Voice Over IP / Internal Presentation

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Qwest Performance Assurance Plan (QPAP)
Implementation
The Qwest CLEC Forum September 16-17, 2002
The information provided on every slide in the
following presentation is for training purposes
only. The information provided does not create or
modify any legal obligations, promises or
expectations between Qwest and CLEC customer. The
parties relationship is governed by existing
legal obligations and contracts.
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Agenda

• What is QPAP?
• How does it work?
• Positioning What do CLECs need to do?
• Pre-QPAP SGATS, Questionnaire, Web site
• Post-QPAP Roles and Processes, CLEC reports
• Resources/Support

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What is a Performance Assurance Plan (PAP)?

• The PAP is a performance remedy plan for services
  that Qwest provides to CLECs
• The PAP encompasses a broad range of
  carrier-to-carrier functions
• Qwest offers the plan to CLECs in conjunction
  with its 271 application as an anti-backsliding
  mechanism once 271 approval has been granted

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Payments

• Per occurrence payments Qwest pays on the
  difference between CLEC performance and benchmark
  or parity performance
• Measures prioritized High, Medium and Low
• Tiers
• Tier 1 payments to CLECs
• Tier 2 to state designated funds
• Payments under the plan will be self-executing -
  calculated based on monthly performance results
  for each state

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Generic ROC QPAP Features

• PAP is essentially a per occurrence payment plan
• For example, if the CLEC performance on OP-3 was
  85
• and the parity/benchmark performance was 90,
  assuming
• 100 orders, Qwest would pay for 5 occurrences
• Measures are classified as High (150), Medium
  (75) or Low (25) per miss to reflect relative
  importance
• CLECs receive Tier I payments if Qwest does not
  provide parity between the service it provides to
  the CLECs and that which it provides to its
  retail customers or if Qwest fails to meet
  applicable benchmarks

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Generic ROC QPAP Features

• Qwest will make additional Tier 2 payments to the
  state if it fails parity and benchmark standards
  on an aggregateCLEC basis
• The amount of payment also depends on the number
  of consecutive months of non-compliant
  performance
• The CAP for payments is generally set at 36 of
  Qwests FCC NOI

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Generic ROC QPAP Reporting

• On or before last business day of the month
  following the performance period, e.g., January
  results reported by end of February
• 5 day grace period in QPAP
• 500 per calendar day payment for late reports
• QPAP 500 per business day for 6-10 days, 1000
  for 11-15 days, 2000 per day gt15 business days

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PAP Payments

• Qwest will make bill credits to CLECs and will
  issue checks of additional amounts due to CLECs
  over and above amount owed to Qwest. In
  Colorado, Nebraska and Washington, this will be
  primarily EFT and checks.
• - It is important to note that credits will
  appear on CLEC bills in March for January
  performance
• Qwest will make payments to state funds for Tier
  2 measures.

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PAP Calculations
Step 1 Determine whether Qwest passed or failed

• Benchmarks
• Stare and compare
• Parity measurements
• Compare CLEC z-scores to critical z-values
• For Colorado Tier 1A parity measurements require
  a comparison between the six month rolling
  average of Qwest retail results adjusted for
  sample size and variance

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ROC Statistical Table
Critical Values
LIS Trunks, UDITs,
resale,
unbundled loops -- Other Parity
Sample Size DS1 and
DS3All Measurements
1-10 1.04 1.645
11-150 1.645 1.645 151-300 2.0
2.0 301-600 2.7 2.7 601-3000 3.7 3.7 30
01 and above 4.3 4.3 Applies for
individual month testing. For purposes of
determining consecutive month misses, 1.645
shall be used. Zone 1 and Zone 2 shall be
combined.
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PAP Calculations
Step 2 Calculate Occurrences/Misses and Payment

• Calculate the difference between the actual CLEC
  performance and the benchmark or parity
  performance
• multiply the difference by CLEC
  denominator/volume (number of items)
• Tier 2 calculations done similarly, except
  utilizes CLEC aggregate rather than individual
  CLEC data

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Payment Calculation Percent Benchmark
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Payment Calculation Interval Benchmark
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Payment Calculation Parity Interval

• Modified z-score
• (CLEC Result Qwest Result)
• Qwest Std Dev SQRT(1/Qwest Volume
  1/CLEC Qwest)
• Calculate Occurrences/Misses
• (Qwest Result Critical z-value Qwest Std Dev
  (SQRT(1/Qwest Vol 1/CLEC Vol)) - CLEC Result)
  (Qwest Result Critical z-value Qwest Std
  Dev (SQRT(1/Qwest Volume 1/CLEC Volume))
• CLEC Volume
• Calculate Payment
• Occurrences/Misses per occurrence/miss amount

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Occurrence/Miss Calculation Parity Interval
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Payment Calculation Parity Percent

• Modified z-score
• (Qwest Result - CLEC Result)
• SQRT(Qwest Result (1 - Qwest Result))(1/Qwest
  Volume 1/CLEC Volume))
• Calculate Occurrences/Misses
• Qwest Result - Critical z-value (SQRT((Qwest
  Result (1 - Qwest Result)) (1/Qwest Vol
  1/CLEC Vol)) - CLEC Result) CLEC Volume
• Calculate Payment
• Occurrences/Misses per occurrence/miss amount

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Occurrence/Miss Calculation Parity Percent
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Generic Tier 1 per Miss/Occurrence Table All
states except Colorado and Minnesota
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Generic QPAP ROC Tier 2 Payment Table
Per Occurrence Measurement Group High
500 Medium 300 Low 200
Per Measurement/Cap Measurement Group High
75,000 Medium 30,000 Low 20,000
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Payments Utilizing per Measure Structure
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Communication Strategies

• Qwest QPAP Web site initiated August 16th
• New PAP CLEC Questionnaire issued August 16th
• CLEC Forum September 17th

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Positioning

• QPAP is predicated on and a subset of
  Performance Indicator Definitions (PIDS).
  PIDs were developed during 271 workshops in
  all 14 states.
• The two triggers for QPAP are (1) Qwest 271
  approval and (2) An approved amendment to an
  interconnection agreement.

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Steps a CLEC Takes to Elect QPAP
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SGAT Opt in Process

• CLECs should review Qwest template website.
• The CLEC contacts Qwest to obtain a copy of the
  template.
• If 271 approval occurs first, the date of
  execution determines when the CLEC becomes
  eligible for the QPAP. If the agreement is
  executed prior to 271 approval, the 271 approval
  date determines when the CLEC becomes QPAP
  eligible.

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CLEC Questionnaire

• Follows same form and procedures as other
  questionnaires.
• Asks CLECs to declare the form of payment
  preferred (Paper check vs Electronic Funds
  Transfer).
• Should be completed and returned prior to QPAP
  execution.
• Provides critical information to ensure QPAP
  payments are issued correctly.
• Must be updated should CLECs information
  concerning QPAP change.

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Validation of CLEC Information

• Qwest Accounts Payable will validate all CLEC
  information and confirm usefulness and
  accuracy of this detail obtained via CLEC
  QPAP questionnaire.

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CLEC Reports

• Individual CLEC PID/PAP calculations will be
  available on a password protected website. This
  site will provide two months of a CLECs
  performance reports and one month of their QPAP
  payment calculations.
• A digital certificate is necessary to obtain
  access to this information.

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Key Resources
QPAP Agreements and Questionnaire
site http//www.qwest.com/wholesale/clecs/negotia
tions.html Notifications http//www.qwest.com/w
holesale/notices/cnla/ Website to obtain digital
certificate http//www.qwest.com/wholesale/system
s/generalinfo.html
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