Assurance of Payment Requirements
Except as may otherwise be provided in Verizon’s interconnection or resale agreement with a CLEC (which term, as used herein, for the avoidance of any doubt includes, without limitation, both facilities based CLECs and resellers), Verizon may require the CLEC to provide to Verizon appropriate assurance of payment (as set forth herein) for services that Verizon is to render to the CLEC. Summary of Requirements
Any CLEC Verizon does not consider creditworthy is required to provide adequate assurance of payment to Verizon, as set forth herein, and Verizon will not provide service to a CLEC unless and, until, the CLEC has paid all outstanding amounts owed to Verizon and, if applicable, Verizon has received appropriate assurance of payment from the CLEC. CLEC Credit Information
A CLEC must provide appropriate credit information to Verizon to facilitate Verizon’s review of the CLEC’s creditworthiness. Such information includes, but is not necessarily limited to, the following (and, where applicable, such information should be included on the completed Credit Information Request Form).
Provide the following credit information | • | Governmental authorization(s) the CLEC has obtained to provide local exchange service in the subject state(s). | | • | Certification as to the CLEC’s form of business organization (e.g., corporation, partnership, sole proprietorship, etc.). | | • | Certification as to the CLEC’s primary business addresses. | | • | Certification as to the CLEC’s directors (if applicable) and primary officers (e.g., president, chief executive officer, chief operating officer, general counsel, etc.), with a biography for each such individual. |
| • | Certification as to whether any of the CLEC’s directors or officers has been charged with civil or criminal fraud (or any related or similar offenses). | | • | Copies of recent Dun & Bradstreet or financial statements for the CLEC. | | • | A listing of other services the CLEC has purchased (or is purchasing) from Verizon. |
Such information should be sent to the following address:
Verizon
Michael Treat - Manager Credit Review
6929 N. Lakewood Ave.
Mail Drop 5.3-1035
Tulsa OK 74117
918-590-9070 - Phone
301-966-1931 - Fax Determination of Creditworthiness
As a general matter, any CLEC with a satisfactory credit history as a Verizon carrier customer is considered creditworthy. A credit history evaluation will include, without limitation, an evaluation of the creditworthiness of any Predecessor Company, parent, affiliate, subsidiary or holding company of a CLEC. A satisfactory credit history requires that the following criteria, among others, be met. | • | CLECs obtain service as a carrier customer with Verizon within the last two years. | | • | The length of service as a carrier customer was for more than one year. | | • | Certification as to the CLEC’s primary business addresses. | | • | CLEC paid Verizon’s bills on a timely basis and in full on the accounts over the most recent twelve-month period (excluding any bona fide disputed amounts that were properly disputed pursuant to applicable tariff/agreement); and there are no outstanding bills on the accounts (i.e., all bills have been paid in full). | A CLEC is not creditworthy where, for example, it admits its inability to pay its debts as such debts become due, has commenced a voluntary case (or has had a case commenced against it) under the U.S. Bankruptcy Code or any other law relating to bankruptcy, insolvency, reorganization, winding-up, composition
or adjustment of debts or the like, has made an assignment for the benefit of creditors, or is subject to a receivership or similar proceeding.
In addition, any CLEC that has no credit history with Verizon must provide a credit bureau report (e.g., a Dun & Bradstreet report) from a reporting agency reasonably acceptable to Verizon, which report has a score/appraisal rating satisfactory to Verizon, in order to be considered potentially creditworthy. If there is no satisfactory score/appraisal rating, the applicant is required to provide adequate assurance of payment.
An existing CLEC is not considered creditworthy if, for example: | • | It fails to pay a bill rendered by Verizon on a timely basis (excluding any bona fide disputed amounts that are properly being disputed pursuant to applicable tariff/agreement). | | • | It admits its inability to pay its debts as such debts become due, has commenced a voluntary case (or has had a case commenced against it) under the U.S. Bankruptcy Code or any other law relating to bankruptcy, insolvency, reorganization, winding-up, composition or adjustment of debts or the like, has made an assignment of the benefit of creditors or is subject to a receivership or similar proceeding. | | • | It suffers an adverse change to its credit rating by a recognized credit bureau. |
Assurance of Payment Amount
The required assurance of payment shall equal the actual or an estimated amount to cover Verizon’s applicable charges, from time to time, for a two-month period by jurisdiction as reasonably determined by Verizon. If the CLEC is assuming lines or facilities already provisioned to another CLEC, as a general matter the assurance of payment amount shall equal the most recent two months of actual charges to that other CLEC, or two months estimated charges, whichever is greater. If, from time to time, a CLEC purchases materially more services from Verizon than it previously purchased, at Verizon’s request CLEC must promptly obtain (and provide to Verizon) a replacement letter of credit conforming to the
terms hereof (including, without limitation, that the amount of the replacement letter of credit must reflect the increased level of services that CLEC is purchasing from Verizon).
At any time that Verizon determines a CLEC is not credit worthy, the CLEC will be required to provide assurance of payment in an amount equal to the most recent two months’ charges. This security requirement is in addition to any other treatment procedures, including the discontinuance of service, as permitted under tariff, agreement or applicable law. Until the CLEC is current on its bill and Verizon receives appropriate payment assurance, the CLEC will be embargoed (no increase allowed in the number of lines/service/facilities, etc.) and, in addition, Verizon may terminate provision of existing services to the CLEC. Verizon shall not provide service to the CLEC until all outstanding bills to Verizon have been satisfied and, if applicable, Verizon receives appropriate assurance of payment from the CLEC. Form of Payment Assurance
Except as set forth below (i.e., with respect to “Additional Payment Assurance Requirement: Monthly Prepayments”), all payment assurance required hereunder must be in the form of an irrevocable, unconditional, standby letter of credit, in form and substance satisfactory to Verizon, requirements (among others) for which being set forth below: | • | A financial institution acceptable must issue the letter of credit to Verizon (e.g., the issuing bank must be a recognized financial institution). | | • | The letter of credit must name Verizon as the beneficiary. | | • | The letter of credit must state that it is irrevocable and that it is a standby letter of credit. | | • | The letter of credit may not have an expiration date earlier that one year from the date the letter of credit is accepted by Verizon. | | • | The letter of credit must state explicitly that notwithstanding any provisions of the letter of credit or otherwise, any and all charges, fees
and the like arising under or in connection with the letter of credit are for the account of the CLEC. | | • | The letter of credit may not contain any conditions upon the issuing bank’s obligation to pay Verizon there under (other than a requirement that Verizon provide to the issuing bank the original of the letter of credit, together with a drawing request). | | • | The letter of credit must state that, except as explicitly set forth in the letter of credit, it is governed by the most current version of the International Chamber of Commerce’s standing practice for standby letters of credit. • The letter of credit must be in the amount equal to the actual or estimated two-month charges for the CLEC as required above. |
A CLEC should submit a draft letter of credit for Verizon’s review. Upon Verizon’s agreement as to the form of the letter of credit, the CLEC shall promptly have prepared (and shall provide to Verizon) the final letter of credit executed by the issuing bank.
Verizon may (but is not obligated to) draw on a letter of credit upon notice to CLEC in respect of any amounts to be paid by CLEC that are not paid within thirty (30) days of the date that payment of such amounts is due to Verizon.
If Verizon draws on a letter of credit, the CLEC shall promptly provide to Verizon a replacement or supplemental letter of credit conforming to the requirements set forth herein.
Actions Upon Expiration of Letter of Credit
Upon expiration of a letter of credit supplied as payment assurance, a CLEC will be required to secure a new letter of credit if its credit history is unsatisfactory. Among other things, if a CLEC has not paid its bills on a timely basis during the period of time the letter of credit was outstanding, Verizon will consider its credit history unsatisfactory.
Additional Payment Assurance Requirement: Monthly Prepayments
In addition to (and not in replacement of) the payment assurance requirements described above, if a CLEC (a) admits its inability to pay its debts as such debts become due, has commenced a voluntary case (or has had a case commenced against it) under
the U.S. Bankruptcy Code or any other law relating to bankruptcy, insolvency, reorganization, winding-up, composition or adjustment of debts or the like, has made an assignment of the benefit of creditors or is subject to a receivership or similar proceeding or (b) has failed to timely pay two or more bills rendered by Verizon or a Verizon Affiliate in any twelve (12)-month period, Verizon may, at its option, demand (and CLEC shall promptly provide to Verizon) additional assurance of payment, consisting of monthly advanced payments of estimated charges as reasonably determined by Verizon, with appropriate true-up against actual billed charges no more frequently than once per calendar quarter.
Account Security Requirements for UNE-P and Resale
The following amounts should be requested from the CLEC/Reseller for each jurisdiction and service type
(Resale/UNE-P) in which the CLEC is applying for service. These amounts represent an “estimated two month bill” and we only accept Letter of Credit for security. For service in: NJ, NY( Large state grouping ) = $28,000.00 For service in: MA, MD, NC, PA, and VA ( Medium state grouping ) = $17,000.00 |
