STATE OF VERMONT
PUBLIC SERVICE BOARD
Joint Petition of Verizon New England Inc.
d/b/a Verizon Vermont, Certain Affiliates
Thereof and FairPoint Communications, Inc.
For approval of asset transfer, acquisition of
Control by merger and associated transactions
)
)
)
)
)
Docket No. 7270
DIRECT TESTIMONY OF
Scott A. Wierson
ON BEHALF OF
THE DEPARTMENT OF PUBLIC SERVICE
May 24, 2007
Summary:
The purpose of Mr. Wierson’s testimony is to provide the Vermont Public Service Board
with an analysis of several of the following Board identified criteria associated to the
acquisition. Mr. Wierson addresses the results of his investigation into FairPoint’s
understanding of the existing Verizon network, staff and operations. Mr. Wierson
evaluates the merits of FairPoint’s plans for taking over the operations of this legacy
network and FairPoint’s planned network build out and the implications of this
acquisition for compatibility with neighboring systems, service quality, customer service
and quality of the facilities. Mr. Wierson provides recommendations for the Board to
consider for the mitigation of potential risks associated with his findings.
1
A. IDENTIFICATION AND QUALIFICATION OF WITNESS
2
Q.
3
A.
4
What is your name and business address?
My name is Scott Alan Wierson and my business address is 4080 McGinnis Ferry
Road, Suite 1303 Alpharetta Georgia 30005.
5
Q.
6
A.
7
By whom are you employed?
I am a Senior Consultant working with ProCom Consulting, LLC on behalf of
Huron Consulting Group.
8
Q.
9
A.
10
On whose behalf are you testifying in this proceeding?
My testimony is presented on behalf of The State of Vermont Department of
Public Service (Department).
11
Q.
12
A.
Please provide your background and experience.
I have been employed in the telecommunications industry for over 25 years
13
managing the network design, integration and operations of fiber and wireless based
14
communication systems all over the world. I have helped a number of operators develop
15
a business case, select equipment and implement broadband solutions. Most recently I
16
have been consulting with InSite Wireless and Nokia to help them plan and develop a
17
hybrid fiber and wireless network to provide cellular backhaul. I am also acting CTO for
18
Oceanic Digital Communications, helping them with cellular operations in the Caribbean.
19
This includes reducing costs, optimizing performance and adding data (3G) services to
20
their network. Prior to this work, I was Vice President of planning and engineering for
21
Evolution Networks. I led a team of network, systems, and RF engineers in the design of
22
both long haul and metropolitan hybrid optical and wireless networks. This included
23
designing the architecture for a network providing backhaul transport for cell site traffic
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 1
1
using Third Generation (3G) technology. While with Metromedia I provided technical,
2
project management and operational expertise to over 40 joint venture initiatives in
3
Eastern Europe, Russia, the Baltic’s, China, and Indonesia. These ventures provided a
4
variety of services including fixed wireless, mobile telephone, data, Internet, and CATV
5
services including Fiber to The Premise (FTTP).
6
Q.
7
A.
8
What is your role on the consulting team retained by the Department?
I serve as the network and operations expert regarding the properties in the
Vermont acquisition.
9
10
B. PURPOSE OF DIRECT TESTIMONY
11
Q.
12
A.
What is the purpose of your Direct Testimony?
My direct testimony provides the Vermont Public Service Board (referred to as
13
“Board”) with an analysis of several of the following Board identified criteria associated
14
to the acquisition.
15

Criteria 3 – Compatibility with Neighboring Systems
16

Criteria 5 – Service Quality
17

Criteria 6 – Customer Service
18

Criteria 7 – Quality of Facilities
19
This testimony addresses the results of my investigation into FairPoint’s
20
understanding of the existing Verizon network, staff and operations. My testimony also
21
evaluates the merits of FairPoint’s plans for taking over the operations of this legacy
22
network and FairPoint’s planned network build out and the implications of this
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 2
1
acquisition for each of the criteria above. I will provide recommendations for the Board
2
to consider for the mitigation of potential risks associated with each finding.
3
4
C. SUMMARY OF TESTIMONY
5
Q.
6
A.
What is the basis for your review, observations and findings?
My observations and findings are largely based on interviews conducted with
7
FairPoint management. Two interviews were held. One was a day long interview held at
8
FairPoint’s Charlotte North Carolina offices on April 25, 2007. The second was a half
9
day session in Montpelier Vermont on May 3, 2007. Additional information was derived
10
from a variety of public and discovery documents. These are noted where applicable.
11
Q.
12
A.
Please provide a summary of your Direct Testimony.
FairPoint has a knowledgeable management staff who understands both the
13
legacy technology utilized today in the Verizon network and the “next generation”
14
technology they plan to deploy as an overlay to extend their service area and expand their
15
service offerings. FairPoint also understands how to deploy and operate this equipment
16
on a much smaller scale compared to the network size associated with this acquisition.
17
FairPoint entire operations today service about 311,115 access line equivalents in 18
18
states, 7,426 of these are currently in Vermont1. This acquisition would increase that to
19
2,022,109 access line equivalents2 a 6.5 times increase. FairPoint operates 31 local
20
exchange companies in 18 states. These companies are in predominately rural markets
1
2
FairPoint Communications Inc 10K filed March 13, 2007 – page 7 chart
Analysts Presentation dated January 16, 2007 – slide 15
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 3
1
with an average density of 13 access lines per square mile.3 This acquisition would
2
increase their access line density to 36 access lines per square mile.4
3
FairPoint also has experience operating and managing networks providing DSL
4
and POTs services containing multiple technologies and vendors. Again, these are
5
relatively smaller networks utilizing very little union labor.
6
It is my opinion that the primary risk associated with the FairPoint acquisition is
7
execution. As of the writing of this testimony I have no evidence they have adequate
8
knowledge of the existing Verizon network from the Central Offices (COs) to the
9
network edge regarding the condition of the Outside Plant (fiber and copper
10
infrastructure), Power Plant, Remote Switch facilities, Remote Terminal facilities and the
11
associated equipment. FairPoint has not provided a Work Plan for the build out of the
12
network. A draft Cutover Plan5 does exist; however, the terms heavily favor Verizon.
13
One item under dispute is FairPoint's acquisition of Verizon’s existing Signal Transfer
14
Points (STPs). The Cutover Plan indicates that FairPoint will not get these STPs. It would
15
add significant risk if FairPoint did not acquire these STPs or lease capacity on the
16
existing Verizon STPs. I recommend that FairPoint provide a more updated Cutover Plan
17
that is more equitable to both parties (Verizon and FairPoint) to the Board for review
18
prior to the approval of the acquisition.
19
Service quality was also a major item of concern. Verizon has paid the state of
20
Vermont Quality Compensation Payments for the past 5 years for residential service
3
FairPoint Communications Inc 10K filed March 13, 2007 - page 6
Analysts Presentation dated January 16, 2007 – slide 14
5
A.Sovernet-setTEL 1-39, VZ Cutover Plan
4
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 4
1
troubles.
FairPoint must take on the Verizon infrastructure using mostly Verizon
2
employees, most of which are union, and rectify the source of these troubles.
3
Throughout my testimony I will suggest certain conditions be met by FairPoint in
4
order for Board approval of the acquisition. In my opinion meeting these conditions will
5
help mitigate risks to network deployment cost, schedule, and network operations. It will
6
also help insure service quality, and help ensure a successful and timely delivery of
7
quality service to the citizens of Vermont.
8
.
D. CRITERIA 3 – COMPATIBILITY WITH NEIGHBORING SYSTEMS
9
10
Q.
11
12
Describe the current Verizon Signaling System in Vermont and the connection to
the nationwide signaling system.
A.
[BEGIN PROPRIETARY]
13
6
14
15
7
16
.
17
18
19
20
21
[END PROPRIETARY]
6
7
ARMIS report 43-07, 2006
[BEGIN PROPRIETARY]
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
[END PROPRIETARY]
Page 5
1
The Verizon STPs are connected to other STPs within and without the FairPoint
2
acquisition area by pairs of “B” and “D” links. The Verizon Vermont STPs are also
3
connected to a pair of Signal Control Points (SCP) using pairs “B” and “D” links. SCPs
4
act as Hubs for routing the signaling traffic between multiple STPs. “B” and “D” link
5
transport facilities are typically multiple T1s. SCPs also provide gateway and routing
6
functions to other local exchange carries (LEC) and Inter-exchange carriers (IXC).
7
Additionally STPs and SCPs provide end office switches access to numerous databases
8
supporting number portability and advanced calling features.
9
The SS7 network is a fundamental component of local telephony in that it
10
provides an avenue for all call set up and tear down functionality with the exception of
11
E911 calling.
12
communications links are deployed in redundant, highly reliable pairs. Communications
13
links between SCPs are in redundant pairs to provide added network reliability. The end
14
result is a highly reliable system with virtually no outages. The Verizon Vermont SS7
15
network must retain this high level of availability throughout the transition to FairPoint
16
operation.
17
[BEGIN PROPRIETARY]
As noted above, all elements in the SS7 network, STPs, SCPs and
[END PROPRIETARY] FairPoint’s
18
19
options include the following
20
1. Leasing capacity from Verizon
21
2. Using a third party SS7 service provider
22
3. Building their own SS7 network.
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 6
1
Plans showing itemized costs for any of these options have not been provided by
2
FairPoint. If no service agreement with Verizon exists then an undefined, and potentially
3
significant, operational cost in FairPoint’s business case exists. Verizon could charge a
4
significant fee for leasing capacity if an agreement is not made prior to the acquisition.
5
The second option would provide an alternative for FairPoint. However, in addition to
6
another service fee, this option would require the re-homing of all 88 switches in
7
Vermont. This is a costly and time consuming endeavor. The third option would require
8
FairPoint to build all or a portion of their own SS7 network. This option would not only
9
involve the re-homing of the switches in Vermont but also the purchase of SCPs and
10
STPs.
11
12
Q.
13
14
What are the implications and risks associated with FairPoint not acquiring the
Verizon STPs?
A.
Changing Signaling System 7 (SS7) network and Signal Transfer Point (STP)
15
connections for one switch is manageable. However 88 switches becomes difficult and
16
risky due to the number of “A”-link connections. Existing Verizon “A”-links in Vermont
17
are carried on the Verizon backbone network to the two STPs located within Vermont.
18
FairPoint switching to a 3rd party SS7 service provider will require “A”-link connectivity
19
to STPs that are most likely not in Vermont. The 88 switches will require 176 leased T1s
20
from the switches to the new STPs. Unless the third party STPs are located in Vermont,
21
New Hampshire or Maine, T1s will have to be leased from IXCs or regional fiber
22
carriers. Again, none of these operational or capital costs have been clearly identified by
23
FairPoint in any of the discovery documents.
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 7
1
A second potential risk or impact is to service delivery or schedule. SS7 “A”-link
2
Integration, test and turn up takes 30 days per “A” link8. Performing these cutovers in a
3
12 month period will require an average of 15 “A”-links in transition at any time.
4
Additionally, with each “A”-link pair swing there are several database updates and
5
service features that require updating or setup, including: Calling Name Database
6
(CNAM), Transaction Capabilities Applications Part (TCAP)9, ISDN User Part Signaling
7
(ISUP), Line Information Database (LIDB), “800” number Database (800DB), and Local
8
Number Portability Database (LNP).
9
The third impact is service affecting. The conversion complexity strongly implies
10
opportunities for failure. This would all have to be accomplished without disrupting
11
service. Without SS7 links a switch and all of its subscribers are out of service.
12
13
Q.
14
A.
What is the recommended solution for SS7 Interconnection service in Vermont?
My recommendation is for FairPoint to either acquire the SS7 network from
15
Verizon or to negotiate a multi-year interconnection service contract with VERIZON to
16
utilize the existing “A”-links, STPs in Rutland and White River and their established
17
interconnection to the nationwide SS7 network. This agreement should be completed
18
prior to Board approval of the acquisition. These solutions remove all the risk and level
19
of effort described earlier. The long term solution is for FairPoint to evolve to their own
20
network by acquiring the Verizon network components (STPs and SCPs) and migrate
8
Verizon SS7 Interconnection Info. Package, Oct. 3, 2006
ISUP and TCAP are signaling services that allow an end office switch to provide out-of-band signaling and custom
local area signaling services, including: caller ID, call waiting, call forwarding, etc.
9
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 8
1
their switches to newly purchased “A”-links while continuing to operate the remainder of
2
their SS7 network using the capacity leased on Verizon’s STPs.
3
[BEGIN PROPRIETARY]
4
5
10
6
11
,
7
8
[END PROPRIETARY]
9
I recommend that the Board require FairPoint to present a plan for SS7 network
10
transition that includes schedule, cost, risks, and risk mitigation for each of the options
11
they are considering before the acquisition is approved.
12
13
14
E. CRITERIA 5 – SERVICE QUALITY
Q.
payments and the potential impact on FairPoint’s DSL expansion.
15
16
Address the Service Quality issues encountered by Verizon leading to penalty
A.
[BEGIN PROPRIETARY]
12
17
18
19
[END
20
PROPRIETARY]
21
absorbing outside plant staff and creating new policies and procedures. FairPoint will
10
FairPoint will have to address these service quality issues while
11
This number is unique to Verizon and is the first group of 3 numbers in the Point Code format XXX-XXX-XXX.
[BEGIN PROPRIETARY]
[END PROPRIETARY]
12
reported in DPS1-40 (i)
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 9
1
have an additional burden of expanding DSL service in the Verizon territory while
2
addressing these service quality issues. This effort places an extra burden on the newly
3
acquired supervisors and first level managers who must manage daily operations, DSL
4
expansion projects and improve service quality.
5
According to FairPoint management AFL was contracted by FairPoint to do an
6
assessment of the Verizon network including some portion of the outside plant condition,
7
alarm history and outstanding alarms being generated by the network. [BEGIN
8
PROPRIETARY]
13
9
10
[END PROPRIETARY]
11
Q.
12
A.
How do you recommend these Service Quality issues be addressed?
It is customary for a buyer to perform a reliable audit on at least portions of a
13
seller’s network before final purchase. The buyer should be allowed to randomly select
14
what they want to audit. Before the acquisition is approved FairPoint should be required
15
to perform a network reliability analysis and provide the following to the Board.
16

17
The entire AFL report (Note: If the AFL report is not adequate then a new and more
in depth audit should be performed)

18
A Fairport reliability report showing results from the audit with a gap analysis
19
highlighting areas of deficiency in the existing network and a plan to rectify all
20
identified potential service affecting issues.
13
[BEGIN PROPRIETARY]
[END PROPRIETARY]
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 10
1
This report and plan should demonstrate to the Board that FairPoint understands the
2
scope of the existing service quality issues and condition of the outside plant. The fiber,
3
copper, and power plant could easily contribute to these service quality issues and could
4
lead to significant investment in upgrades, replacement and/or repair. (Refer to section
5
“G. Criteria 7 – Quality of Facilities” in this testimony)
6
According to interviews with FairPoint management there are no work plans for
7
upgrading the outside plant or for the new Ethernet based overlay network planned
8
similar to the cutover plan[BEGIN PROPRIETARY]14 [END PROPRIETARY] provided
9
for the Operational Support System (OSS) conversion. It is recommended that a plan for
10
network deployment and cutover be provided to the Board prior to approval of the
11
acquisition.
12
I also recommend that if the Board were to approve the acquisition, FairPoint
13
should also be required to conduct a complete outside plant audit within 12 months of
14
closing to catalog the current plant condition and help further determine the root cause of
15
present and potential service effecting problems in the state. The extent of the audit
16
should focus on the following.
17

Outside plant areas where service quality issues dominate.
18

Outside plant (fiber, copper infrastructure) over which Verizon has not
19
implemented DSL services.
20
21
14
[BEGIN PROPRIETARY]
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
[END PROPRIETARY]
Page 11
1
A copy of the audit report should be provided to the Board along with a similar
2
action plan to rectify all remaining service issues and plant conditions discovered in the
3
audit. The plan should address how newly discovered service affecting issues will be
4
rectified along with how potential service problems will be circumvented. An example of
5
a potential service affecting issue would be an old or un-serviced battery plant that needs
6
repair or replacement. It could also include backup generators that require repair or have
7
not gone through the manufactures recommended maintenance cycle.
8
Q.
9
10
Will FairPoint be establishing a New England specific senior management team
focused on the three states?
A.
According to my interviews with FairPoint management they are in the process of
11
establishing a New England specific senior management team focused on the three
12
States. This is a very positive indication that will help ensure service quality and delivery.
13
Q.
14
A.
What issues must this management team address to improve service in Vermont?
I recommend that all issues concerning the management team be addressed within
15
a management plan. I also recommend that the New England management team be
16
structured to include the following areas of expertise and experience;
17

Regulatory issues concerning the three states, especially Vermont.
18

Network planning and deployment.
19

Operational management focused on establishing quantifiable measurement tools
20
(Metrics) to allow management to see where service levels are unsatisfactory and to
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 12
1
implement improvement programs. The new OSS system being developed for this
2
project should help in collecting many of the Metrics needed.
3

4
5
programs within the constraints of the existing union agreements.

6
7
Organized labor management capable of implementing service improvement
Transition management experience capable of managing through the TSA period with
Verizon and implementation of the new CapGemini platform.

Quality Assurance (QA) and Quality Control (QC)
8
In the event the new management team is lacking in any of these areas, it is
9
recommended that FairPoint contract an experienced outside management firm to help
10
transition during the first 12-24 months. The focus should be on training the management
11
team in any areas of deficiency and to fill voids during the transition period. Vermont-
12
based senior managers in each of these areas should be hired to focus on specific needs of
13
that state. These positions should be in place during the TSA period.
14
FairPoint must also establish a Quality Assurance and Control Plan which utilizes
15
management staff that will report directly to the CEO. This will provide focus to resolve
16
many of the existing service issues today and will minimize service problems in the
17
future. Special metrics must be established and over-site maintained by this group.
18
It is recommend FairPoint provide a detailed management plan that includes a
19
management structure and addresses all the management issues discussed in this
20
testimony before the acquisition is approved.
21
22
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 13
1
Q.
2
3
Could Verizon staffing levels or issues have contributed to their inability to meet
service quality and delivery deadlines?
A.
It is possible for staffing issues to have contributed to Verizon’s inability to meet
4
service quality and delivery deadlines. Poor service deadlines may result from any of the
5
following staffing issues:
6

Insufficient staff (especially when working with aging equipment)
7

Poor training
8

Outdated procedures
9

Poor service
10

Poor planning
11

Misaligned goals
12

Confusion regarding needs
13

Poor communications
14

Sub optimal process
15

Ineffective relationships
16

Competing agendas
17

Lack of coordinated agreement
18

Lack of measurement
19

Disconnected reward system
20

Complacency
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 14
1

Insecurity
2

Bad Data
3

New leadership
4

New team members
5

New products
6

New markets
7

Re-work
8

Defects
9

Disagreement
10
As of the writing of this testimony FairPoint has not provided a management plan
11
with organizational structure addressing the above issues. It is recommended that each of
12
these issues be addressed in the management plan.
13
Q.
14
15
What must FairPoint do to resolve staffing issues after they inherit these Verizon
employees?
A.
FairPoint must demonstrate that they have plans to avert possible staffing issues.
16
FairPoint must have a management plan with an organizational structure designed to
17
address potential staffing issues. FairPoint will need to implement service delivery
18
assessment programs focused on meeting customer commitment dates and deadlines.
19
These programs need to incorporate quantitative assessment tools focused on establishing
20
the root cause of the failures.
21
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 15
1
Any issues delineated previously can lead to friction between management and
2
staff. To avoid this friction, it is recommended that a plan be devised for the
3
incorporation of operational metrics and training for all employees as well as the
4
establishment of employee incentive programs to eliminate possible network failures and
5
improve delivery performance. To date, FairPoint has not provided any information on
6
how they plan to address these issues.
7
8
In addition, I requested in discovery written policies and procedures utilized by
FairPoint today in each of the following areas.
9

Provisioning
10

CRM
11

Billing
12

Trouble Ticketing
13

NOC
14

Element Management
15

Plant Management
16
o Outside Plant
17
o Maintenance and repair processes and procedures
18

New build implementation plans
19

All leased access line plans
20

Interconnection agreements and charges
21
In response FairPoint management stated in interviews that they did not have formal
22
written policies and procedures. FairPoint is acquiring ex-Verizon employees who have
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 16
1
worked under strict policies, practices and procedures in the past. FairPoint also stated in
2
interviews they will not inherit the Verizon practices. If the Board approves this
3
acquisition, it is recommended that FairPoint create a plan within 10-12 months after
4
closing to transition and train Verizon employees who are accustomed to Verizon’s
5
procedures into FairPoint’s operational processes. It is recommended that FairPoint
6
establish their own written policies and procedures and provide those along with the plan.
7
Q.
8
9
The union contract prohibits the use of non-union resources to install new plant.
What does FairPoint need to do to address this situation?
A.
We have no evidence that FairPoint has management experience in working with
10
union personnel on the scale associated with this acquisition. If this is the case, it is
11
possible that there could be numerous issues between employees and management. I
12
recommend the following:
13

FairPoint management team should acclimate itself to labor unions
14
specifically in the state of Vermont as well as familiarizing themselves with
15
laws pertaining to their particular situation.
16

FairPoint should acquire expertise in the area of operations experience with
17
union labor. While this expertise could be in the form of transition
18
consultants, it is highly recommended that some of the permanent senior and
19
mid-level management have direct experience with CWA and IBEW
20
employees. It is clear the CWA has major concerns about the
21
FairPoint/Verizon transaction and FairPoint must address these concerns
22
directly with experienced upper-level management expertise.
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 17
1
It is extremely doubtful that any union concessions regarding contract definitions of work
2
responsibility can be achieved in the near future. As a result, FairPoint needs to prepare
3
itself to manage any new service or network deployment under the existing terms of the
4
union contract.
5
This issue should also be addressed in the management plan discussed earlier in
6
7
this testimony.
Q.
FairPoint will be hiring 600 new employees within the 3 states to perform functions
8
previously performed by out-of-state Verizon employees. What concerns does this
9
present?
10
A.
In addition to concerns discussed previously, new employees must be capable of
11
working through the Transition Services Agreement (TSA) period where certain services
12
will be provided by Verizon and adequately transition to in-state personnel. FairPoint
13
must develop a staffing plan (delineated in the management plan) that addresses the
14
following areas:
15

Management during the TSA period
16

Permanent employment plans post TSA. This will include:
17
o Training of employees on the new systems developed by CapGemini
18
o Transition management focused on implementing a transition plan that:
19

Provides an adequate period of time (minimum of 60 days) where new
20
systems are operated in a parallel ‘shadow mode’ with the TSA
21
services (This should be addressed in the updated Cutover Plan
22
recommended in this Testimony)
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 18

1
2
Employs a change analysis team focused on identifying gaps between
the existing support system and the new system

3
Management plans for dealing with union-based employees
4
5
6
Q.
What are the potential quality control and quality assurance risks that may be
encountered during the cutover?
7
A.
[BEGIN PROPRIETARY]
8
9
10
15
11
12
. [END PROPRIETARY] Many opportunities
exist for failure, including the following:
13

Missing files or records from incomplete transfer
14

Verification of Verizon databases prior to transfer
15

Software incompatibility and database configuration mismatch
16

Data extracts done in multiple stages containing conflicting data
17

Data verification incomplete
18

Testing databases in FairPoint systems
19

Operational cutover with mismatched data between Verizon and FairPoint
20

Field operations policies and procedures cutover from Verizon to FairPoint
21

Establishment of new processes for daily operations in COs and outside plant
22
15
BEGIN PROPRIETARY]
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
[END PROPRIETARY]
Page 19
1
In order to assure a fully operation telephone system the day after FairPoint’s
2
assumption of operational responsibility, several quality control initiatives must be
3
established and adhered to. A Quality Assurance (QA) team should be established to
4
monitor development of the final cutover plan and to review all cutover test results.
5
FairPoint quality assurance and control functions organizationally should report at the
6
senior management level. A database test plan should be established to verify the validity
7
of data extracts prior to any use by FairPoint’s Operations department. The QA team
8
must have the authority to reject portions of the cutover process task completion and
9
specify corrective actions.
10
It is recommended that FairPoint provide to the Board a QA/QC plan prior to
11
approval of the acquisition that addresses all of the quality issues discussed in this
12
testimony and include in the management plan, addressed in this testimony, how the
13
QA/QC management will fit into the origination and who they report too.
14
Q.
15
16
Are there any risks associated with the integration of the OSS with the network
elements?
A.
Yes. According to FairPoint management they will not receive any of the Element
17
Managers used by Verizon to manage the equipment in their network. The Element
18
Manager provides the interface between the Network Management System in the OSS
19
and the equipment in the network. No provisioning or monitoring can take place unless
20
specialized applications are developed for each equipment type in the Network
21
Management System. This is not very practical. Not only can it be costly, but
22
configuration control (especially software) could become unmanageable as network
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 20
1
elements are upgraded. This means that if the acquisition is approved FairPoint will have
2
to go out and acquire the Network Element Managers from each major vendor used in the
3
legacy network. They will also lose any special tools Verizon developed in the Element
4
Manager to assist them in monitoring and provisioning their network elements. FairPoint
5
did not identify this cost in any of the discovery items received to date. It is
6
recommended that this cost be identified and provided to the Board in a detailed capital
7
cost plan prior to Board approval of the acquisition.
8
F. CRITERIA 6 – CUSTOMER SERVICE
9
10
Q.
11
12
Will customer service representatives need to have access to new systems prior to
converting from the Verizon TSA?
A.
Yes. Consistent with some of the recommendations made earlier in this testimony,
13
it is recommended that FairPoint develop and implement in their cutover plan how they
14
will familiarize themselves with the existing Verizon system during the TSA to assist
15
new employees in transitioning to the new systems. A customer service transition plan
16
that incorporates a minimum of 60 days of parallel operation is recommended to prevent
17
any service disruption. During this period, the new system must be fully operational and
18
production ready. Customer service representatives need to be able to access the system
19
in substantially the same manner as they will post TSA.
20
During this cutover period, system integrity and usability must be evaluated and
21
compared with existing system and customer service rep performance using existing
22
Verizon systems as the baseline for performance. The uniqueness of the skills needed to
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 21
1
transition through this period suggests the employment of contract or consultant
2
operational resources would be wise. This may be provided for in the arrangement with
3
CapGemini. We did not receive detailed information as to the staffing of the CapGemini
4
team, and as a result, would recommend that a thorough review of the staffing occur to
5
see if they are adequately addressing these concerns.
6
All of these issues should be addressed in either the Cutover Plan or Management Plan
7
discussed in this testimony.
8
G. CRITERIA 7 – QUALITY OF FACILITIES
9
10
Q.
11
12
Please assess FairPoint’s understanding of the VERIZON outside plant Network
and the data they have reviewed.
VERIZON has provided the following types of data in their “Data Room”16
A.
13
relating to the outside plant facilities, equipment and trouble reports in the following
14
categories:
15

#302; Network hub with annotations of fiber/ copper, IDF
16

#306; Subscriber carrier equipment & loop systems detail
17

#307; 2 years of trouble index
18

#308 List of capital expenditure network projects for 2004 and 2005
19

#318 Exchange cable mileage by type
20
To date FairPoint has provided no evidence of the statistical makeup of the copper
21
cable plant with respect to length, gage, bridge taps and load coils.
16
A.DPS:FP.1-176b, Verizon Data Room Index –PROPRIETARY-
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 22
1
FairPoint may have examined certain items in the Data Room17 pertaining to the
2
Verizon outside plant in Vermont, including categories: #302, #306 and #318. To date
3
FairPoint has not provided evidence that they have examined all sources of relevant data
4
available. FairPoint expects to receive all relevant reports at closing; however they hired
5
AFL to study the outside plant and audit trouble reports and a report was generated. The
6
extent of FairPoint’s knowledge of the copper plant is unknown because they have not
7
provided the AFL report to the Department.
8
Throughout our interviews with FairPoint management discovery items were
9
requested that have not yet been provided.
Therefore, I have no evidence at this time
10
that FairPoint has sufficient knowledge of the outside plant facilities.
11
petition nor FairPoint’s direct testimony addresses this issue.
Neither the
12
The action plan provided by FairPoint should also include an impact analysis.
13
This information should be used in the capital expenditure exercise in which a worst case
14
scenario should be run.
15
Q.
16
17
What is the normal process regarding the auditing of a network to be acquired by
another operator?
A.
Normally a spot audit is done prior to purchase. This consists of a random audit of
18
one or more of each type of facility in a network selected at random by the buyer. Usually
19
this audit consists of a site survey where the actual configuration is compared to the
20
documentation provided by the seller. The general condition of the network is also
21
evaluated. Repair records especially on items needing periodic maintenance are audited
17
A.DPS:FP.1-103 list of VZ records reviewed by FP
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 23
1
as well. This is done for various Point–of-Presences (POPs) and on the copper and fiber
2
facilities also.
3
Q.
4
5
What are FairPoint’s risks in developing a DSL overlay with limited knowledge of
the outside plant network and local loop makeup?
A.
FairPoint runs the risk of deploying DSL overlay systems that will either under
6
perform or require additional capital to extend fiber and add new remote terminal
7
cabinets. The following are examples of risk scenarios,

8
Copper loops with load coils (typically in excess of 15k ft.) may need to be
9
removed to carry ADSL signals. If the load coils are removed, traditional POTS
10
will have to be provided over the DSL transport since the line attenuation will be
11
too great to support POTS.

12
Areas with existing remote terminal cabinets that are only copper fed[BEGIN
13
PROPRIETARY]18 [END PROPRIETARY] will require multiple copper feeds,
14
which may require additional equipment or the extension of the fiber network to
15
the existing RT site in order to provide additional bandwidth for internet access
16
service.

17
New remote terminal sites will have to be established in areas where the copper
18
loop length is in excess of ADSL limits providing the planned (marketed)
19
bandwidth. Fiber backhaul, commercial AC power and rights of way issues will
20
have to be resolved. Existing copper local loop cables will have to be
21
reconfigured on the site and terminated in the remote DSL equipment.
18
[BEGIN PROPRIETARY] 1015
[END PROPRIETARY]
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 24
1
Both capital budgets and deployment schedules will be impacted by each of these
2
scenarios. The cost and schedule impact could be significant depending on the actual
3
copper plant loop profile. Deployment schedules could easily double with the discovery
4
of non-favorable cable data. A more thorough knowledge of the Verizon Vermont
5
copper plant could lead to alternate technologies or serving areas.
6
A case in point is the unknown amount of fiber needed to build out the network.
7
According to Michael Brown, FairPoint had identified 44 miles of fiber that must be
8
built. He indicated that 90% of this would be aerial fiber. This alone could cost around
9
$60k per mile (or more) or $2.6M. Not knowing what additional fiber is required to build
10
out to the Remote Terminals or to close fiber rings, which is part of FairPoint’s plan to
11
improve the reliability of the network, could significantly impact FairPoint’s ability to
12
provide their service level commitments.
13
I recommend that FairPoint provide an inclusive list of Verizon Data Room files
14
and documents that were examined by FairPoint during their due diligence process. I am
15
also recommending that the issues addressed above be addressed in the updated Cutover
16
Plan discussed in this testimony.
17
The aforementioned outside plant audit should also include a complete inventory
18
of fiber and copper transport facilities between the 88 COs and 1380 remote terminals.
19
From this audit a plan can be developed to increase fiber connectivity to areas in critical
20
need.
21
22
23
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 25
1
[BEGIN PROPRIETARY] Q.
2
3
4
A.
5
19
6
.
7
8
20
9
10
11
12
[END PROPRIETARY] It is
13
highly probable that FairPoint’s projection will be in the higher range since they must
14
extend the existing network out to more rural areas to achieve the 80% coverage goal.
15
It is recommended that FairPoint provide to the Board a detailed worst case analysis of
16
capital expenditure, deployment cost and schedule impact for the new build out for the
17
state of Vermont before the Board approves the acquisition. It should include a detailed
18
cost breakdown itemizing fiber plant build, power plant, all network elements, CPE
19
(customer premise equipment) services, make ready, copper plant upgrade, and civil
20
works.
19
20
A.DPS:FP.2-63.1
Draft Report- Broadband Deployment in California, Figure 5.1
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 26
1
L. CONCLUSION
2
Q.
Does this conclude your Direct Testimony?
3
A.
Yes.
Direct Testimony of Scott A Wierson (on behalf of the Department of Public Service)
May 24, 2007
Page 27