[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]
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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.
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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 cpabo@fcc.gov or
akearney@fcc.gov, 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
