02-28163. Application by Verizon Virginia Inc., Verizon Long Distance Virginia, Inc., Verizon Enterprise Solutions Virginia Inc., Verizon Global Networks Inc., and Verizon Select Services of Virginia Inc., Pursuant to Section 271 of the ...

AGENCY:

Federal Communications Commission.

ACTION:

Notice.

SUMMARY:

In this document, the Federal Communications Commission grants the section 271 application of Verizon Virginia Inc., et al. (Verizon) for authority to enter the interLATA telecommunications market in the state of Virginia. The Commission grants Verizon's application based on its conclusion that Verizon has satisfied all of the statutory requirements for entry, and opened its local exchange markets to full competition.

DATES:

Effective November 8, 2002.

FOR FURTHER INFORMATION CONTACT:

Uzoma Onyeije, Attorney-Advisor, Wireline Competition Bureau, at [phone] or via the Internet at [e-mail]. The complete text of this Memorandum Opinion and Order is available for inspection and copying during normal business hours in the FCC Reference Information Center, Portals II, 445 12th Street, SW, Room CY-A257, Washington, DC 20554. Further information may also be obtained by calling the Common Carrier Bureau's TTY number: [phone].

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Memorandum Opinion and Order (MO&O) in WC Docket No. 02-214, FCC 02-297, adopted October 30, 2002, and released October 30, 2002. This full text may be purchased from the Commission's duplicating contractor, Qualex International, Portals II, 445 12th Street, SW, Room CY-B402, Washington, DC 20554, telephone [phone], facsimile 202-863-2898, or via e-mail [e-mail]. It is also available on the Commission's Web site at http://www.fcc.gov/​Bureaus/​Wireline_​Competition/​in-regionapplications.

Synopsis of the Order

1. History of the Application. On August 1, 2002, Verizon filed an application pursuant to section 271 of the Telecommunications Act of 1996, with the Commission to provide in-region, interLATA service originating in the state of Virginia. Interested parties filed comments on August 21, 2002, and reply comments on September 12, 2002.

2. The State Commission's Evaluation. On March 15, 2002, Verizon made a compliance filing for section 271 approval with the Virginia Commission. On July 12, 2002, the Virginia Hearing Examiner issued a report recommending that the Virginia Commission “advise the FCC that this Commission supports granting Verizon authority to provide in-region interLATA services in Virginia.” On August 1, 2002, the Virginia Commission forwarded the Virginia Hearing Examiner's Report to this Commission, reporting on the Virginia Hearing Examiner's section 271 proceeding and urging the Commission to consider his recommendations and findings.

3. The Department of Justice's Evaluation. The Department of Justice filed its evaluation on September 5, 2002, concluding that Verizon has generally succeeded in opening its markets to competition in most respects. Accordingly, the Department of Justice recommends approval of Verizon's application for section 271 authority in Virginia.

4. Compliance with Section 271(c)(1)(A). The Commission concludes that Verizon demonstrates that it satisfies the requirements of section 271(c)(1)(A) based on the interconnection agreements it has implemented with competing carriers in Virginia. The record demonstrates that competitive LECs serve business and residential customers using predominantly their own facilities and represents an “actual commercial alternative” to Verizon in the state of Virginia.

Primary Issues in Dispute

5. State Consultation. The Commission finds that the Virginia Hearing Examiner's Report constitutes the Virginia Commission's consultation pursuant to section 271(d)(2)(B). In previous section 271 orders, the Commission has noted that the weight assigned to a state's consultative report is affected by the procedures that the state commission follows to render its report. Consistent with that, the Commission will accord some weight to the Virginia Hearing Examiner's Report, recognizing that the Virginia Commission established evidentiary procedures that provided an opportunity for parties to participate in hearings and offer comments.

6. Virginia Arbitration Proceeding. WorldCom challenges this application based, in large part, on issues arising from the Virginia Arbitration Order. WorldCom argues that Verizon is in non-compliance with section 271 because Verizon does not have interconnection agreements in Virginia that fully comply with the Act; Verizon's application was not complete when filed because Verizon had not memorialized the agreements required by the Virginia Arbitration Order prior to its filing of its section 271 application; and Verizon is not operationally ready to implement the decisions of the Virginia Arbitration Order. The Virginia Arbitration Order was released on July 17, 2002, and the parties to that proceeding have had the opportunity to review the Bureau's decision and to seek reconsideration of any items in dispute. Interested parties were also able to review the Bureau's decisions and familiarize themselves with the new offerings Verizon was required to make available in Virginia. For these reasons, the Commission finds that the circumstances present in this instance warrant waiver of our procedural requirements, and allow consideration of Verizon's finalized interconnection agreements.

7. Checklist Item 2—Unbundled Network Elements. Based on the record, we find that Verizon's Virginia UNE rates are just, reasonable, and nondiscriminatory as required by section 251(c)(3), and are based on cost plus a reasonable profit as required by section 252(d)(1). Thus, Verizon's Virginia UNE rates satisfy checklist item 2. The Commission has previously held that it will not conduct a de novo review of a state's pricing determinations and will reject an application only if either “basic TELRIC principles are violated or the state commission make clear errors in the actual findings on matters so substantial that the end result falls outside the range that a reasonable application of TELRIC principles would produce.”

8. The Commission finds that, while we have serious concerns as to whether the recurring rates established by the Virginia Commission in its state rate proceeding are TELRIC-compliant, Verizon's current recurring UNE rates in Virginia pass a benchmark comparison to New York UNE rates. The Commission confirms that it performs its benchmark analysis by aggregating non-loop rate elements. Although concerns were raised regarding Verizon's switching rate structure, the record does not support a finding that the Virginia Commission committed any clear error. Further, we reject challenges to Verizon's Virginia non-recurring charges and conclude that these rates also fall within the range of rates that a reasonable application of TELRIC principles would produce. Thus, we conclude that Verizon's Virginia UNE rates satisfy the requirements of checklist item 2.

9. Checklist Item 4—Unbundled Local Loops. Verizon demonstrates that it provides unbundled local loops in accordance with the requirements of section 271 and our rules, in that it provides “local loop transmission from the central office to the customer's premises, unbundled from local switching or other services.” More specifically, Verizon establishes that it provides access to loop make-up information in compliance with the UNE Remand Order and nondiscriminatory access to stand alone xDSL-capable loops and high-capacity loops. Also, Verizon provides voice grade loops, both as new loops and through hot-cut conversions, in a nondiscriminatory manner. Finally, Verizon has demonstrated that it has a line-sharing and line-splitting provisioning process that affords competitors nondiscriminatory access to these facilities.

12. Checklist Item 8—White Pages. Section 271(c)(2)(b)(viii) requires a BOC to provide “white page directory listings for customers of the other carrier's telephone exchange service.” A number of parties contend that Verizon does not provide directory listings to competing carriers with the same accuracy and reliability that it provides its own customers. Specifically, commenters argue that Verizon processing errors lead to lost and incorrect directory listings and that the listing verification process that Verizon has put in place in Virginia is inconsistent with the demands of section 271. The Commission concludes that Verizon provides sufficient tools and training for competitive LECs to review and correct errors in their directory listings prior to publication. In addition, it appears that the system modifications and processing changes have substantially increased the accuracy of the listings and significantly reduced the number of pre-production errors. Accordingly, the Commission finds that Verizon satisfies the requirements of checklist item 8.

Other Checklist Items

13. Checklist Item 1—Interconnection. Based on the evidence in the record, the Commission concludes that Verizon provides access and interconnection on terms and conditions that are just, reasonable and nondiscriminatory, in accordance with the requirements of section 251(c)(2) and as specified in section 271, and applied in the Commission's prior orders. Pursuant to this checklist item, Verizon must allow other carriers to interconnect their networks to its network for the mutual exchange of traffic, using any available method of interconnection at any available point in Verizon's network. Verizon's performance generally satisfies the applicable benchmark or retail comparison standards for this checklist item.

14. Checklist Item 5—Unbundled Local Transport. A BOC must demonstrate that it provides nondiscriminatory access to network elements in a manner that allows requesting carriers to combine such elements and that the BOC does not separate already-combined elements, except at the specific request of the competitive carrier. Based upon the evidence in the record, the Commission concludes that Verizon has demonstrated that it provides nondiscriminatory access to network element combinations as required by the Act and its rules.

15. Checklist Item 6—Unbundled Local Switching. Section 271(c)(2)(B)(vi) of the Act requires that a BOC provide “[l]ocal switching unbundled from transport, local loop transmission, or other services.” Based on the record in this proceeding, the Commission concludes that Verizon has demonstrated that it satisfies the requirements of this checklist item in Virginia.

16. Checklist Item 7—911/E911 Access Services. Section 271(c)(2)(B)(vii) of the Act requires a BOC to provide “[n]on-discriminatory access to * * * E911 services.” Based on the record before it, the Commission concludes that Verizon has demonstrated that it provides nondiscriminatory access to E911 services and databases using the same checklist-compliant processes and procedures that it uses in its section 271-approved states.

17. Checklist Item 11—Number Portability. Section 271(c)(2)(B) of the Act requires a BOC to comply with the number portability regulations adopted by the Commission pursuant to section 251. Section 251(b)(2) requires all LECs “to provide, to the extent technically feasible, number portability in accordance with requirements prescribed by the Commission.” Based on the evidence in the record, it concludes that Verizon complies with the requirements of checklist item 11.

18. Remaining Checklist Items—3, 9, 10, 12, 13, and 14. In addition to showing that it is in compliance with the requirements discussed above, an applicant under section 271 must demonstrate that it complies with checklist item 3 (access to poles, ducts, and conduits), item 9 (numbering administration), item 10 (databases and associated signaling), item 12 (local dialing parity), item 13 (reciprocal compensation), and item 14 (resale). Based on the evidence in the record, the Commission concludes that Verizon demonstrates that it is in compliance with checklist items 3, 9, 10, 12, 13, and 14, in Virginia.

19. Section 272 Compliance. Based on the record, Verizon provides evidence that it maintains the same structural separation and nondiscrimination safeguards in Virginia as it does in New Jersey, Connecticut, Maine, Pennsylvania, Rhode Island, Vermont, New York, Connecticut, and Massachusetts—where Verizon has already received section 271 authority. Therefore, the Commission concludes that Verizon has demonstrated that it is in compliance with the requirements of section 272.

20. Public Interest Analysis. The Commission concludes that approval of this application is consistent with the public interest. From its extensive review of the competitive checklist, which embodies the critical elements of market entry under the Act, the Commission finds that barriers to competitive entry in Virginia's local exchange market have been removed, and that the local exchange market is open to competition. It further finds that the record confirms the Commission's 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.

21. Section 271(d)(6) Enforcement Authority. Working with Virginia Commission, the Commission intends to closely monitor Verizon's post-approval compliance to ensure that Verizon continues to meet the conditions required for section 271 approval. It stands ready to exercise its various statutory enforcement powers quickly and decisively in appropriate circumstances to ensure that the local market remains open in each of the states.

Federal Communications Commission.

Marlene H. Dortch,

Secretary.