03-7332. Application by Verizon Maryland Inc., Verizon Washington, D.C. Inc., West Virginia Inc., Bell Atlantic Communications, Inc. (d/b/a Verizon Long Distance), NYNEX Long Distance Company (d/b/a Verizon Enterprise Solutions), Verizon Global ...

AGENCY:

Federal Communications Commission.

ACTION:

Notice.

SUMMARY:

In the document, the Federal Communications Commission (Commission) grants the section 271 application of Verizon Maryland Inc., Verizon Washington, DC Inc., West Virginia Inc., Bell Atlantic Communications, Inc. (d/b/a Verizon Long Distance), NYNEX Long Distance Company (d/b/a Verizon Enterprise Solutions), Verizon Global Networks Inc., and Verizon Select Services Inc., for authority to enter the interLATA telecommunications market in Maryland, Washington, DC, and West 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 March 31, 2003.

FOR FURTHER INFORMATION CONTACT:

Gail Cohen, Senior Economist, 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 Wireline Competition Bureau's TTY number: [phone].

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Memorandum Opinion and Order in WC Docket No. 02-384, FCC 03-57, adopted March 18, 2003, and released March 19, 2003. The full text of this order 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-region_applications.

Synopsis of the Order

1. History of the Application. On December 19, 2002, Verizon filed an application pursuant to section 271 of the Telecommunications Act of 1996, with the Commission to provide in-region, interLATA service in the states of Maryland, and West Virginia, and the District of Columbia (Washington, DC).

2. The State Commissions' Evaluations. The Maryland Public Service Commission (Maryland Commission), the District of Columbia Public Service Commission (DC Commission), and the West Virginia Public Service Commission (West Virginia Commission), following an extensive review process, advised the Commission that Verizon has taken the statutorily required steps to open it local markets in each state to competition. Consequently, the state commissions recommended that the Commission approve Verizon's in-region, interLATA entry in their evaluations and comments in this proceeding.

3. The Department of Justice's Evaluation. The Department of Justice filed its evaluation on January 27, 2003, recommending approval of the application, subject to the resolution of questions regarding Verizon's checklist compliance for certain pricing and directory assistance issues. Accordingly, the Department of Justice recommends approval of Verizon's application for section 271 authority in Maryland, Washington, DC, and West Virginia.

Primary Issues in Dispute

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 Maryland, Washington, DC, and West Virginia. The record shows that Verizon relies on interconnection agreements with AT&T, Comcast, eLEC, FiberNet, Starpower, and StratusWave in support of this showing.

5. Checklist Item 2—Unbundled Network Elements. Based on the record, the Commission finds that Verizon has provided “nondiscriminatory access to network elements in accordance with the requirements of sections 251(c)(3) and 252(d)(1)” of the Act in compliance with checklist item 2.

6. Operating Support Systems (OSS). Based on the record, the Commission finds that Verizon provides “nondiscriminatory access to network elements in accordance with the requirements of sections 251(c)(3) and 252(d)(1)” of the Act in compliance with checklist item 2. The Commission finds that Verizon provides non-discriminatory access to its OSS—the systems, databases, and personnel necessary to support network elements or services. Nondiscriminatory access to OSS ensures that new entrants have the ability to order service for their customers and communicate effectively with Verizon regarding basic activities such as placing orders and providing maintenance and repair services for customers. The Commission finds that, for each of the primary OSS functions (pre-ordering, ordering, provisioning, maintenance and repair, and billing, as well as change management), Verizon provides access to its OSS in a manner that enables competing carriers to perform the functions in substantially the same time and manner as Verizon does or, if no appropriate retail analogue exists within Verizon's systems, in a manner that permits competitors a meaningful opportunity to compete. In addition, regarding specific areas where the Commission identifies issues with Verizon's OSS performance in the application states, these problems are not sufficient to warrant a finding of checklist noncompliance.

7. UNE Combinations. Pursuant to section 271(c)(2)(B)(ii) 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 competing carrier. The Commission concludes, based on the performance data in the record, that Verizon meets its obligation to provide access to UNE combinations in compliance with the Commission's rules.

8. Pricing of Unbundled Network Elements. Based on the record, we find that Verizon's UNE rates in Maryland, Washington, DC, and West Virginia 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 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 makes 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.”

9. The Commission finds that, while Verizon's current recurring UNE rates were not established via state rate proceedings that applied TELRIC principles, the recurring UNE rates in all three jurisdictions are TELRIC-compliant based on a benchmark comparison to Verizon's New York UNE rates. The Commission concludes that Verizon's current loop provisioning policy does not preclude us from finding that Verizon's loop rates in these states are TELRIC-compliant based on a benchmark comparison. In addition, the Commission confirms that it performs its benchmark analysis by aggregating non-loop rate elements. Thus, we conclude that Verizon's UNE rates in Maryland, Washington, DC, and West Virginia satisfy the requirements of checklist item 2.

10. Checklist Item 12—Dialing Parity. Based on the evidence in the record, the Commission finds that Verizon provides local dialing parity in accordance with the Commission's rules. No commenter challenges Verizon's provision of dialing parity in Maryland or Washington, DC. However, FiberNet claims that in West Virginia local dialing parity is not achieved in certain locations where an extended area service (EAS) crosses LATA and state boundaries. The Commission concludes that Verizon complies with our dialing parity rules and that our rules implementing 251(b)(3) do not require Verizon to develop interconnections arrangements for facilities-based competitive LECs with third-party carriers.

11. 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. Verizon also demonstrates that it offers interconnection in Maryland, Washington, DC, and West Virginia to other telecommunications carriers at just, reasonable, and nondiscriminatory rates, in compliance with checklist item 1.

Other Items in Dispute

12. 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.” The Commission's conclusions are based on Verizon's performance for all loop types, which include, as in past section 271 orders, voice grade loops, hot cut provisioning, xDSL-capable loops, digital loops, high capacity loops, as well as our review of Verizon's processes for line sharing and line splitting.

13. Checklist Item 7—911-E911 Access & Directory Assistance/Operator Services. Section 271(c)(2)(B)(vii)(I), (II), and (III) require a BOC to provide nondiscriminatory access to “911 and E911 services,” “directory assistance services to allow the other carrier's customers to obtain telephone numbers” and “operator call completion services,” respectively. Additionally, section 251(b)(3) of the 1996 Act imposes on each LEC “the duty to permit all [competing providers of telephone exchange service and telephone toll service] to have nondiscriminatory access to “* * * operator services, directory assistance, and directory listing with no unreasonable dialing delays.” Based on the evidence in the record, the Commission concludes that Verizon offers nondiscriminatory access to its 911-E911 databases, operator services (OS), and directory assistance (DA).

14. Checklist Item 8—White Pages. Section 271(c)(2)(B)(viii) of the Act requires a BOC to provide “[w]hite page directory listings for customers of the other carrier's telephone exchange service.” The Commission has previously found that a BOC satisfies the requirements of checklist item 8 by demonstrating that it: (1) Provides nondiscriminatory appearance and integration of white page directory listings to competitive LECs' customers; and (2) provides white page listings for competitors' customers with the same accuracy and reliability that it provides its own customers. Based on the evidence in the record, the Commission concludes that Verizon satisfies checklist item 8.

15. Checklist Item 10—Databases and Associated Signaling. Section 271(c)(2)(B)(x) of the Act requires a BOC to provide “nondiscriminatory access to databases and associated signaling necessary for call routing and completion.” Based on the evidence in the record, the Commission finds that Verizon provides nondiscriminatory access to databases and signaling networks in the application states.

16. Checklist Item 11—Local Number Portability. 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, the Commission finds that Verizon complies with the requirements of checklist item 11.

17. Checklist Item 13—Reciprocal Compensation. Section 271(c)(2)(B)(xiii) of the Act requires BOCs to enter into “[r]eciprocal compensation arrangements in accordance with the requirements of section 252(d)(2).” In turn, section 252(d)(2)(A) specifies the conditions necessary for a state commission to find that the terms and conditions for reciprocal compensation are just and reasonable. The Commission concludes that Verizon provides reciprocal compensation as required by checklist item 13.

18. Checklist Item 14—Resale. Section 271(c)(2)(B)(xiv) of the Act requires that a BOC make “telecommunications services * * * available for resale in accordance with the requirements of section 251(c)(4) and section 252(d)(3).” Based on the record in this proceeding, the Commission concludes as that Verizon satisfies the requirements of this checklist item. Verizon has demonstrated that it has satisfied its legal obligation to make retail telecommunications services available for resale to competitive LECs at wholesale rates.

19. Remaining Checklist items (3, 5, 6 and 9). 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 5 (unbundled transport), item 6 (local switching unbundled from transport), and item 9 (numbering administration). Based on the evidence in the record, the Commission concludes that Verizon demonstrates that it is in compliance with the requirements of these checklist items. It notes that no party objects to Verizon's compliance with these checklist items (other than checklist item 5, which is addressed as part of checklist item 4).

20. Section 272 Compliance. Based on the record, Verizon provides evidence that it maintains the same structural separation and nondiscrimination safeguards in the application states as it does in Virginia, New Jersey, Connecticut, Maine, Pennsylvania, Rhode Island, Vermont, New York, Connecticut, and Massachusetts—where Verizon has already received section 271 authority. Based on the record before us, we conclude that Verizon has demonstrated that it will comply with the requirements of section 272.

21. 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, we find that barriers to competitive entry in the local exchange markets have been removed and the local exchange markets in Maryland, Washington, DC and West Virginia are open to competition. The Commission further finds that, as noted in prior section 271 orders, 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. Verizon demonstrates that there is significant local competition in Maryland, Washington, DC and West Virginia and that Verizon's local market will remain open to competition, and that section 271 approval would enhance local and long distance competition in Maryland, Washington, DC and West Virginia.

22. Section 271(d)(6) Enforcement Authority. Working with each of the state commissions, 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.