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
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Docket No. 7270
SURREBUTTAL TESTIMONY OF
Scott A. Wierson
ON BEHALF OF
THE DEPARTMENT OF PUBLIC SERVICE
August 10, 2007
Summary: Mr. Wierson’s surrebuttal testimony addresses the following network related
subjects addressed in the FairPoint and Verizon rebuttal testimony: Quality and
Condition of Facilities; Cutover Plan; Quality Control and Management Plan; Network
CAPEX Projection; Operational Staff.
A. IDENTIFICATION AND QUALIFICATION OF WITNESS
Q.
What is your name and business address?
A.
My name is Scott Alan Wierson and my business address is 4080 McGinnis Ferry Road,
Suite 1303 Alpharetta Georgia 30005.
Q.
Are you the same Scott Alan Wierson who filed direct testimony in this proceeding
on May 24, 2007?
A.
Yes.
Q.
On whose behalf are you testifying in this proceeding?
A.
My testimony is presented on behalf of The State of Vermont Department of Public
Service (Department).
B. PURPOSE OF DIRECT TESTIMONY
Q.
What is the purpose of your Surrebuttal Testimony?
A.
My surrebuttal testimony provides the Vermont Public Service Board (referred to as
“Board”) with a response to portions of the rebuttal testimony of FairPoint
Communications, Inc. (FairPoint) and Verizon New England, Inc. (Verizon). Specifically
my surrebuttal testimony addresses the following network related subjects addressed in
the FairPoint and Verizon rebuttal testimony:

Quality and Condition of Facilities

Cutover Plan

Quality Control and Management Plan

Network CAPEX Projection
Surrebuttal Testimony of Scott A Wierson (on behalf of the Department of Public Service)
August 10, 2007
Page 2

Operational Staff
This testimony addresses the results of my investigation into FairPoint’s understanding of
the existing Verizon network, staff and operations. My testimony also 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 each of
the criteria above. In each area I will recommend actions that the Board should adopt if it
is to approve the acquisition.
C. SUMMARY OF TESTIMONY
Q.
Please provide a summary of your Surrebuttal Testimony.
A.
My surrebuttal testimony addresses rebuttal testimony by Verizon and FairPoint. It
remains my opinion that the primary risk associated with the FairPoint acquisition is
execution.
Service quality was also a major item of concern. Verizon has paid the
state of Vermont Quality Compensation Payments for the past 5 years for residential
service troubles. FairPoint must take on the Verizon infrastructure using mostly Verizon
employees, most of which are union, and rectify the source of these troubles.
As of the writing of this testimony FairPoint has not provided the following:

Evidence they have adequate knowledge of the existing Verizon network from the
Central Offices (COs) to the network edge.

Evidence to determine they have an adequate work plan for the build out of the
network.
Surrebuttal Testimony of Scott A Wierson (on behalf of the Department of Public Service)
August 10, 2007
Page 3

A plan that fully address the quality assurance and quality control issues.

Enough details to assess the accuracy of the projected CAPEX expenditures.
Throughout my testimony I will suggest certain conditions be met or agreed too by
FairPoint in order for Board approval of the acquisition. In my opinion meeting these
conditions will help mitigate risks to network deployment cost, schedule, and network
operations. This testimony will also help insure a successful and timely delivery of
quality service to the citizens of Vermont.
D. TESTIMONY
QUALITY AND CONDITIONS OF FACILITIES
Q.
In FairPoint’s rebuttal did they show they had an adequate understanding of the
Verizon facilities?
A.
As of the writing of this testimony FairPoint has not provided evidence they have
adequate knowledge of the existing Verizon network from the Central Offices (COs) to
the network edge regarding the condition of the Outside Plant (fiber and copper
infrastructure), Power Plant, Remote Switch facilities, Remote Terminal facilities and the
associated equipment. As in my earlier testimony it is customary for a buyer to perform
an audit on at least portions of a seller’s network before final purchase. I strongly suggest
that if the acquisition is approved that two audits be performed in two phases. The results
of each audit should be presented to the commission.
Surrebuttal Testimony of Scott A Wierson (on behalf of the Department of Public Service)
August 10, 2007
Page 4
The first phase would be a spot audit performed on selected portions of the Verizon
network. The audit should be performed on a very small percentage (less than 5%) of the
network where the following conditions exist.

Outside plant areas where service quality issues dominate.

Outside plant (fiber, copper infrastructure) over which Verizon has not
implemented DSL services.
This audit and subsequent report should be presented to the commission within 3 months
after closing. It would provide an early assessment of the potential capital expenditures
facing FairPoint for extending the network and what improvements to existing faculties
are required to resolve root cause of present and potential service effecting problems in
the network.
A second audit should also be required which would consist of the complete network.
This audit should be completed and a subsequent report presented to the commission
within 12 months of closing to catalog the plant condition and refine the findings made
during the first audit.
The scope of both audits should include the following:
1. Review of Verizon facility drawings1.
2. Audit of selected network facilities. This should include facility conditions,
environmental conditions, copper loop conditions, copper loop distances, splices,
fiber conditions, cable splices, and conditions of power backup systems including
maintenance records for generators and batteries.
1
A.DPS:FP.1-176b, Verizon Data Room Index –PROPRIETARY-
Surrebuttal Testimony of Scott A Wierson (on behalf of the Department of Public Service)
August 10, 2007
Page 5
3. Reliability assessment to help determine the source of some of the existing
service effecting issues.
4. Gap analysis which should include an assessment of the accuracy of the
documentation, maintenance records, adherence to standard quality practices,
quality issues, and any other findings that are in conflict with reported or expected
conditions of the network facilities.
5. Impact analysis which should include the possible impact to cost and schedule
based on the finding to insure both long and short term quality of service.
CUTOVER PLAN
Q.
In rebuttal did Verizon and FairPoint show they had an adequate Cutover Plan for
the network?
Progress has been made. However, the entire plan provided thus far is inconsistent and
confusing. A draft Cutover Plan2 was originally provided back in April 2007. It was my
contention that the terms heavily favored Verizon. An updated Cutover Plan3 was
provided by Mr. Smith with his rebuttal testimony in June who clarified the issue with the
SS7 network. [BEGIN PROPRIETARY]
[END
PROPRIETARY]
This is good news. However, it is still very difficult to track the tasks in
2
A.Sovernet-segTEL 1-39, VZ Cutover Plan - Proprietary
3
Sovernet Set #1, 1-39b Supp, VZ Cutover Plan - Proprietary
Surrebuttal Testimony of Scott A Wierson (on behalf of the Department of Public Service)
August 10, 2007
Page 6
the FairPoint Cutover Task Index4 with the latest Cutover Plan. It is also not clear how
the plan tracks with agreements between parties. It appears that the tasks and the plan are
not in sync. According to testimony from Mr. Nixon a consolidated plan with consistent
content does not exist5. In the question FairPoint was asked to “provide a plan covering
all cutover tasks in a single document with consistent format and content”. Mr. Nixon
responded as follows:
“The question is overly broad and unduly burdensome in that it would
require FairPoint to combine two very large, dynamic documents at great
expense, but with little useful result. The request also seeks duplicative and
cumulative information. Without waiving any objection, FairPoint answers
that: Such a plan does not exist.”
I agree with Mr. Nixon that the plan is dynamic. However, I disagree that having a
consistent plan in writing is too expensive. I believe in just the opposite. It appears like
we have two disparate documents with no clear correlation. We do not know what
portions of the plan have been agreed to by both parties (FairPoint and Verizon) or what
parts are in contention. In a project of this size there is too much risk and chance for
misunderstanding without such a working plan. This plan can consist of multiple
documents. However, they should easily track each other and be consistent leading to an
executable plan.
I recommend that both parties provide an updated Cutover Plan, Task Index, and other
related documentation to the Board for review prior to the approval of the acquisition. It
should include the integration of the newly acquired Network Element Managers during
4
5
Attachment A.CWA/IBEW:FP.1-5e (Supplemental 2) - Proprietary
Response of FP to the DPS’s 3rd Set of Discovery Requests Q.DPS:FP.3-68 and A.DPS:FP.3-68
Surrebuttal Testimony of Scott A Wierson (on behalf of the Department of Public Service)
August 10, 2007
Page 7
the TSA period and with the newly developed OSS as discussed in my previous
testimony. This updated Cutover Plan should be consistent, more equitable and agreed
too, at least in principal, by both parties (Verizon and FairPoint). Some type of tracking
system between the various documents should be incorporated if it is not already. If there
are areas that are not defined or agreed too they should be identified as such (open items).
Providing this information should not require any appreciable additional work for either
FairPoint or Verizon. based on the processes adopted and discussed above This plan
should be reviewed by an outside party to assess consistency, equity, open issues and the
impact to schedule, service, cost, and risk.
QUALITY CONTROL AND MANAGEMENT PLAN
Q.
In your previous testimony you addressed Service Quality issues experienced by
Verizon leading to penalty payments and the potential impact on FairPoint’s DSL
expansion. Has FairPoint adequately addressed your concerns in their rebuttal?
A.
The reliability assessment performed during the proposed system audit discussed earlier
would do a lot to baseline the current condition of the network and assess the source of
the existing service effecting issues. It is customary for a buyer to perform a reliably audit
on at least portions of a sellers network before final purchase. A part of this assessment
should be to review of the entire AFL report. The fiber, copper, and power plant could
easily contribute to these service quality issues and could lead to significant investment in
upgrades, replacement and/or repair.
Surrebuttal Testimony of Scott A Wierson (on behalf of the Department of Public Service)
August 10, 2007
Page 8
If the acquisition is approved FairPoint should provide the plan to the Board within 4
months after closing. It should include an action plan to rectify all remaining service
issues and plant conditions discovered in the initial audit discussed earlier in this
testimony. The plan should address how newly discovered service affecting issues will be
rectified along with how potential service problems will be circumvented. An example of
a potential service affecting issue would be an old or un-serviced battery plant that needs
repair or replacement. It could also include backup generators that require repair or have
not gone through the manufactures recommended maintenance cycle.
Q.
What about an adequate Quality Control and Management Plan?
A.
FairPoint has provided a New England specific senior management organizational chart.
However no Management Plan or Quality Control Plan has been provided that addresses
Quality Assurance (QA) and Quality Control (QC). The reporting structure is not clear on
how focus will be directed to resolve many of the existing service issues today and how
they will minimize service problems in the future. System metrics are not defined. The
quality team is not defined nor how they will establish over-site or control over the
quality of the network.
It is recommend FairPoint provide a detailed management plan that addresses all the
quality and service issues discussed in previous testimony before the acquisition is
approved. The plan should address the following.





Organizational Structure and responsibility
Implementing a regimented approach to the inspection of work
Quality policies and metrics
Process flow – engineering, construction, testing, service provisioning
Reducing error rate
Surrebuttal Testimony of Scott A Wierson (on behalf of the Department of Public Service)
August 10, 2007
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


On time completion rate
Training employees
Analysis of data and improvement
NETWORK CAPEX PROJECTION
Q.
In FairPoint rebuttal have they adequately defined their projected CAPEX
expenditures for network build out?
A.
No. Mr. Leach did provide some further information on how much CAPEX was
projected for Vermont6. However the network part was not defined nor did it show
enough detail to evaluate if the per line estimate was in line for reaching the unserved
population. The CAPEX can only be accessed by breaking out the costs separately for
equipment, deployment costs, core network, and outside plant. It should include a
detailed cost breakdown itemizing fiber plant build, power plant, all network elements,
CPE (customer premise equipment), services, make ready, copper plant upgrade and civil
works. The marginal costs need to be identified for reaching the underserved rural market
required to meet the projected penetration or homes passed.
OPERATIONAL STAFF
6
Response of FP to the DPS’s 3rd Set of Discovery Requests A.DPS:FP.3-88
Surrebuttal Testimony of Scott A Wierson (on behalf of the Department of Public Service)
August 10, 2007
Page 10
Q.
Does FairPoint’s staffing plans seem adequate?
A.
FairPoint’s staffing plans7 for technicians (including the supervisor to technician
ratio8) appear to be adequate for most on-going operations. However, there is no
way to fully assess the staffing needed in an acquisition like this until we know
more about the existing facilities or infrastructure. It is recommended that the
Management Plan address the staffing and it be assessed after the network audit is
done.
L. CONCLUSION
Q.
Does this conclude your Surrebuttal Testimony?
A.
Yes.
7
Response of FP to the DPS’s 3rd Set of Discovery Requests A.DPS:FP.3-70
8
Response of FP to the DPS’s 3rd Set of Discovery Requests A.DPS:FP.3-69
Surrebuttal Testimony of Scott A Wierson (on behalf of the Department of Public Service)
August 10, 2007
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