Gentlemen,
 
The information that follows is in response to the conference call that we had today.  
 
First, to summarize the outstanding issues in the CA agreement and the applicable amendment that Verizon forwarded to Enron this morning:
 
(1) Enron stated that it would discuss internally the security language proposed by Verizon concerning the parent guarantee from Enron Corp.  After such discussion, that language is acceptable to Enron.
 
(2) Enron requested and Verizon agreed to insert a new Article I, section 5.4 concerning default that would mirror the default language in the proposed amendment for the Level 3 agreement.
 
(3) Verizon agreed to discuss offline Enron's request to insert language regarding dispute resolution in Article II, section 1.5.
 
(4) Enron proposed and Verizon agreed to consider replacing Article II, section 2.8 in the CA agreement with section 44 of Verizon's standard agreement (general terms and conditions).
 
(5) Enron agreed to propose alternative language for Article II, section 2.9.  Having discussed this internally, Enron agrees to abide by the current language in section 2.9 and will not be proposing alternative language.
 
(6)  For Article II, section 5.20, Verizon agreed to delete this section in its entirety and replace it with the assignment language in the proposed amendment for the Level 3 agreement.  In addition, Verizon agreed to insert additional language in both amendments to the effect that written authorization for assignments would not be unreasonably withheld.
 
(7)  For section 2.15 in the UNE attachment, Verizon proposed replacing this section with both section 13 from the UNE attachment in its standard agreement and section 8 of the additional services attachment in its standard agreement.  Having discussed this internally, Enron proposes that the current section 2.15 remain intact.
 
(8) Verizon agreed to substitute "ASR/LSR" in section 4.1 of the UNE attachment with language regarding ordering.
 
(9) Enron stated that the CA amendment or a side agreement needs to incorporate the provisioning intervals for California.  The intervals that were provided to Enron on its July 25, 2001, conference call with Verizon were as follows:
1-19 loops = 15 business days; 20+ is negotiated.
1-24 transport = 5 business days; 25+ is negotiated.
Enron informed Verizon that it intends to hold Verizon to those intervals, at a minimum, for up to DS3 loop and transport.  Verizon claimed that it needed to verify the transport intervals.  In addition, Gary Librizzi will follow up with Susan Fox regarding OC-n loop and transport intervals for the East as well as CA.
 
(10) Enron informed Verizon that it needs some form of accounting mechanism in place for performance in CA as there is no collaborative process or PAP in place in that state.  That metric needs to be incorporated into our agreement.  Verizon agreed to research this issue and discuss internally.
 
(11) Verizon agreed to provide pricing as part of the Amendment 2 for CA that will incorporate the OC-n pricing that Enron received, as well as pricing for mainly NRCs for subloops, dark fiber, and loop conditioning that are not currently in the Appendix/Schedule A for the CA agreement, but that are included in the updated Schedule A that Verizon forwarded to Enron for CA.
 
(12) Verizon agreed to update the collocation attachment language that references the applicable Advice Letter.  In addition, Verizon will insert language at the end of the pertinent paragraph that references any supplements to that Advice Letter.
 
Both parties agreed to try to have a final exchange of documents around Thanksgiving time.  To be more specific, after Verizon inquired whether Enron had a preference for receiving certain states' amendments before others, Enron asked Verizon to provide the amendments for NY, MA, CA, and PA before Thanksgiving (by Nov. 21), and the rest (e.g., VA, DC and NJ) the week after Thanksgiving.  As VA's is almost complete, Verizon realistically could have that one ready on the earlier side.
 
Although I will be on vacation from Nov. 8-15, pursuant to our discussion today, Enron would like these negotiations to continue in my absence.  That is why I am forwarding this summary to Verizon and for the sake of clarifying our discussion.  If Verizon has any questions during this timeframe, please contact Alan Kohler with questions concerning the Level 3 agreement and Andy Klein for the CA agreement.  In my absence, Alan Kohler will advise of Enron's positions regarding the latest draft of the Level 3 amendments which were forwarded today so that Verizon may continue processing the necessary documents.
 
Thank you.
 
Regards,
 
Lara
 
 
 
Lara Leibman
Director, Government Affairs
Enron Corp
713.853.9193 (direct)
713.851.7770 (cellular)
Lara.Leibman@enron.com <mailto:Lara.Leibman@enron.com>