, because it does not take into consideration the true facts and Cox’s defenses based on those facts," he said.

Citing multiple decisions by the Federal Communications Commission, Garrett concluded that Qwest had no right to ownership over the internal wiring at MTEs, regardless of the interconnection agreement between the two.

According to the settlement agreement and previous testimony by Qwest Director in the Public Policy Group Director Rachel Torrence, Qwest has accepted Cox's "significant lump sum payment", Garrett said. In doing so, Cox does not admit to wrong-doing despite spending more than $1.4 million in the past two years to educate its technicians.

Garrett bristled when responding to Fibres conclusion that Cox allegedly caused physical damage and put the public at risk. He also said there are no ongoing problems problems as testified by Fimbres.

"It is so riddled with misunderstandings that I hardly know where to begin," Garrett said.

Nodes is expected to rule on the settlement Friday, April 25.