[Federal Register: September 2, 2003 (Volume 68, Number 169)]
[Rules and Regulations]
[Page 52275-52306]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr02se03-24]
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Part II
Federal Communications Commission
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47 CFR Part 51
Review of the Section 251 Unbundling Obligations of Incumbent Local
Exchange Carriers; Implementation of the Local Competition Provisions
of the Telecommunications Act of 1996; Deployment of Wireline Services
Offering Advanced Telecommunications Capability; Final Rule and
Proposed Rule
[[Page 52276]]
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FEDERAL COMMUNICATIONS COMMISSION
47 CFR Part 51
[CC Docket Nos. 01-338; CC Docket No. 96-98; CC Docket No. 98-147; FCC
03-36]
Review of the Section 251 Unbundling Obligations of Incumbent
Local Exchange Carriers; Implementation of the Local Competition
Provisions of the Telecommunications Act of 1996; Deployment of
Wireline Services Offering Advanced Telecommunications Capability
AGENCY: Federal Communications Commission.
ACTION: Final rule.
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SUMMARY: In this document, the Federal Communications Commission
(Commission) adopts rules which establish a new standard for
determining the existence of impairment under section 251(d)(2) of the
Act, sets forth a new list of unbundled network elements (UNEs), and
creates a specifically defined role for the states in the unbundling
inquiry. The new interpretation of the ``impair'' standard in section
251(d)(2) finds a requesting carrier to be impaired when lack of access
to a facility in the incumbent LEC's network poses a barrier or
barriers to entry, including operational and economic barriers, that
are likely to make entry into a market uneconomic. The Commission
reaffirms that the ``at a minimum'' language of section 251(d)(2)
permits the Commission to take into account factors other than the
``impair'' and ``necessary'' standards, particularly important goals of
the 1996 Act, when making unbundling determinations. The Commission
applies its unbundling analysis to individual elements in a more
granular manner than before. Under this more granular approach, the
Commission determines whether impairment varies by geographic location,
customer class, and service, including a consideration of the type and
capacity of the facilities to be used.
DATES: Effective October 2, 2003.
FOR FURTHER INFORMATION CONTACT: Jeremy Miller, Attorney-Advisor,
Wireline Competition Bureau, at (202) 418-1580 or via the Internet at
jmiller@fcc.gov. The complete text of this Report and Order and Order
on Remand 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: (202) 418-0484.
SUPPLEMENTARY INFORMATION: This is a summary of the Commission's Report
and Order and Order on Remand in CC Docket No. 01-338, CC Docket No.
96-98, and CC Docket No. 98-147; FCC 03-36, adopted February 20, 2003,
and released August 21, 2003. The full text of this document may be
purchased from the Commission's duplicating contractor, Qualex
International, Portals II, 445 12th Street, SW., Room CY-B402,
Washington, DC 20554, telephone (202) 863-2893, facsimile (202) 863-
2898, or via e-mail qualexint@aol.com. It is also available on the
Commission's Web site at http://www.fcc.gov/Bureaus/ Wireline--
Competition/in-region--applications.
Synopsis of the Report and Order and Order on Remand
1. Background. In the Notice of Proposed Rulemaking (NPRM) (67 FR
1947, Jan. 15, 2002), the Commission sought comment on many issues
concerning the unbundling obligations of incumbent local exchange
carriers (LECs) under section 251(c)(3) of the Communications Act of
1934, as amended by the Telecommunications Act of 1996 (the Act). After
the Commission issued the NPRM, the United States Court of Appeals for
the District of Columbia Circuit issued its opinion in United States
Telecom Association v. FCC (USTA), in which it vacated and remanded the
Commission's prior unbundling rules. The Commission issues this Report
and Order and Order on Remand (Order) to complete the rulemaking it
began with the NPRM and respond to the D.C. Circuit's concerns
regarding the prior rules.
2. Section 251(c)(3) of the Act requires that incumbent LECs
provide UNEs to other telecommunications carriers. Section 153(29) of
the Act defines ``network element'' as ``a facility or equipment used
in the provision of a telecommunications service,'' specifying that
``[s]uch term also includes features, functions, and capabilities that
are provided by means of such facility or equipment, including
subscriber numbers, databases, signaling systems, and information
sufficient for billing and collection or used in the transmission,
routing, or other provisions of a telecommunications service.'' Section
251(d)(2) of the Act establishes a general federal standard for use in
determining the UNEs that must be made available by the incumbent LECs
pursuant to section 251. Section 251(d)(2) provides that ``[i]n
determining what network elements should be made available for purposes
of section (c)(3), the Commission shall consider, at a minimum, whether
`` (A) access to such network elements as are proprietary in nature is
necessary; and (B) the failure to provide access to such network
elements would impair the ability of the telecommunications carrier
seeking access to provide the services that it seeks to offer.''
3. In addition, the Act preserves a state role in addressing
unbundling issues. First, section 252 authorizes states to review and
to arbitrate interconnection agreements for compliance with the
requirements of sections 251 and 252 and this Commission's implementing
rules. Second, section 251(d)(3) also preserves states' independent
state law authority to address unbundling issues to the extent that the
exercise of that authority does not conflict with federal law.
4. Definition of Network Element. The Commission interprets the
definition of ``network element'' in section 153(29) to refer to an
element of the incumbent's network that is capable of being used to
provide a telecommunications service.
5. Impair Standard. The Commission finds a requesting carrier to be
``impaired'' under section 251(d)(2) when lack of access to an
incumbent LEC network element poses a barrier or barriers to entry,
including operational and economic barriers, that are likely to make
entry into a market uneconomic. This granular analysis is informed by
consideration of the relevant barriers to entry, as well as a careful
examination of the evidence, especially marketplace evidence showing
whether entry has already occurred in particular markets without
reliance on the incumbent LEC's networks but instead through self-
provisioning or reliance on third-party sources.
6. Several types of barriers to entry inform the ``impair''
analysis. Scale economies, particularly when combined with sunk costs
and first mover advantages, can pose a powerful barrier to entry. The
Commission will consider the pervasiveness of scale economies to
determine whether, in combination with other factors, they are likely
to make entry uneconomic. For similar reasons, the Commission also
examines scope economies to determine whether they, too, could
contribute to a barrier to entry. Sunk costs, particularly when
combined with scale economies, can pose a formidable barrier to entry.
First mover advantages can contribute to the factors described above.
First mover advantages can include preferential access to buildings,
access to rights of way, the higher risk of a new entrants'
[[Page 52277]]
failure (often exacerbated by high sunk costs), the fact that the
incumbent LEC has substantial sunk capacity, operational difficulties
faced by an entrant that have already been worked out by the incumbent
LEC when it built out its network as a monopolist, consumers'
reluctance to switch carriers, and advertising and brand name
preference. The Commission also examines those barriers to entry that
are solely or primarily within the control of the incumbent LEC. The
Commission looks to these barriers because it is within the control of
the incumbent LEC to eliminate them or mitigate their effects, which
could eliminate the need to unbundle network elements to overcome them.
7. Evidence of Impairment. Actual marketplace evidence is the most
persuasive and useful kind of evidence submitted to show that
impairment does not exist, in particular granular evidence that new
entrants are providing retail services in the relevant market using
non-incumbent LEC facilities. The Commission gives substantial weight
to evidence of alternative deployment, but will not find it conclusive
or presumptive of no impairment without additional information. On the
other hand, if the marketplace evidence shows that new entrants have
not widely deployed a particular kind of facility, the Commission will
consider the facts as some evidence that barriers to entry in that
market for that element are preventing the deployment, but will not
presume from lack of entry or lack of deployment, however, that there
are barriers to entry in the relevant market, or that any barriers
cannot be overcome through means other than unbundling without further
analysis. The Commission also gives weight to evidence that intermodal
alternatives can be used to provide telecommunications service.
8. The application of the ``impair'' standard does not change
depending on whether a new entrant is providing retail or wholesale
services. The Commission also reaffirms its prior conclusion in the UNE
Remand Order, 65 FR 2367 (Jan. 14, 2000) to afford little weight to
evidence that requesting carriers are using incumbent LEC tariffed
services.
9. Granularity of the Impairment Analysis. In the NPRM, the
Commission asked many questions about whether and how to make the
unbundling analysis more granular by considering such factors as
specific services, specific geographic locations, the different types
and capacities of facilities, and customer and business considerations.
Subsequently, the USTA decision directed the Commission to approach the
section 251(d)(2) impairment analysis by considering market-specific
variations in impairment. The Commission applies several types of
granularity in the unbundling analysis, including considerations of
customer class, geography, and service. In addition, within discussions
of specific network elements, the Commission injects granularity into
the analysis by considering types and capacities of facilities.
10. In particular, with regard to customer class, the Commission
finds that the economic characteristics of the mass market and
enterprise market can be sufficiently different that they constitute
major market segments. With regard to geographic granularity, the
Commission considers whether impairment varies geographically
throughout the country. In those instances where the record permits the
Commission to create unbundling rules that apply nationally, it does
so. In other instances, the Commission may delegate authority to state
commissions to ensure that the unbundling rules are implemented on the
most accurate level possible while still preserving administrative
practicality.
11. Finally, with regard to the different services that competitors
may wish to offer using UNEs, the Commission adopts an approach that
obligates incumbent LECs to provide access to UNEs only when requesting
carriers seek to use those elements to compete against those services
that traditionally have been the exclusive domain of incumbent LECs, or
``qualifying services.'' ``Qualifying services'' include, for example,
local exchange service, such as POTS, and access services, such as
special access using high-capacity circuits. Once a requesting carrier
has obtained access to a UNE to provide a ``qualifying service,'' the
carrier may use that UNE to provide any additional services, including
non-qualifying telecommunications and information services. In order to
gain access to a UNE under section 251(c)(3), a requesting carrier must
provide a ``telecommunications service,'' and specifically a qualifying
telecommunications service, over that UNE. The Commission has
interpreted ``telecommunications services'' to mean services offered on
a common carrier basis.
12. Implicit Support Flows. In the USTA decision, the D.C. Circuit
addressed the question of implicit support flows and their relationship
to the Commission's decision making under section 251. The court
concluded, among other things, that the Commission had not adequately
explained its decision to adopt nationwide unbundling requirements in
light of the implicit support flows found in telecommunications rates.
In reaching this conclusion, the court expressed concerns about the
Commission's approach to unbundling both in areas where the incumbent
LEC's retail rates may exceed its costs (presumably referring to
historic costs) and in areas where incumbent LEC retail rates may be
below cost. By focusing on the economic and operational viability of
entry in different market segments, the revised impairment standard
addresses the issue of implicit support flows in a manner that is
responsive to the concerns raised by the D.C. Circuit. At the same
time, the Commission concludes that the statute is best interpreted as
giving it considerable discretion to address the relationship between
implicit support flows and its impairment analysis. In general terms,
the new impairment standard provides that a requesting carrier is
deemed to be impaired when lack of access to an incumbent LEC network
element poses a barrier or barriers to entry, including operational and
economic barriers, that are likely to make entry into a market
uneconomic. The impairment standard is unlikely to result in
unwarranted unbundling in the case of areas and services for which
local exchange rates generally exceed the incumbent LEC's costs. In
addition, were the impairment standard to require unbundling for
services and areas with ``below cost'' rates where actual competitive
entry does not take place, little harm would result. The statute
contains an exemption from the unbundling requirements for rural
carriers and provides for state modification or suspension of the
unbundling requirements for incumbent carriers serving, in the
aggregate, less than two percent of the nation's access lines. This
allows the states to prevent any problems that they believe might
result from unbundling requirements in these circumstances.
13. The ``Necessary'' Standard. Section 251(d)(2) requires the
Commission, in making its unbundling determination, to consider whether
``access to such network elements as are proprietary in nature is
necessary.'' The Commission determines to readopt the interpretation of
``necessary'' that it gave in the UNE Remand Order: a proprietary
network element is ``necessary'' if, taking into consideration the
availability of alternative elements outside the
[[Page 52278]]
incumbent's network, including self-provisioning by a requesting
carrier or acquiring an alternative from a third-party supplier, lack
of access to that element would, as a practical, economic, and
operational matter, preclude a requesting carrier from providing the
services it seeks to offer.
14. ``At a Minimum''. Section 251(d)(2) provides that ``the
Commission shall consider, at a minimum, whether * * * the failure to
provide access to such network elements would impair the ability of the
telecommunications carrier seeking access to provide the services that
it seeks to offer.'' While this phrase permits the Commission to take
factors other than ``necessary'' and ``impair'' into account in making
the unbundling determination, the Commission applies ``at a minimum''
with restraint. In this Order, the Commission has not required the
unbundling of any network element in the absence of impairment. But it
has used this authority to inform its consideration of unbundling in
contexts where some level of impairment may exist, but unbundling
appeared likely to undermine important goals of the 1996 Act, such as
in the analyses of fiber-to-the-home and hybrid loops.
15. Role of the States. The 1996 Act--specifically sections
251(d)(3) and 252(e)(3)--preserves the states' authority to establish
unbundling regulations pursuant to state law as long as the exercise of
state authority does not conflict with the Act and its purposes or
substantially prevent the Commission's implementation. In addition,
sections 261(b) and (c) generally preserve state authority to take
action pursuant to state law, provided that such action is consistent
with the Act and the federal framework. The Communications Act assigns
the Commission the responsibility for establishing a framework to
implement the unbundling requirements of section 251(d)(2). In this
Order, the Commission creates rules for UNEs based on the impairment
standard and marketplace developments over the past three years. The
Commission recognizes that competition has evolved at a different pace
in different geographic markets and for different market segments.
Thus, to ensure that the proper degree of unbundling occurs, the
Commission relies, in certain instances when such analysis is
necessary, on market-by-market fact-finding determinations made by the
states.
16. While the Commission delegates to the states a role in the
implementation of the federal unbundling requirements for certain
network elements that require this more granular approach, the
Commission makes clear that any action taken by the states pursuant to
this delegated authority must be in conformance with the Act and the
regulations set forth herein. The Commission also finds that the 1996
Act preserved the states' authority to prescribe access obligations
pursuant to state law in section 251(d)(3), but only to the extent that
state laws or regulations do not conflict with or frustrate the Act and
its purposes or substantially prevent the federal implementation
regime.
17. If a state commission fails to perform the granular inquiry
this Commission delegates to it, any aggrieved party may petition this
Commission to step into the state's role. Any carrier seeking
Commission review of a state commission's failure to act shall file a
petition with this Commission that explains with specificity the bases
for the petition and information that supports the claim that the state
has failed to act. The Commission will issue a public notice seeking
comment on the petition and rule on the petition within ninety days
from this public notice. If the Commission agrees that the state has
failed to act, it will assume responsibility for the proceeding and
make any findings in accordance with the rules set forth herein. These
findings will be made nine months from the time the Commission has
assumed responsibility for the proceeding.
18. Parties that believe that a particular state unbundling
obligation (imposed pursuant to state law) is inconsistent with the
limits of section 251(d)(3)(B) and (C) may seek a declaratory ruling
from this Commission. If a decision pursuant to state law were to
require the unbundling of a network element for which the Commission
has either found no impairment--and thus has found that unbundling that
element would conflict with the limits in section 251(d)(2)--or
otherwise declined to require unbundling on a national basis, it is
unlikely that such decision would fail to conflict with, and thus would
``substantially prevent'' implementation of the federal regime, in
violation of section 251(d)(3)(C).
19. Mass Market Loops. The Commission finds that requesting
carriers are impaired on a national basis without unbundled access to
an incumbent LEC's local loops used to provide narrowband services to
the mass market. The Commission thus requires that incumbent LECs
provide unbundled access to the complete transmission path comprised of
a copper local loop between the central office and the customer's
premises, including all intermediate devices (e.g., repeaters, load
coils) used to establish the transmission path. This network element
includes all local loops comprised of copper cable, whether in active
service or deployed as spares. Incumbent LECs also must provide the
requesting carriers with nondiscriminatory access to the same detailed
loop information that is available to the incumbent LEC in the same
time intervals it is provided to the incumbent LEC's retail operations.
20. The Commission reaffirms the existing rules that require
incumbent LECs to permit competing carriers to engage in line splitting
where a competing carrier purchases the whole loop and provides its own
splitter. For purposes of clarity and regulatory certainty, however,
the Commission also adopts line splitting-specific rules, including the
requirement that incumbent LECs modify their OSS to facilitate line
splitting.
21. The Commission requires incumbent LECs to provide unbundled
access to their copper subloops, i.e., the distribution plant
consisting of the copper transmission facility between a remote
terminal and the customer's premises, including inside wire. To
facilitate competitive LEC access to the copper subloop UNE, the
Commission requires incumbent LECs to provide, upon a site-specific
request, access to the copper subloop at a splice near their remote
terminals. Unlike the Commission's previous subloop unbundling rules,
the Commission does not require incumbent LECs to provide unbundled
access to their feeder loop plant as stand-alone UNEs. The Commission
expects, however, that incumbent LECs will develop wholesale service
offerings for access to their fiber feeder, which would be subject to
sections 201 and 202 of the Act.
22. The Commission finds that unbundled access to conditioned,
stand-alone copper loops is sufficient to overcome impairment for the
provision of broadband services. Consequently, the Commission finds
that, subject to the grandfather provision and transition period,
incumbent LECs do not have to unbundle the high-frequency portion of
the local loop (HFPL) for requesting telecommunications carriers.
23. The Commission adopts an interim grandfathering rule to help
alleviate the impact of the elimination of the HFPL UNE on competitive
LECs and end user customers. Until the next biennial review, the
Commission grandfathers all existing line sharing arrangements unless
the respective competitive LEC discontinues providing
[[Page 52279]]
xDSL service to the particular end user customer. During this interim
period, the Commission directs incumbent LECs to charge the same price
for access to the HFPL for those grandfathered customers as the
incumbent LECs charged prior to the effective date of this Order.
24. The Commission also adopts a three-year transition period for
new line sharing arrangements of requesting carriers. During the first
year, which begins on the effective date of this Order, competitive
LECs may obtain new line sharing customers using the HFPL at recurring
charge equal to 25 percent of the state-approved rates or the agreed-
upon rates in existing interconnection agreements for stand-alone
copper loops for that location. During the second year, the recurring
charge for access to the HFPL for customers acquired after the
effective date of this Order will increase to 50 percent of the state-
approved rate or the agreed-upon rate in existing interconnection
agreements for a stand-alone copper loop for that location. In the last
year of the transition period, the recurring charge for access to the
HFPL for those customers obtained after the effective date of this
Order will increase to 75 percent of the state-approved rate or the
agreed-upon rate for a stand-alone loop for that location. After the
transition period, any new customer must be served through a line
splitting arrangement, through use of a stand-alone copper loop, or
through an arrangement that a competitive LEC has negotiated with the
incumbent LEC to replace line sharing. If line sharing obligations are
imposed by a state law decision after the effective date of this Order,
any party that believes such decision is inconsistent with the limits
of sections 251(d)(3)(B) and (C) may seek a declaratory ruling from
this Commission.
25. In addition, incumbent LECs are only required to provide access
to the HFPL if the incumbent LEC is providing, and continues to
provide, analog circuit-switched voiceband services on the loop over
which the requesting carriers seeks access to provide ADSL service. In
the event that the customer ceases purchasing voice service from the
incumbent LEC, either the new voice provider or the xDSL provider, or
both, must purchase the full stand-alone loop to continue providing
xDSL service. Incumbent LECs may also maintain control over the loop
and splitter equipment and functions.
26. The Commission concludes that the level of impairment without
access to fiber to the home (FTTH) loops varies depending on whether
such loops are new loops or replacements of a pre-existing copper
loops. The Commission does not require incumbent LECs to provide
unbundled access to new FTTH loops for either narrowband or broadband
services. Regarding ``overbuild'' deployment in which an incumbent LEC
constructs fiber transmission facilities parallel to or in replacement
of its existing copper plant, the Commission must ensure continued
access to an unbundled transmission path suitable for providing
narrowband services to customers served by FTTH loops. In this
situation, incumbent LECs have the option to either (1) keep the
existing copper loop connected to a particular customer location after
deploying FTTH; or (2) provide unbundled access to a 64 kbps
transmission path over its FTTH loop. Incumbent LECs do not have to
offer unbundled access to overbuilt fiber loops for competing carriers
to provide broadband services.
27. The Commission finds that a blanket prohibition on the ability
of incumbent LECs to retire any copper loops or subloops they have
replaced with FTTH loops is unnecessary at this time because existing
rules, with minor modifications, serve as adequate safeguards. Because
the retirement of copper loop plant is a network modification that
affects the ability of competitive LECs to provide service, the
Commission clarifies that incumbent LECs must provide notice of such
retirement in accordance with our rules. The Commission revises its
network modification rules with respect to the retirement of copper
loops to allow parties to file objections to the incumbent LEC's notice
of such retirement on the basis that competitors will be denied access
to the loop facilities required under our rules. This process does not
preempt the ability of any state commission to evaluate an incumbent
LEC's retirement of its copper loops to ensure that such retirement
complies with any applicable state requirements.
28. In making our unbundling determination for hybrid loops, the
Commission considers both impairment and, through our section 251(d)(2)
``at a minimum'' authority, additional factors. The Commission declines
to require incumbent LECs to unbundle the next-generation network,
packetized capabilities of their hybrid loops to enable requesting
carriers to provide broadband services to the mass market. The
Commission concludes that applying section 251(c) unbundling
obligations to these next-generation network elements would blunt the
deployment of advanced telecommunications infrastructure in direct
opposition to the express statutory goals authorized in section 706 of
the Telecommunications Act of 1996. Further, a primary benefit of
unbundling hybrid loops--to spur competitive deployment of broadband
services to the mass market--appears to be obviated to some degree by
the existence of cable broadband service competitors, which have a
leading position in the marketplace. The Commission thus does not
require incumbent LECs to unbundle any transmission path over a fiber
transmission facility between the central office and the customer's
premises (including fiber feeder plant) that is used to transmit
packetized information. Moreover, the Commission does not require
incumbent LECs to provide unbundled access to any electronics or other
equipment used to transmit packetized information over hybrid loops,
such as the xDSL-capable line cards installed in DLC systems or
equipment used to provide passive optical networking (PON) capabilities
to the mass market.
29. The Commission requires incumbent LECs to provide unbundled
access to the entire non-packetized transmission path capable of voice-
grade service between the central office and customer's premises. This
unbundling obligation for narrowband services is limited to the TDM-
based features, functions, and capabilities of these hybrid loops.
Incumbent LECs may elect, instead, to provide homerun copper loops
rather than a TDM-based narrowband pathway over their hybrid loop
facilities if the incumbent LEC has not removed such loop facilities.
The Commission further requires incumbent LECs to provide requesting
carriers access to a transmission path over hybrid loops served by
Integrated DLC systems.
30. The Commission retains competitive LECs' existing right to
obtain unbundled access to hybrid loops capable of providing DS1 and
DS3 service. Incumbent LECs remain obligated to comply with the
nondiscrimination requirements of section 251(c)(3) in their provision
of loops to requesting carriers, including stand-alone spare copper
loops, copper subloops, and the features, functions, and capabilities
for TDM-based services over their hybrid loops. The Commission
prohibits incumbent LECs from engineering the transmission capabilities
of their loops in a way that would disrupt or degrade the local loop
UNEs (either hybrid loops or stand-alone copper loops) provided to
competitive LECs.
[[Page 52280]]
31. Enterprise Market Loops. The Commission concludes that
different economic characteristics affect alternative loop deployment
according to whether the loop facility is dark fiber or ``lit'' fiber,
as well as the loop capacity level. The Commission finds that incumbent
LECs are no longer required to unbundle OCn loops, nationwide.
Incumbent LECs must continue to offer, on a nationwide basis, unbundled
access to dark fiber loops, DS3 loops (limited to two DS3 loops per
requesting carrier per customer location) and DS1 loops, except at
specified customer locations where state commissions have found no
impairment based on federally-defined triggers within nine months of
the effective date of this Order.
32. Specifically, a state commission must determine that unbundling
is no longer required at a specific customer location for dark fiber or
DS3 loops when two or more unaffiliated competitive LECs have self-
provisioned their own transmission facilities at the same loop capacity
level to that customer location. A state commission must determine that
unbundling is no longer required at a specific customer location for
DS3 loops or DS1 loops when two or more unaffiliated competitive
providers offer wholesale loops at the same capacity level to
competitive LECs at that customer location. State commissions have a
continuing responsibility to conduct periodic granular reviews of
impairment, which must be completed within six months of a petition to
initiate each subsequent review.
33. Subloops for Multiunit Premises Access. The Commission
concludes that competitive carriers are impaired on a nationwide basis
without access to unbundled subloops used to access customers in
multiunit premises. Based on evidence in the record, the barriers faced
by requesting carriers in accessing customers in multiunit premises are
not unique to customers typically associated with the enterprise market
residing in such premises but extend to all customers residing therein,
including residential or other tenants typically associated with the
mass market. Similarly, impairment is also not limited by the type or
capacity of the loop the requesting carrier will provide. The
Commission finds that incumbent LECs must offer unbundled access to
subloops necessary to access wiring at or near multiunit customer
premises, including the Inside Wire Subloop, i.e., all incumbent LEC
loop plant between the minimum point of entry (MPOE) at a multiunit
premise and the point of demarcation, regardless of the capacity level
or type of loop the requesting carrier will provision to its customer.
Unbundled access must be provided at any technically feasible
accessible terminal at or near the multiunit premise, including but not
limited to, a pole or pedestal, a network interface device (NID), the
MPOE, the single point of interconnection (SPOI) or a feeder
distribution interface. Upon notification by a requesting carrier that
interconnection at a multiunit premise is required through a SPOI, an
incumbent LEC is required to provide a SPOI at that multiunit premise
if the incumbent LEC owns, controls or leases the wiring at such
premise. A requesting carrier accessing a subloop on the incumbent
LEC's network side of the NID obtains the NID functionality as part of
that subloop.
34. Network Interface Device (NID). The Commission concludes that
the NID must remain available as a stand-alone unbundled network
element as the means to enable a competitive LEC to connect its loop to
customer premise inside wiring. The NID is the gateway to the consumer
and thus a key element to local competition. The record shows that the
NID may often be the only means through which a competitive LEC can
provide facilities-based service to customers, particularly those
located in multiunit premises. The NID is defined as any means of
interconnecting the incumbent LEC's loop distribution plant to wiring
at a customer premises location. Incumbent LECs must offer unbundled
access to the NID on a stand alone basis to carriers requesting only
stand-alone NID access. An incumbent LEC shall permit a requesting
carrier to connect its loop facilities through the incumbent LEC's NID.
35. Dedicated Transport. Pursuant to the approach of the NPRM, the
Commission adopts in this Order a more granular unbundling analysis for
transport facilities. See Review of the Section 251 Unbundling
Obligations of Incumbent Local Exchange Carriers, 67 FR 1947 (2002)
(proposed Jan. 15, 2002). As an initial matter, the Commission limits
its definition of the dedicated transport network element to only those
transmission facilities connecting incumbent LEC switches or wire
centers as this provides a reasonable interpretation of an incumbent
LEC's unbundling obligations. The Commission makes findings regarding
impairment by evaluating the attributes of each capacity of transport
and the effect of barriers to entry on each. It believes that its
analysis of transport will create market certainty and provide
incentives for competitive LECs to deploy and utilize alternate
facilities. Specifically, based on the evidence in the record, the
Commission makes the following determinations. First, due to the
ability to self-deploy or utilize unbundled dark fiber or multiple
unbundled DS3 circuits, the Commission finds on a national level that
requesting carriers are not impaired without access to unbundled OCn
transport facilities. Second, due to barriers to entry, including high
sunk costs, and the general lack of alternatives in most areas, it
finds on a national level that requesting carriers are impaired without
access to unbundled dark fiber, DS3, and DS1 transport facilities.
However, the record indicates that competitive dark fiber, DS3, and DS1
transport facilities are available on a wholesale basis in some areas,
and that competing carriers have deployed their own transport networks
in some areas. Because the record is not sufficiently detailed
concerning exactly where these facilities have been deployed, and
because the nature of transport facilities requires a highly granular
impairment analysis, the Commission establishes specific triggers for
states to apply in conducting such an analysis. It establishes two ways
for states to identify where requesting carriers are not impaired
without unbundled transport: (1) By identifying specific point-to-point
routes where carriers have the ability to use two or more alternatives
to the incumbent's network, or (2) by identifying specific point-to-
point routes where three or more competing carriers have self-deployed
transport facilities. The Commission delegates to state regulators the
authority to make findings of fact within the scope of these triggers
to identify on a more granular scale where carriers are not impaired
without access to incumbent LEC unbundled transport. In addition to
allowing a more precise finding of impairment, the Commission's
analysis provides a roadmap for deregulation where regulation does not
serve the goals of the Act.
36. Local Circuit Switching. The Commission finds that, on the
national level, competitive LECs are not impaired without access to
unbundled local circuit switching when serving DS1 enterprise
customers. DS1 enterprise customers are served using DS1 and above
capacity facilities, or served by a sufficient number of DS0 lines that
state commissions have determined they could be served using DS1 and
above capacity facilities. The record reveals widespread switch
deployment by competing carriers to serve the DS1 enterprise market and
[[Page 52281]]
establishes that, in most areas, competitive LECs can overcome barriers
to serving enterprise customers in an economic manner using their own
switching facilities in combination with unbundled loops. The
Commission recognizes, however, that in particular markets special
circumstances might give rise to impairment without access to unbundled
local circuit switching for carriers serving DS1 enterprise customers.
The Commission thus allows states 90 days from the effective date of
this Order to petition the Commission to waive the finding of no
impairment in individual markets based on specific operational and
economic factors. State commissions have a continuing responsibility to
conduct periodic reviews of impairment for carriers serving the DS1
enterprise market.
37. The Commission further concludes that, on the national level,
competitive LECs are impaired without access to unbundled local circuit
switching when serving mass market customers. The record indicates that
there has been only minimal deployment of competitive LEC-owned
switches to serve mass market customers, and that the characteristics
of the mass market give rise to significant barriers to competitive
LECs' use of self-provisioned switching to serve mass market customers.
In particular, inherent difficulties arise from the incumbent LEC hot
cut process for transferring DS0 loops, typically used to serve mass
market customers, to competing carriers' switches. This national
finding of impairment is subject to a more granular review by state
commissions within nine months of the effective date of this Order. The
state commission must find that competing LECs are not impaired in a
particular market if either of two triggers are met: (1) Three or more
competing carriers, unaffiliated with the incumbent carrier, each are
using their own switches to serve mass market customers in the market
or (2) two or more competing carriers, unaffiliated with the incumbent
carrier, offer wholesale local circuit switching to carriers serving
mass market customers in the market. If the triggers are not satisfied,
the state commissions shall examine evidence of the potential for
switch self-provisioning in the particular market, taking into account
current switch deployment, revenues, costs, processes, network
architecture, and the other factors that the Commission identified as
potentially giving rise to impairment. If a state commission makes a
finding of impairment in a particular market as a result of such a
review, it must consider whether this impairment could be addressed by
a narrower rule making unbundled switching temporarily available for a
minimum of 90 days for customer acquisition purposes, rather than
making unbundled switching available for an indefinite period of time.
State commissions have a continuing responsibility to conduct periodic
reviews of impairment for carriers serving the mass market.
38. The Commission also requires state commissions to take steps to
help mitigate the causes of impairment with respect to the mass market.
Specifically, within nine months of the effective date of this Order,
state commissions must approve and implement a seamless, low-cost
process for transferring large volumes of mass market customers or
issue detailed findings that such a ``batch cut'' process is
unnecessary in a particular market.
39. On an interim basis, pending state commission determinations
pursuant to the framework described above, the Commission retains the
rule that incumbent LECs are not obligated to provide unbundled local
circuit switching to requesting carriers for serving customers with
four or more DS0 loops in density zone one of the top fifty MSAs.
Retaining this rule on a temporary basis minimizes the potential
service disruptions that could occur from the changes adopted regarding
local circuit switching if carriers were free to accumulate more DS0
customers while states pursued their inquiries, only to risk losing
those customers after the states had made their determinations.
40. The Commission also establishes a transition plan to migrate
the embedded customer base served using unbundled switching to an
alternative service arrangement when unbundled local circuit switching
is no longer made available. Competitive carriers must transfer their
embedded base of enterprise customers to an alternative service
arrangement within 90 days from the end of the 90-day state commission
consideration period, unless a longer period is necessary to comply
with a ``change of law'' provision in an applicable interconnection
agreement.
41. To the extent a state commission finds that competing LECs are
not impaired without unbundled local circuit switching in serving mass
market customers in a particular market, the Commission requires mass
market carriers to commit to an implementation plan with the incumbent
LEC within 2 months from the finding of no impairment. Within 5 months
after a finding of no impairment, competitive LECs may no longer
request access to unbundled local circuit switching. Competitive LECs
are required to submit the necessary orders to transition their
embedded base of unbundled local circuit switching customers, except
rolling use customers, in accordance with the following schedule: (1)
13 months after a finding of no impairment: Each competitive LEC must
submit orders for one-third of all its unbundled local circuit
switching end users; (2) 20 months after a finding of no impairment:
Each competitive LEC must submit orders for half of its remaining
unbundled local circuit switching end users; and (3) 27 months after a
finding of no impairment: Each competitive LEC must submit orders for
its remaining unbundled local circuit switching end users.
42. Shared Transport. The Commission finds that shared transport
and switching are inextricably linked. Therefore, the Commission finds
that requesting carriers are impaired without access to unbundled
shared transport to the extent that they are impaired without access to
unbundled local circuit switching. Thus, state commissions in
identifying impairment for unbundled circuit switching should also
incorporate into their analyses the economic characteristics of shared
transport.
43. Packet Switching. Incumbent LECs are not required to unbundle
packet switching, including routers and DSLAMs, as a stand-alone
network element. The Order eliminates the current limited requirement
for unbundling of packet switching.
44. Signaling Networks. The Commission finds that, in the instances
in which incumbent LECs will be required to provide access to switching
as a UNE, carriers purchasing the switching UNE must also gain access
to incumbent LEC signaling. In all other cases, however, the Commission
determines that there are sufficient alternatives in the market
available and competitive LECs are no longer impaired without access to
signaling networks as UNEs for all markets. The Commission concludes
that, in the last several years, the market for signaling networks has
matured. The Commission explains that multiple alternative providers
are available to provide rival signaling services to competitive LECs,
and that several competitive carriers are building their own signaling
network capabilities. Accordingly, the Commission finds that, for
competitive carriers deploying their own switches, there are no
barriers to obtaining signaling or self-provisioning signaling
[[Page 52282]]
capabilities. The Commission further finds that the appropriate level
of granularity for its analysis to be at the national level and its
conclusions apply equally to the mass market and the enterprise market.
45. Call-Related Databases. The Commission finds that, competitive
carriers deploying their own switches are not impaired in any market
without access to incumbent LEC call-related databases, with the
exception of the 911 and E911 databases. The Commission concludes that,
for carriers deploying their own switches, there is evidence in the
record of substantial numbers of competitive suppliers that competitive
LECs can reliably utilize as an alternative to the incumbent LECs'
services. In such instances where switching remains a UNE, however, the
Commission finds that competitive carriers purchasing the switching UNE
must be able to have access to signaling and the call-related databases
that the signaling networks permit carriers to access, and if the
incumbent LEC does not provide customized routing, to operator service
and directory assistance. As with signaling, the Commission finds that
the appropriate level of granularity for its analysis to be at the
national level. The alternative call-related database networks are
national and regional networks that competitive LECs will be able to
use throughout the country. In addition, the Commission states that its
conclusions apply equally to the mass market and the enterprise market.
46. With regard to the specific call-related databases, the
Commission finds that carriers deploying their own switches are not
impaired without access to the incumbent LECs' CNAM and LIDB databases.
The Commission concludes that carriers can either self provision or use
alternative providers to obtain CNAM and LIDB database services. The
Commission similarly concludes that carriers deploying their own
switches are not impaired without access to the Toll-Free and LNP
databases. Like CNAM and LIDB, the Commission determines that there are
third-party vendors available to provide competitive carriers access to
Toll-Free and LNP databases. With regard to AIN databases, the
Commission also concludes that competitive carriers are no longer
impaired without unbundled access to those databases if the carrier
deploys its own switches. However, the Commission determines that all
competitive carriers continue to be impaired on a national basis
without access to the 911 and E911 databases and, therefore, the
Commission requires that access to those databases continue to be
unbundled.
47. OSS Functions. The Commission finds that competitive LECs
providing qualifying services continue to be impaired on a national
basis without access to OSS functions, including: pre-ordering,
ordering, provisioning, maintenance and repair, and billing functions
supported by an incumbent LEC's databases and information. Accordingly,
the Commission requires incumbent LECs to continue to provide unbundled
access to OSS. The Commission states that this requirement includes an
ongoing obligation on the incumbent LECs to make modifications to
existing OSS as necessary to offer competitive carriers
nondiscriminatory access and to ensure that the incumbent LEC complies
with all of its network element, resale and interconnection obligations
in a nondiscriminatory manner. In reaching this conclusion, the
Commission finds that the systems, databases, and personnel that the
incumbent LEC uses to provide OSS functions represent an extensive
infrastructure that would be difficult, if not impossible, for
competitors to duplicate. Accordingly, the Commission finds that
competitive LECs are impaired without access to incumbent LECs' OSS.
The Commission adopts an unbundling requirement for OSS functions on a
national basis that applies equally to the mass market and the
enterprise market.
48. Combinations of Network Elements. The Commission reaffirms its
existing rules requiring incumbent LECs to provide UNE combinations
upon request where such combinations are technically feasible and do
not undermine the ability of other carriers to access UNEs or
interconnect with the incumbent LEC's network, and prohibiting
incumbent LECs from separating UNE combinations that are ordinarily
combined except upon request. The Commission concludes that incumbent
LECs shall make UNE combinations, including unbundled loop-transport
combinations, available in all areas where the underlying UNEs are
available and in all instances where the requesting carrier meets the
applicable eligibility requirements. Apart from the applicable service
eligibility criteria for high-capacity circuits, incumbent LECs may not
impose additional conditions or limitations, such as pre-audits or a
requirement to purchase special access services which are subsequently
converted to UNE combinations, to obtaining access to EELs and other
UNE combinations.
49. The Commission concludes that requesting carriers are permitted
to commingle UNEs and combinations of UNEs with other wholesale
facilities and services obtained from an incumbent LEC. Incumbent LECs,
however, are not required to implement any changes to their systems to
bill a single circuit at multiple rates in order to charge competitive
LECs a single, blended rate.
50. The Commission concludes that competitive LECs may both convert
UNEs and UNE combinations to wholesale services and convert wholesale
services to UNEs and UNE combinations, so long as the competitive LEC
meets the applicable eligibility criteria. To the extent a competitive
LEC fails to meet the eligibility criteria for serving a particular
customer, the incumbent LEC may convert the UNE or UNE combination to
the equivalent wholesale service in accordance with the procedures
established between the parties.
51. The Commission declines to require incumbent LECs to provide
requesting carriers an opportunity to supersede or dissolve existing
contractual arrangements governing loop-transport combinations. The
Commission concludes, however, that incumbent LECs may not assess
termination charges, re-connect and disconnect fees, or non-recurring
charges associated with establishing a service for the first time
because such charges deter legitimate conversions from wholesale
services to UNEs or UNE combinations and unjustly enrich an incumbent
LEC. Further, because incumbent LECs are never required to perform a
conversion in order to continue serving their own customers, the
Commission concludes that such charges are inconsistent with an
incumbent LEC's duty to provide nondiscriminatory access to UNEs and
UNE combinations on just, reasonable, and nondiscriminatory rates,
terms, and conditions, and that such charges unlawfully subject
competitive LECs purchasing UNEs or UNE combinations to undue or
unreasonable prejudice or disadvantage.
52. Service Eligibility Criteria to Access UNEs. The Order
concludes that a carrier seeking access to an unbundled element of the
incumbent LEC's network must provide qualifying service to a customer
in order to obtain access to that facility pursuant to the Commission's
section 251 unbundling rules. With respect to combinations of high-
capacity (DS1 and DS3) loops and interoffice transport only, the
Commission adopts additional
[[Page 52283]]
eligibility criteria due to the potential for a provider of exclusively
non-qualifying service to obtain access to these combinations at UNE
prices.
53. The Commission does not, however, impose these additional
requirements on access to UNEs other than high-capacity EELs. To ensure
that the Commission's rules on service eligibility are not gamed in
whole or in part, the Commission makes clear that the service
eligibility criteria must be satisfied (1) to convert a special access
circuit to a high-capacity EEL; (2) to obtain a new high-capacity EEL;
or (3) to obtain at UNE pricing part of a high-capacity loop-transport
combination (commingled EEL).
54. Service Eligibility Criteria for High-Capacity EELs. The Order
concludes that where a requesting carrier satisfies the following three
categories of criteria, it is a bona fide provider of qualifying
services and thus is entitled to order high-capacity EELs. Requesting
carriers must certify to meeting all three criteria (authorization,
local number and E911 assignment, and architectural safeguards) to
qualify for the high-capacity circuit, subject to the separate
certification and auditing requirements.
55. First, the Commission finds that each requesting carrier must
have a state certification of authority to provide local voice service.
Second, to demonstrate that it actually provides a local voice service
to the customer over every DS1 circuit, the Commission finds that the
requesting carrier must have at least one local number assigned to each
circuit and must provide 911 or E911 capability to each circuit. To
ensure the legitimacy of these assignments, the origination and
termination of local voice traffic should not include a toll charge,
and should not require dialing special digits beyond those normally
required for a local voice call. Further, the Commission also clarifies
that each DS1-equivalent circuit of a DS3 EEL must have its own local
number assignment, so that each DS3 must have at least 28 local voice
numbers assigned to it.
56. Third, the Commission finds additional circuit-specific
architectural safeguards to prevent gaming are necessary. Each circuit
must terminate into a collocation governed by section 251(c)(6) at an
incumbent LEC central office within the same LATA as the customer
premises. In particular, for this collocation safeguard, the Order
finds that termination of a circuit into a section 251(c)(6)
collocation arrangement in an incumbent LEC central office is an
effective tool to prevent arbitrage, because collocation is a necessary
building block for providing local voice services and is traditionally
not used by interexchange carriers. More specifically, because
traditional interexchange configurations route long-distance traffic
from a customer premises over tariffed channel termination and
transport facilities directly to an interexchange point-of-presence, a
section 251(c)(6) collocation requirement ensures that a carrier has
set up an architecture that ensures that traffic can leave the
incumbent network prior to hitting the POP. As further evidence that a
carrier provides qualifying voice service, the collocation arrangement
must be within the same LATA as the customer premises. The Commission
determines that a requesting carrier can satisfy this prong through
reverse collocation, and that any non-incumbent LEC collocation
arrangement pursuant to section 251(c)(6) meets this test.
57. As an additional indicator of providing local voice service,
the Commission concludes that each EEL circuit must be served by an
interconnection trunk in the same LATA as the customer premises served
by the EEL, and that for every 24 DS1 EELs or the equivalent, the
requesting carrier must maintain at least one active DS1
interconnection trunk for the exchange of local voice traffic. As a
further safeguard against gaming, where a requesting carrier strips off
the calling party number on calls exchanged over the interconnection
trunk, that trunk shall not be counted towards meeting the trunk/EEL
ratio. The costs and difficulties of network configuration necessary to
satisfy the interconnection and collocation requirements minimize the
potential for these safeguards to be gamed; only a bona fide provider
of qualifying local services would undertake these measures, all of
which are a necessary precondition to compete directly against the
incumbent LEC's voice service. The 24-to-1 EEL to interconnection trunk
ratio provides a reliable gauge that the competitive LEC exchanges
local traffic with the incumbent LEC in a manner that indicates that it
is a bona fide provider of local voice service. The Commission finds
that this ratio therefore provides a reasonable proxy for the capacity
of interconnection that a bona fide provider of local voice service
competing against the incumbent LEC would require.
58. In addition, the Commission finds that each EEL circuit must be
served by a Class 5 switch or other switch capable of providing local
voice traffic. To ensure that the traffic carried over each EEL is not
exclusively non-local, a requesting carrier must certify that the
switching equipment is either registered as Class 5 or that it can
switch local voice traffic.
59. The Commission applies the service eligibility requirements on
a circuit-by-circuit basis, so each DS1 EEL (or combination of DS1 loop
with DS3 transport) must satisfy the service eligibility criteria. For
a requesting carrier to obtain a DS3 EEL as a UNE, the requesting
carrier must satisfy the criteria for service eligibility for the DS1-
equivalent circuit capacity of that DS3 EEL. The Commission is
persuaded that while no single requirement can prevent gaming, the
criteria the Commission adopts are collectively sufficient to restrict
the availability of these UNE combinations to legitimate providers of
local voice service.
60. Certification and Auditing. The Commission concludes that
requesting carriers may self-certify to satisfying the qualifying
service eligibility criteria for high-capacity EELs. The Order does not
specify the form for such a self-certification, but re-adopts the
Commission's prior findings that a letter sent to the incumbent LEC by
a requesting carrier is a practical method. The Order concludes that
incumbent LECs may obtain and pay for an independent auditor to audit,
on an annual basis, compliance with the qualifying service eligibility
criteria. The independent auditor must perform its evaluation in
accordance with the standards established by the American Institute for
Certified Public Accountants (AICPA), which will require the auditor to
perform an ``examination engagement'' and issue an opinion regarding
the requesting carrier's compliance with the qualifying service
eligibility criteria. To the extent the independent auditor's report
concludes that the competitive LEC failed to comply with the service
eligibility criteria, that carrier must true-up any difference in
payments, convert all noncompliant circuits to the appropriate service,
and make the correct payments on a going-forward basis.
61. In addition, to the extent the independent auditor's report
concludes that the competitive LEC failed to comply in all material
respects with the service eligibility criteria, the competitive LEC
must reimburse the incumbent LEC for the cost of the independent
auditor. Similarly, to the extent the independent auditor's report
concludes that the requesting carrier complied in all material respects
with the eligibility criteria, the incumbent LEC must reimburse the
audited carrier for its costs associated with the audit.
[[Page 52284]]
The Commission also expects that requesting carriers will maintain the
appropriate documentation to support their certifications.
62. Modification of Existing Network. The Commission concludes that
incumbent LECs must make routine network modifications to unbundled
transmission facilities used by requesting carriers where the requested
transmission facility has already been constructed, meaning that
incumbent LECs must perform those activities that incumbent LECs
regularly undertake for their own customers. Routine modifications,
however, do not include the construction of new wires for a requesting
carrier. The Commission finds that loop modification functions that the
incumbent LECs routinely perform for their own customers, and therefore
must perform for competitors, include rearrangement or splicing of
cable, and deploying a new multiplexer or reconfiguring an existing
multiplexer. The Commission also concludes that incumbent LECs must
provide access, on an unbundled basis, to xDSL-capable stand-alone
copper loops because competitive LECs are impaired without such loops.
Such access may require incumbent LECs to condition the local loop for
the provision of xDSL-capable services by removing bridge taps and
similar devices as part of this obligation. The Commission concludes
that incumbent LECs are not obligated to construct transmission
facilities so that requesting carriers can access them as UNEs at cost-
based rates. However, the Commission also clarifies that an incumbent
LEC's unbundling obligation includes all deployed transmission
facilities in its network, unless specifically exempted in the Order.
To ensure that no incumbent LEC is obligated to build out facilities at
TELRIC pricing, the Commission clarifies that the tariffed termination
liabilities for special construction apply to the conversion of special
access circuits built to customer specification.
63. Section 271 Issues. The Commission concludes that BOCs have an
independent obligation, under section 271(c)(2)(B), to provide access
to each network element on section 271's ``competitive checklist'' even
where that element is no longer required to be unbundled under section
251(c)(3). This conclusion follows from the plain language and
structure of section 271(c)(2)(B) and is a reasonable interpretation of
the Act. Sections 251, 252 and 271 do not establish standards for the
rates, terms and conditions of offerings pursuant to section
271(c)(2)(B) alone. Rather, the offering of such network elements is
governed by the just, reasonable and nondiscriminatory rate standards
of sections 201 and 202. The Commission further concludes that
following a grant of section 271 authorization, the BOC must continue
to comply with any conditions required for approval, subject to changes
in the law. It would be inconsistent with public policy to impose
different--and potentially out-of-date or vacated--rules on BOCs based
solely on the date of section 271 entry.
64. Clarification of TELRIC Rules. The Order clarifies two key
components of its TELRIC pricing rules to ensure that UNE prices send
appropriate economic signals to incumbent LECs and competitive LECs.
First, the Order clarifies that the risk-adjusted cost of capital used
in calculating UNE prices should reflect the risks associated with a
competitive market. The Order also reiterates the Commission's finding
from the Local Competition Order that the cost of capital may be
different for different UNEs. Second, the Order declines to mandate the
use of any particular set of asset lives for depreciation, but
clarifies that the use of an accelerated depreciation mechanism may
present a more accurate method of calculating economic depreciation. In
addition to these clarifications, the Order notes that the Commission
plans to open a proceeding to consider issues related to its TELRIC
pricing rules.
65. Fresh Look. The Commission retains the determination made in
the UNE Remand Order that it will not permit competitive LECs to avoid
any liability under contractual early termination clauses in the event
that it converts a special access circuit to a UNE. Although ``fresh
look'' has occurred in the past, this rare exercise of Commission
discretion is not appropriate here because it would be unfair to both
incumbent LECs and other competitors, disruptive to the market place,
and ultimately inconsistent with the public interest.
66. Transition Period. The Commission will not intervene in the
contract modification process to establish a specific transition period
for each of the rules established in this Order. Instead, as
contemplated in the Act, individual carriers will have the opportunity
to negotiate specific terms and conditions necessary to translate our
rules into the commercial environment, and to resolve disputes over any
new contract language arising from differing interpretations of our
rules.
67. Periodic Review of National Unbundling Rules. The Commission
will evaluate these rules consistent with the biennial review mechanism
established in section 11 of the Act. These reviews, however, will not
be performed de novo but according to the standards of the biennial
review process.
68. Duty to Negotiate in Good Faith. The Commission amends its
duty-to-negotiate rule 51.301(c)(8)(ii) to make the rule conform to the
text of the Local Competition Order.
Final Regulatory Flexibility Analysis
69. As required by the Regulatory Flexibility Act of 1980, as
amended (RFA), an Initial Regulatory Flexibility Analysis (IRFA) was
incorporated in the Federal Register summary of the NPRM. The
Commission sought written public comments on the proposals in the NPRM,
including comments on the IRFA. Comments addressed the proposals
contained in the NPRM, as well as the IRFA. This present Final
Regulatory Flexibility Analysis (FRFA) addresses comments on the IRFA
and conforms to the RFA.
Need for, and Objectives of, the Rules
70. This Order fulfills the commitment the Commission undertook in
its 1999 UNE Remand Order to reexamine, in three years, the list of
network elements that incumbent LECs must offer to competitors on an
unbundled basis, and responds to several significant judicial rulings
that have been issued since the Commission last conducted a
comprehensive review of its unbundling rules. More specifically, this
Order refines the ``impair'' standard set forth in section 251(d)(2) of
the Act, and applies the revised standard to an array of
``transmission'' and ``intelligence'' network elements. The revised
``impair'' standard is designed to reflect both the experience of the
local service market during the seven years since the Act's market-
opening provisions took effect and the legal guidance mentioned above.
Applying this standard, which pays special attention to the requesting
carrier's ability to self-provision the element or to obtain it from a
source other than the incumbent LEC, this Order adopts a list of
network elements that must be unbundled and sets forth the particular
circumstances in which unbundling will be required. The approach
adopted is substantially more granular than our earlier formulations of
the ``impair'' standard, accounting for considerations of customer
class, geography, and service. This Order also reaffirms a state
commission's authority to establish unbundling requirements, as long as
the unbundling obligations are consistent with the requirements of
section 251(d)(3) and do not
[[Page 52285]]
substantially prevent implementation of the requirements of that
section and the purposes of the Act, and authorizes state commissions
to make certain factual determinations necessary to implementation of
the granular analysis we adopt here.
Summary of Significant Issues Raised by the Public Comments in Response
to the IRFA
71. In this section, the Commission responds to various arguments
raised by TeleTruth, the National Federation of Independent Businesses
(NFIB), and the Office of Advocacy of the Small Business Administration
(SBA Advocacy) relating to the IRFA presented in the NPRM. It also
addresses concerns raised by Senator (then-Representative) James Talent
in a letter submitted in response to the UNE Remand Order, which was
later incorporated into this proceeding. To the extent the Commission
received comments raising general small business concerns during this
proceeding, those comments are discussed throughout the Order and are
summarized in Part X.A.5, below.
72. As an initial matter, the Commission rejects the contention
that it failed to consider the needs of small business customers of
competitive LECs in fashioning the analysis set forth in this Order. It
has grappled, throughout this proceeding and throughout this Order,
with the consequences our determinations will have on all market
participants, including small business providers and the small business
end users about which TeleTruth, NFIB, SBA Advocacy, and Senator Talent
express concern. The Commission has also considered various
alternatives to the rules it adopts, and has stated the reasons for
rejecting these alternative rules, as commenters have urged. A summary
of our analysis regarding small business concerns, and of alternative
rules that we considered in light of those concerns, is presented in
subsection 5 of the FRFA, infra.
73. Many of the complaints raised regarding the Commission's IRFA
hinge on the argument that in performing the analysis mandated by the
RFA, an agency must analyze the effects its proposed rules will have on
``customers'' of the entities it regulates. But as the courts have made
clear time and again, this is not the case. Indeed, the D.C. Circuit
``has consistently held that the RFA imposes no obligation to conduct a
small entity impact analysis of effects on entities which [the agency
conducting the analysis] does not regulate.'' Thus, the RFA imposes no
independent obligation to examine the effects an agency's action will
have on the customers of the companies it regulates unless those
customers are, themselves, subject to regulation by the agency. In any
event, as noted above, we have considered the needs of small business
customers of competitive (and incumbent) LECs throughout this Order.
Our analysis of small business concerns is summarized in Part X.A.5,
below.
74. TeleTruth argues that the Commission has taken inadequate steps
to notify small businesses of this and other proceedings, in violation
of the RFA. The Commission disagrees. The RFA requires the Commission
to ``assure that small entities have been given an opportunity to
participate in the rulemaking,'' and proposes as example five
``reasonable techniques'' that an agency might employ to do so. In this
proceeding, the Commission has employed several of these techniques: it
has published a ``notice of proposed rulemaking in publications likely
to be obtained by small entities''; has ``inclu[ded] * * * a statement
that the proposed rule may have a significant economic effect on a
substantial number of small entities'' in the NPRM; has solicited
comments over its computer network; and has acted ``to reduce the cost
or complexity of participation in the rulemaking by small entities''
by, among other things, facilitating electronic submission of comments.
The Commission thus concludes that it has satisfied its RFA obligation
to assure that small companies were able to participate in this
proceeding.
75. TeleTruth further contends that the Commission's IRFA was
flawed by its use of ``boilerplate'' language that differed little from
the language used in the IRFAs prepared for other proceedings. However,
the only language it cites does not even appear in the IRFA prepared
for this proceeding. Moreover, TeleTruth has suggested no reason why
the use of similar language in several proceedings is at all
problematic. Indeed, the particular language about which it complains
merely describes the ``number of telephone companies affected'' by a
given proceeding-- a class that is likely to differ little, if at all,
among industry-wide rulemakings such as this.
76. TeleTruth next complains that the IRFA used outdated census
data from 1992 in estimating the number of small businesses that might
be affected by the Commission's decisions here. While certain 1997
census data became available in late 2000 and were not incorporated
into the previous NPRM, this updating would not, we believe, have
affected a small entity's decisions concerning IRFA. This more recent
data are reflected in subsection 3 of the FRFA, infra.
77. TeleTruth also contends that ``[a] true IRFA analysis about
small business telecom competitors would conclude that the current FCC
is in violation of the Telecom Act and all of its provisions'' because
the Commission purportedly has failed to enforce its local competition
rules. Such an assertion falls outside the scope of this rulemaking
proceeding and our analysis herein. Complaints regarding carriers'
compliance with the Commission's Rules are properly addressed in other
venues. For example, section 208 of the Communications Act specifically
permits small businesses and other entities to lodge complaints
regarding other carriers' activities, and to seek enforcement of
Commission regulations. Also, to the extent an incumbent LEC's
obligations under section 251 are implemented through interconnection
agreements, those obligations are enforceable as a matter of contract
law through the courts.
78. TeleTruth next argues the RFA requires ``an impact study on how
[an agency's regulations] will harm small businesses,'' and that ``the
FCC has not done anything of the sort for this proceeding.'' The
Commission disagrees: the RFA requires us to provide precisely the
information contained in this FRFA, but does not mandate a separate
``impact study.'' The Commission has therefore satisfied its RFA
obligations.
79. In a letter challenging the UNE Remand Order, Senator Talent
argued that that Order violated section 3(a)(2)(C) of the Small
Business Act. Specifically, Senator Talent noted that the UNE Remand
Order differentiated between businesses that used fewer than four
access lines and those that used four or more lines, in contravention
of the Small Business Act's directive that ``unless specifically
authorized by statute, no Federal department or agency may prescribe a
size standard for categorizing a business concern as a small business
concern,'' unless certain procedural requirements are satisfied. In the
present Order, our action does not establish any special small business
size standard.
80. TeleTruth and Senator Talent suggest that section 257 of the
Act dictates a particular substantive result in this matter.
Specifically, TeleTruth claims that this ``Triennial Review is mandated
in Section [257(c)],'' and requires an outcome favorable to
entrepreneurs and small businesses. Senator Talent argued that in
limiting the class of elements subject to section
[[Page 52286]]
251(c), the UNE Remand Order ``erected a new barrier to entry'' by
small business carriers, and consequently violated section 257 of the
Communications Act. Section 257, however, did not mandate this
proceeding and in no way cabins this Commission's exercise of its
authority to adopt rules implementing the Act. Section 257 required the
Commission to conduct a proceeding designed to identify and eliminate
``market entry barriers for entrepreneurs and other small businesses in
the provision and ownership of telecommunications services and
information services'' within 15 months of the enactment of the 1996
Act, and periodically to review its regulations and report to Congress
on any such barriers. The Commission concluded the requisite proceeding
in 1997 and issued its first subsequent section 257 Report to Congress
in 2000. Thus, this proceeding is not mandated (or in any way governed)
by section 257. Rather, as described above, this Order fulfills the
Commission's commitment--set forth in the UNE Remand Order--to
reevaluate unbundling requirements, and responds to various judicial
rulings regarding those requirements.
81. TeleTruth, the NFIB, and SBA Advocacy caution that this Order
may stand in violation of Executive Order 13272. Setting aside the
question of whether a multi-member independent agency such as the FCC
must comply with that Executive Order, it notes that affected agencies
must: (1) Comply with the RFA, (2) give SBA Advocacy advanced notice of
any proposed rules that might substantially impact small businesses,
and (3) give ``appropriate consideration to'' and provide a written
response to ``any comments provided by'' SBA Advocacy. Here, the
Commission did send SBA Advocacy a copy of the published NPRM (which
pre-dated the Executive Order). Moreover, in this FRFA, we fully
satisfy our obligations under the RFA. Finally, we address SBA
Advocacy's other comments below. Therefore, this proceeding stands in
compliance with Executive Order 13272.
82. SBA Advocacy argues that the Commission's IRFA ``did not
consider the impact of delisting unbundled network elements * * * on
small competitive local exchange carriers.'' While SBA Advocacy
recommends that we issue a revised IRFA to account more fully for the
impact our rules might have on competitive LECs, it recognizes that we
might appropriately address any such impact in this FRFA instead. The
Commission has adopted the latter course. It notes that we have
considered the concerns of competitive LECs throughout this Order, and
those considerations are summarized in Part X.A.5, below. Moreover, in
Part X.A.3, we attempt to estimate the number of competitive LECs that
will be affected by the rules we adopt herein.
83. SBA Advocacy also claims that the proposals contained in the
NPRM were not sufficiently specific to allow small businesses the
opportunity to comment meaningfully. The Commission disagrees. This
proceeding has elicited well over one thousand filings, submitted by
scores of parties. These parties--which include numerous small
businesses--found in the NPRM sufficient specificity to permit
meaningful comment. SBA Advocacy notes its ``particular concern'' that
the Commission ``is considering removing elements from the list'' of
incumbent LECs' unbundling obligations, whereas the NPRM purportedly
gave no indication of this eventuality. The NPRM clearly explained that
the Commission was considering ``an unbundling analysis that is more
targeted,'' including approaches ``that take into consideration
specific services, facilities, and customer and business
considerations.'' It expressly sought comment ``on applying the
unbundling analysis to define the network elements'' subject to
unbundling, and indicated our intention to ``probe whether and to what
extent we should adopt a more sophisticated, refined unbundling
analysis.'' The Commission officially stated its intention to reexamine
unbundling obligations with respect to loops, switching, interoffice
transport, OSS, call-related signaling and call-related databases. It
is thus not persuaded that the NPRM somehow failed to signal our intent
to examine rules that might result in modification of the list of
elements (including possible removal of elements) subject to section
251(c)(3)'s unbundling requirements.
Description and Estimate of the Number of Small Entities to Which the
Actions Taken Will Apply
84. The RFA directs agencies to provide a description of and, where
feasible, an estimate of the number of small entities that will be
affected by the rules. The RFA generally defines the term ``small
entity'' as having the same meaning as the terms ``small business,''
``small organization,'' and ``small governmental jurisdiction.'' In
addition, the term ``small business'' has the same meaning as the term
``small business concern'' under the Small Business Act. A small
business concern is one which: (1) Is independently owned and operated;
(2) is not dominant in its field of operation; and (3) satisfies any
additional criteria established by the Small Business Administration
(SBA).
85. In this section, we further describe and estimate the number of
small entity licensees and regulatees that may be affected by rules
adopted in this Order. The most reliable source of information
regarding the total numbers of certain common carrier and related
providers nationwide, as well as the number of commercial wireless
entities, appears to be the data that the Commission publishes in its
Trends in Telephone Service report. The SBA has developed small
business size standards for wireline and wireless small businesses
within the three commercial census categories of Wired
Telecommunications Carriers, Paging, and Cellular and Other Wireless
Telecommunications. Under these categories, a business is small if it
has 1,500 or fewer employees. Below, using the above size standards and
others, we discuss the total estimated numbers of small businesses that
might be affected by our actions.
86. The Commission has included small incumbent LECs in this
present RFA analysis. As noted above, a ``small business'' under the
RFA is one that, inter alia, meets the pertinent small business size
standard (e.g., a wired telecommunications carrier having 1,500 or
fewer employees), and ``is not dominant in its field of operation.''
SBA Advocacy contends that, for RFA purposes, small incumbent LECs are
not dominant in their field of operation because any such dominance is
not ``national'' in scope. The Commission has therefore included small
incumbent LECs in this RFA analysis, although it emphasizes that this
RFA action has no effect on Commission analyses and determinations in
other, non-RFA contexts.
87. Wired Telecommunications Carriers. The SBA has developed a
small business size standard for Wired Telecommunications Carriers,
which consists of all such companies having 1,500 or fewer employees.
According to Census Bureau data for 1997, there were 2,225 firms in
this category, total, that operated for the entire year. Of this total,
2,201 firms had employment of 999 or fewer employees, and an additional
24 firms had employment of 1,000 employees or more. Thus, under this
size standard, the great majority of firms can be considered small.
88. Incumbent LECs. Neither the Commission nor the SBA has
developed a size standard for small businesses specifically applicable
to incumbent local exchange services. The closest applicable size
standard under SBA
[[Page 52287]]
rules is for Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 1,329 carriers reported that they were
engaged in the provision of local exchange services. Of these 1,329
carriers, an estimated 1,024 have 1,500 or fewer employees and 305 have
more than 1,500 employees. Consequently, the Commission estimates that
most providers of incumbent local exchange service are small businesses
that may be affected by the rules and policies adopted herein.
89. Competitive LECs. Neither the Commission nor the SBA has
developed a size standard for small businesses specifically applicable
to providers of competitive exchange services or to competitive access
providers or to ``Other Local Exchange Carriers,'' all of which are
discrete categories under which TRS data are collected. The closest
applicable size standard under SBA rules is for Wired
Telecommunications Carriers. Under that size standard, such a business
is small if it has 1,500 or fewer employees. According to Commission
data, 532 companies reported that they were engaged in the provision of
either competitive access provider services or competitive LEC
services. Of these 532 companies, an estimated 411 have 1,500 or fewer
employees and 121 have more than 1,500 employees. In addition, 55
carriers reported that they were ``Other Local Exchange Carriers.'' Of
the 55 ``Other Local Exchange Carriers,'' an estimated 53 have 1,500 or
fewer employees and two have more than 1,500 employees. Consequently,
the Commission estimates that most providers of competitive local
exchange service, competitive access providers, and ``Other Local
Exchange Carriers'' are small entities that may be affected by the
rules and policies adopted herein.
90. Interexchange Carriers. Neither the Commission nor the SBA has
developed a size standard for small businesses specifically applicable
to interexchange services. The closest applicable size standard under
SBA rules is for Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 229 companies reported that their primary
telecommunications service activity was the provision of payphone
services. Of these 229 companies, an estimated 181 have 1,500 or fewer
employees and 48 have more than 1,500 employees. Consequently, the
Commission estimates that the majority of payphone service providers
are small entities that may be affected by the rules and policies
adopted herein.
91. Operator Service Providers (OSPs). Neither the Commission nor
the SBA has developed a size standard for small businesses specifically
applicable to OSPs. The closest applicable size standard under SBA
rules is for Wired Telecommunications Carriers. Under that size
standard, such a business is small if it has 1,500 or fewer employees.
According to Commission data, 22 companies reported that they were
engaged in the provision of operator services. Of these 22 companies,
an estimated 20 have 1,500 or fewer employees and two have more than
1,500 employees. Consequently, the Commission estimates that the great
majority of OSPs are small entities that may be affected by the rules
and policies adopted herein.
92. Prepaid Calling Card Providers. The SBA has developed a size
standard for a small business within the category of Telecommunications
Resellers. Under that SBA size standard, such a business is small if it
has 1,500 or fewer employees. According to Commission data, 32
companies reported that they were engaged in the provision of prepaid
calling cards. Of these 32 companies, an estimated 31 have 1,500 or
fewer employees and one has more than 1,500 employees. Consequently,
the Commission estimates that the great majority of prepaid calling
card providers are small entities that may be affected by the rules and
policies adopted herein.
93. Other Toll Carriers. Neither the Commission nor the SBA has
developed a size standard for small businesses specifically applicable
to ``Other Toll Carriers.'' This category includes toll carriers that
do not fall within the categories of interexchange carriers, OSPs,
prepaid calling card providers, satellite service carriers, or toll
resellers. The closest applicable size standard under SBA rules is for
Wired Telecommunications Carriers. Under that size standard, such a
business is small if it has 1,500 or fewer employees. According to
Commission's data, 42 companies reported that their primary
telecommunications service activity was the provision of payphone
services. Of these 42 companies, an estimated 37 have 1,500 or fewer
employees and five have more than 1,500 employees. Consequently, the
Commission estimates that most ``Other Toll Carriers'' are small
entities that may be affected by the rules and policies adopted herein.
94. Wireless Service Providers. The SBA has developed a small
business size standard for wireless firms within the two broad economic
census categories of Paging and Cellular and Other Wireless
Telecommunications. Under both SBA categories, a wireless business is
small if it has 1,500 or fewer employees. For the census category of
Paging, Census Bureau data for 1997 show that there were 1,320 firms in
this category, total, that operated for the entire year. Of this total,
1,303 firms had employment of 999 or fewer employees, and an additional
17 firms had employment of 1,000 employees or more. Thus, under this
category and associated small business size standard, the great
majority of firms can be considered small. For the census category
Cellular and Other Wireless Telecommunications firms, Census Bureau
data for 1997 show that there were 977 firms in this category, total,
that operated for the entire year. Of this total, 965 firms had
employment of 999 or fewer employees, and an additional 12 firms had
employment of 1,000 employees or more. Thus, under this second category
and size standard, the great majority of firms can, again, be
considered small.
95. Broadband Personal Communications Service. The broadband
Personal Communications Service (PCS) spectrum is divided into six
frequency blocks designated A through F, and the Commission has held
auctions for each block. The Commission defined ``small entity'' for
Blocks C and F as an entity that has average gross revenues of $40
million or less in the three previous calendar years. For Block F, an
additional classification for ``very small business'' was added and is
defined as an entity that, together with its affiliates, has average
gross revenues of not more than $15 million for the preceding three
calendar years.'' These standards defining ``small entity'' in the
context of broadband PCS auctions have been approved by the SBA. No
small businesses, within the SBA-approved small business size standards
bid successfully for licenses in Blocks A and B. There were 90 winning
bidders that qualified as small entities in the Block C auctions. A
total of 93 small and very small business bidders won approximately 40
percent of the 1,479 licenses for Blocks D, E, and F. On March 23,
1999, the Commission re-auctioned 347 C, D, E, and F Block licenses.
There were 48 small business winning bidders. On January 26, 2001, the
Commission completed the auction of 422 C and F Broadband PCS licenses
in Auction No. 35. Of the 35 winning bidders in this auction, 29
qualified as
[[Page 52288]]
``small'' or ``very small'' businesses. Subsequent events, concerning
Auction 35, including judicial and agency determinations, resulted in a
total of 163 C and F Block licenses being available for grant. In
addition, we note that, as a general matter, the number of winning
bidders that qualify as small businesses at the close of an auction
does not necessarily represent the number of small businesses currently
in service. Also, the Commission does not generally track subsequent
business size unless, in the context of assignments or transfers,
unjust enrichment issues are implicated.
96. Narrowband PCS. To date, two auctions of narrowband PCS
licenses have been conducted. For purposes of the two auctions that
have already been held, ``small businesses'' were entities with average
gross revenues for the prior three calendar years of $40 million or
less. Through these auctions, the Commission has awarded a total of 41
licenses, out of which 11 were obtained by small businesses. To ensure
meaningful participation of small business entities in future auctions,
the Commission has adopted a two-tiered small business size standard in
the Narrowband PCS Second Report and Order. A ``small business'' is an
entity that, together with affiliates and controlling interests, has
average gross revenues for the three preceding years of not more than
$40 million. A ``very small business'' is an entity that, together with
affiliates and controlling interests, has average gross revenues for
the three preceding years of not more than $15 million. The SBA has
approved these small business size standards. In the future, the
Commission will auction 459 licenses to serve Metropolitan Trading
Areas (MTAs) and 408 response channel licenses. There is also one
megahertz of narrowband PCS spectrum that has been held in reserve and
that the Commission has not yet decided to release for licensing. The
Commission cannot predict accurately the number of licenses that will
be awarded to small entities in future actions. However, four of the 16
winning bidders in the two previous narrowband PCS auctions were small
businesses, as that term was defined under the Commission's Rules. The
Commission assumes, for purposes of this analysis that a large portion
of the remaining narrowband PCS licenses will be awarded to small
entities. The Commission also assumes that at least some small
businesses will acquire narrowband PCS licenses by means of the
Commission's partitioning and disaggregation rules.
97. 220 MHz Radio Service--Phase I Licensees. The 220 MHz service
has both Phase I and Phase II licenses. Phase I licensing was conducted
by lotteries in 1992 and 1993. There are approximately 1,515 such non-
nationwide licensees and four nationwide licensees currently authorized
to operate in the 220 MHz band. The Commission has not developed a
small business size standard for small entities specifically applicable
to such incumbent 220 MHz Phase I licensees. To estimate the number of
such licensees that are small businesses, we apply the small business
size standard under the SBA rules applicable to ``Cellular and Other
Wireless Telecommunications'' companies. This standard provides that
such a company is small if it employs no more than 1,500 persons.
According to Census Bureau data for 1997, there were 977 firms in this
category, total, that operated for the entire year. Of this total, 965
firms had employment of 999 or fewer employees, and an additional 12
firms had employment of 1,000 employees or more. If this general ratio
continues in the context of Phase I 220 MHz licensees, the Commission
estimates that nearly all such licensees are small businesses under the
SBA's small business size standard.
98. 220 MHz Radio Service--Phase II Licensees. The 220 MHz service
has both Phase I and Phase II licenses. The Phase II 220 MHz service is
a new service, and is subject to spectrum auctions. In the 220 MHz
Third Report and Order, we adopted a small business size standard for
``small'' and ``very small'' businesses for purposes of determining
their eligibility for special provisions such as bidding credits and
installment payments. This small business size standard indicates that
a ``small business'' is an entity that, together with its affiliates
and controlling principals, has average gross revenues not exceeding
$15 million for the preceding three years. A ``very small business'' is
an entity that, together with its affiliates and controlling
principals, has average gross revenues that do not exceed $3 million
for the preceding three years. The SBA has approved these small
business size standards. Auctions of Phase II licenses commenced on
September 15, 1998, and closed on October 22, 1998. In the first
auction, 908 licenses were auctioned in three different-sized
geographic areas: three nationwide licenses, 30 Regional Economic Area
Group (EAG) Licenses, and 875 Economic Area (EA) Licenses. Of the 908
licenses auctioned, 693 were sold. Thirty-nine small businesses won
licenses in the first 220 MHz auction. The second auction included 225
licenses: 216 EA licenses and 9 EAG licenses. Fourteen companies
claiming small business status won 158 licenses.
99. 800 MHz and 900 MHz Specialized Mobile Radio Licenses. The
Commission awards ``small entity'' and ``very small entity'' bidding
credits in auctions for Specialized Mobile Radio (SMR) geographic area
licenses in the 800 MHz and 900 MHz bands to firms that had revenues of
no more than $15 million in each of the three previous calendar years,
or that had revenues of no more than $3 million in each of the previous
calendar years, respectively. These bidding credits apply to SMR
providers in the 800 MHz and 900 MHz bands that either hold geographic
area licenses or have obtained extended implementation authorizations.
The Commission does not know how many firms provide 800 MHz or 900 MHz
geographic area SMR service pursuant to extended implementation
authorizations, nor how many of these providers have annual revenues of
no more than $15 million. One firm has over $15 million in revenues.
The Commission assumes, for purposes here, that all of the remaining
existing extended implementation authorizations are held by small
entities, as that term is defined by the Small Business Act. The
Commission has held auctions for geographic area licenses in the 800
MHz and 900 MHz SMR bands. There were 60 winning bidders that qualified
as small or very small entities in the 900 MHz SMR auctions. Of the
1,020 licenses won in the 900 MHz auction, bidders qualifying as small
or very small entities won 263 licenses. In the 800 MHz auction, 38 of
the 524 licenses won were won by small and very small entities.
Consequently, the Commission estimates that there are 301 or fewer
small entity SMR licensees in the 800 MHz and 900 MHz bands that may be
affected by the rules and policies adopted herein.
100. Common Carrier Paging. In the Paging Third Report and Order,
the Commission developed a small business size standard for ``small
businesses'' and ``very small businesses'' for purposes of determining
their eligibility for special provisions such as bidding credits and
installment payments. A ``small business'' is an entity that, together
with its affiliates and controlling principals, has average gross
revenues not exceeding $15 million for the preceding three years.
Additionally, a ``very small business'' is an entity that, together
with its affiliates and controlling principals, has average gross
revenues that are not more than $3 million for the preceding three
years. An auction of Metropolitan
[[Page 52289]]
Economic Area licenses commenced on February 24, 2000, and closed on
March 2, 2000. Of the 985 licenses auctioned, 440 were sold. Fifty-
seven companies claiming small business status won. At present, there
are approximately 24,000 Private-Paging site-specific licenses and
74,000 Common Carrier Paging licenses. According to the most recent
Trends in Telephone Service, 471 carriers reported that they were
engaged in the provision of either paging and messaging services or
other mobile services. Of those, the Commission estimates that 450 are
small, under the SBA business size standard specifying that firms are
small if they have 1,500 or fewer employees.
101. 700 MHz Guard Band Licensees. In the 700 MHz Guard Band Order,
the Commission adopted a small business size standard for ``small
businesses'' and ``very small businesses'' for purposes of determining
their eligibility for special provisions such as bidding credits and
installment payments. A ``small business'' as an entity that, together
with its affiliates and controlling principals, has average gross
revenues not exceeding $15 million for the preceding three years.
Additionally, a ``very small business'' is an entity that, together
with its affiliates and controlling principals, has average gross
revenues that are not more than $3 million for the preceding three
years. An auction of 52 Major Economic Area (MEA) licenses commenced on
September 6, 2000, and closed on September 21, 2000. Of the 104
licenses auctioned, 96 licenses were sold to nine bidders. Five of
these bidders were small businesses that won a total of 26 licenses. A
second auction of 700 MHz Guard Band licenses commenced on February 13,
2001 and closed on February 21, 2001. All eight of the licenses
auctioned were sold to three bidders. One of these bidders was a small
business that won a total of two licenses.
102. Rural Radiotelephone Service. The Commission has not adopted a
size standard for small businesses specific to the Rural Radiotelephone
Service. A significant subset of the Rural Radiotelephone Service is
the Basic Exchange Telephone Radio System (BETRS). The Commission uses
the SBA's small business size standard applicable to ``Cellular and
Other Wireless Telecommunications,'' i.e., an entity employing no more
than 1,500 persons. There are approximately 1,000 licensees in the
Rural Radiotelephone Service, and the Commission estimates that there
are 1,000 or fewer small entity licensees in the Rural Radiotelephone
Service that may be affected by the rules and policies adopted herein.
103. Air-Ground Radiotelephone Service. The Commission has not
adopted a small business size standard specific to the Air-Ground
Radiotelephone Service. The Commission will use SBA's small business
size standard applicable to ``Cellular and Other Wireless
Telecommunications,'' i.e., an entity employing no more than 1,500
persons. There are approximately 100 licensees in the Air-Ground
Radiotelephone Service, and we estimate that almost all of them qualify
as small under the SBA small business size standard.
104. Aviation and Marine Radio Services. Small businesses in the
aviation and marine radio services use a very high frequency (VHF)
marine or aircraft radio and, as appropriate, an emergency position-
indicating radio beacon (and/or radar) or an emergency locator
transmitter. The Commission has not developed a small business size
standard specifically applicable to these small businesses. For
purposes of this analysis, the Commission uses the SBA small business
size standard for the category ``Cellular and Other
Telecommunications,'' which is 1,500 or fewer employees. Most
applicants for recreational licenses are individuals. Approximately
581,000 ship station licensees and 131,000 aircraft station licensees
operate domestically and are not subject to the radio carriage
requirements of any statute or treaty. For purposes of our evaluations
in this analysis, we estimate that there are up to approximately
712,000 licensees that are small businesses (or individuals) under the
SBA standard. In addition, between December 3, 1998 and December 14,
1998, the Commission held an auction of 42 VHF Public Coast licenses in
the 157.1875-157.4500 MHz (ship transmit) and 161.775-162.0125 MHz
(coast transmit) bands. For purposes of the auction, the Commission
defined a ``small'' business as an entity that, together with
controlling interests and affiliates, has average gross revenues for
the preceding three years not to exceed $15 million dollars. In
addition, a ``very small'' business is one that, together with
controlling interests and affiliates, has average gross revenues for
the preceding three years not to exceed $3 million dollars. There are
approximately 10,672 licensees in the Marine Coast Service, and the
Commission estimates that almost all of them qualify as ``small''
businesses under the above special small business size standards.
105. Fixed Microwave Services. Fixed microwave services include
common carrier, private operational-fixed, and broadcast auxiliary
radio services. At present, there are approximately 22,015 common
carrier fixed licensees and 61,670 private operational-fixed licensees
and broadcast auxiliary radio licensees in the microwave services. The
Commission has not created a size standard for a small business
specifically with respect to fixed microwave services. For purposes of
this analysis, the Commission uses the SBA small business size standard
for the category ``Cellular and Other Telecommunications,'' which is
1,500 or fewer employees. The Commission does not have data specifying
the number of these licensees that have more than 1,500 employees, and
thus are unable at this time to estimate with greater precision the
number of fixed microwave service licensees that would qualify as small
business concerns under the SBA's small business size standard.
Consequently, the Commission estimates that there are up to 22,015
common carrier fixed licensees and up to 61,670 private operational-
fixed licensees and broadcast auxiliary radio licensees in the
microwave services that may be small and may be affected by the rules
and policies adopted herein. We noted, however, that the common carrier
microwave fixed licensee category includes some large entities.
106. Offshore Radiotelephone Service. This service operates on
several UHF television broadcast channels that are not used for
television broadcasting in the coastal areas of states bordering the
Gulf of Mexico. There are presently approximately 55 licensees in this
service. We are unable to estimate at this time the number of licensees
that would qualify as small under the SBA's small business size
standard for ``Cellular and Other Wireless Telecommunications''
services. Under that SBA small business size standard, a business is
small if it has 1,500 or fewer employees.
107. Wireless Communications Services (WCS). This service can be
used for fixed, mobile, radiolocation, and digital audio broadcasting
satellite uses. The Commission established small business size
standards for the WCS auction. A ``small business'' is an entity with
average gross revenues of $40 million for each of the three preceding
years, and a ``very small business'' is an entity with average gross
revenues of $15 million for each of the three preceding years. The SBA
has approved these small business size standards. The Commission
auctioned geographic area licenses in the WCS service. In the auction,
there were seven winning bidders that qualified as ``very small
business'' entities, and one that
[[Page 52290]]
qualified as a ``small business'' entity. We conclude that the number
of geographic area WCS licensees affected by this analysis includes
these eight entities.
108. 39 GHz Service. The Commission created a special small
business size standard for 39 GHz licenses--an entity that has average
gross revenues of $40 million or less in the three previous calendar
years. An additional size standard for ``very small business'' is: an
entity that, together with affiliates, has average gross revenues of
not more than $15 million for the preceding three calendar years. The
SBA has approved these small business size standards. The auction of
the 2,173 39 GHz licenses began on April 12, 2000 and closed on May 8,
2000. The 18 bidders who claimed small business status won 849
licenses. Consequently, the Commission estimates that 18 or fewer 39
GHz licensees are small entities that may be affected by the rules and
polices adopted herein.
109. Multipoint Distribution Service (MDS), Multichannel Multipoint
Distribution Service (MMDS), and Instructional Television Fixed Service
(ITFS). MMDS systems, often referred to as ``wireless cable,'' transmit
video programming to subscribers using the microwave frequencies of the
MDS and ITFS. In connection with the 1996 MDS auction, the Commission
established a small business size standard as an entity that had annual
average gross revenues of less than $40 million in the previous three
calendar years. The MDS auctions resulted in 67 successful bidders
obtaining licensing opportunities for 493 Basic Trading Areas (BTAs).
Of the 67 auction winners, 61 met the definition of a small business.
MDS also includes licensees of stations authorized prior to the
auction. In addition, the SBA has developed a small business size
standard for Cable and Other Program Distribution, which includes all
such companies generating $12.5 million or less in annual receipts.
According to Census Bureau data for 1997, there were a total of 1,311
firms in this category, total, that had operated for the entire year.
Of this total, 1,180 firms had annual receipts of under $10 million and
an additional 52 firms had receipts of $10 million or more but less
than $25 million. Consequently, we estimate that the majority of
providers in this service category are small businesses that may be
affected by the rules and policies adopted herein. This SBA small
business size standard also appears applicable to ITFS. There are
presently 2,032 ITFS licensees. All but 100 of these licenses are held
by educational institutions. Educational institutions are included in
this analysis as small entities. Thus, we tentatively conclude that at
least 1,932 licensees are small businesses.
110. Local Multipoint Distribution Service. Local Multipoint
Distribution Service (LMDS) is a fixed broadband point-to-multipoint
microwave service that provides for two-way video telecommunications.
The auction of the 1,030 LMDS licenses began on February 18, 1998, and
closed on March 25, 1998. The Commission established a small business
size standard for LMDS licenses as an entity that has average gross
revenues of less than $40 million in the three previous calendar years.
An additional small business size standard for ``very small business''
was added as an entity that, together with its affiliates, has average
gross revenues of not more than $15 million for the preceding three
calendar years. The SBA has approved these small business size
standards in the context of LMDS auctions. There were 93 winning
bidders that qualified as small entities in the LMDS auctions. A total
of 93 small and very small business bidders won approximately 277 A
Block licenses and 387 B Block licenses. On March 27, 1999, the
Commission re-auctioned 161 licenses; there were 40 winning bidders.
Based on this information, we conclude that the number of small LMDS
licenses consists of the 93 winning bidders in the first auction and
the 40 winning bidders in the re-auction, for a total of 133 small
entity LMDS providers.
111. 218-219 MHz Service. The first auction of 218-219 MHz spectrum
resulted in 170 entities winning licenses for 594 Metropolitan
Statistical Area (MSA) licenses. Of the 594 licenses, 557 were won by
entities qualifying as a small business. For that auction, the small
business size standard was an entity that, together with its
affiliates, has no more than a $6 million net worth and, after federal
income taxes (excluding any carry-over losses), has no more than $2
million in annual profits each year for the previous two years. In the
218-219 MHz Report and Order and Memorandum Opinion and Order, we
established a small business size standard for a ``small business'' as
an entity that, together with its affiliates and persons or entities
that hold interests in such an entity and their affiliates, has average
annual gross revenues not to exceed $15 million for the preceding three
years. A ``very small business'' is defined as an entity that, together
with its affiliates and persons or entities that hold interests in such
an entity and its affiliates, has average annual gross revenues not to
exceed $3 million for the preceding three years. We cannot estimate,
however, the number of licenses that will be won by entities qualifying
as small or very small businesses under our rules in future auctions of
218-219 MHz spectrum.
112. 24 GHz--Incumbent Licensees. This analysis may affect
incumbent licensees who were relocated to the 24 GHz band from the 18
GHz band, and applicants who wish to provide services in the 24 GHz
band. The applicable SBA small business size standard is that of
``Cellular and Other Wireless Telecommunications'' companies. This
category provides that such a company is small if it employs no more
than 1,500 persons. According to Census Bureau data for 1997, there
were 977 firms in this category, total, that operated for the entire
year. Of this total, 965 firms had employment of 999 or fewer
employees, and an additional 12 firms had employment of 1,000 employees
or more. Thus, under this size standard, the great majority of firms
can be considered small. These broader census data notwithstanding, we
believe that there are only two licensees in the 24 GHz band that were
relocated from the 18 GHz band, Teligent and TRW, Inc. It is our
understanding that Teligent and its related companies have less than
1,500 employees, though this may change in the future. TRW is not a
small entity. Thus, only one incumbent licensee in the 24 GHz band is a
small business entity.
113. 24 GHz--Future Licensees. With respect to new applicants in
the 24 GHz band, the small business size standard for ``small
business'' is an entity that, together with controlling interests and
affiliates, has average annual gross revenues for the three preceding
years not in excess of $15 million. ``Very small business'' in the 24
GHz band is an entity that, together with controlling interests and
affiliates, has average gross revenues not exceeding $3 million for the
preceding three years. The SBA has approved these small business size
standards. These size standards will apply to the future auction, if
held.
114. Internet Service Providers. While internet service providers
(ISPs) are only indirectly affected by our present actions, and ISPs
are therefore not formally included within this present FRFA, we have
addressed them informally to create a fuller record and to recognize
their participation in this proceeding. The SBA has developed a small
business size standard for Online Information Services, which consists
of all such companies having $21 million or less in annual receipts.
According to Census Bureau data for 1997, there were 2,751 firms in
this category, total, that operated for the entire year. Of this
[[Page 52291]]
total, 2,659 firms had annual receipts of $9,999,999 or less, and an
additional 67 had receipts of $10 million to $24,999,999. Thus, under
this size standard, the great majority of firms can be considered
small.
Description of Projected Reporting, Recordkeeping, and Other Compliance
Requirements
115. Pursuant to sections 251(c) and (d) of the Act, incumbent
LECs, including those that qualify as small entities, are required to
provide nondiscriminatory access to UNEs. The only exception to this
rule applies to qualifying rural carriers that have gone through the
process of obtaining an exemption, suspension, or modification pursuant
to section 251(f) of the Act. This Order represents, in large part, a
fresh examination of the issues presented in implementing the
unbundling requirements of section 251, based on comments from
interested parties responding to the NPRM. This Order also interprets
the necessary and impair standards of section 251(d)(2) in a manner
that satisfies the D.C. Circuit's directives that (1) the Commission
eschew broad national standards in favor of more granular analysis, and
that, (2) in determining whether a carrier is ``impaired'' by
diminished access to a given element, the Commission distinguish
between ``cost disparities that are universal as between new entrants
and incumbents in any industry'' and disparities resulting specifically
from the conditions of natural monopoly that the Act is designed to
redress.
116. In this Order, we determine that requesting carriers (1) are
impaired without access to local circuit switching in providing service
to mass market customers using DS0 capacity loops; (2) are not impaired
without access to unbundled local circuit switching for the provision
of service to enterprise customers using DS1 and higher capacity loops;
(3) are not impaired without access to packet switching, including
routers and DSLAMs; (4) are not impaired without access to incumbent
LECs' signaling systems except where they are also impaired without
access to the incumbent LEC's unbundled circuit switching; (5) are
impaired without unbundled access to the incumbent LEC's 911 and e911
databases; (6) are not impaired without access to the incumbent LEC's
other call-related databases if they deploy their own switches, but
otherwise are impaired; (7) are impaired without access to incumbent
LECs' OSS; (8) are impaired without access to copper loop or subloop
facilities (and must condition copper loops for provision of advanced
services), but are not impaired without access to line-sharing (subject
to a three-year transition) or hybrid loops; (9) are not impaired
without access to new build/greenfield fiber-to-the-home (FTTH) loops
for broadband or narrowband services or overbuild/brownfield FTTH loops
for broadband services; (10) are not impaired without unbundled access
to OCn capacity loop facilities, but are impaired, subject to certain
triggers, without access to dark fiber loops, DS1 loops, and DS3 loops;
(11) are impaired without access to unbundled subloops associated with
accessing customer premises wiring at multiunit premises and are also
impaired without unbundled access to the incumbent LEC Inside Wire
Subloops and NIDs, regardless of loop type; (12) are not impaired
without unbundled access to OCn transport facilities, but are impaired,
subject to certain triggers, without access to dark fiber transport
facilities, DS1 transport facilities, and DS3 transport facilities; and
(13) are impaired without access to unbundled shared transport only to
the extent they are impaired without access to local circuit switching.
The Order also affirms that incumbent LECs are obligated to provide
access to UNE combinations.
117. In this Order, the Commission adopts rules to implement a
congressionally-mandated scheme, embodied in section 251 of the Act,
that imposes upon incumbent LECs an obligation to provide unbundled
access to certain network elements. This Order articulates a new
impairment standard to govern which network elements incumbent LECs
must unbundle for competitors in accordance with the Act. While this
Order imposes no general obligations on competitive LECs, the Order
does require competitive LECs to satisfy certain reporting requirements
in order to obtain as UNEs certain high-capacity network elements from
incumbent LECs. We have attempted to keep the obligations imposed by
this Order to the minimum necessary to implement the requirements of
the Act.
118. In addition, this Order outlines procedures whereby states may
conduct proceedings to determine whether certain network elements
satisfy our impairment standard according to specific guidelines and
triggers, as outlined in the Order. While this Order does not
specifically impose any obligations on carriers in this regard, records
regarding facility use may be necessary for these state proceedings.
119. The various compliance requirements contained in this Order
will require the use of engineering, technical, operational,
accounting, billing, and legal skills. The carriers that are affected
by these requirements already possess these skills. This Order contains
new or modified information collections, which are subject to Office of
Management and Budget review pursuant to the Paperwork Reduction Act of
1995, Pub. L. 104-13.
Steps Taken To Minimize Significant Economic Impact on Small Entities,
and Significant Alternatives Considered
120. The RFA requires an agency to describe any significant
alternatives that it has considered in reaching its proposed approach,
which may include the following four alternatives (among others): (1)
The establishment of differing compliance or reporting requirements or
timetables that take into account the resources available to small
entities; (2) the clarification, consolidation, or simplification of
compliance or reporting requirements under the rule for small entities;
(3) the use of performance, rather than design, standards; and (4) an
exemption from coverage of the rule, or any part thereof, for small
entities.
121. In this Order, the Commission adopts rules regarding the
unbundling of network elements. It has modified our impairment analysis
to find that a requesting carrier is impaired when lack of access to a
facility in the incumbent LEC's network poses barriers that are likely
to make entry into the market uneconomic. These can include both
operational and economic barriers, such as scale economies, sunk costs,
first mover advantages, absolute cost advantages, and barriers within
the control of the incumbent LEC. In adopting this interpretation, the
Commission considered a variety of factors relating to the size of
regulated entities and the customers they serve. It considered a number
of barriers to competitive entry, including those faced by small
competitors, as well as the importance of scale economies as they
relate to small entities. Finally, the Commission considered and
rejected a number of suggested approaches to impairment.
122. In applying its impairment analysis to specific network
elements, the Commisson adopts a more granular approach, including the
considerations of customer class, geography, and service. The
Commission found that conducting a more granular analysis permits it to
distinguish, with more particularity, those situations for which there
is impairment from those for which there is none. It also found that an
even more granular analysis--loop by loop, for example--is neither
[[Page 52292]]
administratively feasible nor required by the courts. The Commission
considered the differing needs of three classes of telecommunications
customers: mass market customers (i.e., residential customers and
sometimes very small business customers), small and medium enterprise
customers, and large enterprise customers. Mass market customers
typically generate lower revenue and tighter profit margins than the
other classes and therefore require service providers to minimize
costs. Small and medium business customers typically are willing to pay
higher prices but are more sensitive to reliability and quality of
service. Large enterprise customers tend to demand extensive and
sophisticated service packages, and reliability and quality of service
are essential to these customers.
123. In addition, because requiring unbundling in the absence of
impairment imposes unnecessary costs--including for small or rural
incumbent LECs--we considered whether impairment varies geographically
throughout the country. The Commission makes unbundling decisions on a
national scale where the record permits us to, but delegate some
determining role to the states where it appears that impairment might
exist in some regions of the country but not others. In this regard, we
note that Congress provided a mechanism--in section 251(f) of the Act--
to exempt small and rural incumbent LECs from several of the Act's
obligations. For example, unbundling rules shall not apply to a rural
telephone company until it receives a bona fide request for
interconnection and until the state commission determines that the
request is technically feasible, not unduly economically burdensome,
and consistent with section 254. Or, a LEC with fewer than two percent
of the nation's subscriber lines may obtain relief from unbundling if
the state commission decides, among other things, that relief is
necessary to avoid imposing a economically burdensome requirement or
other significant adverse economic impact.
124. Through our granular impairment analysis, the Commission has
considered the resources and needs of various carriers, including small
businesses, and have examined the state of the marketplace to determine
whether it was economically feasible for competitors to self-provision
network elements or obtain them from competitive sources other than
incumbent LECs. This approach strikes the appropriate balance between
the needs of competitors--including small competitors--to access
certain network elements, against the burdens unbundling imposes upon
incumbent LECs--including small incumbents--and yields a more accurate
picture of the state of competition for each of the varied network
elements composing the local telephone network. For those network
elements for which carriers may be impaired only in certain geographic
markets, such as certain high capacity loops and transport, we adopt an
approach that permits localized determination--with a role for the
states--as to where and whether impairment exists. In this way, the
Commission has sought to take a more specific view of the needs of
differently situated competitors.
125. The Commission also has established service eligibility
requirements for UNEs which are designed to ensure that carriers use
UNEs primarily to provide local services in competition with incumbent
LECs, ``while avoiding burdensome administrative rules that serve as a
drag on competitive entry.'' While we recognize that regulatory
requirements may disproportionately impact smaller entities, we have
adopted the least burdensome of several available alternatives in
requiring competitors to satisfy certain service eligibility criteria.
For example, rather than requiring carriers to certify to be the sole
provider of local service in order to access certain elements (e.g.,
high capacity loops and transport)--an approach that might require
frequent and costly assurance from a carrier's customers--the
Commission permits carriers to certify that they are the primary
providers of local service. In this regard, being certified as a
competitive LEC is probative of providing qualifying service. The
Commission also adopts collocation and local interconnection
requirements as less burdensome ways of assuring service eligibility.
By contrast, we have rejected a number of suggested approaches as
unnecessarily burdensome, such as measuring minutes or traffic
percentages, separately measuring voice and data use, or permitting
UNEs only where a competitive carrier uses certain types of switches.
It finds that our adopted indicia of service eligibility serve as
adequate and less burdensome assurance that a carrier is using UNEs in
a manner consistent with the local competition goals of the Act.
Ordering Clauses
126. Accordingly, pursuant to sections 1, 3, 4, 201-205, 251, 256,
271, 303(r) of the Communications Act of 1934, as amended, 47 U.S.C.
151, 153, 154, 201-205, 251, 252, 256, 271, 303(r), and section 706 of
the Telecommunications Act of 1996, 47 U.S.C. 157 nt, the Report and
Order on Remand and Further Notice of Proposed Rulemaking in CC Docket
No. 01-338 is adopted, and that part 51 of the Commission's Rules, 47
CFR part 51, is amended as set forth in the rule changes.
127. The rules contained herein are effective October 2, 2003.
128. Pursuant to sections 1, 3, 4, 201-205, 251, 256, 271, and
303(r) of the Communications Act, as amended, 47 U.S.C. 151, 153, 154,
201-205, 251, 252, 256, 271, and 303(r), and Section 706 of the
Telecommunications Act of 1996, 47 U.S.C. 157 nt. that the petitions
for reconsideration of the UNE Remand Order filed in CC Docket No. 96-
98 by Low Tech Designs, Inc. on February 15, 2000, and by the
Telecommunications Resellers Association on February 18, 2000; the
petition for partial reconsideration of the UNE Remand Order filed in
CC Docket No. 96-98 by Birch Telecom, Inc. on February 17, 2000; the
petition for reconsideration and clarification of the UNE Remand Order
filed in CC Docket No. 96-98 by Sprint Corporation on February 17,
2000; the petition for clarification on reconsideration of the UNE
Remand Order filed in CC Docket No. 96-98, 95-185 by MGC
Communications, Inc.; d/b/a Mpower Communications, Corp. on February
17, 2000; the joint petition filed in CC Docket No. 96-98 by BellSouth
Corporation and BellSouth Telecommunications, Inc., SBC Communications,
Inc., and Verizon Telephone Companies on April 5, 2001; the petitions
for waiver of the supplemental order clarification filed in CC Docket
No. 96-98 by WorldCom, Inc. on September 12, 2000, and
ITC[caret]DeltaCom Communications, Inc. on August 16, 2001;
the petition filed in CC Docket Nos. 01-338, 96-98, 98-147 by Promoting
Active Competition Everywhere (PACE) Coalition on February 6, 2002; and
the petition for declaratory ruling filed in CC Docket No. 01-338 by
WorldCom, Inc. on August 8, 2002 are dismissed as moot.
129. Pursuant to sections 1, 3, 4, 201-205, 251, 256, 271, and
303(r) of the Communications Act, as amended, 47 U.S.C. 151, 153, 154,
201-205, 251, 252, 256, 271, and 303(r), and Section 706 of the
Telecommunications Act of 1996, 47 U.S.C. 157 nt. that the joint
petition for declaratory ruling filed in CC Docket No. 96-98 by AT&T
Wireless Services, Inc. and VoiceStream Wireless, Corp. on November 19,
2001 is granted to the extent indicated herein and otherwise is moot.
[[Page 52293]]
130. Pursuant to sections 1, 3, 4, 201-205, 251, 256, 271, and
303(r) of the Communications Act, as amended, 47 U.S.C. 151, 153, 154,
201-205, 251, 252, 256, 271, and 303(r), and Section 706 of the
Telecommunications Act of 1996, 47 U.S.C. 157 nt. that the petition for
reconsideration/clarification of the UNE Remand Order filed in CC
Docket No. 96-98 by BellSouth Corporation and BellSouth
Telecommunications, Inc. on February 17, 2000 is granted to the extent
indicated herein and otherwise are denied.
131. Pursuant to sections 1, 3, 4, 201-205, 251, 256, 271, and
303(r) of the Communications Act, as amended, 47 U.S.C. 151, 153, 154,
201-205, 251, 252, 256, 271, and 303(r), and Section 706 of the
Telecommunications Act of 1996, 47 U.S.C. 157 nt. that the petitions
for reconsideration of the UNE Remand Order filed in CC Docket Nos. 96-
98, 95-185 by Rhythms Netconnections Inc. and Covad Communications Co.
on January 21, 2000, @Link Networks, Inc., DSL.net, Inc. and MGC
Communications, Inc., d/b/a Mpower Communications Corp. on February 17,
2000, McLeodUSA Telecommunications Services, Inc. and the petition for
reconsideration of the UNE Remand Order filed in CC Docket No. 96-98 by
RCN Telecom Services, Inc. on February 17, 2000 are denied.
132. Pursuant to sections 1, 3, 4, 201-205, 251, 256, 271, and
303(r) of the Communications Act, as amended, 47 U.S.C. 151, 153, 154,
201-205, 251, 252, 256, 271, and 303(r), and section 706 of the
Telecommunications Act of 1996, 47 U.S.C. 157 nt. that the petition of
the UNE Remand Order filed in CC Docket No. 96-98 by Competitive
Telecommunications Association on November 26, 2001; and the petitions
for reconsideration of the UNE Remand Order filed in CC Docket No. 96-
98 by Intermedia Communications, Inc. and by MCI WorldCom, Inc. on
February 17, 2000 are denied to the extent indicated herein and
otherwise are dismissed as moot.
133. Pursuant to sections 1, 3, 4, 201-205, 251, 256, 271, and
303(r) of the Communications Act, as amended, 47 U.S.C. 151, 153, 154,
201-205, 251, 252, 256, 271, and 303(r), and Section 706 of the
Telecommunications Act of 1996, 47 U.S.C. 157 nt. that the petition for
clarification of the UNE Remand Order filed in CC Docket No. 96-98 by
MCI WorldCom, Inc. on February 17, 2000; the petition for
reconsideration of the UNE Remand Order filed in CC Docket No. 96-98 by
the Competitive Telecommunications Association on February 17, 2000;
the petition for reconsideration and clarification of the UNE Remand
Order filed in CC Docket No. 96-98 by Bell Atlantic on February 17,
2000; and the petition for reconsideration and clarification of the UNE
Remand Order filed in CC Docket No. 96-98 by AT&T Corp. on February 17,
2000 are granted to the extent indicated herein and otherwise are
denied or dismissed as moot.
134. The Public Notice, Comments Sought on the Use of Unbundled
Network Elements to Provide Exchange Access Service, CC Docket No. 96-
98, DA 01-169 (rel. Jan. 24, 2001); Deployment of Wireline Services
Offering Advanced Telecommunications Capability and Implementation of
the Local Competition Provisions of the Telecommunications Act of 1996,
Third Report and Order on Reconsideration in CC Docket No. 98-147,
Fourth Report and Order on Reconsideration in CC Docket No. 96-98,
Third Further Notice of Proposed Rulemaking in CC Docket No. 98-147,
and Sixth Further Notice of Proposed Rulemaking in CC Docket No. 96-98,
16 FCC Rcd 2101 (2001); Implementation of Local Competition Provisions
of the Telecommunications Act of 1996, Third Order on Reconsideration
and Further Notice of Proposed Rulemaking, CC Docket Nos. 96-98 and 95-
185, 12 FCC Rcd 12460 (1997); and Implementation of the Local
Competition Provisions of the Telecommunications Act of 1996, Third
Report and Order and Fourth Further Notice of Proposed Rulemaking, CC
Docket No. 96-98, 15 FCC Rcd 3696 (1999) are terminated.
135. The Commission's Consumer and Governmental Affairs Bureau,
Reference Information Center, shall send a copy of this Report and
Order and Order on Remand, including the Final Regulatory Flexibility
Analysis, to the Chief Counsel for Advocacy of the Small Business
Administration.
Report to Congress
125. The Commission will send a copy of the Order, including this
FRFA, in a report to be sent to Congress pursuant to the Congressional
Review Act. In addition, the Commission will send a copy of the Order,
including the FRFA, to the Chief Counsel for SBA Advocacy. The Order
and FRFA, or summaries thereof, will also be published in the Federal
Register.
List of Subjects in 47 CFR Part 51
Interconnection, Telecommunications carriers.
Federal Communications Commission.
William F. Caton,
Deputy Secretary.
Final Rules
0
Part 51 of title 47 of the Code of Federal Regulations is amended as
follows:
PART 51--INTERCONNECTION
0
1. The authority citation for part 51 is revised to read as follows:
Authority: Sections 1-5, 7, 201-05, 207-09, 218, 225-27, 251-54,
256, 271, 303(r), 332, 48 Stat. 1070, as amended, 1077; 47 U.S.C.
151-55, 157, 201-05, 207-09, 218, 225-27, 251-54, 256, 271, 303(r),
332, 47 U.S.C. 157 note, unless otherwise noted.
0
2. Section 51.5 is amended by adding six new definitions in
alphabetical order and by revising the definition of ``state
commission'' to read as follows:
Sec. 51.5 Terms and definitions.
* * * * *
Commingling. Commingling means the connecting, attaching, or
otherwise linking of an unbundled network element, or a combination of
unbundled network elements, to one or more facilities or services that
a requesting telecommunications carrier has obtained at wholesale from
an incumbent LEC, or the combining of an unbundled network element, or
a combination of unbundled network elements, with one or more such
facilities or services. Commingle means the act of commingling.
* * * * *
Enhanced extended link. An enhanced extended link or EEL consists
of a combination of an unbundled loop and unbundled dedicated
transport, together with any facilities, equipment, or functions
necessary to combine those network elements.
* * * * *
Intermodal. The term intermodal refers to facilities or
technologies other than those found in traditional telephone networks,
but that are utilized to provide competing services. Intermodal
facilities or technologies include, but are not limited to, traditional
or new cable plant, wireless technologies, and power line technologies.
* * * * *
Non-qualifying service. A non-qualifying service is a service that
is not a qualifying service.
* * * * *
Qualifying service. A qualifying service is a telecommunications
service that competes with a telecommunications service that has been
traditionally the exclusive or
[[Page 52294]]
primary domain of incumbent LECs, including, but not limited to, local
exchange service, such as plain old telephone service, and access
services, such as digital subscriber line services and high-capacity
circuits.
* * * * *
State commission. A state commission means the commission, board,
or official (by whatever name designated) which under the laws of any
state has regulatory jurisdiction with respect to intrastate operations
of carriers. As referenced in this part, this term may include the
Commission if it assumes responsibility for a proceeding or matter,
pursuant to section 252(e)(5) of the Act or Sec. 51.320. This term
shall also include any person or persons to whom the state commission
has delegated its authority under sections 251 and 252 of the Act and
this part.
* * * * *
Triennial Review Order. The Triennial Review Order means the
Commission's Report and Order and Order on Remand and Further Notice of
Proposed Rulemaking in CC Docket Nos. 01-338, 96-98, and 98-147.
* * * * *
0
3. Section 51.301 is amended by revising paragraph (c)(8)(ii) to read
as follows:
Sec. 51.301 Duty to negotiate.
* * * * *
(c) * * *
(8) * * *
(ii) Refusal by an incumbent LEC to furnish cost data that would be
relevant to setting rates if the parties were in arbitration.
0
4. Section 51.305 is amended by removing paragraph (a)(4),
redesignating paragraph (a)(5) as paragraph (a)(4), and revising
paragraph (a)(3) to read as follows:
Sec. 51.305 Interconnection.
(a) * * *
(3) That is at a level of quality that is equal to that which the
incumbent LEC provides itself, a subsidiary, an affiliate, or any other
party. At a minimum, this requires an incumbent LEC to design
interconnection facilities to meet the same technical criteria and
service standards that are used within the incumbent LEC's network.
This obligation is not limited to a consideration of service quality as
perceived by end users, and includes, but is not limited to, service
quality as perceived by the requesting telecommunications carrier; and
* * * * *
0
5. Section 51.309 is amended by revising paragraphs (a) and (b), and by
adding paragraphs (d) through (g) to read as follows:
Sec. 51.309 Use of unbundled network elements.
(a) Except as provided in Sec. 51.318, an incumbent LEC shall not
impose limitations, restrictions, or requirements on requests for, or
the use of, unbundled network elements for the service a requesting
telecommunications carrier seeks to offer.
(b) A requesting telecommunications carrier may not access an
unbundled network element for the sole purpose of providing non-
qualifying services.
* * * * *
(d) A requesting telecommunications carrier that accesses and uses
an unbundled network element pursuant to section 251(c)(3) of the Act
and this part to provide a qualifying service may use the same
unbundled network element to provide non-qualifying services.
(e) Except as provided in Sec. 51.318, an incumbent LEC shall
permit a requesting telecommunications carrier to commingle an
unbundled network element or a combination of unbundled network
elements with wholesale services obtained from an incumbent LEC.
(f) Upon request, an incumbent LEC shall perform the functions
necessary to commingle an unbundled network element or a combination of
unbundled network elements with one or more facilities or services that
a requesting telecommunications carrier has obtained at wholesale from
an incumbent LEC.
(g) An incumbent LEC shall not deny access to an unbundled network
element or a combination of unbundled network elements on the grounds
that one or more of the elements:
(1) Is connected to, attached to, linked to, or combined with, a
facility or service obtained from an incumbent LEC; or
(2) Shares part of the incumbent LEC's network with access services
or inputs for non-qualifying services.
0
6. Section 51.311 is amended by revising paragraphs (a) and (b),
removing paragraph (c), redesignating paragraphs (d) and (e) as
paragraphs (c) and (d) to read as follows:
Sec. 51.311 Nondiscriminatory access to unbundled network elements.
(a) The quality of an unbundled network element, as well as the
quality of the access to the unbundled network element, that an
incumbent LEC provides to a requesting telecommunications carrier shall
be the same for all telecommunications carriers requesting access to
that network element.
(b) To the extent technically feasible, the quality of an unbundled
network element, as well as the quality of the access to such unbundled
network element, that an incumbent LEC provides to a requesting
telecommunications carrier shall be at least equal in quality to that
which the incumbent LEC provides to itself. If an incumbent LEC fails
to meet this requirement, the incumbent LEC must prove to the state
commission that it is not technically feasible to provide the requested
unbundled network element, or to provide access to the requested
unbundled network element, at a level of quality that is equal to that
which the incumbent LEC provides to itself.
* * * * *
0
7. Section 51.315 is amended by revising paragraphs (c) and (f) to read
as follows:
Sec. 51.315 Combination of unbundled network elements.
* * * * *
(c) Upon request, an incumbent LEC shall perform the functions
necessary to combine unbundled network elements in any manner, even if
those elements are not ordinarily combined in the incumbent LEC's
network, provided that such combination:
(1) Is technically feasible; and
(2) Would not undermine the ability of other carriers to obtain
access to unbundled network elements or to interconnect with the
incumbent LEC's network.
* * * * *
(f) An incumbent LEC that denies a request to combine unbundled
network elements pursuant to paragraph (c)(2) of this section must
demonstrate to the state commission that the requested combination
would undermine the ability of other carriers to obtain access to
unbundled network elements or to interconnect with the incumbent LEC's
network.
0
8. Section 51.316 is added to read as follows:
Sec. 51.316 Conversion of unbundled network elements and services.
(a) Upon request, an incumbent LEC shall convert a wholesale
service, or group of wholesale services, to the equivalent unbundled
network element, or combination of unbundled network elements, that is
available to the requesting telecommunications carrier under section
251(c)(3) of the Act and this part.
(b) An incumbent LEC shall perform any conversion from a wholesale
service
[[Page 52295]]
or group of wholesale services to an unbundled network element or
combination of unbundled network elements without adversely affecting
the service quality perceived by the requesting telecommunications
carrier's end-user customer.
(c) Except as agreed to by the parties, an incumbent LEC shall not
impose any untariffed termination charges, or any disconnect fees, re-
connect fees, or charges associated with establishing a service for the
first time, in connection with any conversion between a wholesale
service or group of wholesale services and an unbundled network element
or combination of unbundled network elements.
0
9. Section 51.317 is revised to read as follows:
Sec. 51.317 Standards for requiring the unbundling of network
elements.
Proprietary network elements. A network element shall be considered
to be proprietary if an incumbent LEC can demonstrate that it has
invested resources to develop proprietary information or
functionalities that are protected by patent, copyright or trade secret
law. The Commission shall undertake the following analysis to determine
whether a proprietary network element should be made available for
purposes of section 251(c)(3) of the Act:
(a) Determine whether access to the proprietary network element is
``necessary.'' A network element is ``necessary'' if, taking into
consideration the availability of alternative elements outside the
incumbent LEC's network, including self-provisioning by a requesting
telecommunications carrier or acquiring an alternative from a third-
party supplier, lack of access to the network element precludes a
requesting telecommunications carrier from providing the services that
it seeks to offer. If access is ``necessary,'' the Commission may
require the unbundling of such proprietary network element.
(b) In the event that such access is not ``necessary,'' the
Commission may require unbundling if it is determined that:
(1) The incumbent LEC has implemented only a minor modification to
the network element in order to qualify for proprietary treatment;
(2) The information or functionality that is proprietary in nature
does not differentiate the incumbent LEC's services from the requesting
telecommunications carrier's services; or
(3) Lack of access to such element would jeopardize the goals of
the Act.
0
10. Section 51.318 is added to read as follows:
Sec. 51.318 Eligibility criteria for access to certain unbundled
network elements.
(a) Except as provided in paragraph (b) of this section, an
incumbent LEC shall provide access to unbundled network elements and
combinations of unbundled network elements without regard to whether
the requesting telecommunications carrier seeks access to the elements
to establish a new circuit or to convert an existing circuit from a
service to unbundled network elements.
(b) An incumbent LEC need not provide access to an unbundled DS1
loop in combination, or commingled, with a dedicated DS1 transport or
dedicated DS3 transport facility or service, or to an unbundled DS3
loop in combination, or commingled, with a dedicated DS3 transport
facility or service, unless the requesting telecommunications carrier
certifies that all of the following conditions are met:
(1) The requesting telecommunications carrier has received state
certification to provide local voice service in the area being served
or, in the absence of a state certification requirement, has complied
with registration, tariffing, filing fee, or other regulatory
requirements applicable to the provision of local voice service in that
area.
(2) The following criteria are satisfied for each combined circuit,
including each DS1 circuit, each DS1 enhanced extended link, and each
DS1-equivalent circuit on a DS3 enhanced extended link:
(i) Each circuit to be provided to each customer will be assigned a
local number prior to the provision of service over that circuit;
(ii) Each DS1-equivalent circuit on a DS3 enhanced extended link
must have its own local number assignment, so that each DS3 must have
at least 28 local voice numbers assigned to it;
(iii) Each circuit to be provided to each customer will have 911 or
E911 capability prior to the provision of service over that circuit;
(iv) Each circuit to be provided to each customer will terminate in
a collocation arrangement that meets the requirements of paragraph (c)
of this section;
(v) Each circuit to be provided to each customer will be served by
an interconnection trunk that meets the requirements of paragraph (d)
of this section;
(vi) For each 24 DS1 enhanced extended links or other facilities
having equivalent capacity, the requesting telecommunications carrier
will have at least one active DS1 local service interconnection trunk
that meets the requirements of paragraph (d) of this section; and
(vii) Each circuit to be provided to each customer will be served
by a switch capable of switching local voice traffic.
(c) A collocation arrangement meets the requirements of this
paragraph if it is:
(1) Established pursuant to section 251(c)(6) of the Act and
located at an incumbent LEC premises within the same LATA as the
customer's premises, when the incumbent LEC is not the collocator; and
(2) Located at a third party's premises within the same LATA as the
customer's premises, when the incumbent LEC is the collocator.
(d) An interconnection trunk meets the requirements of this
paragraph if the requesting telecommunications carrier will transmit
the calling party's number in connection with calls exchanged over the
trunk.
0
11. Section 51.319 is revised to read as follows:
Sec. 51.319 Specific unbundling requirements.
(a) Local loops. An incumbent LEC shall provide a requesting
telecommunications carrier with nondiscriminatory access to the local
loop on an unbundled basis, in accordance with section 251(c)(3) of the
Act and this part and as set forth in paragraphs (a)(1) through (a)(9)
of this section. The local loop network element is defined as a
transmission facility between a distribution frame (or its equivalent)
in an incumbent LEC central office and the loop demarcation point at an
end-user customer premises. This element includes all features,
functions, and capabilities of such transmission facility, including
the network interface device. It also includes all electronics,
optronics, and intermediate devices (including repeaters and load
coils) used to establish the transmission path to the end-user customer
premises as well as any inside wire owned or controlled by the
incumbent LEC that is part of that transmission path.
(1) Copper loops. An incumbent LEC shall provide a requesting
telecommunications carrier with nondiscriminatory access to the copper
loop on an unbundled basis. A copper loop is a stand-alone local loop
comprised entirely of copper wire or cable. Copper loops include two-
wire and four-wire analog voice-grade copper loops, digital copper
loops (e.g., DS0s and integrated services digital network
[[Page 52296]]
lines), as well as two-wire and four-wire copper loops conditioned to
transmit the digital signals needed to provide digital subscriber line
services, regardless of whether the copper loops are in service or held
as spares. The copper loop includes attached electronics using time
division multiplexing technology, but does not include packet switching
capabilities as defined in paragraph (a)(2)(i) of this section. The
availability of DS1 and DS3 copper loops is subject to the requirements
of paragraphs (a)(4) and (a)(5) of this section.
(i) Line sharing. Beginning on the effective date of the
Commission's Triennial Review Order, the high frequency portion of a
copper loop shall no longer be required to be provided as an unbundled
network element, subject to the transitional line sharing conditions in
paragraphs (a)(1)(i)(A) and (a)(1)(i)(B) of this section. Line sharing
is the process by which a requesting telecommunications carrier
provides digital subscriber line service over the same copper loop that
the incumbent LEC uses to provide voice service, with the incumbent LEC
using the low frequency portion of the loop and the requesting
telecommunications carrier using the high frequency portion of the
loop. The high frequency portion of the loop consists of the frequency
range on the copper loop above the range that carries analog circuit-
switched voice transmissions. This portion of the loop includes the
features, functions, and capabilities of the loop that are used to
establish a complete transmission path on the high frequency range
between the incumbent LEC's distribution frame (or its equivalent) in
its central office and the demarcation point at the end-user customer
premises, and includes the high frequency portion of any inside wire
owned or controlled by the incumbent LEC.
(A) Line sharing customers before the effective date of the
Commission's Triennial Review Order. An incumbent LEC shall provide a
requesting telecommunications carrier with the ability to engage in
line sharing over a copper loop where, prior to the effective date of
the Commission's Triennial Review Order, the requesting
telecommunications carrier began providing digital subscriber line
service to a particular end-user customer and has not ceased providing
digital subscriber line service to that customer. Until such end-user
customer cancels or otherwise discontinues its subscription to the
digital subscriber line service of the requesting telecommunications
carrier, or its successor or assign, an incumbent LEC shall continue to
provide access to the high frequency portion of the loop at the same
rate that the incumbent LEC charged for such access prior to the
effective date of the Commission's Triennial Review Order.
(B) Line sharing customers on or after the effective date of the
Commission's Triennial Review Order. An incumbent LEC shall provide a
requesting telecommunications carrier with the ability to engage in
line sharing over a copper loop, between the effective date of the
Commission's Triennial Review Order and three years after that
effective date, where the requesting telecommunications carrier began
providing digital subscriber line service to a particular end-user
customer on or before the date one year after that effective date.
Beginning three years after the effective date of the Commission's
Triennial Review Order, the incumbent LEC is no longer required to
provide a requesting telecommunications carrier with the ability to
engage in line sharing for this end-user customer or any new end-user
customer. Between the effective date of the Commission's Triennial
Review Order and three years after that effective date, an incumbent
LEC shall provide a requesting telecommunications carrier with access
to the high frequency portion of a copper loop in order to serve line
sharing customers obtained between the effective date of the
Commission's Triennial Review Order and one year after that effective
date in the following manner:
(1) During the first year following the effective date of the
Commission's Triennial Review Order, the incumbent LEC shall provide
access to the high frequency portion of a copper loop at 25 percent of
the state-approved monthly recurring rate, or 25 percent of the monthly
recurring rate set forth in the incumbent LEC's and requesting
telecommunications carrier's interconnection agreement, for access to a
copper loop in effect on that date.
(2) Beginning one year plus one day after the effective date of the
Commission's Triennial Review Order until two years after that
effective date, the incumbent LEC shall provide access to the high
frequency portion of a copper loop at 50 percent of the state-approved
monthly recurring rate, or 50 percent of the monthly recurring rate set
forth in the incumbent LEC's and requesting telecommunications
carrier's interconnection agreement, for access to a copper loop in
effect on the effective date of the Commission's Triennial Review
Order.
(3) Beginning two years plus one day after effective date of the
Commission's Triennial Review Order until three years after that
effective date, the incumbent LEC shall provide access to the high
frequency portion of a copper loop at 75 percent of the state-approved
monthly recurring rate, or 75 percent of the monthly recurring rate set
forth in the incumbent LEC's and requesting telecommunications
carrier's interconnection agreement, for access to a copper loop in
effect on the effective date of the Commission's Triennial Review
Order.
(ii) Line splitting. An incumbent LEC shall provide a requesting
telecommunications carrier that obtains an unbundled copper loop from
the incumbent LEC with the ability to engage in line splitting
arrangements with another competitive LEC using a splitter collocated
at the central office where the loop terminates into a distribution
frame or its equivalent. Line splitting is the process in which one
competitive LEC provides narrowband voice service over the low
frequency portion of a copper loop and a second competitive LEC
provides digital subscriber line service over the high frequency
portion of that same loop.
(A) An incumbent LEC's obligation, under paragraph (a)(1)(ii) of
this section, to provide a requesting telecommunications carrier with
the ability to engage in line splitting applies regardless of whether
the carrier providing voice service provides its own switching or
obtains local circuit switching as an unbundled network element
pursuant to paragraph (d) of this section.
(B) An incumbent LEC must make all necessary network modifications,
including providing nondiscriminatory access to operations support
systems necessary for pre-ordering, ordering, provisioning, maintenance
and repair, and billing for loops used in line splitting arrangements.
(iii) Line conditioning. The incumbent LEC shall condition a copper
loop at the request of the carrier seeking access to a copper loop
under paragraph (a)(1) of this section, the high frequency portion of a
copper loop under paragraph (a)(1)(i) of this section, or a copper
subloop under paragraph (b) of this section to ensure that the copper
loop or copper subloop is suitable for providing digital subscriber
line services, including those provided over the high frequency portion
of the copper loop or copper subloop, whether or not the incumbent LEC
offers advanced services to the end-user customer on that copper loop
or copper subloop. If the incumbent LEC seeks compensation from the
requesting telecommunications carrier for line conditioning, the
requesting telecommunications carrier
[[Page 52297]]
has the option of refusing, in whole or in part, to have the line
conditioned; and a requesting telecommunications carrier's refusal of
some or all aspects of line conditioning will not diminish any right it
may have, under paragraphs (a) and (b) of this section, to access the
copper loop, the high frequency portion of the copper loop, or the
copper subloop.
(A) Line conditioning is defined as the removal from a copper loop
or copper subloop of any device that could diminish the capability of
the loop or subloop to deliver high-speed switched wireline
telecommunications capability, including digital subscriber line
service. Such devices include, but are not limited to, bridge taps,
load coils, low pass filters, and range extenders.
(B) Incumbent LECs shall recover the costs of line conditioning
from the requesting telecommunications carrier in accordance with the
Commission's forward-looking pricing principles promulgated pursuant to
section 252(d)(1) of the Act and in compliance with rules governing
nonrecurring costs in Sec. 51.507(e).
(C) Insofar as it is technically feasible, the incumbent LEC shall
test and report troubles for all the features, functions, and
capabilities of conditioned copper lines, and may not restrict its
testing to voice transmission only.
(D) Where the requesting telecommunications carrier is seeking
access to the high frequency portion of a copper loop or copper subloop
pursuant to paragraphs (a) or (b) of this section and the incumbent LEC
claims that conditioning that loop or subloop will significantly
degrade, as defined in Sec. 51.233, the voiceband services that the
incumbent LEC is currently providing over that loop or subloop, the
incumbent LEC must either:
(1) Locate another copper loop or copper subloop that has been or
can be conditioned, migrate the incumbent LEC's voiceband service to
that loop or subloop, and provide the requesting telecommunications
carrier with access to the high frequency portion of that alternative
loop or subloop; or
(2) Make a showing to the state commission that the original copper
loop or copper subloop cannot be conditioned without significantly
degrading voiceband services on that loop or subloop, as defined in
Sec. 51.233, and that there is no adjacent or alternative copper loop
or copper subloop available that can be conditioned or to which the
end-user customer's voiceband service can be moved to enable line
sharing.
(E) If, after evaluating the incumbent LEC's showing under
paragraph (a)(1)(iii)(D)(2) of this section, the state commission
concludes that a copper loop or copper subloop cannot be conditioned
without significantly degrading the voiceband service, the incumbent
LEC cannot then or subsequently condition that loop or subloop to
provide advanced services to its own customers without first making
available to any requesting telecommunications carrier the high
frequency portion of the newly conditioned loop or subloop.
(iv) Maintenance, repair, and testing. (A) An incumbent LEC shall
provide, on a nondiscriminatory basis, physical loop test access points
to a requesting telecommunications carrier at the splitter, through a
cross-connection to the requesting telecommunications carrier's
collocation space, or through a standardized interface, such as an
intermediate distribution frame or a test access server, for the
purpose of testing, maintaining, and repairing copper loops and copper
subloops.
(B) An incumbent LEC seeking to utilize an alternative physical
access methodology may request approval to do so from the state
commission, but must show that the proposed alternative method is
reasonable and nondiscriminatory, and will not disadvantage a
requesting telecommunications carrier's ability to perform loop or
service testing, maintenance, or repair.
(v) Control of the loop and splitter functionality. In situations
where a requesting telecommunications carrier is obtaining access to
the high frequency portion of a copper loop either through a line
sharing or line splitting arrangement, the incumbent LEC may maintain
control over the loop and splitter equipment and functions, and shall
provide to the requesting telecommunications carrier loop and splitter
functionality that is compatible with any transmission technology that
the requesting telecommunications carrier seeks to deploy using the
high frequency portion of the loop, as defined in paragraph (a)(1)(i)
of this section, provided that such transmission technology is presumed
to be deployable pursuant to Sec. 51.230.
(2) Hybrid loops. A hybrid loop is a local loop composed of both
fiber optic cable, usually in the feeder plant, and copper wire or
cable, usually in the distribution plant.
(i) Packet switching facilities, features, functions, and
capabilities. An incumbent LEC is not required to provide unbundled
access to the packet switched features, functions and capabilities of
its hybrid loops. Packet switching capability is the routing or
forwarding of packets, frames, cells, or other data units based on
address or other routing information contained in the packets, frames,
cells or other data units, and the functions that are performed by the
digital subscriber line access multiplexers, including but not limited
to the ability to terminate an end-user customer's copper loop (which
includes both a low-band voice channel and a high-band data channel, or
solely a data channel); the ability to forward the voice channels, if
present, to a circuit switch or multiple circuit switches; the ability
to extract data units from the data channels on the loops; and the
ability to combine data units from multiple loops onto one or more
trunks connecting to a packet switch or packet switches.
(ii) Broadband services. When a requesting telecommunications
carrier seeks access to a hybrid loop for the provision of broadband
services, an incumbent LEC shall provide the requesting
telecommunications carrier with nondiscriminatory access to the time
division multiplexing features, functions, and capabilities of that
hybrid loop, including DS1 or DS3 capacity (where impairment has been
found to exist), on an unbundled basis to establish a complete
transmission path between the incumbent LEC's central office and an end
user's customer premises. This access shall include access to all
features, functions, and capabilities of the hybrid loop that are not
used to transmit packetized information.
(iii) Narrowband services. When a requesting telecommunications
carrier seeks access to a hybrid loop for the provision of narrowband
services, the incumbent LEC may either:
(A) Provide nondiscriminatory access, on an unbundled basis, to an
entire hybrid loop capable of voice-grade service (i.e., equivalent to
DS0 capacity), using time division multiplexing technology; or
(B) Provide nondiscriminatory access to a spare home-run copper
loop serving that customer on an unbundled basis.
(3) Fiber-to-the-home loops. A fiber-to-the-home loop is a local
loop consisting entirely of fiber optic cable, whether dark or lit, and
serving a residential end user's customer premises.
(i) New builds. An incumbent LEC is not required to provide
nondiscriminatory access to a fiber-to-the-home loop on an unbundled
basis when the incumbent LEC deploys such a loop to a residential unit
that previously has not been served by any loop facility.
[[Page 52298]]
(ii) Overbuilds. An incumbent LEC is not required to provide
nondiscriminatory access to a fiber-to-the-home loop on an unbundled
basis when the incumbent LEC has deployed such a loop parallel to, or
in replacement of, an existing copper loop facility, except that:
(A) The incumbent LEC must maintain the existing copper loop
connected to the particular customer premises after deploying the
fiber-to-the-home loop and provide nondiscriminatory access to that
copper loop on an unbundled basis unless the incumbent LEC retires the
copper loop pursuant to paragraph (a)(3)(iii) of this section.
(B) An incumbent LEC that maintains the existing copper loop
pursuant to paragraph (a)(3)(ii)(A) of this section need not incur any
expenses to ensure that the existing copper loop remains capable of
transmitting signals prior to receiving a request for access pursuant
to that paragraph, in which case the incumbent LEC shall restore the
copper loop to serviceable condition upon request.
(C) An incumbent LEC that retires the copper loop pursuant to
paragraph (a)(3)(iii) of this section shall provide nondiscriminatory
access to a 64 kilobits per second transmission path capable of voice
grade service over the fiber-to-the-home loop on an unbundled basis.
(iii) Retirement of copper loops or copper subloops. Prior to
retiring any copper loop or copper subloop that has been replaced with
a fiber-to-the-home loop, an incumbent LEC must comply with:
(A) The network disclosure requirements set forth in section
251(c)(5) of the Act and in Sec. 51.325 through Sec. 51.335; and
(B) Any applicable state requirements.
(4) DS1 loops. (i) An incumbent LEC shall provide a requesting
telecommunications carrier with nondiscriminatory access to a DS1 loop
on an unbundled basis except where the state commission has found,
through application of the competitive wholesale facilities trigger in
paragraph (a)(4)(ii) of this section, that requesting
telecommunications carriers are not impaired without access to a DS1
loop at a specific customer location. A DS1 loop is a digital local
loop having a total digital signal speed of 1.544 megabytes per second.
DS1 loops include, but are not limited to, two-wire and four-wire
copper loops capable of providing high-bit rate digital subscriber line
services, including T1 services.
(ii) Competitive wholesale facilities trigger for DS1 loops. A
state commission shall find that a requesting telecommunications
carrier is not impaired without access to a DS1 loop at a specific
customer location where two or more competing providers not affiliated
with each other or with the incumbent LEC, including intermodal
providers of service comparable in quality to that of the incumbent
LEC, each satisfy the conditions in paragraphs (a)(4)(ii)(A) and
(a)(4)(ii)(B) of this section:
(A) The competing provider has deployed its own DS1 facilities, and
offers a DS1 loop over its own facilities on a widely available
wholesale basis to other carriers desiring to serve customers at that
location. For purposes of this paragraph, the competing provider's DS1
facilities may use dark fiber facilities that the competing provider
has obtained on an unbundled, leased, or purchased basis if it has
attached its own optronics to activate the fiber.
(B) The competing provider has access to the entire customer
location, including each individual unit within that location.
(5) DS3 loops. Subject to the cap in paragraph (a)(5)(iii), an
incumbent LEC shall provide a requesting telecommunications carrier
with nondiscriminatory access to a DS3 loop on an unbundled basis
except where the state commission has found, through application of
either paragraph (a)(5)(i) of this section or the potential deployment
analysis in paragraph (a)(5)(ii) of this section, that requesting
telecommunications carriers are not impaired without access to a DS3
loop at a specific customer location. A DS3 loop is a digital local
loop having a total digital signal speed of 44.736 megabytes per
second.
(i) Triggers for DS3 loops. A state commission shall find that a
requesting telecommunications carrier is not impaired without access to
unbundled DS3 loops at a specific customer location where two or more
competing providers not affiliated with each other or with the
incumbent LEC, including intermodal providers of service comparable in
quality to that of the incumbent LEC, satisfy either paragraph
(a)(5)(i)(A) or paragraph (a)(5)(i)(B) of this section:
(A) Self-provisioning trigger for DS3 loops. To satisfy this
trigger, a state commission must find that each competing provider has
either deployed its own DS3 facilities at that specific customer
location and is serving customers via those facilities at that
location, or has deployed DS3 facilities by attaching its own optronics
to activate dark fiber transmission facilities obtained under a long-
term indefeasible right of use and is serving customers via those
facilities at that location.
(B) Competitive wholesale facilities trigger for DS3 loops. To
satisfy this trigger, a state commission must find that each competing
provider satisfies the conditions in paragraphs (a)(5)(i)(B)(1) and
(a)(5)(i)(B)(2) of this section.
(1) The competing provider has deployed its own DS3 facilities, and
offers a DS3 loop over its own facilities on a widely available
wholesale basis to other competing providers seeking to serve customers
at the specific customer location. For purposes of this paragraph, the
competing provider's DS3 facilities may use dark fiber facilities that
the competing provider has obtained on an unbundled, leased, or
purchased basis if it has attached its own optronics to activate the
fiber.
(2) The competing provider has access to the entire customer
location, including each individual unit within that location.
(ii) Potential deployment of DS3 loops. Where neither trigger in
paragraph (a)(5)(i) of this section is satisfied, a state commission
shall consider whether other evidence shows that a requesting
telecommunications carrier is not impaired without access to an
unbundled DS3 loop at a specific customer location. To make this
determination, a state must consider the following factors: evidence of
alternative loop deployment at that location; local engineering costs
of building and utilizing transmission facilities; the cost of
underground or aerial laying of fiber or copper; the cost of equipment
needed for transmission; installation and other necessary costs
involved in setting up service; local topography such as hills and
rivers; availability of reasonable access to rights-of-way; building
access restrictions/costs; and availability/feasibility of similar
quality/reliability alternative transmission technologies at that
particular location.
(iii) Cap on unbundled DS3 circuits. A requesting
telecommunications carrier may obtain a maximum of two unbundled DS3
loops for any single customer location where DS3 loops are available as
unbundled loops.
(6) Dark fiber loops. An incumbent LEC shall provide a requesting
telecommunications carrier with nondiscriminatory access to a dark
fiber loop on an unbundled basis except where a state commission has
found, through application of the self-provisioning trigger in
paragraph (a)(6)(i) of this section or the potential deployment
analysis in paragraph
[[Page 52299]]
(a)(6)(ii) of this section, that requesting telecommunications carriers
are not impaired without access to a dark fiber loop at a specific
customer location. Dark fiber is fiber within an existing fiber optic
cable that has not yet been activated through optronics to render it
capable of carrying communications services.
(i) Self-provisioning trigger for dark fiber loops. A state
commission shall find that a requesting telecommunications carrier is
not impaired without access to a dark fiber loop at a specific customer
location where two or more competing providers not affiliated with each
other or with the incumbent LEC, have deployed their own dark fiber
facilities at that specific customer location. For purposes of making
this determination, a competing provider that has obtained those dark
fiber facilities under a long-term indefeasible right of use shall be
considered a competing provider with its own dark fiber facilities.
Dark fiber purchased on an unbundled basis from the incumbent LEC shall
not be considered under this paragraph.
(ii) Potential deployment of dark fiber loops. Where the trigger in
paragraph (a)(6)(i) of this section is not satisfied, a state
commission shall consider whether other evidence shows that a
requesting telecommunications carrier is not impaired without access to
an unbundled dark fiber loop at a specific customer location. To make
this determination, a state must consider the following factors:
evidence of alternative loop deployment at that location; local
engineering costs of building and utilizing transmission facilities;
the cost of underground or aerial laying of fiber; the cost of
equipment needed for transmission; installation and other necessary
costs involved in setting up service; local topography such as hills
and rivers; availability of reasonable access to rights-of-way;
building access restrictions/costs; and availability/feasibility of
similar quality/reliability alternative transmission technologies at
that particular location.
(7) State commission proceedings. A state commission shall complete
the proceedings necessary to satisfy the requirements in paragraphs
(a)(4), (a)(5), and (a)(6) of this section in accordance with
paragraphs (a)(7)(i) and (a)(7)(ii) of this section.
(i) Initial review. A state commission shall complete any initial
review applying the triggers and criteria in paragraphs (a)(4), (a)(5),
and (a)(6) of this section within nine months from the effective date
of the Commission's Triennial Review Order.
(ii) Continuing review. A state commission shall complete any
subsequent review applying these triggers and criteria within six
months of the filing of a petition or other pleading to conduct such a
review.
(8) Routine network modifications. (i) An incumbent LEC shall make
all routine network modifications to unbundled loop facilities used by
requesting telecommunications carriers where the requested loop
facility has already been constructed. An incumbent LEC shall perform
these routine network modifications to unbundled loop facilities in a
nondiscriminatory fashion, without regard to whether the loop facility
being accessed was constructed on behalf, or in accordance with the
specifications, of any carrier.
(ii) A routine network modification is an activity that the
incumbent LEC regularly undertakes for its own customers. Routine
network modifications include, but are not limited to, rearranging or
splicing of cable; adding an equipment case; adding a doubler or
repeater; adding a smart jack; installing a repeater shelf; adding a
line card; deploying a new multiplexer or reconfiguring an existing
multiplexer; and attaching electronic and other equipment that the
incumbent LEC ordinarily attaches to a DS1 loop to activate such loop
for its own customer. They also include activities needed to enable a
requesting telecommunications carrier to obtain access to a dark fiber
loop. Routine network modifications may entail activities such as
accessing manholes, deploying bucket trucks to reach aerial cable, and
installing equipment casings. Routine network modifications do not
include the construction of a new loop, or the installation of new
aerial or buried cable for a requesting telecommunications carrier.
(9) Engineering policies, practices, and procedures. An incumbent
LEC shall not engineer the transmission capabilities of its network in
a manner, or engage in any policy, practice, or procedure, that
disrupts or degrades access to a local loop or subloop, including the
time division multiplexing-based features, functions, and capabilities
of a hybrid loop, for which a requesting telecommunications carrier may
obtain or has obtained access pursuant to paragraph (a) of this
section.
(b) Subloops. An incumbent LEC shall provide a requesting
telecommunications carrier with nondiscriminatory access to subloops on
an unbundled basis in accordance with section 251(c)(3) of the Act and
this part and as set forth in paragraph (b) of this section.
(1) Copper subloops. An incumbent LEC shall provide a requesting
telecommunications carrier with nondiscriminatory access to a copper
subloop on an unbundled basis. A copper subloop is a portion of a
copper loop, or hybrid loop, comprised entirely of copper wire or
copper cable that acts as a transmission facility between any point of
technically feasible access in an incumbent LEC's outside plant,
including inside wire owned or controlled by the incumbent LEC, and the
end-user customer premises. A copper subloop includes all intermediate
devices (including repeaters and load coils) used to establish a
transmission path between a point of technically feasible access and
the demarcation point at the end-user customer premises, and includes
the features, functions, and capabilities of the copper loop. Copper
subloops include two-wire and four-wire analog voice-grade subloops as
well as two-wire and four-wire subloops conditioned to transmit the
digital signals needed to provide digital subscriber line services,
regardless of whether the subloops are in service or held as spares.
(i) Point of technically feasible access. A point of technically
feasible access is any point in the incumbent LEC's outside plant where
a technician can access the copper wire within a cable without removing
a splice case. Such points include, but are not limited to, a pole or
pedestal, the serving area interface, the network interface device, the
minimum point of entry, any remote terminal, and the feeder/
distribution interface. An incumbent LEC shall, upon a site-specific
request, provide access to a copper subloop at a splice near a remote
terminal. The incumbent LEC shall be compensated for providing this
access in accordance with Sec. Sec. 51.501 through 51.515.
(ii) Rules for collocation. Access to the copper subloop is subject
to the Commission's collocation rules at Sec. Sec. 51.321 and 51.323.
(2) Subloops for access to multiunit premises wiring. An incumbent
LEC shall provide a requesting telecommunications carrier with
nondiscriminatory access to the subloop for access to multiunit
premises wiring on an unbundled basis regardless of the capacity level
or type of loop that the requesting telecommunications carrier seeks to
provision for its customer. The subloop for access to multiunit
premises wiring is defined as any portion of the loop that it is
technically feasible to access at a terminal in the incumbent
[[Page 52300]]
LEC's outside plant at or near a multiunit premises. One category of
this subloop is inside wire, which is defined for purposes of this
section as all loop plant owned or controlled by the incumbent LEC at a
multiunit customer premises between the minimum point of entry as
defined in Sec. 68.105 of this chapter and the point of demarcation of
the incumbent LEC's network as defined in Sec. 68.3 of this chapter.
(i) Point of technically feasible access. A point of technically
feasible access is any point in the incumbent LEC's outside plant at or
near a multiunit premises where a technician can access the wire or
fiber within the cable without removing a splice case to reach the wire
or fiber within to access the wiring in the multiunit premises. Such
points include, but are not limited to, a pole or pedestal, the network
interface device, the minimum point of entry, the single point of
interconnection, and the feeder/distribution interface.
(ii) Single point of interconnection. Upon notification by a
requesting telecommunications carrier that it requests interconnection
at a multiunit premises where the incumbent LEC owns, controls, or
leases wiring, the incumbent LEC shall provide a single point of
interconnection that is suitable for use by multiple carriers. This
obligation is in addition to the incumbent LEC's obligations, under
paragraph (b)(2) of this section, to provide nondiscriminatory access
to a subloop for access to multiunit premises wiring, including any
inside wire, at any technically feasible point. If the parties are
unable to negotiate rates, terms, and conditions under which the
incumbent LEC will provide this single point of interconnection, then
any issues in dispute regarding this obligation shall be resolved in
state proceedings under section 252 of the Act.
(3) Other subloop provisions--(i) Technical feasibility. If parties
are unable to reach agreement through voluntary negotiations as to
whether it is technically feasible, or whether sufficient space is
available, to unbundle a copper subloop or subloop for access to
multiunit premises wiring at the point where a telecommunications
carrier requests, the incumbent LEC shall have the burden of
demonstrating to the state commission, in state proceedings under
section 252 of the Act, that there is not sufficient space available,
or that it is not technically feasible to unbundle the subloop at the
point requested.
(ii) Best practices. Once one state commission has determined that
it is technically feasible to unbundle subloops at a designated point,
an incumbent LEC in any state shall have the burden of demonstrating to
the state commission, in state proceedings under section 252 of the
Act, that it is not technically feasible, or that sufficient space is
not available, to unbundle its own loops at such a point.
(c) Network interface device. Apart from its obligation to provide
the network interface device functionality as part of an unbundled loop
or subloop, an incumbent LEC also shall provide nondiscriminatory
access to the network interface device on an unbundled basis, in
accordance with section 251(c)(3) of the Act and this part. The network
interface device element is a stand-alone network element and is
defined as any means of interconnection of customer premises wiring to
the incumbent LEC's distribution plant, such as a cross-connect device
used for that purpose. An incumbent LEC shall permit a requesting
telecommunications carrier to connect its own loop facilities to on-
premises wiring through the incumbent LEC's network interface device,
or at any other technically feasible point.
(d) Local circuit switching. An incumbent LEC shall provide a
requesting telecommunications carrier with nondiscriminatory access to
local circuit switching, including tandem switching, on an unbundled
basis, in accordance with section 251(c)(3) of the Act and this part
and as set forth in paragraph (d) of this section.
(1) Definition. Local circuit switching is defined as follows:
(i) Local circuit switching encompasses all line-side and trunk-
side facilities, plus the features, functions, and capabilities of the
switch. The features, functions, and capabilities of the switch shall
include the basic switching function of connecting lines to lines,
lines to trunks, trunks to lines, and trunks to trunks.
(ii) Local circuit switching includes all vertical features that
the switch is capable of providing, including custom calling, custom
local area signaling services features, and Centrex, as well as any
technically feasible customized routing functions.
(2) DS0 capacity (i.e., mass market) determinations. An incumbent
LEC shall provide access to local circuit switching on an unbundled
basis to a requesting telecommunications carrier serving end users
using DS0 capacity loops except where the state commission has found,
in accordance with the conditions set forth in paragraph (d)(2) of this
section, that requesting telecommunications carriers are not impaired
in a particular market, or where the state commission has found that
all such impairment would be cured by implementation of transitional
unbundled local circuit switching in a given market and has implemented
such transitional access as set forth in paragraph (d)(2)(iii)(C) of
this section.
(i) Market definition. A state commission shall define the markets
in which it will evaluate impairment by determining the relevant
geographic area to include in each market. In defining markets, a state
commission shall take into consideration the locations of mass market
customers actually being served (if any) by competitors, the variation
in factors affecting competitors' ability to serve each group of
customers, and competitors' ability to target and serve specific
markets profitably and efficiently using currently available
technologies. A state commission shall not define the relevant
geographic area as the entire state.
(ii) Batch cut process. In each of the markets that the state
commission defines pursuant to paragraph (d)(2)(i) of this section, the
state commission shall either establish an incumbent LEC batch cut
process as set forth in paragraph (d)(2)(ii)(A) of this section or
issue detailed findings explaining why such a batch process is
unnecessary, as set forth in paragraph (d)(2)(ii)(B) of this section. A
batch cut process is defined as a process by which the incumbent LEC
simultaneously migrates two or more loops from one carrier's local
circuit switch to another carrier's local circuit switch, giving rise
to operational and economic efficiencies not available when migrating
loops from one carrier's local circuit switch to another carrier's
local circuit switch on a line-by-line basis.
(A) A state commission shall establish an incumbent LEC batch cut
process for use in migrating lines served by one carrier's local
circuit switch to lines served by another carrier's local circuit
switch in each of the markets the state commission has defined pursuant
to paragraph (d)(2)(i) of this section. In establishing the incumbent
LEC batch cut process:
(1) A state commission shall first determine the appropriate volume
of loops that should be included in the ``batch.''
(2) A state commission shall adopt specific processes to be
employed when performing a batch cut, taking into account the incumbent
LEC's particular network design and cut over practices.
(3) A state commission shall evaluate whether the incumbent LEC is
capable of migrating multiple lines served using
[[Page 52301]]
unbundled local circuit switching to switches operated by a carrier
other than the incumbent LEC for any requesting telecommunications
carrier in a timely manner, and may require that incumbent LECs comply
with an average completion interval metric for provision of high
volumes of loops.
(4) A state commission shall adopt rates for the batch cut
activities it approves in accordance with the Commission's pricing
rules for unbundled network elements. These rates shall reflect the
efficiencies associated with batched migration of loops to a requesting
telecommunications carrier's switch, either through a reduced per-line
rate or through volume discounts as appropriate.
(B) If a state commission concludes that the absence of a batch cut
migration process is not impairing requesting telecommunications
carriers' ability to serve end users using DS0 loops in the mass market
without access to local circuit switching on an unbundled basis, that
conclusion will render the creation of such a process unnecessary. In
such cases, the state commission shall issue detailed findings
regarding the volume of unbundled loop migrations that could be
expected if requesting telecommunications carriers were no longer
entitled to local circuit switching on an unbundled basis, the ability
of the incumbent LEC to meet that demand in a timely and efficient
manner using its existing hot cut process, and the non-recurring costs
associated with that hot cut process. The state commission further
shall explain why these findings indicate that the absence of a batch
cut process does not give rise to impairment in the market at issue.
(iii) State commission analysis. To determine whether requesting
telecommunications carriers are impaired without access to local
circuit switching on an unbundled basis, a state commission shall
perform the inquiry set forth in paragraphs (d)(2)(iii)(A) through
(d)(2)(iii)(C) of this section:
(A) Local switching triggers. A state commission shall find that a
requesting telecommunications carrier is not impaired without access to
local circuit switching on an unbundled basis in a particular market
where either the self-provisioning trigger set forth in paragraph
(d)(2)(iii)(A)(1) of this section or the competitive wholesale
facilities trigger set forth in paragraph (d)(2)(iii)(A)(2) of this
section is satisfied.
(1) Local switching self-provisioning trigger. To satisfy this
trigger, a state commission must find that three or more competing
providers not affiliated with each other or the incumbent LEC,
including intermodal providers of service comparable in quality to that
of the incumbent LEC, each are serving mass market customers in the
particular market with the use of their own local circuit switches.
(2) Local switching competitive wholesale facilities trigger. To
satisfy this trigger, a state commission must find that two or more
competing providers not affiliated with each other or the incumbent
LEC, including intermodal providers of service comparable in quality to
that of the incumbent LEC, each offer wholesale local circuit switching
service to customers serving DS0 capacity loops in that market using
their own switches.
(B) Additional state authority. If neither of the triggers
described in paragraph (d)(2)(iii)(A) of this section has been
satisfied, the state commission shall find that requesting
telecommunications carriers are not impaired without access to
unbundled local circuit switching in a particular market where the
state commission determines that self-provisioning of local switching
is economic based on the following criteria:
(1) Evidence of actual deployment. The state commission shall
consider whether switches actually deployed in the market at issue
permit competitive entry in the absence of unbundled local circuit
switching. Specifically, the state commission shall examine whether, in
the market at issue, there are either two wholesale providers or three
self-provisioners of local switching not affiliated with each other or
the incumbent LEC, serving end users using DS1 or higher capacity loops
in the market at issue; or there is any carrier, including any
intermodal provider of service comparable in quality to that of the
incumbent LEC, using a self-provisioned switch to serve end users using
DS0 capacity loops. If so, and if the state commission determines that
the switch or switches identified can be used to serve end users using
DS0 capacity loops in that market in an economic fashion, this evidence
must be given substantial weight.
(2) Operational barriers. The state commission also shall examine
the role of potential operational barriers in determining whether to
find ``no impairment'' in a given market. Specifically, the state
commission shall examine whether the incumbent LEC's performance in
provisioning loops, difficulties in obtaining collocation space due to
lack of space or delays in provisioning by the incumbent LEC, or
difficulties in obtaining cross-connects in an incumbent LEC's wire
center render entry uneconomic for requesting telecommunications
carriers in the absence of unbundled access to local circuit switching.
(3) Economic barriers. The state commission shall also examine the
role of potential economic barriers in determining whether to find ``no
impairment'' in a given market. Specifically, the state commission
shall examine whether the costs of migrating incumbent LEC loops to
requesting telecommunications carriers' switches or the costs of
backhauling voice circuits to requesting telecommunications carriers'
switches from the end offices serving their end users render entry
uneconomic for requesting telecommunications carriers.
(4) Multi-line DS0 end users. As part of the economic analysis set
forth in paragraph (d)(2)(iii)(B)(3) of this section, the state
commission shall establish a maximum number of DS0 loops for each
geographic market that requesting telecommunications carriers can serve
through unbundled switching when serving multiline end users at a
single location. Specifically, in establishing this ``cutoff,'' the
state commission shall take into account the point at which the
increased revenue opportunity at a single location is sufficient to
overcome impairment and the point at which multiline end users could be
served in an economic fashion by higher capacity loops and a carrier's
own switching and thus be considered part of the DS1 enterprise market.
(C) Transitional use of unbundled switching. If the triggers
described in paragraph (d)(2)(iii)(A) of this section have not been
satisfied with regard to a particular market and the analysis described
in paragraph (d)(2)(iii)(B) of this section has resulted in a finding
that requesting telecommunications carriers are impaired without access
to local circuit switching on an unbundled basis in that market, the
state commission shall consider whether any impairment would be cured
by transitional (``rolling'') access to local circuit switching on an
unbundled basis for a period of 90 days or more. ``Rolling'' access
means the use of unbundled local circuit switching for a limited period
of time for each end-user customer to whom a requesting
telecommunications carrier seeks to provide service. If the state
commission determines that transitional access to unbundled local
circuit switching would cure any impairment, it shall require incumbent
LECs to make unbundled local circuit switching available to requesting
telecommunications carriers for 90 days
[[Page 52302]]
or more, as specified by the state commission. The time limit set by
the commission shall apply to each request for access to unbundled
local circuit switching by a requesting telecommunications carrier on a
per customer basis.
(iv) DS0 capacity end-user transition. If a state commission finds
that no impairment exists in a market or that any impairment could be
cured by transitional access to unbundled local circuit switching, all
requesting telecommunications carriers in that market shall commit to
an implementation plan with the incumbent LEC for the migration of the
embedded unbundled switching mass market customer base within 2 months
of the state commission determination. A requesting telecommunications
carrier may no longer obtain access to unbundled local circuit
switching 5 months after the state commission determination, except,
where applicable, on a transitional basis as described in paragraph
(d)(2)(iii)(C) of this section.
(A) Transition timeline. Each requesting telecommunications carrier
shall submit the orders necessary to migrate its embedded base of end-
user customers off of the unbundled local circuit switching element in
accordance with the following timetable, measured from the day of the
state commission determination. For purposes of calculating the number
of customers who must be migrated, the embedded base of customers shall
include all customers served using unbundled switching that are not
customers being served with transitional unbundled switching pursuant
to paragraph (d)(3)(iii)(C) of this section.
(1) Month 13: Each requesting telecommunications carrier must
submit orders for one-third of all its unbundled local circuit
switching end-user customers;
(2) Month 20: Each requesting telecommunications carrier must
submit orders for half of its remaining unbundled local circuit
switching end-user customers, as calculated pursuant to paragraph
(d)(2)(iv)(A)(1) of this section; and
(3) Month 27: Each requesting telecommunications carrier must
submit orders for its remaining unbundled local circuit switching end-
user customers.
(B) Operational aspects of the migration. Requesting
telecommunications carriers and the incumbent LEC shall jointly submit
the details of their implementation plans for each market to the state
commission within two months of the state commission's determination
that requesting telecommunications carriers are not impaired without
access to local circuit switching on an unbundled basis. Each
requesting telecommunications carrier shall also notify the state
commission when it has submitted its orders for migration. Each
incumbent LEC shall notify the state commission when it has completed
the migration.
(3) DS1 capacity and above (i.e., enterprise market)
determinations. An incumbent LEC is not required to provide access to
local circuit switching on an unbundled basis to requesting
telecommunications carriers for the purpose of serving end-user
customers using DS1 capacity and above loops except where the state
commission petitions this Commission for waiver of this finding in
accordance with the conditions set forth in paragraph (d)(3)(i) of this
section and the Commission grants such waiver.
(i) State commission inquiry. In its petition, a state commission
wishing to rebut the Commission's finding should petition the
Commission to show that requesting telecommunications carriers are
impaired without access to local circuit switching to serve end users
using DS1 capacity and above loops in a particular geographic market as
defined in accordance with paragraph (d)(2)(i) of this section if it
finds that operational or economic barriers exist in that market.
(A) In making this showing, the state commission shall consider the
following operational characteristics: incumbent LEC performance in
provisioning loops; difficulties associated with obtaining collocation
space due to lack of space or delays in provisioning by the incumbent
LEC; and the difficulties associated with obtaining cross-connects in
the incumbent LEC's wire center.
(B) In making this showing, the state commission shall consider the
following economic characteristics: the cost of entry into a particular
market, including those caused by both operational and economic
barriers to entry; requesting telecommunications carriers' potential
revenues from serving enterprise customers in that market, including
all likely revenues to be gained from entering that market; the prices
requesting telecommunications carriers are likely to be able to charge
in that market, based on a consideration of the prevailing retail rates
the incumbent LEC charges to the different classes of customers in the
different parts of the state.
(ii) Transitional four-line carve-out. Until the state commission
completes the review described in paragraph (b)(2)(iii)(B)(4) of this
section, an incumbent LEC shall comply with the four-line ``carve-out''
for unbundled switching established in Implementation of the Local
Competition Provisions of the Telecommunications Act of 1996, CC Docket
No. 96-98, Third Report and Order and Fourth Further Notice of Proposed
Rulemaking, 15 FCC Rcd 3822-31, paras. 276-98 (1999), reversed and
remanded in part sub. nom. United States Telecom Ass'n v. FCC, 290 F.3d
415 (D.C. Cir. 2002).
(A) DS1 capacity and above end-user transition. Each requesting
telecommunications carrier shall transfer its end-user customers served
using DS1 and above capacity loops and unbundled local circuit
switching to an alternative arrangement within 90 days from the end of
the 90-day state commission consideration period set forth in paragraph
(d)(5)(i), unless a longer period is necessary to comply with a
``change of law'' provision in an applicable interconnection agreement.
(4) Other elements to be unbundled. Elements relating to the local
circuit switching element shall be made available on an unbundled basis
as set forth in paragraphs (d)(4)(i) and (d)(4)(ii) of this section.
(i) An incumbent LEC shall provide a requesting telecommunications
carrier with nondiscriminatory access to signaling, call-related
databases, and shared transport facilities on an unbundled basis, in
accordance with section 251(c)(3) of the Act and this part, to the
extent that local circuit switching is required to be unbundled by a
state commission. These elements are defined as follows:
(A) Signaling networks. Signaling networks include, but are not
limited to, signaling links and signaling transfer points.
(B) Call-related databases. Call-related databases are defined as
databases, other than operations support systems, that are used in
signaling networks for billing and collection, or the transmission,
routing, or other provision of a telecommunications service. Where a
requesting telecommunications carrier purchases unbundled local circuit
switching from an incumbent LEC, an incumbent LEC shall allow a
requesting telecommunications carrier to use the incumbent LEC's
service control point element in the same manner, and via the same
signaling links, as the incumbent LEC itself.
(1) Call-related databases include, but are not limited to, the
calling name database, 911 database, E911 database, line information
database, toll free calling database, advanced intelligent
[[Page 52303]]
network databases, and downstream number portability databases by means
of physical access at the signaling transfer point linked to the
unbundled databases.
(2) Service management systems are defined as computer databases or
systems not part of the public switched network that interconnect to
the service control point and send to the service control point
information and call processing instructions needed for a network
switch to process and complete a telephone call, and provide a
telecommunications carrier with the capability of entering and storing
data regarding the processing and completing of a telephone call. Where
a requesting telecommunications carrier purchases unbundled local
circuit switching from an incumbent LEC, the incumbent LEC shall allow
a requesting telecommunications carrier to use the incumbent LEC's
service management systems by providing a requesting telecommunications
carrier with the information necessary to enter correctly, or format
for entry, the information relevant for input into the incumbent LEC's
service management system, including access to design, create, test,
and deploy advanced intelligent network-based services at the service
management system, through a service creation environment, that the
incumbent LEC provides to itself.
(3) An incumbent LEC shall not be required to unbundle the services
created in the advanced intelligent network platform and architecture
that qualify for proprietary treatment.
(C) Shared transport. Shared transport is defined as the
transmission facilities shared by more than one carrier, including the
incumbent LEC, between end office switches, between end office switches
and tandem switches, and between tandem switches, in the incumbent LEC
network.
(ii) An incumbent LEC shall provide a requesting telecommunications
carrier nondiscriminatory access to operator services and directory
assistance on an unbundled basis, in accordance with section 251(c)(3)
of the Act and this part, to the extent that local circuit switching is
required to be unbundled by a state commission, if the incumbent LEC
does not provide that requesting telecommunications carrier with
customized routing, or a compatible signaling protocol, necessary to
use either a competing provider's operator services and directory
assistance platform or the requesting telecommunications carrier's own
platform. Operator services are any automatic or live assistance to a
customer to arrange for billing or completion, or both, of a telephone
call. Directory assistance is a service that allows subscribers to
retrieve telephone numbers of other subscribers.
(5) State commission proceedings. A state commission shall complete
the proceedings necessary to satisfy the requirements in paragraphs
(d)(2) and (d)(3) of this section in accordance with paragraphs
(d)(5)(i) and (d)(5)(ii) of this section.
(i) Timing. A state commission shall complete any initial review
applying the triggers and criteria in paragraph (d)(2) of this section
within nine months from the effective date of the Commission's
Triennial Review Order. A state commission wishing to rebut the
Commission's finding of non-impairment for DS1 and above enterprise
switches must file a petition with the Commission in accordance with
paragraph (d)(3) of this section within 90 days from that effective
date.
(ii) Continuing review. A state commission shall complete any
subsequent review applying these triggers and criteria within six
months of the filing of a petition or other pleading to conduct such a
review.
(e) Dedicated transport. An incumbent LEC shall provide a
requesting telecommunications carrier with nondiscriminatory access to
dedicated transport on an unbundled basis, in accordance with section
251(c)(3) of the Act and this part and as set forth in paragraph (e)(1)
through (e)(5) of this section. As used in those paragraphs, a
``route'' is a transmission path between one of an incumbent LEC's wire
centers or switches and another of the incumbent LEC's wire centers or
switches. A route between two points (e.g., wire center or switch ``A''
and wire center or switch ``Z'') may pass through one or more
intermediate wire centers or switches (e.g., wire center or switch
``X''). Transmission paths between identical end points (e.g., wire
center or switch ``A'' and wire center or switch ``Z'') are the same
``route,'' irrespective of whether they pass through the same
intermediate wire centers or switches, if any.
(1) Dedicated DS1 transport. (i) An incumbent LEC shall provide a
requesting telecommunications carrier with nondiscriminatory access to
dedicated DS1 transport on an unbundled basis except where the state
commission has found, through application of the competitive wholesale
facilities trigger in paragraphs (e)(1)(ii) of this section, that
requesting telecommunications carriers are not impaired without access
to dedicated DS1 transport along a particular route. Dedicated DS1
transport consists of incumbent LEC interoffice transmission facilities
that have a total digital signal speed of 1.544 megabytes per second
and are dedicated to a particular customer or carrier.
(ii) Competitive wholesale facilities trigger for dedicated DS1
transport. A state commission shall find that a requesting
telecommunications carrier is not impaired without access to dedicated
DS1 transport along a particular route where two or more competing
providers not affiliated with each other or with the incumbent LEC,
including intermodal providers of service comparable in quality to that
of the incumbent LEC, each satisfy the conditions in paragraphs
(e)(1)(ii)(A) through (e)(1)(ii)(D) of this section.
(A) The competing provider has deployed its own transport
facilities and is operationally ready to use those facilities to
provide dedicated DS1 transport along the particular route. For
purposes of this paragraph, the competing provider's DS1 facilities may
use dark fiber facilities that the competing provider has obtained on
an unbundled, leased, or purchased basis if it has attached its own
optronics to activate the fiber.
(B) The competing provider is willing immediately to provide, on a
widely available basis, dedicated DS1 transport along the particular
route.
(C) The competing provider's facilities terminate in a collocation
arrangement at each end of the transport route that is located at an
incumbent LEC premises and in a similar arrangement at each end of the
transport route that is not located at an incumbent LEC premises.
(D) Requesting telecommunications carriers are able to obtain
reasonable and nondiscriminatory access to the competing provider's
facilities through a cross-connect to the competing provider's
collocation arrangement at each end of the transport route that is
located at an incumbent LEC premises and though a similar arrangement
at each end of the transport route that is not located at an incumbent
LEC premises.
(2) Dedicated DS3 transport. Subject to the cap in paragraph
(e)(2)(iii) of this section, an incumbent LEC shall provide a
requesting telecommunications carrier with nondiscriminatory access to
dedicated DS3 transport on an unbundled basis except where the state
commission has found, through application of either paragraph (e)(2)(i)
of this section or the potential deployment analysis in paragraph
(e)(2)(ii) of this section, that requesting telecommunications carriers
are not impaired without access to dedicated DS3 transport along a
particular route.
[[Page 52304]]
Dedicated DS3 transport consists of incumbent LEC interoffice
transmission facilities that have a total digital signal speed of
44.736 megabytes per second and are dedicated to a particular customer
or carrier.
(i) Triggers for dedicated DS3 transport. A state commission shall
find that a requesting telecommunications carrier is not impaired
without access to unbundled dedicated DS3 transport along a particular
route where either of the triggers in paragraphs (e)(2)(i)(A) or
(e)(2)(i)(B) of this section is satisfied.
(A) Self-provisioning trigger for dedicated DS3 transport. To
satisfy this trigger, a state must find that three or more competing
providers not affiliated with each other or with the incumbent LEC,
including intermodal providers of service comparable in quality to that
of the incumbent LEC, each satisfy the conditions in paragraphs
(e)(2)(i)(A)(1) and (e)(2)(i)(A)(2) of this section.
(1) The competing provider has deployed its own transport
facilities and is operationally ready to use those transport facilities
to provide dedicated DS3 transport along the particular route. For
purposes of this paragraph, the competing provider's DS3 transport
facilities may use dark fiber facilities that the competing provider
has obtained on a long-term, indefeasible-right of use basis and that
it has deployed by attaching its own optronics to activate the fiber.
(2) The competing provider's facilities terminate at a collocation
arrangement at each end of the transport route that is located at an
incumbent LEC premises and in a similar arrangement at each end of the
transport route that is not located at an incumbent LEC premises.
(B) Competitive wholesale facilities trigger for dedicated DS3
transport. To satisfy this trigger, a state must find that two or more
competing providers not affiliated with each other or with the
incumbent LEC, including intermodal providers of service comparable in
quality to that of the incumbent LEC, each satisfy the conditions in
paragraphs (e)(2)(i)(B)(1) through (e)(2)(i)(B)(4) of this section.
(1) The competing provider has deployed its own transport
facilities, including transport facilities that use dark fiber
facilities that the competing provider has obtained on an unbundled,
leased, or purchased basis if it has attached its own optronics to
activate the fiber, and is operationally ready to use those facilities
to provide dedicated DS3 transport along the particular route.
(2) The competing provider is willing immediately to provide, on a
widely available basis, dedicated DS3 transport along the particular
route.
(3) The competing provider's facilities terminate in a collocation
arrangement at each end of the transport route that is located at an
incumbent LEC premises and in a similar arrangement at each end of the
transport route that is not located at an incumbent LEC premises.
(4) Requesting telecommunications carriers are able to obtain
reasonable and nondiscriminatory access to the competing provider's
facilities through a cross-connect to the competing provider's
collocation arrangement at each end of the transport route that is
located at an incumbent LEC premises and though a similar arrangement
at each end of the transport route that is not located at an incumbent
LEC premises.
(ii) Potential deployment of dedicated DS3 transport. Where neither
trigger in paragraph (e)(2)(i) of this section is satisfied, a state
commission shall consider whether other evidence shows that a
requesting telecommunications carrier is not impaired without access to
unbundled dedicated DS3 transport along a particular route. To make
this determination, a state must consider the following factors: local
engineering costs of building and utilizing transmission facilities;
the cost of underground or aerial laying of fiber or copper; the cost
of equipment needed for transmission; installation and other necessary
costs involved in setting up service; local topography such as hills
and rivers; availability of reasonable access to rights-of-way;
availability/feasibility of similar quality/reliability alternative
transmission technologies along the particular route; customer density
or addressable market; and existing facilities-based competition.
(iii) Cap on unbundled DS3 circuits. A requesting
telecommunications carrier may obtain a maximum of 12 unbundled
dedicated DS3 circuits for any single route for which dedicated DS3
transport is available as unbundled transport.
(3) Dark fiber transport. An incumbent LEC shall provide a
requesting telecommunications carrier with nondiscriminatory access to
dark fiber transport on an unbundled basis except where the state
commission has found, through application of either paragraph (e)(3)(i)
of this section or the potential deployment analysis in paragraph
(e)(3)(ii) of this section, that requesting telecommunications carriers
are not impaired without access to unbundled dark fiber transport along
the particular route. Dark fiber transport consists of unactivated
optical interoffice transmission facilities.
(i) Triggers for dark fiber transport. A state commission shall
find that a requesting telecommunications carrier is not impaired
without access to dark fiber transport along a particular route where
either of the triggers in paragraph (e)(3)(i)(A) or paragraph
(e)(3)(i)(B) of this section is satisfied.
(A) Self-provisioning trigger for dark fiber transport. To satisfy
this trigger, a state commission must find three or more competing
providers not affiliated with each other or with the incumbent LEC,
each satisfy paragraphs (e)(3)(i)(A)(1) and (e)(3)(i)(A)(2) of this
section.
(1) The competing provider has deployed its own dark fiber
facilities, which may include dark fiber facilities that it has
obtained on a long-term, indefeasible-right of use basis.
(2) The competing provider's facilities terminate in a collocation
arrangement at each end of the transport route that is located at an
incumbent LEC premises and in a similar arrangement at each end of the
transport route that is not located at an incumbent LEC premises.
(B) Competitive wholesale facilities trigger for dark fiber
transport. To satisfy this trigger, a state commission must find that
two or more competing providers not affiliated with each other or with
the incumbent LEC, each satisfy paragraphs (e)(3)(i)(B)(1) through
(e)(3)(i)(B)(4) of this section. In applying this trigger, the state
commission may consider whether competing providers have sufficient
quantities of dark fiber available to satisfy current demand along that
route.
(1) The competing provider has deployed its own dark fiber,
including dark fiber that it has obtained from an entity other than the
incumbent LEC, and is operationally ready to lease or sell those
facilities for the provision of fiber-based transport along the
particular route.
(2) The competing provider is willing immediately to provide, on a
widely available basis, dark fiber along the particular route.
(3) The competing provider's dark fiber terminates in a collocation
arrangement at each end of the transport route that is located at an
incumbent LEC premises and in a similar arrangement at each end of the
transport route that is not located at an incumbent LEC premises.
(4) Requesting telecommunications carriers are able to obtain
reasonable and nondiscriminatory access to the competing provider's
dark fiber through a cross-connect to the competing provider's
collocation arrangement at each end of the transport route that is
located at an incumbent LEC premises and though a similar arrangement
at each end of the transport route that is
[[Page 52305]]
not located at an incumbent LEC premises.
(ii) Potential deployment of dark fiber transport. Where neither
trigger in paragraph (e)(3)(i) of this section is satisfied, a state
commission shall consider whether other evidence shows that a
requesting telecommunications carrier is not impaired without access to
unbundled dark fiber transport along a particular route. To make this
determination, a state must consider the following factors: local
engineering costs of building and utilizing transmission facilities;
the cost of underground or aerial laying of fiber; the cost of
equipment needed for transmission; installation and other necessary
costs involved in setting up service; local topography such as hills
and rivers; availability of reasonable access to rights-of-way;
availability/feasibility of similar quality/reliability alternative
transmission technologies along the particular route; customer density
or addressable market; and existing facilities-based competition.
(4) State commission proceedings. A state commission shall complete
the proceedings necessary to satisfy the requirements in paragraphs
(e)(1), (e)(2), and (e)(3) of this section in accordance with
paragraphs (e)(4)(i) and (e)(4)(ii) of this section.
(i) Initial review. A state commission shall complete any initial
review applying the triggers and criteria in paragraphs (e)(1), (e)(2),
and (e)(3) of this section within nine months from the effective date
of the Commission's Triennial Review Order.
(ii) Continuing review. A state commission shall complete any
subsequent review applying these triggers and criteria within six
months of the filing of a petition or other pleading to conduct such a
review.
(5) Routine network modifications. (i) An incumbent LEC shall make
all routine network modifications to unbundled dedicated transport
facilities used by requesting telecommunications carriers where the
requested dedicated transport facilities have already been constructed.
An incumbent LEC shall perform all routine network modifications to
unbundled dedicated transport facilities in a nondiscriminatory
fashion, without regard to whether the facility being accessed was
constructed on behalf, or in accordance with the specifications, of any
carrier.
(ii) A routine network modification is an activity that the
incumbent LEC regularly undertakes for its own customers. Routine
network modifications include, but are not limited to, rearranging or
splicing of cable; adding an equipment case; adding a doubler or
repeater; installing a repeater shelf; and deploying a new multiplexer
or reconfiguring an existing multiplexer. They also include activities
needed to enable a requesting telecommunications carrier to light a
dark fiber transport facility. Routine network modifications may entail
activities such as accessing manholes, deploying bucket trucks to reach
aerial cable, and installing equipment casings. Routine network
modifications do not include the installation of new aerial or buried
cable for a requesting telecommunications carrier.
(f) 911 and E911 databases. An incumbent LEC shall provide a
requesting telecommunications carrier with nondiscriminatory access to
911 and E911 databases on an unbundled basis, in accordance with
section 251(c)(3) of the Act and this part.
(g) Operations support systems. An incumbent LEC shall provide a
requesting telecommunications carrier with nondiscriminatory access to
operations support systems on an unbundled basis, in accordance with
section 251(c)(3) of the Act and this part. Operations support system
functions consist of pre-ordering, ordering, provisioning, maintenance
and repair, and billing functions supported by an incumbent LEC's
databases and information. An incumbent LEC, as part of its duty to
provide access to the pre-ordering function, shall provide the
requesting telecommunications carrier with nondiscriminatory access to
the same detailed information about the loop that is available to the
incumbent LEC.
0
12. Section 51.320 is added to read as follows:
Sec. 51.320 Assumption of responsibility by the Commission.
If a state commission fails to exercise its authority under Sec.
51.319, any party seeking that the Commission step into the role of the
state commission shall file with the Commission and serve on the state
commission a petition that explains with specificity the bases for the
petition and information that supports the claim that the state
commission has failed to act. Subsequent to the Commission's issuing a
public notice and soliciting comments on the petition from interested
parties, the Commission will rule on the petition within 90 days of the
date of the public notice. If it agrees that the state commission has
failed to act, the Commission will assume responsibility for the
proceeding, and within nine months from the date it assumed
responsibility for the proceeding, make any findings in accordance with
the Commission's rules.
0
13. Section 51.325 is amended by adding paragraph (a)(4) to read as
follows:
Sec. 51.325 Notice of network changes: Public notice requirement.
(a) * * *
(4) Will result in the retirement of copper loops or copper
subloops, and the replacement of such loops with fiber-to-the-home
loops, as that term is defined in Sec. 51.319(a)(3).
* * * * *
0
14. Section 51.331 is amended by adding paragraph (c) to read as
follows:
Sec. 51.331 Notice of network changes: Timing of notice.
* * * * *
(c) Competing service providers may object to incumbent LEC notice
of retirement of copper loops or copper subloops and replacement with
fiber-to-the-home loops in the manner set forth in Sec. 51.333(c).
0
15. Section 51.333 is amended by revising the section heading,
paragraph (b), paragraph (c) introductory text, and by adding paragraph
(f) to read as follows:
Sec. 51.333 Notice of Network Changes: Short term notice, objections
thereto and objections to retirement of copper loops or copper
subloops.
* * * * *
(b) Implementation date. The Commission will release a public
notice of filings of such short term notices or notices of replacement
of copper loops or copper subloops with fiber-to-the-home loops. The
effective date of the network changes referenced in those filings shall
be subject to the following requirements:
(i) Short term notice. Short term notices shall be deemed final on
the tenth business day after the release of the Commission's public
notice, unless an objection is filed pursuant to paragraph (c) of this
section.
(ii) Replacement of copper loops or copper subloops with fiber-to-
the-home loops. Notices of replacement of copper loops or copper
subloops with fiber-to-the-home loops shall be deemed approved on the
90th day after the release of the Commission's public notice of the
filing, unless an objection is filed pursuant to paragraph (c) of this
section. Incumbent LEC notice of intent to retire any copper loops or
copper subloops and replace such loops or subloops with fiber-to-the-
home loops shall be subject to the short term notice provisions of this
section, but under no circumstances may an incumbent LEC
[[Page 52306]]
provide less than 90 days notice of such a change.
(c) Objection procedures for short term notice and notices of
replacement of copper loops or copper subloops with fiber-to-the-home
loops. An objection to an incumbent LEC's short term notice or to its
notice that it intends to retire copper loops or copper subloops and
replace such loops or subloops with fiber-to-the-home loops may be
filed by an information service provider or telecommunications service
provider that directly interconnects with the incumbent LEC's network.
Such objections must be filed with the Commission, and served on the
incumbent LEC, no later than the ninth business day following the
release of the Commission's public notice. All objections filed under
this section must:
* * * * *
(f) Resolution of objections to replacement of copper loops or
copper subloops with fiber-to-the-home loops. An objection to a notice
that an incumbent LEC intends to retire any copper loops or copper
subloops and replace such loops or subloops with fiber-to-the-home
loops shall be deemed denied 90 days after the date on which the
Commission releases public notice of the incumbent LEC filing, unless
the Commission rules otherwise within that time. Until the Commission
has either ruled on an objection or the 90-day period for the
Commission's consideration has expired, an incumbent LEC may not retire
those copper loops or copper subloops at issue for replacement with
fiber-to-the-home loops.
0
16. Section 51.509 is amended by revising paragraph (a) and adding
paragraph (h) to read as follows:
Sec. 51.509 Rate structure standards for specific elements.
(a) Local loop and subloop. Loop and subloop costs shall be
recovered through flat-rated charges.
* * * * *
(h) Network interface device. An incumbent LEC must establish a
price for the network interface device when that unbundled network
element is purchased on a stand-alone basis pursuant to Sec.
51.319(c).
[FR Doc. 03-22193 Filed 8-29-03; 8:45 am]
BILLING CODE 6712-01-P