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EXHIBIT 10.38
SETTLEMENT AGREEMENT
WHEREAS, U S WEST Communications, Inc. amended its Centrex Plus catalog
on February 5, 1996 to withdraw the service effective that date and to
grandparent Centrex Plus to existing customers subject to certain terms and
conditions; and,
WHEREAS, On February 7, 1996, McLeod Telemanagement, Inc., a Centrex
Plus customer as of February 5, 1996, filed a complaint with the Iowa Utilities
Board pursuant to Iowa Code Section 476.101(8); and,
WHEREAS, the Board docketed that complaint as Docket No. FCU-96-1, and
established a procedural schedule; and,
WHEREAS, U S WEST and McLeod filed direct and rebuttal testimony
pursuant to that procedural schedule; and,
WHEREAS, U S WEST and McLeod desire to avoid the time and expense of
hearing and briefing the McLeod Complaint case;
THEREFORE, U S WEST and McLeod do hereby agree and stipulate as
follows:
1. This Settlement Agreement shall only settle McLeod's pending complaint
before the Iowa Utilities Board. This Settlement Agreement will neither
settle McLeod's pending regulatory complaints in states other than Iowa nor
govern McLeod's purchase of Centrex Plus in states other than Iowa.
2. McLeod agrees to immediately withdraw its Complaint in Docket No. FCU-96-1.
3. U S WEST and McLeod will execute the U S WEST Master Agreement for Centrex
Plus Service Rate Stability Plan for the State of Iowa ("Master
Agreement"). That Master Agreement will cover all Centrex Plus service
ordered by McLeod in the State of Iowa as of the date of this Settlement
Agreement. The Master Agreement will run for five (5) years from the date
of this Settlement Agreement.
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4. The Master Agreement will include the alternative dispute resolution clause
contained in the Master Agreement tendered to U S WEST by McLeod in
correspondence to Timothy Fyke dated February 19, 1996.
5. U S WEST waives all claims for payment of Centrex Plus station line prices
other than those contained in the current U S WEST - McLeod Centrex
Plus Service Rate Stability contracts for station lines McLeod currently
purchases from U S WEST, but upon which contracts were pending as of
February 5, 1996. U S WEST expressly does not waive its claims for payment
of SMDR, tax and other charges with respect to the ongoing U S WEST -
McLeod billing disputes.
6. McLeod may add seven (7) main common blocks per year during the term of the
Master Agreement. McLeod may also add one adjunct common block for each
existing or new main common block it has in service or places in service.
7. McLeod may add Centrex Plus station lines and new locations without
limitation in Iowa during the term of the Master Agreement.
8. The Centrex Plus station line prices will be those contained in the U S
WEST Centrex Plus service catalog for Iowa on February 5, 1996. Those
prices will remain unchanged during the term of the Master Agreement,
except that the prices may be renegotiated if they do not pass an
imputation test incorporating the unbundled loop price approved by the
Board. McLeod and U S WEST will use any cost and imputation methodology
developed by the Board in Docket No. RMU-95-5 to test the Centrex Plus
station line prices. If the Board does not adopt an applicable cost or
imputation methodology, U S WEST and McLeod will apply a mutually agreeable
methodology to test the competitive fairness of the Centrex Plus station
line prices for resale purposes.
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9. U S WEST and McLeod will test whether the Centrex Plus station lines pass
an imputation test any time U S WEST changes its unbundled loop price.
10. At the conclusion of the Master Agreement, McLeod may execute an extension
of the Master Agreement until April 29, 2005, at which point U S WEST
will cease offering Centrex Plus in Iowa to Centrex Plus customers as of
February 5, 1996.
11. U S WEST and McLeod shall engage in negotiations pursuant to 47 U.S.C.
Section 252 to determine the prices, terms and any limitations on
McLeod's purchase of Centrex Plus that will apply to any extension of the
Master Agreement requested by McLeod.
12. McLeod may terminate its use of Centrex Plus at any time on sixty (60) days
notice without termination liability.
13. In consideration of this Settlement Agreement, McLeod agrees to waive any
antitrust or other civil claims against U S WEST with respect to the
withdrawal and grandparenting of Centrex Plus in Iowa.
14. U S WEST expressly states that it has entered into this Settlement
Agreement in order to avoid the time and expense of lititation. By
executing this Settlement Agreement, U S WEST makes no express or implied
admissions regarding the legality or appropriateness of its withdrawal and
grandparenting of Centrex Plus in Iowa or in any other state.
15. This Settlement Agreement shall not be used for any purpose, disclosed or
offered into evidence by U S WEST, McLeod or any other entity in any
regulatory or civil proceeding in Iowa or in any other state.
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16. U S WEST or McLeod may submit a copy of this Settlement Agreement to a
regulatory body or a court upon an order of the regulatory body or
court. Neither U S WEST nor McLeod can, either directly or indirectly,
request such an order by a regulatory body or a court.
17. This Settlement Agreement and the executed Master Agreement (including
reference to the Centrex Plus catalog in effect as of February 5, 1996)
shall constitute the entirety of U S WEST's and McLeod's agreement
regarding McLeod's continued use of Centrex Plus service in Iowa, except
that any applicable rules or decisions of the Federal Communications
Commission will govern the parties and this Settlement Agreement.
Date: March 18, 1996 McLeod Telemanagement, Inc.
/s/ David R. Conn
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David R. Conn
Associate General Counsel
McLeod, Inc.
Town Centre, Suite 500
221 Third Avenue SE
Cedar Rapids, IA 52401
(319)-298-7000
Date: March 18, 1996 U S WEST Communications, Inc.
/s/ William M. Ojile, Jr.
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William M. Ojile, Jr.
Senior Attorney
U S WEST, Inc.
1801 California St., Suite 5100
Denver, CO 80202
(303)-672-2812
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