[Federal Register Volume 64, Number 250 (Thursday, December 30, 1999)] [Notices] [Pages 73555-73559] From the Federal Register Online via the Government Publishing Office [www.gpo.gov] [FR Doc No: 99-33901] ======================================================================= ----------------------------------------------------------------------- FEDERAL COMMUNICATIONS COMMISSION [CC Docket No. 99-295, FCC 99-404] Application by Bell Atlantic New York for Authorization Under Section 271 of the Communications Act To Provide In-Region, Inter-LATA Service in the State of New York AGENCY: Federal Communications Commission. ACTION: Notice. ----------------------------------------------------------------------- SUMMARY: In this document, the Commission grants Bell Atlantic's section 271 application for authority to enter the inter-LATA toll market in the state of New York. The Commission grants Bell Atlantic's application based on our conclusion that Bell Atlantic has satisfied all of the statutory requirements for entry, and opened its local exchange markets to full competition. DATES: Effective December 22, 1999. FOR FURTHER INFORMATION CONTACT: Claudia Pabo or Andrea Kearney, Attorneys, Policy and Program Planning Division, Common Carrier Bureau, at (202) 418-1580, or via the Internet at [email protected] or [email protected], respectively. The full text of this Order is available for inspection and copying during normal business hours in the FCC Reference Information Center, CY-A257, 445 12th Street, Washington, DC 204554. Further information may also be obtained by calling the Common Carrier Bureau's TTY number: (202) 418-0484. SUPPLEMENTARY INFORMATION: This document is a brief description of the Commission's Memorandum Opinion and Order adopted December 21, 1999, and released December 22, 1999. The full text also may be obtained through the World Wide Web, at http://www.fcc.gov/ccb/Orders/ index6.html; or may be purchased from the Commission's copy contractor, International Transcription Service Inc. (ITS), CY B-400, 445 12th Street, SW, Washington, DC. Synopsis of the Memorandum Opinion and Order 1. The New York Commission's Evaluation. The New York Commission advised the Commission that, following two and one-half years of review, testing, and process improvements, Bell Atlantic-NY had met the checklist requirements of section 271(c). Specifically, the New York Commission stated that Bell Atlantic had met its obligation under section 271(c)(1)(A) by entering into more than 75 [[Page 73556]] interconnection agreements approved by the New York Commission, and that competitive LECs are providing facilities-based local exchange service. The New York Commission also stated that the record developed in the New York proceeding establishes that Bell Atlantic has a legal obligation to provide the 14 checklist items, and it is meeting that obligation. 2. The Department of Justice's Evaluation. The Department of Justice concluded that it did not have substantial concerns about the ability of facilities-based carriers and firms that wish to resell Bell Atlantic's retail services to enter the local telecommunications markets in New York. It also concluded that Bell Atlantic had made great progress in opening the market to competition through the use of unbundled network elements, but two major areas of deficiency, operations support systems (OSS) and access to unbundled local loops, remain as important obstacles to local competition. As a result, the Department stated that this Commission could properly deny this application or, as an alternative, approve the application subject to carefully drafted conditions under which Bell Atlantic would be permitted to offer interLATA services only after taking specified steps and demonstrating that its performance has met appropriate requirements. 3. Compliance with Section 271(c)(1)(A). We conclude that Bell Atlantic demonstrates that it satisfies the requirements of section 271(c)(1)(A) based on the interconnection agreements it has implemented with competing carriers in New York. Specifically, we find that AT&T, MCI World Com, and Cablevision Lightpath provide telephone exchange service either exclusively or predominantly over their own facilities to residential subscribers and to business subscribers. The New York Commission also concludes that Bell Atlantic has met the requirements of section 271(c)(1)(A). None of the commenting parties, including the competitors cited by Bell Atlantic in support of its showing, challenges Bell Atlantic's assertion in this regard. 4. Checklist Item 1--Interconnection. We conclude that Bell Atlantic satisfies the requirements of checklist item 1. Pursuant to this checklist item, Bell Atlantic must allow other carriers to interconnect their networks to its network for the mutual exchange of traffic. To do so, BellSouth must permit carriers to use any available method of interconnection at any available point in BellSouth's network. We find that Bell Atlantic demonstrates that it provides interconnection at all technically feasible points on its network. We likewise find that Bell Atlantic adequately demonstrates that it provides collocation in New York in accordance with the Commission's rules. Furthermore, interconnection between networks must be equal in quality whether the interconnection is between Bell Atlantic and an affiliate, or between Bell Atlantic and another carrier. Bell Atlantic demonstrates that it provides interconnection that meets this standard. 5. Bell Atlantic satisfies the pricing requirements of checklist item 1. Pursuant to this checklist item, Bell Atlantic must make physical and virtual collocation arrangements available at rates that are just, reasonable, and nondiscriminatory. We find that Bell Atlantic's collocation arrangements meet this test because Bell Atlantic offers cageless physical collocation to those competitive LECs that request it at just, reasonable, and nondiscriminatory prices. With respect to security measures, Bell Atlantic's collocation rates are not discriminatory because Bell Atlantic does not impose this cost. In addition, Bell Atlantic complies with the Commission's requirements that it allocate its space preparation and related up-front costs among competing carriers on a pro-rata basis. The New York Commission has set prices for a competing carrier's up-front site preparation costs at TELRIC-based costs, and ensured that the initial competitor to collocate will not bear the complete up-front collocation costs. 6. Checklist Item 2--Access to Unbundled Network Elements. We conclude that Bell Atlantic satisfies the requirements of checklist item 2. For purposes of the checklist, Bell Atlantic's obligation to provide ``access to unbundled network elements,'' or the individual components of the telephone network, is comprised of three aspects. First, to fulfill its nondiscrimination checklist obligation, Bell Atlantic must provide access to its operations support systems (OSS), meaning the systems, databases and personnel necessary to support the elements or services. Nondiscriminatory access ensures that new entrants have the ability to order service for their customers and communicate effectively with Bell Atlantic regarding basic activities such as placing orders and providing maintenance and repair for customers. For each of the primary OSS functions, including pre- ordering, ordering, provisioning, maintenance and repair, and billing, as well as change management and technical assistance, Bell Atlantic must provide access that enables competing carriers to perform the function in substantially the same time and manner as Bell Atlantic or, if there is not an appropriate retail analogue in Bell Atlantic's systems, in a manner that permits an efficient competitor a meaningful opportunity to compete. 7. As an initial matter, Bell Atlantic demonstrates that it provides documentation and technical assistance necessary for new entrants to connect with its OSS, and a change management process that provides information necessary for competing carriers to modify their systems and procedures when Bell Atlantic changes its OSS. With respect to pre-ordering, or the activities that a competing carrier undertakes to gather and verify the information necessary to place an order, Bell Atlantic demonstrates through evidence of actual commercial usage and results of independent third-party testing that it has deployed operationally ready interfaces and systems that offer nondiscriminatory access to pre-ordering OSS functions. Specifically, Bell Atlantic's pre-ordering interfaces and systems enable competing carriers to retrieve customer service records, validate addresses, select and reserve telephone numbers, assess the services and features available to customers, retrieve due date information, determine whether a loop is capable of supporting advanced technologies, and view a customers' directory listing. 8. In terms of the interfaces and systems that enables competing carriers to place an order for service, Bell Atlantic demonstrates through performance data and third-party testing that it return timely order confirmation and rejection notices, processes manually handled orders accurately, provides jeopardy information and order completion notification, and is capable of handling reasonably foreseeable demand volumes. In terms of provisioning, performance data and third-party test results demonstrate that Bell Atlantic provisions competing carriers' customers orders in substantially the same time and manner that it provisions orders for its own retail customers. 9. In addition, with respect to maintenance and repair, Bell Atlantic demonstrates through commercial usage and third-party test results that its interfaces and systems enable competing carriers to create, modify, and cancel trouble tickets, and to request that Bell Atlantic test a customer's circuit, in substantially the same time and manner as Bell Atlantic's retail operations. Similarly, Bell [[Page 73557]] Atlantic resolves problems associated with customers of competing carriers in substantially the same time and manner and at the same level of quality that it performs repair work for its own customers. Finally, with respect to billing, Bell Atlantic demonstrates that it provides complete and accurate reports on the service usage of competing carriers' customers in the same manner that Bell Atlantic provides such information to itself. 10. Second, pursuant to the checklist, Bell Atlantic must provide nondiscriminatory access to network elements in a manner that allows other carriers to combine such elements. Using evidence of actual commercial usage and the results of independent third-party testing. Bell Atlantic demonstrates that it provides to competitors combinations of already-combined network elements as well as nondiscriminatory access to unbundled network elements in a manner that allows competing carriers to combine those elements themselves. 11. Bell Atlantic satisfies the pricing requirements of checklist item 2. In order to fulfill its obligations under this checklist item, Bell Atlantic must provide nondiscriminatory access to network elements on an unbundled basis at any technically feasible point on rates, terms, and conditions that are just, reasonable, and nondiscriminatory. This checklist item ensures that new entrants are not placed at a competitive disadvantage due to discriminatory prices for network elements. The Commission has determined that prices for unbundled network elements must be based on Bell Atlantic's forward-looking, long-run incremental costs, or TELRIC (Total Element Long Run Incremental Cost) for each network element. 12. We find that Bell Atlantic demonstrates that the pricing of its unbundled network elements complies with TELRIC. Specifically, Bell Atlantic's prices for switches and loops offered as unbundled network elements are priced pursuant to a forward-looking, long-run incremental cost methodology. 13. In addition, we do not find that the contract termination liability provisions contained in Bell Atlantic's customer-specific arrangements (CSAs) constitute an unreasonable or discriminatory condition or limitation on the resale of its telecommunications services. We also find that Bell Atlantic is not required to provide an avoided-cost discount on its wholesale DSL offering because it is not a retail service subject to discount obligations. 13. Checklist Item 3--Access to Poles, Ducts, Conduits, and Rights- of-Way. Based on the evidence in the record, we find that Bell Atlantic demonstrates that it is providing nondiscriminatory access to its poles, ducts, conduits, and rights-of-way at just and reasonable rates, terms, and conditions in accordance with the requirements of section 224, and thus, satisfies the requirements of checklist item 3. The New York Commission concluded that Bell Atlantic provides nondiscriminatory access to poles, ducts, conduits, and rights-of-way in compliance with this checklist item. 14. Checklist Item 4--Unbundled Local Loops. Bell Atlantic satisfies the requirements of checklist item 4. Local loops are the wires, poles, and conduits that connect the telephone company end office to the customer's home or business. To satisfy the nondiscrimination requirement under checklist item 4, Bell Atlantic must demonstrate that it can efficiently furnish unbundled local loops to other carriers within a reasonable time frame, with a minimum level of service disruption, and at the same level of service quality it provides to its own customers. Nondiscriminatory access to unbundled local loops ensures that new entrants can provide quality telephone service promptly to new customers without constructing new loops to each customer's home or business. 15. Bell Atlantic provides evidence and performance data establishing that it can efficiently furnish unbundled loops, for the provision of both traditional voice services and various advanced services, to other carriers in a nondiscriminatory manner. More specifically, Bell Atlantic establishes that it misses fewer new loop installation appointments for competing carriers than it does for its retail customers. In addition, Bell Atlantic demonstrates that the new loops it installs are of substantially the same quality as the loops it provides to its retail customers. Bell Atlantic also demonstrates that it provides coordinated cutovers of loops, i.e., hot cuts, to competing carriers within the prescribed time interval at least 90 percent of the time; that in no more than five percent of cases has the hot cut resulted in a service disruption; and that less than two percent of lines provisioned through hot cuts have been the subject of installation trouble reports. Additionally, Bell Atlantic establishes that it provides loop maintenance and repair functions to competitors in substantially the same time and manner as it provides them to its retail customers. Although due to unique circumstances present in this application we do not examine Bell Atlantic's provision of xDSL-capable loops separately, we provide guidance as to the evidentiary showing we would find most persuasive in evaluating future applicants' checklist compliance with respect to xDSL-capable loops. 16. Checklist Item 5--Unbundled Local Transport. Based on the evidence in the record, the Commission concludes that Bell Atlantic provides both shared and dedicated transport in compliance with the requirements of this checklist item. The New York Commission also finds that Bell Atlantic is in compliance with this checklist item. We are not persuaded by the assertions of some commenters that Bell Atlantic fails to provide dedicated local transport in a timely manner. We cannot accept the assertion by a number of these parties that the provision of special access should be considered for purposes of determining checklist compliance in this proceeding. Nevertheless, to the extent that parties are experiencing delays in the provisions of special access services ordered from Bell Atlantic's federal tariffs, we note that these issues are appropriately addressed in the Commission's section 208 compliant process. 17. Checklist Item 6--Unbundled Local Switching. Bell Atlantic satisfies the requirements of checklist item 6. A switch connects end user lines to other end user lines, and connects end user lines to trunks used for transporting a call to another central office or to a long-distance carrier. Switches can also provide end users with ``vertical features'' such as call waiting, call forwarding, and caller ID, and can direct a call to a specific trunk, such as to a competing carrier's operator services. We find that Bell Atlantic satisfies the requirements of checklist item 6, because Bell Atlantic demonstrates that it provides all of the features, functions, and capabilities of the switch. 18. Checklist Item 7--911/E911/Directory Assistance/Operator Services. Based on the evidence submitted in the record, the Commission concludes that Bell Atlantic demonstrates that it is providing nondiscriminatory access to 911/E911 services, and thus satisfies the requirements of checklist item 7. We note that no commenter disputes Bell Atlantic's compliance with this portion of checklist item 7, and the New York Commission concludes that Bell Atlantic is providing nondiscriminatory access to 911/E911. We further conclude that Bell Atlantic demonstrates that it provides directory assistance services in accordance with the requirements of [[Page 73558]] checklist item 7. The New York Commission concludes that Bell Atlantic satisfies this portion of checklist item 7. We are not persuaded by commenters' arguments that Bell Atlantic fails to provide adequately directory assistance and operator services. To the extent that Bell Atlantic has not adequately addressed this problem, we note that the present record does not indicate that there is a widespread problem. Only two commenters raise this objection, suggesting the difficulty is of limited competitive consequence. In fact, several parties support Bell Atlantic's assertion of compliance with this checklist item. Accordingly, we conclude that these objections are not sufficient to conclude that Bell Atlantic has failed to comply with the requirements of checklist item 7. 19. Checklist Item 8--White Pages Directory Listings. Bell Atlantic satisfies the requirements of checklist item 8. White pages are the directory listings of telephone numbers of residences and businesses in a particular area. This checklist item ensures that white pages listings for customers of different carriers are compatible, in terms of accuracy and reliability, notwithstanding the identity of the customer's telephone service provider. Bell Atlantic demonstrates that its provision of white pages listings to customers of competitive LECs is nondiscriminatory in terms of their appearance and integration, and that it provides white pages listings for competing carriers' customers with the same accuracy and reliability that it provides to its own customers. 20. Checklist Item 9--Numbering Administration. Bell Atlantic satisfies the requirements of checklist item 9. Telephone numbers are currently assigned to telecommunications carriers based on the first three digits of the local number, known as ``NXX'' codes. To fulfill the nondiscrimination obligation in checklist item 9, Bell Atlantic must comply with the numbering administration guidelines, plan, or rules. This checklist item ensures that other carriers have the same access to new telephone numbers as Bell Atlantic. Bell Atlantic demonstrates that it has adhered to industry guidelines and the Commission's requirements. 21. Checklist Item 10--Databases and Associated Signaling. Bell Atlantic satisfies the requirements of checklist item 10. Databases and associated signaling refer to the call-related databases and signaling systems that are used for billing and collection or the transmission, routing, or other provision of a telecommunications service. To fulfill the nondiscrimination obligation in checklist item 10, Bell Atlantic must demonstrate that it provides new entrants with the same access to these call-related databases and associated signaling that it provides itself. This checklist item ensures that other carriers have the same ability to transmit, route, complete, and bill for telephone calls as Bell Atlantic. Bell Atlantic demonstrates that it provides other carriers nondiscriminatory access to its: (1) signaling networks, including signaling links and signaling transfer points; (2) certain call-related databases necessary for call routing and completion or, in the alternative, a means of physical access to the signaling transfer point linked to the unbundled database; and (3) Service Management Systems; and to design, create, test, and deploy Advanced Intelligent Network (AIN) based services at the SMS through a Service Creation Environment. 22. Checklist Item 11--Number Portability. Bell Atlantic satisfies the requirements of checklist item 11. Number portability enables consumers to take their phone number with them when they change local telephone companies. Bell Atlantic demonstrates that it provides number portability to consumers without impairment of quality, reliability, or convenience. 23. Checklist Item 12--Dialing Parity. Based on the evidence in the record, we find that Bell Atlantic demonstrates that it provides local dialing parity in accordance with the requirements of section 251(b)(3) and thus satisfies the requirements of this checklist item. No commenter challenges Bell Atlantic's assertion that it provides local dialing parity. Furthermore, the New York Commission concludes that Bell Atlantic meets the requirements of this checklist obligation. 24. Checklist Item 13--Reciprocal Compensation. Bell Atlantic satisfies the requirements of checklist item 13. Pursuant to this checklist item, Bell Atlantic must compensate other carriers for the cost of transporting and terminating a local call from Bell Atlantic. Alternatively, Bell Atlantic and the other carrier may enter into an arrangement whereby neither of the two carriers charges the other for terminating local traffic that originates on the other carrier's network. This checklist item is important to ensuring that all carriers that originate calls bear the cost of terminating such calls. Bell Atlantic demonstrates that it has reciprocal compensation arrangements in accordance with section 252(d)(2) in place, and that it is making all required payments in a timely fashion. 25. Checklist Item 14--Resale. Bell Atlantic satisfies the requirements of checklist item 14. This checklist item requires Bell Atlantic to offer other carriers all of its retail services at wholesale rates without unreasonable or discriminatory conditions or limitations so that other carriers may resell those services to an end user. This checklist item ensures a mode of entry into the local market for carriers that have not deployed their own facilities. Bell Atlantic demonstrates that it offers all of its retail services for resale at wholesale rates without unreasonable or discriminatory conditions or limitations. Bell Atlantic also shows that it provides nondiscriminatory access to operations support systems for the resale of its retail telecommunications services, and provisions resale services on a nondiscriminatory basis. 26. Section 272 Compliance. Bell Atlantic demonstrates that it will comply with the requirements of section 272. Pursuant to section 271(d)(3), Bell Atlantic must demonstrate that it will comply with the structural, transitional, and non-discriminatory requirements of section 272, as well as certain requirements governing its marketing arrangements. Bell Atlantic shows that it will provide interLATA telecommunications through structurally separate affiliates, and that its BOCs will operate in a non-discriminatory manner with respect to these affiliates and unaffiliated third parties. In addition, Bell Atlantic demonstrates that it will comply with public disclosure requirements of section 272, which requires Bell Atlantic to post on the Internet certain information about transactions between its affiliates and BOCs. Finally, Bell Atlantic demonstrates compliance with the joint marketing requirements of section 272. 27. Public Interest Standard. We conclude that approval of this application is consistent with the public interest, convenience, and necessity. While no single factor is dispositive in our public interest analysis, our overriding goal is to ensure that nothing undermines our conclusion, based on our analysis of checklist compliance, that markets are open to competition. We note that a strong public interest showing cannot overcome failure to demonstrate compliance with one or more checklist items. 28. Among other factors, we may review the local and long distance markets to ensure that there are not unusual circumstances that would make entry contrary to the public interest under the particular circumstances of [[Page 73559]] this Application. We find that, consistent with our extensive review of the competitive checklist, barriers to competitive entry in the local market have been removed and the local exchange market today is open to competition. We thus disagree with commenters' arguments that the public interest would be disserved by granting Bell Atlantic's application because the local market in New York has not yet truly been opened to competition. We also find that the record confirms our view that BOC entry into the long distance market will benefit consumers and competition if the relevant local exchange market is open to competition consistent with the competitive checklist. 29. Another factor that could be relevant to our analysis is whether we lack sufficient assurance that markets will remain open after grant of application. We find that the performance monitoring and enforcement mechanisms developed in New York, in combination with other factors, provide strong assurance that Bell Atlantic will continue to satisfy the requirements of section 271 after entering the long distance market. Where, as here, a BOC relies on performance monitoring and enforcement mechanisms to provide such assurance, we will review the mechanisms involved to ensure that they are likely to perform as promised. We conclude that these mechanisms have a reasonable design and are likely to provide incentives sufficient to foster post-entry checklist compliance. We base this predictive judgment on the fact that the plan has the following important characteristics: (1) potential liability that provides a meaningful and significant incentive to comply with the designated performance standards; (2) clearly- articulated, pre-determined measures and standards, which encompass a comprehensive range of carrier-to-carrier performance; (3) a reasonable structure that is designed to detect and sanction poor performance when it occurs; (4) a self-executing mechanism that does not leave the door open unreasonably to litigation and appeal; and (5) reasonable assurances that the reported data is accurate. Parties to this proceeding identify numerous criticisms relating to the structure of these mechanisms, but none are sufficient to cause us to conclude that the plan will fail to foster post-entry compliance with the checklist requirements. 30. Consistent with our accounting rules with respect to antitrust damages and certain other penalties paid by carriers, we conclude that Bell Atlantic should not be permitted to reflect any portion of the bill credits associated with these enforcement mechanisms as expenses under the revenue requirement for interstate services of the Bell Atlantic incumbent LEC. We also conclude that other concerns identified by commenters do not convince us that grant of this application would be inconsistent with the public interest. Finally, we have determined in a separate order that Bell Atlantic's provisions of National Directory Assistance is permissible and consistent with section 271(g)(6) of the Act, and conclude that any uncertainty about Bell Atlantic's past compliance with this provisions is not grounds for denying the application. 31. Section 271(d)(6) Enforcement Authority. Congress sought to create incentives for BOCs to cooperate with competitions by withholding long distance authorization until they satisfy various conditions related to local competition. We note that these incentives may diminish with respect to a given state once a BOC receives authorization to provide interLATA service in that state. The statute nonetheless mandates that a BOC comply fully with section 271's requirements both before and after it receives approval from the Commission and competes in the interLATA market. Working in concert with state commissions, we intend to monitor closely post-entry compliance and to enforce vigorously the provisions of section 271 using the various enforcement tools Congress provided us in the Communications Act. Swift and effective post-approval enforcement of section 271's requirements is essential to Congress' goal of achieving lasting competition in local markets. Federal Communications Commission. William F. Caton, Deputy Secretary. [FR Doc. 99-33901 Filed 12-29-99; 8:45 am] BILLING CODE 6712-01-M