**Before the**

Federal Communications Commission

Washington, D.C. 20554

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| In the Matter of                 | * | WC Docket No. 06-109         |
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| Petition of ACS of Anchorage,    | ) |                              |
| Inc. Pursuant to Section 10 of   | * |                              |
| the Communications Act of 1934,  | * |                              |
| as Amended (47 U.S.C. § 160(c)), |   |                              |
| for Forbearance from Certain     | * |                              |
| Dominant Carrier Regulation of   | * |                              |
| Its Interstate Access Services,  | ) |                              |
| and for Forbearance from Title   | * |                              |
| II Regulation of Its Broadband   | * |                              |
| Services, in the Anchorage,      |   |                              |
| Alaska, Incumbent Local Exchange | * |                              |
| Carrier Study Area               | * |                              |
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+----------------------------------+---+------------------------------+

memorandum opinion and order

**Adopted: August 20, 2007 Released: August 20, 2007**

By the Commission: Chairman Martin and Commissioners Tate and McDowell
issuing separate statements; Commissioners Copps and Adelstein
concurring in part, dissenting in part and issuing a joint statement.

Table of Contents

**Paragraph**

I. introduction 1

II\. SUMMARY OF RELIEF GRANTED 4

III\. BACKGROUND 7

A. Regulatory Requirements 7

B. Prior Regulatory Relief 12

1\. Qwest Omaha Order 12

2\. ACS UNE Order 14

3\. Prior Broadband Relief 15

IV\. discussion 18

A. Forbearance Standard 19

B. Scope of ACS's Petition 20

C. Sufficiency of ACS's Petition 23

D. Requested Forbearance Relief Similar to *Qwest Omaha Order* 25

1\. Threshold Market Analysis 27

a\. Services for Which Forbearance Is Requested 27

b\. Geographic Scope of Analysis 32

c\. Marketplace Competitors 36

2\. Market Analysis 39

a\. Mass Market Switched Access Services 39

b\. Enterprise Switched Access Services 43

c\. Mass Market Broadband Internet Access Transmission Services 47

d\. Special Access Services 50

3\. Forbearance Analysis for Dominant Carrier Regulation 56

a\. Switched Access Services 56

b\. Mass Market Broadband Internet Access Transmission Services 74

c\. Regulation of Special Access Services 82

E. Requested Forbearance Relief Similar to Forbearance Granted Verizon\
by Operation of Law 93

1\. Dominant Carrier Regulation 94

2\. *Computer Inquiry* Requirements 120

3\. General Title II Economic Regulation 125

a\. Regulation Applied to ACS as a Common Carrier or LEC 126

b\. Regulation Applied to ACS as an Incumbent LEC or Independent
Incumbent LEC 130

4\. Public Policy Regulation 132

V. EFFECTIVE DATE 138

VI\. ORDERING CLAUSES 139

APPENDIX A ─ List of Commenters

# introduction

1.  In this order, we address a forbearance petition filed by ACS of
    Anchorage, Inc. (ACS) on May 22, 2006[^1] pursuant to section 10 of
    the Communications Act of 1934, as amended (Communications Act, or
    the Act) in which it seeks forbearance from certain statutory and
    regulatory obligations that apply to it as a former monopoly
    telephone company.[^2] ACS asserts that it seeks forbearance
    comparable to: (1) the relief that the Commission granted to Qwest
    Corporation (Qwest) in the Omaha Metropolitan Statistical Area
    (MSA);[^3] and (2) the relief granted to the Verizon Telephone
    Companies (Verizon) by operation of law on March 19, 2006.[^4] We
    grant the petition in part, and forbear from applying certain
    dominant carrier regulation to ACS's provision of interstate
    switched access services in the Anchorage, Alaska incumbent local
    exchange carrier (LEC) study area (Anchorage study area or
    Anchorage). We also grant its request for forbearance for mass
    market broadband Internet access transmission service and grant in
    part for certain specified enterprise broadband services that ACS
    offers in the Anchorage study area ACS's request for forbearance
    from Title II and *Computer Inquiry* requirements. These grants of
    forbearance are subject to certain conditions described below. We
    otherwise deny ACS's requested relief.

2.  More generally, ACS states that it seeks relief similar to that
    which certain price cap carriers have obtained in previous
    forbearance proceedings. Its petition, however, raises novel issues
    because ACS is a rate-of-return carrier, rather than a price cap
    carrier. In requesting forbearance subject to certain conditions,
    ACS essentially is seeking to implement an alternative regulation
    plan for the Anchorage study area. The Commission has identified
    concerns that must be addressed before rate-of-return carriers'
    services are deregulated. For example, section 254(k) of the Act
    states that a telecommunications carrier "may not use services that
    are not competitive to subsidize services that are subject to
    competition."[^5] Likewise, in the *Wireline Broadband Internet
    Access Services Order*, the Commission found that in particular for
    rate-of-return carriers, treating wireline broadband Internet access
    transmission services as free from Title II regulation would require
    the allocation of regulated costs among Title II-regulated and
    non-Title II regulated services.[^6] Consequently, regulatory relief
    from pricing regulations presents difficult challenges in the
    rate-of-return context. These challenges must be addressed
    regardless of whether such relief from pricing regulation is adopted
    in the rulemaking or forbearance context to ensure that the relief
    does not have harmful consequences for ratepayers, as well as for
    universal service.

3.  Based on the exceptional circumstances presented in the record of
    this proceeding, and the statutory goal of deregulation, we find
    that granting ACS a portion of the conditional relief it seeks is
    justified. One critical factor, as discussed below, is the evidence
    that ACS faces extraordinary facilities-based competition in the
    Anchorage market. Indeed, we observe that the Regulatory Commission
    of Alaska (Alaska Commission) itself has granted ACS significant
    pricing freedom with respect to intrastate rates in light of this
    competition,[^7] and the Commission likewise previously has granted
    relief from pricing regulation based on unique factors in
    Anchorage.[^8] We note that critical to our grant of additional
    relief are the conditions proposed by ACS and adopted today, which,
    among other things, will prohibit ACS from increasing its interstate
    rates for switched access services either generally or for specific
    rate elements, and will require ACS to withdraw from the National
    Exchange Carrier Association (NECA) pooling functions and NECA
    tariffs for the Anchorage study area. Moreover, both by virtue of
    its commitment, adopted as a condition of forbearance, and by virtue
    of the Commission's forbearance from rate-of-return regulation for
    ACS in Anchorage, ACS no longer will have the ability to seek rate
    increases based on underearnings under the rate-of-return framework
    with respect to the categories of services for which we grant
    pricing relief. Further, universal service support under the
    Interstate Common Line Support (ICLS) mechanism for all eligible
    telecommunications carriers (ETCs) in Anchorage, including ACS, will
    be distributed on a per-line basis at the current competitive ETC
    per-line level.[^9] Our decision is also influenced by the fact that
    General Communication Inc. (GCI), ACS's primary competitor in the
    Anchorage market, supports ACS's proposal for conditional
    forbearance from dominant carrier regulation of switched access
    services, which we adopt today. Each of these factors, in addition
    to the others discussed below, is critical to our finding that
    forbearance meets the statutory criteria.

# SUMMARY OF RELIEF GRANTED 

4.  In accordance with our responsibilities under the Act, and in light
    of the evidence and the conditions we adopt in this order, we grant
    ACS's Petition in part and deny it in part and take the following
    actions:

-   *Interstate Switched Access Services*: We forbear from the
    application of the rate-of-return, tariffing, discontinuance, and
    transfer of control regulations that apply to dominant carriers,
    subject to certain conditions described below.

-   *Broadband Internet Access Transmission Services*: We grant ACS
    forbearance for its broadband Internet access transmission service,
    subject to a cost allocation condition described below.

-   *Interstate Special Access Services*: We deny ACS's Petition to the
    extent it seeks forbearance from dominant carrier regulation of its
    interstate special access services generally.

-   *Specified Enterprise Broadband Services*: We grant in part and deny
    in part ACS's request for forbearance from Title II and *Computer
    Inquiry* requirements for certain interstate enterprise broadband
    services, subject to certain conditions. In all other respects,
    ACS's Petition is denied.

5.  For the reasons discussed below, we impose the following conditions
    on our grant of forbearance relief with respect to ACS's interstate
    switched access services. Specifically, we require ACS to:

-   Cap at current levels all of its switched access and end-user rate
    elements at the benchmark that applies to all of its competitors --
    ACS's tariffed rate as of June 30, 2007.

-   Comply with the interstate access charge rules applicable to
    competitive LECs, with the exception that ACS must file tariffs for
    switched access and end-user rates, which may be done on one day's
    notice,[^10] subject to the rate caps identified in this order.

-   File all contract offerings that include charges for switched access
    and/or end-user services as contract tariffs.

-   Comply with our nondominant discontinuance and transfer of control
    rules.

-   Exit the NECA common line pooling process and tariffs for the
    Anchorage study area.

-   Receive universal service support under the ICLS mechanism on a
    per-line basis at the current competitive ETC per-line level.

-   Contribute to universal service based on the June 30, 2007
    subscriber line charge (SLC) rates.

-   Maintain the allocation of common costs assigned to ACS and its
    affiliates located outside of Anchorage at current levels.

6.  In addition, to avail itself of the granted forbearance relief for
    mass market and enterprise broadband services, ACS first must file,
    and have approved by the Commission, a description of how it will
    properly allocate the costs for these services to address the cost
    shifting concerns raised by that forbearance.[^11]

# BACKGROUND

## Regulatory Requirements 

7.  Title II of the Act and the Commission's implementing rules impose
    both economic and non-economic regulation on common carriers. The
    most extensive regulations are imposed on dominant carriers (*i.e.,*
    those with individual market power). These carriers are subject to
    price cap or rate-of-return regulation, and must file tariffs for
    many of their interstate telecommunications services -- on either
    seven or 15 days' notice -- and usually with supporting data.[^12]
    In contrast, nondominant carriers generally are not subject to
    direct rate regulation and may file tariffs, on one day's notice and
    without cost support, that are presumed lawful.[^13] In addition,
    applications to discontinue, reduce, or impair service are subject
    to a 60-day waiting period for dominant carriers, as opposed to a
    30-day period for nondominant carriers.[^14] Finally, dominant
    carriers must follow more stringent procedures under section 214 of
    the Act for certain types of transfers of control, while nondominant
    carriers are accorded presumptive streamlined treatment.[^15]

8.  The Act and the Commission's rules also impose certain regulation on
    common carriers or LECs generally, regardless of whether they are
    incumbents or competing carriers, and regardless of their
    classification as dominant or nondominant. For instance, Title II
    places a duty on all common carriers engaged in interstate or
    foreign communication by wire or radio to provide such
    communications services upon reasonable request and at rates and on
    terms and conditions that are just, reasonable, and not unjustly or
    unreasonably discriminatory.[^16] In addition, all
    telecommunications carriers must interconnect directly or indirectly
    with the facilities and equipment of other common carriers.[^17] All
    LECs, in turn, have a number of additional duties, such as the duty
    not to impose unreasonable or discriminatory conditions or
    limitations on resale of their telecommunications services,[^18] and
    the duty to provide competing telecommunications services providers
    with access to the LECs' poles, ducts, and conduits under just and
    reasonable rates, terms, and conditions.[^19]

9.  The Act and the Commission's rules impose additional obligations on
    incumbent LECs or on independent incumbent LECs. Incumbent LECs, in
    particular, must meet the interconnection, collocation, and other
    obligations set forth in section 251(c) of the Act and the
    Commission's implementing rules.[^20] Independent incumbent LECs,
    including ACS, moreover, are subject to certain structural
    separation requirements if they wish to provide in-region,
    interstate, interexchange telecommunications services other than
    through resale.[^21]

10. In addition to the economic regulation described above, Title II and
    the Commission's rules subject all common carriers to a variety of
    non-economic regulations designed to further important public policy
    goals and to protect consumers. These include requirements that
    carriers contribute to federal universal service support mechanisms
    on an equitable and nondiscriminatory basis,[^22] ensure access to
    telecommunications services by people with disabilities,[^23] meet
    standards regarding the privacy of their customers'
    information,[^24] and facilitate the delivery of emergency
    services.[^25] All common carriers, moreover, are subject to a
    formal complaint process under which any person may complain to the
    Commission about anything the carrier may do that is contrary to the
    provisions of the Act.[^26]

11. ACS also is subject to certain *Computer Inquiry* requirements.
    Specifically, in the *Computer II* proceeding,[^27] in response to
    the convergence and increasing interdependence of computer and
    telecommunications technologies, the Commission established a
    regulatory framework that distinguished between "basic services" and
    "enhanced services."[^28] The Commission determined that enhanced
    services were not within the scope of its Title II jurisdiction but
    rather were within its ancillary jurisdiction under Title I of the
    Communications Act.[^29] To protect against anti-competitive
    behavior, the Commission, pursuant to this ancillary jurisdiction,
    required facilities-based common carriers to provide the basic
    transmission services underlying their enhanced services on a
    nondiscriminatory basis pursuant to tariffs governed by Title II of
    the Act.[^30] ACS thus must offer the underlying basic service at
    the same prices, terms, and conditions, to all enhanced service
    providers, including its own enhanced services operations.[^31] We
    note that ACS's *Computer Inquiry* obligations are much less
    extensive than those imposed on the Bell Operating Companies
    (BOCs).[^32]

## Prior Regulatory Relief

### Qwest Omaha Order 

12. On September 16, 2005, the Commission adopted an order granting in
    part and denying in part a forbearance petition filed by Qwest,
    which sought forbearance from certain section 251 and other
    obligations with respect to Qwest's operations in the Omaha
    MSA.[^33] In the *Qwest Omaha Order*, the Commission held that
    section 251(c)(3) had been "fully implemented" nationwide[^34] and
    granted Qwest forbearance from Qwest's section 251(c)(3) unbundling
    obligations in nine of the 24 wire centers in the Omaha MSA. The
    Commission premised its relief on the state of competition and the
    level of competitive facilities deployment in those nine wire
    centers, as well as the presence of certain other regulatory
    safeguards, such as continued availability of section 251(c)(4)
    resale and section 271 access obligations.[^35]

13. Of particular relevance in the instant proceeding, the Commission
    also granted Qwest forbearance in part from the application of
    certain dominant carrier regulation in the Omaha MSA. Specifically,
    the Commission forbore from applying its price cap, rate-of-return,
    tariffing, and 60-day discontinuance and transfer of control rules
    to Qwest's interstate mass market exchange access services and mass
    market broadband Internet access transmission services in the Omaha
    MSA.[^36] The Commission denied forbearance relief with respect to
    Qwest's enterprise telecommunications services, because Qwest had
    failed to provide sufficient information to meet the statutory
    forbearance criteria.[^37]

### ACS UNE Order 

14. Prior to filing its petition in the instant proceeding, ACS filed a
    petition with the Commission seeking relief from section 251(c)(3)
    unbundling obligations similar to that granted to Qwest in the
    *Qwest Omaha Order.*[^38] On December 28, 2006, the Commission, in
    the *ACS UNE Order*, granted in part ACS's petition for forbearance
    from section 251 unbundling. Subject to certain specific conditions,
    the Commission granted ACS forbearance from the obligation to
    provide unbundled loops and dedicated transport pursuant to sections
    251(c)(3) and 252(d)(1) in those portions of its service territory
    in the Anchorage study area where it found that ACS's main
    competitor in the Anchorage study area, GCI, had substantially built
    out its network.[^39] First, the Commission granted ACS relief from
    section 251(c)(3) unbundling obligations and section 252(d)(1)
    pricing obligations in the five of the 11 wire centers in the
    Anchorage study area where it found that the level of
    facilities-based competition by GCI ensured that market forces would
    protect the interests of consumers and that such regulation,
    therefore, was unnecessary.  Second, as a condition of the order,
    the Commission required ACS to make loops and certain subloops
    available in those five wire centers, by no later than the end of
    the transition period, at the same rates, terms and conditions as
    those negotiated between GCI and ACS in Fairbanks, Alaska until
    commercially negotiated rates are reached.  Third, the Commission
    provided for a one-year transition period before the forbearance
    grant takes effect.[^40]  Since that time, ACS and GCI reached an
    agreement, whereby ACS will continue to provide access to the
    specified elements in the Anchorage study area for at least five
    years.[^41]

### Prior Broadband Relief 

15. In previous orders, the Commission has taken a number of other
    important steps aimed at easing the regulatory requirements for
    broadband facilities and services. Specifically, in the *Triennial
    Review Order*, the Commission determined, on a national basis, that
    incumbent LECs do not have to unbundle certain broadband elements,
    including fiber-to-the-home (FTTH) loops in greenfield situations,
    broadband capabilities of FTTH loops in overbuild situations, the
    packet-switched capabilities of hybrid loops, and packet
    switching.[^42] In making its determination, the Commission
    considered, among other things, the directive of section 706 of the
    1996 Act that it provide incentives for investment in broadband
    facilities, and concluded that these facilities should not be
    unbundled.[^43] In subsequent reconsideration orders, the Commission
    extended this same unbundling relief to encompass fiber loops
    serving predominantly residential multiple dwelling units (MDUs) and
    to fiber-to-the-curb (FTTC) loops.[^44] Moreover, in the *Broadband
    271 Forbearance Order*, the Commission granted the BOCs forbearance
    relief from the requirements of section 271 specifically for the
    broadband elements for which it had granted unbundling relief under
    section 251.[^45] The Commission applied its section 10 forbearance
    analysis in light of the Act's overall goals of promoting local
    competition and encouraging broadband deployment.[^46]

16. In the *Wireline Broadband Internet Access Services Order*, the
    Commission, among other things, generally eliminated the Title II
    and *Computer Inquiry* requirements applicable to wireline broadband
    Internet access services offered by facilities-based providers.[^47]
    The Commission granted this relief for wireline broadband Internet
    access service and its underlying broadband transmission component,
    whether that component is provided over all copper loops, hybrid
    copper-fiber loops, a FTTC or fiber-to-the-premises (FTTP) network,
    or any other type of wireline facilities.[^48] The Commission's
    actions did not encompass other wireline broadband services, such as
    stand-alone Asynchronous Transfer Mode service (ATM), Frame Relay
    service, Gigabit Ethernet service, and other high-capacity special
    access services.[^49] The Commission stated that carriers and end
    users traditionally have used these services for basic transmission
    purposes and that these services, unlike wireline broadband Internet
    access services, are telecommunications services under the statutory
    definitions and thus subject to Title II.[^50]

17. On December 20, 2004, Verizon filed a petition requesting that the
    Commission forbear from applying Title II common carrier
    requirements or *Computer Inquiry* rules to Verizon's broadband
    services.[^51] On December 19, 2005, the Commission, pursuant to
    section 10(c) of the Act, extended by 90 days (until March 19, 2006)
    the date by which Verizon's petition would be deemed granted in the
    absence of a Commission decision that the petition fails to meet the
    standards for forbearance under section 10(a) of the Act.[^52] By
    their recorded vote, two Commissioners voted for and two
    Commissioners voted against a Memorandum Opinion and Order granting
    Verizon's petition in part. Section 10(c) provides that a
    forbearance petition "shall be deemed granted if the Commission does
    not deny the petition for failure to meet the requirements for
    forbearance under subsection (a) within one year after the
    Commission receives it, unless the one year period is extended by
    the Commission."[^53] On March 20, 2006, the Commission issued a
    News Release announcing that the petition had been granted by
    operation of law.[^54] At that same time, the Chairman and
    Commissioners issued statements expressing their views on the deemed
    grant of Verizon's forbearance petition.[^55]

# discussion

18. We grant in part and deny in part ACS's petition. In particular, we
    forbear from applying the dominant carrier rate-of-return,
    tariffing, discontinuance, and transfer of control regulations for
    interstate switched access services provided that ACS complies with
    certain conditions, specified below. We also grant forbearance
    relief for mass market broadband Internet access transmission
    services subject to the conditions specified below. We deny ACS's
    Petition to the extent it seeks forbearance from dominant carrier
    regulation of special access services. We also grant in part and
    deny in part ACS's request for forbearance from Title II and
    *Computer Inquiry* requirements for certain enterprise broadband
    services subject to certain conditions. In all other respects, ACS's
    Petition is denied.

## Forbearance Standard 

19. The Commission is required to forbear from any statutory provision
    or regulation if it determines that: (1) enforcement of the
    regulation is not necessary to ensure that the telecommunications
    carrier's charges, practices, classifications, or regulations are
    just, reasonable, and not unjustly or unreasonably
    discriminatory; (2) enforcement of the regulation is not necessary
    to protect consumers; and (3) forbearance from applying such
    provision or regulation is consistent with the public interest.[^56]
    In making such determinations, the Commission also must consider
    pursuant to section 10(b) "whether forbearance from enforcing the
    provision or regulation will promote competitive market
    conditions."[^57]

## Scope of ACS's Petition

20. As in prior orders, we focus our forbearance analysis on the
    specific services and legal requirements from which ACS seeks
    forbearance. [^58] Thus, we begin by identifying the specific relief
    ACS requests in its petition, including the statutory provisions and
    the Commission regulations. First, with respect to its interstate
    switched access services and special access services generally, ACS
    seeks forbearance from dominant carrier regulations for all of the
    switched and special access services it offers in the Anchorage
    study area, and appends a list of those regulations and a summary of
    those rules.[^59] The Petition states that ACS is not seeking a
    declaratory ruling that it is nondominant. With respect to mass
    market broadband Internet access transmission services, ACS further
    states that it seeks to offer residential digital subscriber line
    (DSL) transmission service on a non-common carrier basis.[^60]

21. Second, ACS seeks relief "consistent with that granted to Verizon
    Telephone Companies on March 19, 2006," for "broadband
    services."[^61] Specifically, ACS seeks relief from regulation as a
    common carrier or telecommunications service provider for any
    packetized broadband services it offers or may offer in
    Anchorage.[^62] ACS seeks the ability to offer all these services on
    a non-common carrier basis.[^63] ACS also seeks forbearance from
    "the same regulation from which forbearance was sought and granted
    in the original Verizon petition."[^64] ACS does not seek relief
    from universal service contribution obligations "to the extent
    \[it\] offers broadband services that remain subject to the
    obligation to contribute to universal service as
    'telecommunications.'"[^65]

22. ACS claims that the services for which it seeks relief fall within
    the same two categories of services as those for which Verizon
    sought relief: (1) packet-switched services capable of transmitting
    at speeds of at least 200 kilobits per second (kbps) in both
    directions; and (2) non-time division multiplexing-based
    (non-TDM-based) optical networking, optical hubbing, and optical
    transmission services having the same transmission speed
    capabilities.[^66] ACS states that it presently offers the following
    services within these categories on an interstate basis: Transparent
    Local Area Network (LAN) Service, Transparent LAN Service Lite, LAN
    Extension Networking Service, and Video Transmission Services.[^67]
    ACS also states that it may offer in the future the following
    additional broadband telecommunications services on an interstate
    basis: Frame Relay Services, ATM Service, Optical Networking
    Service, Wavelength-Based Transport Service, and Remote Network
    Access Service.[^68] ACS's broadband forbearance request encompasses
    these enumerated existing and planned services as well as any other
    broadband telecommunication services that ACS might offer in the
    future in Anchorage.[^69]

## Sufficiency of ACS's Petition

23. Before we examine the merits of ACS's Petition, we address certain
    procedural objections. Certain commenters in this proceeding ask the
    Commission to dismiss or deny the petition for lack of the
    specificity in the relief requested that is necessary to provide
    commenters with proper notice and allow the Commission to undertake
    the required section 10 analysis.[^70]

24. We decline to reject any aspect of ACS's Petition on the grounds of
    ambiguity or insufficiency of pleading. No party disputes that ACS's
    request for forbearance includes certain services, such as mass
    market switched access services. Rather, the parties' concerns focus
    primarily on ACS's special access services. As discussed below, we
    deny ACS's request for forbearance from dominant carrier regulation
    of its special access services generally, and thus we need not reach
    the issue of whether the Petition should be denied for lack of
    clarity.[^71] We also reject the criticism of the petition's
    forbearance request with respect to enterprise broadband services
    based on the fact that the precise scope of forbearance deemed
    granted to Verizon was subject to disagreement.[^72] Rather than
    counseling in favor of denying the petition for lack of clarity, we
    find that setting forth our analysis below will help clarify the
    Commission's approach to this issue, although the ultimate outcome
    is based on the specific facts of the record here.

## Requested Forbearance Relief Similar to *Qwest Omaha Order* 

25. ACS requests conditional forbearance from dominant carrier
    regulation of its interstate switched and special access services,
    and contends that such relief would be consistent with the *Qwest
    Omaha Order*.[^73] To the extent that ACS seeks relief for mass
    market switched access services and mass market broadband Internet
    access transmission services, its request falls within the same
    category of services for which relief was granted to Qwest. ACS also
    requests forbearance relief for enterprise switched access services
    and special access services, and thus seeks forbearance relief that
    goes beyond that granted in the *Qwest Omaha Order*. For the reasons
    explained below, the evidence in this proceeding enables us,
    consistent with the criteria of section 10, to grant ACS the
    conditional forbearance relief it seeks for both mass market and
    enterprise switched access and end-user services. We otherwise deny
    ACS's request for forbearance relief similar to that granted in the
    *Qwest Omaha Order*.[^74]

26. ACS states that it does not seek a declaratory ruling that it is
    nondominant.[^75] Nevertheless, we recognize the strong relationship
    between the statutory forbearance criteria and the Commission's
    dominance analysis, particularly with regard to the statutory
    assessment of competitive conditions and the goal of protecting
    consumers through dominant carrier regulations. [^76] Specifically,
    section 10(a)'s mandate to forbear for a "telecommunications
    service, or class of . . . telecommunications service" in any or
    some of a carrier's "geographic markets"[^77] closely parallels the
    Commission's traditional approach under its dominance assessments to
    product markets and geographic markets, respectively. Accordingly,
    as we evaluate the dominant carrier regulations at issue pursuant to
    the section 10 standard below, our inquiry is informed by the
    Commission's traditional market power analysis.[^78]

### Threshold Market Analysis 

#### Services for Which Forbearance Is Requested

27. ACS proposes that we focus our analysis on the services that the
    Commission identified in the *Qwest Omaha Order* --mass market and
    enterprise market services, with mass market services subdivided
    into interstate exchange access services and broadband Internet
    access transmission services.[^79] As discussed in greater detail
    below, for the purposes of this proceeding, and consistent with the
    *Qwest Omaha Order* framework,[^80] we separately consider: (1) mass
    market switched access services; (2) mass market broadband Internet
    access transmission services; (3) enterprise switched access
    services; and (4) special access services.

28. *Mass Market*. For the purposes of evaluating Qwest's request for
    relief from dominant carrier regulation in the *Qwest Omaha Order*,
    the Commission separately analyzed mass market switched access
    services and mass market broadband Internet access transmission
    services.[^81] No party challenges the reliance on this precedent,
    and we adopt the same approach for the instant proceeding.[^82] For
    the reasons given in the *SBC/AT&T Order* and *Verizon/MCI Order*,
    we reject ACS's suggestion that we should include e-mail and instant
    messaging in our analysis of mass market services.[^83] We also
    decline to include facilities-based voice over Internet Protocol
    (VoIP) service and wireless service as close substitute products in
    our analysis, since there is no data in the record that justifies
    including such services in our analysis. Accordingly, we will
    separately consider mass market switched access services and mass
    market broadband Internet access transmission services.

29. *Enterprise Market*. In the *Qwest Omaha Order*, the Commission
    explained that, because the record in that proceeding did not
    generally provide a more granular break-down between small and large
    businesses or other categories, the Commission did not attempt to
    analyze enterprise services at a more disaggregated level.[^84] In
    addition, because the Commission found insufficient basis in the
    record to grant forbearance from dominant carrier regulation of
    enterprise services, it found that a more granular breakdown was
    unnecessary. In more recent orders, the Commission has separately
    analyzed retail enterprise services and special access
    services.[^85] In addition, we note that commenters argue that there
    are additional distinct categories of retail and wholesale
    enterprise services in Anchorage.[^86]

30. As an initial matter, consistent with our precedent and the record
    in this proceeding, we separately analyze enterprise switched and
    special access services for three reasons. First, the evidence in
    the record suggests that enterprise customers do not view switched
    access services and special access services as close
    substitutes.[^87] Second, certain of the regulations from which ACS
    seeks forbearance distinguish between switched and special access
    services.[^88] Third, ACS has proposed different conditions for
    enterprise switched access services and special access services. The
    qualified and limited nature of these distinct proposed conditions
    necessitates distinct evaluation of these services. Separately
    analyzing enterprise switched access services and special access
    services also addresses GCI's specific concern that it would be
    inappropriate to treat the enterprise market as a whole.[^89]

31. Consistent with Commission precedent, we separately analyze retail
    special access services and wholesale special access services.[^90]
    The arguments raised in the record, the data presented by GCI, and
    the particular characteristics of the Anchorage study area all argue
    for such a separate analysis. Furthermore, because special access
    services serve as such an important input for other carriers'
    provision of retail enterprise services,[^91] we believe it is
    appropriate to analyze separately the extent of competition for
    wholesale special access services, since the requested relief would
    implicate wholesale special access services.[^92]

#### Geographic Scope of Analysis 

32. ACS seeks forbearance in the area coextensive with the ACS Anchorage
    incumbent LEC study area.[^93] ACS submits that consumers throughout
    the Anchorage study area have access to the same choices of service
    at the same retail rates.[^94] In the *Qwest Omaha Order*, the
    Commission explained that it began its forbearance analysis of
    dominant carrier regulation with the proposed area of relief as the
    relevant geographic market, unless the record indicated compelling
    reasons to narrow it.[^95]

33. We note that no commenter opposes the use of the Anchorage study
    area for purposes of evaluating mass market switched access and
    broadband services. In addition, such an approach is consistent with
    that taken by the Commission in the *Qwest Omaha Order*, where the
    Omaha MSA was used for purposes of analyzing mass market switched
    access and broadband services.[^96]

34. With respect to enterprise switched access services, we reject
    commenters' contention that the Anchorage study area is overbroad
    for purposes of analyzing enterprise services.[^97] GCI notes that
    pricing in the business market is customer-specific, and asserts
    that, if the Commission were to forbear from ACS's obligation to
    offer section 251 UNEs, different business customers would face
    different competitive alternatives depending upon the availability
    of GCI's facilities.[^98] Although the Commission ultimately granted
    ACS forbearance from section 251 unbundling obligations in certain
    wire centers in the *ACS UNE Order*, it targeted that relief to
    those wire centers where GCI had extensive facilities deployed.[^99]
    Thus, we do not anticipate that mass market or enterprise switched
    access customers will face different competitive choices throughout
    the Anchorage study area by virtue of the forbearance from section
    251 unbundling. Likewise, ACS's commitment to offer residential and
    enterprise switched access services, under terms, conditions, and
    prices mutually agreed upon between ACS and GCI, is uniform
    throughout the Anchorage study area.[^100]

35. With regard to special access services, we believe for several
    reasons that it is necessary to perform our analysis on a more
    disaggregated geographic basis.[^101] First, the Commission has
    traditionally adopted a building-specific approach to analyzing
    competition in special access services.[^102] Second, the evidence
    in the record indicates that the availability of competitive
    facilities varies from building to building.[^103] Third, the
    evidence indicates that prices for enterprise customers are set on a
    customer-specific basis. Accordingly, we reject ACS's suggestion
    that defining the relevant geographic market as less than the entire
    study area would be inappropriate.[^104]

#### Marketplace Competitors

36. *Mass Market* *Switched Access Services*. The record indicates that
    ACS faces strong competition from GCI for the provision of mass
    market switched access. GCI first entered the Anchorage service area
    in 1997, and is in the midst of a multi-phase process of upgrading
    its cable facilities to transition customers from UNEs to its own
    facilities for voice services.[^105] Other traditional wireline
    competitors in the Anchorage study area include AT&T Alascom.[^106]
    AT&T Alascom competes in the mass market solely using resold
    services obtained from ACS.[^107] Although the Commission, in
    previous orders, has identified facilities-based VoIP providers and
    wireless carriers as market participants, there are no data in the
    record that justifies our including such providers in our
    analysis.[^108]

37. *Mass Market Broadband Service*. We find that ACS is subject to
    significant intermodal broadband competition in the Anchorage study
    area. Most notably, GCI, which offers cable modem service to
    virtually all mass market customers in Anchorage, is the largest
    provider of mass market broadband services in the Anchorage
    market.[^109] In addition, ACS claims that AT&T Alascom, Clearwire,
    and TelAlaska are entering this market by offering broadband
    services over wireless facilities.[^110] Although we recognize that
    providers of wireless broadband services operate in the Anchorage
    study area, we are unable to make more detailed findings regarding
    these competitors due to a lack of record evidence indicating the
    extent and geographic scope of the services they offer.

38. *Enterprise Switched and Special Access Services*. We also find that
    ACS is subject to significant competition from GCI for enterprise
    switched access services, but lack record evidence regarding the
    extent to which GCI or other competitors provide special access
    service, particularly those that do not rely on ACS's tariffed
    special access offerings. GCI initially entered the Anchorage market
    as a long-distance carrier and competitive access provider.[^111] In
    1998, GCI completed the construction of its fiber optic network,
    which is concentrated in the Anchorage midtown and downtown
    areas.[^112] GCI has been able to use its network facilities to
    provide competitive enterprise switched access offerings. Although
    we recognize GCI as an established competitor in the market for some
    types of enterprise services, we lack evidence to make any specific
    findings regarding the extent of GCI's role as a competitive
    provider of special access services. Although ACS claims that Dobson
    Cellular and Alaska DigiTel provide wireless enterprise switched
    access services in Anchorage, [^113] there are no data in the record
    that justify our including these providers, or any other providers,
    in our analysis. [^114]

### Market Analysis

#### Mass Market Switched Access Services

39. *Market Share*. As the Commission observed in the *ACS UNE Order*,
    retail competition in the Anchorage study area is robust.[^115] In
    its petition, ACS asserts generally that "GCI alone already has won
    approximately half of the overall exchange access market."[^116] To
    calculate market shares, we make more specific determinations and
    find that ACS has **\[REDACTED\]** residential access lines for no
    more than a **\[REDACTED\]** percent share of the switched access
    mass market, compared to **\[REDACTED\]** residential access lines
    for GCI.[^117] Consistent with the *Qwest Omaha Order*, we find that
    the data ACS and GCI have submitted regarding residential customers
    are a reasonable proxy for the number of mass market switched access
    customers served by each carrier.[^118]

40. *Other Factors*. In assessing demand elasticities for mass market
    exchange access services, we recognize here as we did in the *CLEC
    Access Charge Reform Order* that competitive carriers serve two
    distinct customer groups -- end users for long distance calls, and
    interexchange carriers.[^119] With regard to the end user market, we
    find the demand elasticity in the interstate exchange access mass
    market to be high. The Commission has repeatedly found that
    residential customers are highly demand-elastic and willing to
    switch to or from their provider to obtain price reductions and
    desired features.[^120] Nothing in this record indicates otherwise
    for mass market customers in Anchorage, and the growth in GCI's
    residential access line base and corresponding decline in ACS's base
    support our forbearance determination here. Furthermore, consumers
    in Anchorage will have the added protection of a cap on their
    end-user SLCs, which we adopt as a condition of the forbearance we
    grant ACS. Separately, with regard to the exchange access services
    ACS provides interexchange carriers, we previously have identified
    concerns stemming from the terminating access monopoly and
    interexchange carriers' inability to switch exchange access
    providers.[^121] Thus, as further explained below, to address these
    concerns, we also adopt certain conditions, including a cap on
    switched access rates, that will help ensure that our forbearance
    does not result in rates that are unjust or unreasonable.

41. With respect to supply substitutability, we find that GCI has
    extensive and modern facilities throughout much of Anchorage, and
    that its network has sufficient capacity such that GCI could easily
    expand the number of customers it serves. In addition, network
    elements unbundled pursuant to section 251(c)(3) remain available in
    much of Anchorage.[^122] Accordingly, we find that there is adequate
    supply elasticity in this market for competitors to respond to any
    price increase ACS might attempt.

42. *Firm Cost, Size, Resources*. The record reveals that ACS's most
    significant competitor in the Anchorage study area is GCI.[^123]
    There is no record evidence to indicate that ACS possesses
    sufficiently lower costs or superior resources, size, financial
    strength, or technical capabilities as compared to GCI. GCI is a
    large business that can provide a suite of mass market switched
    access services that are reasonably comparable to services provided
    by ACS.[^124]

#### Enterprise Switched Access Services

43. *Market Share*. With regard to market share for these services, we
    find compelling that GCI has acquired **\[REDACTED\]** business
    switched voice lines in the Anchorage study area, compared to the
    **\[REDACTED\]** business retail access lines that ACS has
    retained.[^125] As with our mass market switched access analysis, we
    are unable to calculate market shares precisely, given the lack of
    data regarding other carriers. Thus, considering just the data for
    GCI and ACS indicates an approximate **\[REDACTED\]** market share
    for ACS. We find that even this estimated market share suggests that
    there exists substantial competition for enterprise switched access
    services.[^126]

44. *Other Factors*. As with mass market switched access services, the
    record in this proceeding does not include data sufficient for us to
    estimate precisely the own-price elasticity of demand for the
    relevant services. However, similar to our finding above regarding
    the mass market, the evidence in the record is consistent with a
    finding that enterprise switched access customers are highly
    sensitive to changes in the price of switched access
    telecommunications services.[^127] Furthermore, as a condition of
    the forbearance we grant ACS, enterprise customers will have the
    added protection of a cap on their end-user SLC charges.

45. Also similar to the evidence for mass market customers, with respect
    to supply substitutability, the record of competition in this
    proceeding and the other market-opening regulations that remain in
    place support the finding that supply elasticity is high. With
    respect to business customers, as with mass market customers, GCI
    has the ability to serve customers over its own facilities in many
    instances.[^128] Moreover, in those areas of the Anchorage study
    area where GCI has fewer facilities capable of being used to provide
    exchange access services, network elements unbundled pursuant to
    section 251(c)(3) remain available.[^129]

46. *Firm Cost, Size, Resources*. As compared to GCI in relation to the
    provision of interstate enterprise switched access services, as
    explained above, there is no record evidence to indicate that ACS
    possesses sufficiently lower costs or superior resources, size,
    financial strength, or technical capabilities than GCI as relevant
    here.

#### Mass Market Broadband Internet Access Transmission Services

47. *Market Share*. We evaluate ACS's request for forbearance for its
    DSL transmission service consistent with the Commission's findings
    in the *Wireline Broadband Internet Access Services Order*. In that
    order, the Commission found that the market for broadband Internet
    access services is "an emerging market" and that broadband providers
    would continue to be subject to actual and potential competition by
    intermodal and intramodal competitors.[^130] The Commission further
    found that "snapshot data . . . may quickly and predictably be
    rendered obsolete as this market continues to evolve."[^131]
    Although our analysis does not rely solely on static market share
    data, we note that the available information regarding the Anchorage
    market is consistent with the Commission's general conclusions in
    the *Wireline Broadband Internet Access Services Order*. No party
    disputes ACS's assertion that GCI is the largest provider of mass
    market broadband services in Anchorage, and GCI recognizes the
    significant role that it plays in the retail market generally.[^132]
    ACS submits estimated data that GCI has an even greater share of the
    mass market for broadband Internet access services than for switched
    access. In particular, ACS estimates that GCI has a market share of
    **\[REDACTED\]** percent of this market.[^133] ACS admits that
    broadband subscriber data for the Anchorage market is not readily
    available and has not supported its methodology in making this
    estimate. Therefore, although we are unable on this record to
    determine any specific percentage, we note that GCI has not
    challenged this estimate.[^134] Moreover, the factual conclusions in
    the *ACS UNE Order* likewise indicate that GCI is the leading
    provider of broadband Internet access services.[^135]

48. *Other Factors*. We find that demand substitutability and elasticity
    for mass market broadband Internet access services also are high.
    The record here is consistent with the Commission's findings in
    recent decisions that customers have the ability and willingness to
    choose between competing DSL and cable modem services.[^136] In
    terms of supply elasticity, we find that GCI's entry over the last
    several years into the broadband market and its current market
    position indicate that GCI is capable of quickly serving additional
    customers should ACS attempt to raise the price of its wireline
    broadband Internet access services. Indeed, as the Commission found
    in the *ACS UNE Order*, GCI has "market leading broadband
    facilities."[^137]

49. *Firm Cost, Size, Resources*. As compared to GCI in relation to the
    provision of mass market broadband Internet access transmission
    services, there is no record evidence to indicate that ACS possesses
    sufficiently lower costs or superior resources, size, financial
    strength, or technical capabilities as relevant here.

#### Special Access Services

50. *Market Share*. We are unable to determine on the record before us
    the market share for ACS or any other carrier for either retail or
    wholesale special access services in Anchorage. The Commission found
    in the *ACS UNE Order* that nothing on the record in that proceeding
    reflected any significant alternative sources of wholesale inputs
    for carriers in the Anchorage study area,[^138] and no evidence in
    the instant proceeding persuades us to conclude otherwise here.

51. ACS states that it "provides a very small number of special access
    circuits directly to end-user customers," and explains that it
    primarily supplies special access circuits as wholesale inputs to
    other carriers, including ACS's own long distance, Internet access,
    and wireless affiliates.[^139] ACS has submitted data showing that,
    as of May 2, 2007, it provisioned only **\[REDACTED\]** voice grade
    or digital data DS0, **\[REDACTED\]** DS1, and **\[REDACTED\]** DS3
    special access circuits to retail customers.[^140] In contrast, ACS
    provides **\[REDACTED\]** voice grade or digital data DS0,
    **\[REDACTED\]** DS1, and **\[REDACTED\]** DS3 special access
    circuits as wholesale inputs to other carriers, including ACS's long
    distance, Internet access, and wireless affiliates.[^141] We place
    particular weight on the evidence that other carriers -- in
    particular GCI and AT&T Alascom -- appear to rely heavily on ACS for
    wholesale special access services.[^142] For instance, GCI and AT&T
    Alascom together purchase approximately **\[REDACTED\]** times as
    many DS0 special access voice and data circuits, and
    **\[REDACTED\]** times as many DS1 and **\[REDACTED\]** as many DS3
    special access circuits, as ACS sells either at retail or at
    wholesale to its long distance affiliate.[^143]

52. In addition, GCI submits that, of the approximately 5000 business
    locations in Anchorage, it provides telecommunications services to
    only about **\[REDACTED\]** locations over its own fiber network,
    and has placed fiber into approximately **\[REDACTED\]** other
    locations.[^144] However, nothing that ACS or any other party has
    submitted on this record allows us to determine the total market for
    either retail special access or wholesale special access services
    for any circuit capacity. For example, absent data about the number
    of DS1 interstate channel terminations that GCI or another carrier
    self-provisions or sells to third-party carriers, we are unable to
    calculate ACS's share for such special access services. Although GCI
    estimates that it has cable plant near only **\[REDACTED\]** percent
    of small business locations and **\[REDACTED\]** percent of medium
    and large business locations in Anchorage, the data does not
    identify those specific buildings; does not reveal the capacity
    demanded at those locations; nor the relative extent to which ACS,
    GCI, and other providers can meet the demand for capacity for those
    buildings.[^145]

53. *Other Factors*. No party to this proceeding has submitted any data
    or estimates regarding the price elasticity of demand or the
    elasticity of supply for enterprise special access services, and the
    ACS Petition's treatment of these factors aggregates enterprise
    switched access with wholesale and retail special access issues. ACS
    cites anecdotal evidence of enterprise customers' willingness to
    switch to alternative providers offering better prices, and cites
    the "guaranteed value" terms in enterprise customers' contracts that
    allow GCI or ACS customers to terminate their contract without
    penalty if a competitor offers a better price that the current
    provider is unwilling to match.[^146] We find, however, the record
    before us contrasts with those before the Commission in the *Qwest
    Section 272 Sunset Forbearance Order* and prior proceedings, where
    the Commission concluded that large enterprise customers in BOC
    regions tend to be sophisticated consumers aware of the multitude of
    choices available to them. Here, the enterprise market appears to
    include few large enterprise customers.[^147] Although ACS cites to
    three recent competitive requests for proposal issued by large
    enterprise customers, we are unable to make inferences from those
    customers about enterprise customers in Anchorage as a whole.
    Moreover, given the limitations of our other competitive findings
    with respect to special access services, the mixed record with
    regard to this issue alone does not persuade us that there is
    sufficient competition for retail or wholesale enterprise
    services.[^148]

54. The record evidence does not enable us to find that wholesale or
    retail special access services in the Anchorage study area have high
    supply elasticity. Although ACS makes a variety of claims about the
    availability of competitive access networks in Anchorage, as
    discussed above, we have not been able to estimate special access
    market shares or the availability of competitive facilities to
    particular buildings.[^149] We also have not been able to determine
    a reliable estimate of retail enterprise market shares generally.
    Moreover, it appears that the existing enterprise competition relies
    to a significant extent on wholesale inputs from ACS, including
    special access services.[^150] Given our conclusions below about the
    insufficiency of ACS's proposed conditions,[^151] we cannot assume
    the continued availability of such inputs on prices, terms, and
    conditions to allow competitors to increase their supply in response
    to attempts by ACS to exercise market power in the event we were to
    forbear from dominant carrier regulation of ACS's special access
    services generally.

55. *Firm Cost, Size, Resources*. As explained above, we are unable to
    determine on the record before us the market share for ACS or any
    other carrier for either retail or wholesale special access services
    in the Anchorage study area, which impacts our ability to make
    findings here, particularly with respect to whether ACS incurs
    sufficiently lower costs than its competitors regarding the
    provision of special access services.

### Forbearance Analysis for Dominant Carrier Regulation

#### Switched Access Services

56. ACS asks "to be regulated under 'the same regime under which
    competitive LECs currently operate,'" similar to the forbearance
    regime that the Commission granted Qwest for mass market switched
    access services in the *Qwest Omaha Order.*[^152] ACS asserts that
    it should be treated like any other competitive LEC in the Anchorage
    market based on the high level of competition and elasticity of
    customer demand.[^153] Specifically, ACS seeks forbearance from
    dominant carrier regulation, comprising rate-of-return regulations,
    certain related tariffing and pricing rules, and section 214
    discontinuance and transfer of control requirements. If granted
    forbearance from this regulation, ACS proposes to meet certain
    conditions that provide "further assurance that the interests of
    both consumers and competition will be promoted."[^154] Among other
    things, ACS agrees to cap at current levels all interstate switched
    access rates, including the SLC, "such that ACS will be unable to
    increase the price of any individual access service."[^155] ACS
    agrees to be subject to a ceiling for terminating interstate
    switched access rates as are competitive LECs, which is similar to
    the ceiling that the Commission imposed on Qwest in the *Qwest Omaha
    Order.*[^156] ACS asserts that it "is willing to accept
    downward-only pricing flexibility" in order to help it design
    competitive offerings and better serve its customers.[^157]

##### Section 10(a)(1) -- Charges, Practices, Classifications, and Regulations

57. We find that the criteria of section 10 are satisfied with respect
    to the requested relief for ACS's mass market and enterprise
    switched access services, subject to the conditions discussed below.
    First, our forbearance analysis under section 10(a)(1) requires that
    we determine whether enforcement of the regulations at issue is not
    necessary to ensure that charges, practices, classifications, or
    regulations for those services are not unjustly or unreasonably
    discriminatory.[^158] In its petition, ACS argues broadly that
    certain dominant carrier regulation of interstate switched access
    services, including end-user charges, is no longer necessary to
    ensure that ACS's rates and practices are just, reasonable and not
    unreasonably discriminatory, and that ACS therefore satisfies the
    criteria of section 10(a)(1) of the 1996 Act.[^159] More
    specifically, it contends that the Anchorage telecommunications
    market has become highly competitive and that ACS lacks market
    power.[^160] Further, ACS argues that the high level of competition
    for switched access services in the mass market and enterprise
    market will ensure that ACS's charges and practices remain just and
    reasonable and warrants forbearance from dominant carrier regulation
    of switched access services.[^161]

58. *Rate-of-return and Tariffing Forbearance for Switched Access
    Services*. Based on the significant competition ACS faces for both
    mass market and enterprise switched access services and on the
    conditions described below, we conclude that enforcement of dominant
    carrier rate-of-return regulations and certain related tariffing and
    pricing rules is not necessary to ensure that ACS's charges,
    practices, or regulations are just, reasonable, and not unjustly or
    unreasonably discriminatory with regard to end users and access
    customers.[^162] Accordingly, we forbear from those regulations with
    respect to switched access services.

59. We adopt certain conditions on this grant of forbearance to address
    the special problem of carrier's carrier charges, where all LECs
    have monopoly power over the rates that they charge carriers wishing
    to terminate calls to their end user customers. In the *CLEC Access
    Charge Reform Order*, the Commission found that interexchange
    carriers are subject to the monopoly power that all competitive LECs
    wield over access to their end users, and that carriers' carrier
    charges cannot be fully deregulated.[^163] In addition, section
    254(g) requires interexchange carriers to geographically average
    their rates and thereby to spread the cost of both originating and
    terminating access over all their end users. Consequently, because
    interexchange carriers are effectively unable either to pass through
    access charges to their end users or to create other incentives for
    end users to choose LECs with low access rates, the party causing
    the costs -- the end user that chooses the high-priced LEC -- has no
    incentive to minimize costs.[^164] As a result, the Commission
    imposed a permissive detariffing regime through section 61.26 that
    permits the filing of tariffs on one day's notice without cost
    support (and presumes the access charges that competitive LECs
    charge their carrier customers to be just and reasonable) where the
    rates are at or below a benchmark that is "the rate of the competing
    ILEC." [^165] Competitive LECs are subject to mandatory detariffing
    of any rates that exceed that benchmark.[^166] The Commission does
    not otherwise regulate the rates charged pursuant to any other
    arrangement that competitive LECs may reach with interexchange
    carriers.

60. To ensure that our forbearance today does not result in rates that
    are unjust or unreasonable by virtue of the problems identified in
    the *CLEC Access Charge Reform Order*, and in light of the "unique
    nature" of the access market in Anchorage,[^167] we condition this
    forbearance upon: (1) ACS's capping at current levels all of its
    interstate switched access rate elements, including those charged to
    carriers and end-users;[^168] and (2) ACS's compliance with the same
    regime under which competitive LECs currently operate, with the
    exception that ACS must file tariffs for switched access and
    end-user rates, which may be done on one day's notice,[^169] and
    cannot charge rates higher than the rate ceilings we adopt as
    conditions in this order. Thus, ACS will be subject to a ceiling on
    terminating interstate switched access rates similar to the
    benchmark that the Commission imposed on Qwest pursuant to section
    61.26 of the Commission's rules*.*[^170] Accordingly, we extend to
    ACS the current benchmark that applies to all of its competitors --
    ACS's tariffed rate as of June 30, 2007 -- which will also serve as
    the benchmark for other LECs operating within ACS's service
    territory in the Anchorage market.

61. In addition, based on the unique circumstances in the Anchorage
    market, we grant ACS forbearance from the rate-of-return regulation
    that applies to ACS's mass market and enterprise switched access
    services in Anchorage, subject to certain additional conditions.
    First, as a condition of this relief, ACS may not seek rate
    increases from the Commission under the rate-of-return framework,
    which we believe ensures that ACS no longer will have the ability to
    seek rate increases based on underearnings.[^171] Second, we require
    ACS to continue to file all contract offerings as contract tariffs,
    as GCI suggests.[^172] We agree with GCI that such a requirement
    will help maintain the transparency, and facilitate the evaluation,
    of ACS's rates and offerings. [^173] As GCI observes,
    "\[r\]ate-of-return carriers are currently prohibited from offering
    switched . . . access services pursuant to individual customer
    contracts."[^174] The transparency associated with ACS's contract
    tariff filings will aid the evaluation of its compliance with the
    other conditions of this order, including the requirement that the
    rates for ACS's switched access services not increase above current
    levels. Finally, we reject GCI's argument that ACS should not be
    allowed to obtain deemed lawful treatment of its tariffed
    rates.[^175] Deemed lawful status is available to all LECs,
    including competitive LECs, that meet the requirements of section
    204(a)(3) of the Act, and GCI has shown no reason why deemed lawful
    status should not apply in the case of ACS.[^176] Given these
    conditions, we find that continued application of dominant carrier
    tariff filing requirements is no longer necessary to ensure just,
    reasonable, and not unjustly or unreasonably discriminatory charges
    and practices.

62. Further, because ACS's special access services and services outside
    of the Anchorage study area will remain subject to rate-of-return
    regulation, we need to ensure that the allocation of common costs
    assigned to ACS of Anchorage and its affiliates located outside of
    Anchorage does not disadvantage ACS customers in any area. ACS
    proposes the following to maintain the allocation of common costs
    assigned to ACS of Anchorage and its affiliates at current levels:

> The regulated joint and common expenses assigned to ACS of Anchorage
> as a percentage of regulated joint and common expenses assigned to all
> commonly owned ACS ILECs will not be lower than in Calendar Year 2005.
> USF Data Collections reports used to compute Study Area Cost per Loop
> for each ACS LEC study area will be provided to GCI for the sole
> purpose of computing the percentage of joint and common expenses
> assigned to ACS of Anchorage. This percentage will be computed
> annually by dividing the sum of "Total Corporate Operations" (FCC Part
> 32 accounts 6710 and 6720, currently line 565) plus total "General
> Support Expense" (FCC Part 32 Account 6120, currently line 350) for
> Anchorage (SAC 613000) by the sum "Corporate Operations Expense" and
> "General Support Expense" for all ACS LEC study areas (ACS-Anchorage,
> 613000; ACS of the Northland-Sitka, 613020; ACS of the
> Northland-Glacier State 613010; ACS of Alaska-Greatland, 613022; ACS
> of Alaska-Juneau, 613022; ACS of Fairbanks 613008). If the calculation
> for any given year shows that the percentage of "Corporate Operations
> Expense" and "General Support Expense" assigned to ACS of Anchorage
> has decreased below the 2005 percentage, joint and common expenses in
> the final access cost studies and USF submissions for all other ACS
> study areas will be adjusted downward proportionately. The downward
> adjustment will be of a magnitude that a re-computation of the USF
> Data Collection reports using the adjusted numbers would bring the
> percentage of joint and common expenses assigned to ACS of Anchorage
> up to the 2005 ratio.[^177]

We adopt this proposal as a condition of this order to address concerns
that ACS might recover costs disproportionately from customers in other
areas of Alaska.

63. *Discontinuance and Streamlined Transfer of Control Forbearance*.
    For all mass market and enterprise switched access services, we find
    that continued application of our dominant carrier discontinuance
    rules is not necessary to ensure that ACS's charges, practices, or
    regulations are just, reasonable, and not unjustly or unreasonably
    discriminatory so long as discontinuance of service by ACS is
    subject to the Commission's discontinuance rules for nondominant
    carriers.[^178] We conclude that subjecting ACS to a 60-day
    automatic grant period for discontinuance of service, and a 30-day
    comment period for affected customer notice, is not necessary under
    section 10(a)(1), where GCI and other competitive LECs are subject
    to a 30-day automatic grant period and 15-day comment period. Where
    such a significant share of customers have selected carriers other
    than ACS, we find that continuing to impose more onerous
    discontinuance requirements on ACS is no longer necessary to ensure
    just, reasonable, and not unjustly or unreasonably discriminatory
    charges and practices. As a condition of this forbearance and to
    ensure the criteria of section 10 are satisfied, we require ACS to
    comply with the discontinuance requirements that apply to
    nondominant carriers.[^179] For similar reasons, we forbear from
    applying our streamlined transfer of control rules to ACS as a
    dominant carrier, conditioned upon treatment of ACS as a
    non-dominant carrier under these rules.[^180]

##### Section 10(a)(2) -- Protection of Consumers

64. The second criterion under section 10 requires that we assess
    whether enforcement of the Commission's dominant carrier regulations
    as they apply to mass market and enterprise interstate switched
    access rates, including end-user charges, is not necessary for the
    protection of consumers.[^181] ACS asserts that it satisfies the
    criteria of section 10(a)(2) because the "high level of
    facilities-based competition in Anchorage and the continued
    regulation of ACS's rates and practices" will protect
    consumers.[^182] In particular, ACS asserts that, in addition to
    competition, requirements other than dominant carrier regulation,
    such as sections 201 and 202 of the Act, are sufficient to protect
    consumers from any carrier attempting to charge unreasonable
    rates.[^183] It further argues that forbearance from certain
    dominant common carrier regulation would allow ACS greater
    flexibility with respect to its pricing and service offerings that
    would benefit consumers.[^184] Moreover, ACS asserts that its
    proposal to cap at current levels all switched access rates and
    accept downward-only pricing flexibility will further protect
    consumers.[^185]

65. For many of the same reasons that led us to conclude that section
    10(a)(1) is satisfied, we also conclude that section 10(a)(2) is
    satisfied with regard to a limited set of dominant carrier
    regulations, comprising rate-of-return regulations, certain related
    tariffing and pricing rules, and section 214 regulation.[^186] Most
    notably, in light of GCI's capture of **\[REDACTED\]** residential
    access lines compared to ACS's **\[REDACTED\]** residential access
    lines,[^187] and GCI's **\[REDACTED\]** enterprise switched access
    lines compared to ACS's **\[REDACTED\]** business retail switched
    access lines,[^188] continuing to subject ACS to these requirements
    does not enhance consumer protection. Also critical to our finding
    that consumers will not be harmed is the condition requiring ACS to
    cap all of its switched access rates at current levels on an
    "absolute" basis for each rate element, rather than on an averaged
    basis. Thus, consumers will be protected by this downward-only
    pricing flexibility for ACS, and there will be no opportunity for
    the rates of some elements to be raised to recapture revenue lost
    from other services.

##### Section 10(a)(3) -- Public Interest

66. The third criterion of section 10 requires that we determine whether
    forbearance from applying our dominant carrier regulations for
    switched access services and end-user charges, including our
    rate-of-return regulations, related tariffing and pricing
    requirements, and our section 214 transfer of control requirements,
    is consistent with the public interest.[^189] In making this
    determination, the Commission shall consider whether forbearance
    will promote competitive market conditions, including the extent to
    which forbearance will enhance competition among providers of
    telecommunications services.[^190] ACS argues that "asymmetric
    regulation is hobbling the ability of ACS to compete with its more
    than evenly matched competitor in GCI."[^191] ACS, for example,
    argues that it faces burdensome dominant carrier tariffing
    requirements, like those that applied to Qwest prior to the relief
    granted in the *Qwest Omaha Order*.[^192] ACS argues that a grant of
    forbearance relief is in the public interest because it will promote
    competitive market conditions by allowing ACS greater flexibility in
    its price and service offerings, "likely triggering better price and
    service offerings from GCI."[^193]

67. Consistent with our findings in the *Qwest Omaha Order,* we conclude
    that forbearing from our dominant carrier regulations that apply to
    interstate switched access rate elements, including those charged to
    both carriers and end-users, is consistent with the public
    interest.[^194] Specifically, we find that such forbearance will
    enhance the vigorous competition that has emerged in the Anchorage
    market and will serve the public interest. Accordingly, we no longer
    apply to ACS the dominant carrier regulations that apply to
    interstate switched access and end-user services, including our
    rate-of-return regulations, related tariffing and pricing
    requirements, and our section 214 requirements.[^195] We believe
    that ACS will price its mass market and enterprise interstate
    switched access services competitively without this level of
    burdensome regulatory oversight because it is subject to sufficient
    competition.[^196] Further, as the Commission stated in the *Qwest
    Omaha Order,* in environments that are competitive for end users,
    applying dominant carrier regulations limits a carrier's "ability to
    respond to competitive forces and, therefore, its ability quickly to
    offer consumers new pricing plans or service packages."[^197]
    Similarly, forbearance in these circumstances will help ACS compete
    more vigorously and offer consumers more choice and prices that
    respond to market forces.

68. We also do not believe that reduced regulation will harm competition
    or consumers. Significantly, as discussed above, we have found that
    the ceiling we impose on individual switched access rate elements as
    a condition of our forbearance provides protection against the
    possibility that competition might be harmed. Market pressures,
    moreover, created by GCI and other competitors, will force ACS to
    price its interstate exchange access services competitively, or face
    further loss of market share for these services.[^198] As a result
    of ACS's substantially diminished market position in Anchorage,
    rate-of-return regulation and related rules, such as section 61.38
    which requires the provision of cost support for rate changes, no
    longer serve their intended regulatory purpose with respect to
    interstate switched access and end-user rates in Anchorage, and thus
    this level of burdensome regulation is not consistent with the
    public interest.[^199]

69. We agree with GCI, however, that to ensure that the increased
    regulatory parity between ACS and competing carriers such as GCI is
    in the public interest, it is necessary to adopt certain additional
    conditions on ACS, besides the ceiling on individual rate elements.
    First, we condition our grant of forbearance on ACS's not
    participating in the NECA pooling process and tariffs for the
    Anchorage study area. [^200] As a member of the NECA common line
    pool, ACS would receive payment of its costs from NECA irrespective
    of the amount that ACS actually collects from its customers.[^201]
    We agree with GCI that permitting ACS to remain in the NECA pool
    with regard to Anchorage would provide an implicit subsidy
    unavailable to its competitors and at odds with ACS's request to end
    rate-of-return regulation.[^202] We also note that ACS does not
    object to this condition.[^203]

70. Second, we condition ACS's receipt of ICLS. In the *MAG Order*, the
    Commission created the ICLS mechanism to compensate rate-of-return
    carriers for the interstate loop costs that they could not otherwise
    recover due to the cap on the SLCs that rate-of-return carriers
    assess on their end-user customers.[^204] ACS seeks forbearance from
    the SLC caps applicable to rate-of-return carriers.[^205] Upon grant
    of its forbearance request, ACS would no longer be subject to the
    SLC caps, and would therefore be able to fully recover its common
    line costs from its end users, negating its eligibility to receive
    ICLS. ACS, however, has agreed to cap its interstate switched access
    rates, including its SLCs, at their current levels.[^206] Given that
    ACS's SLCs will be capped at their current levels, thereby
    precluding ACS from increasing these rates to recover its interstate
    loop costs, we believe that it is consistent with the purpose of the
    ICLS mechanism to permit ACS to continue to be eligible to receive
    ICLS. ACS will remain eligible to receive ICLS only so long as its
    SLCs remain capped at current levels.[^207]

71. ICLS is provided to both rate-of-return ETCs and competitive ETCs in
    a study area based on the incumbent LEC's embedded costs.[^208]
    After the grant of its forbearance request becomes effective, ACS
    will no longer be required to calculate its common line revenue
    requirement per study area pursuant to Part 69 of the Commission's
    rules.[^209] Therefore, ACS's ICLS amounts will no longer be
    calculated in the same manner as is ICLS for other rate-of-return
    regulated incumbent LEC ETCs pursuant to section 54.901(a).[^210]
    GCI has proposed, and ACS has agreed, that, as a condition of
    granting its forbearance request, ACS's ICLS amounts would be set at
    the current competitive ETC per-line level.[^211] After grant of the
    forbearance request, all ETCs in ACS's Anchorage study area,
    including ACS, would receive ICLS at the same per-line support
    amounts. We find that ACS's ICLS shall be set at the per-line level
    of ICLS provided to competitive ETCs on the effective date of this
    order subject to Commission modification in its universal service
    reform proceedings.[^212]

72. We note that our grant of ACS's forbearance petition in no way
    alters its obligation to contribute to the universal service
    fund.[^213]  After grant of its request, to the extent that ACS
    chooses to no longer assess federal end-user subscriber line
    charges, ACS must identify the interstate portion of fixed local
    exchange service revenues for universal service contribution
    purposes.[^214] ACS states that it will impute the tariffed SLC
    rates when calculating its universal service contributions.[^215] As
    discussed above, as a condition of this forbearance grant, ACS's SLC
    rates will be capped. ACS will be able, however, to reduce its
    tariffed SLC rates, thereby reducing the amount it contributes to
    the universal service fund.[^216] To preclude ACS from using its
    forbearance grant to significantly reduce its universal service
    contribution amounts, therefore, ACS shall use the June 30, 2007,
    residential and single-line business SLC rate and the multi-line
    business SLC rate to calculate the interstate end-user revenues on
    which its universal service contributions are based. In addition, we
    note that section 54.712 of the Commission's rules dictates the
    manner in which contributors to the universal service fund are
    permitted to recover their contributions from end users.[^217]

73. We believe that this conditional forbearance from dominant carrier
    regulation in Anchorage will serve the public interest by increasing
    the regulatory parity among providers of mass market interstate
    exchange access services in that market. As a result of our decision
    today, the playing field between ACS and GCI will be leveled to the
    extent ACS will no longer be subject to dominant carrier regulations
    for its mass market and enterprise interstate switched access
    services. In light of the competitive findings above, we believe
    this outcome is warranted and serves the public interest.[^218]

#### Mass Market Broadband Internet Access Transmission Services

74. We find that the criteria of section 10 are satisfied with respect
    to the requested conditional relief for ACS's mass market broadband
    Internet access transmission services, conditioned upon ACS filing,
    and having approved by the Commission, a description of how it will
    address the cost allocation implications of this forbearance before
    it exercises this relief. In the *Qwest Omaha Order*, the Commission
    granted Qwest forbearance from rate-of-return and tariffing
    requirements for mass market broadband Internet access transmission
    services.[^219] Subsequent to the adoption of the *Qwest Omaha
    Order*, the Commission released its *Wireline Broadband Internet
    Access Services Order*, which, among other things: (1) determined
    that wireline broadband Internet access service is an information
    service; (2) concluded that the wireline broadband Internet access
    services market is an evolving market characterized by emerging
    intermodal and intramodal competition; and (3) held that
    facilities-based wireline broadband Internet access service
    providers were free to offer the transmission component of wireline
    broadband Internet access service on either a common carrier or
    non-common carrier basis, if they chose. Consequently, the *Wireline
    Broadband Internet Access Services Order* effectively supplants the
    need for relief for these services like that granted in the *Qwest
    Omaha Order*, at least for price cap carriers.[^220]

75. With respect to rate-of-return carriers, the Commission likewise
    granted relief from tariffing requirements for wireline broadband
    Internet access transmission services. However, with respect to rate
    regulation, and the ability to offer wireline broadband Internet
    access transmission services on a non-common carrier basis, the
    Commission further observed in the *Wireline Broadband Internet
    Access Services Order* that "all rate-of-return carriers that have
    participated in this proceeding have stated that they wish to
    continue offering broadband transmission service as a Title II
    common carrier service."[^221] Thus, the Commission did not address
    cost allocation issues for rate-of-return carriers that, as a
    practical matter, are a prerequisite to a carrier's availing itself
    of the ability to offer the transmission component of wireline
    broadband Internet access services on a non-common carrier
    basis.[^222] Rather, the Commission held that "\[i\]n the event that
    an earnings determination is needed for some ratemaking purpose," as
    would be the case under rate-of-return regulation, "the affected
    carrier will have to propose a way of removing the costs of any
    non-Title II services from the computation."[^223] This was
    necessary because the Commission found that, although carriers were
    allowed to offer wireline broadband Internet access transmission
    service on a non-common carrier basis, for accounting purposes the
    activities of incumbent LECs associated with these offerings would
    continue to be treated as regulated under Part 64 of the
    Commission's rules.[^224] Thus, unless there likewise is an
    appropriate allocation of a rate-of-return carrier's costs for the
    non-common carrier provision of DSL transmission service, those
    costs could be recovered through increases in the rates for other
    interstate special access services that remain subject to
    rate-of-return regulation.

76. Although the *Wireline Broadband Internet Access Services Order* was
    not principally conducted as a section 10 forbearance proceeding,
    the Commission concluded in that order that "the reasons that
    persuade us not to require that the transmission component of
    wireline broadband Internet access service be offered as a
    telecommunications service under Title II also persuade us that
    application of the tariffing provisions in Title II is 'not
    necessary to ensure that the charges, practices, classifications, or
    regulations by, for, or in connection with that telecommunications
    carrier or telecommunications service are just and reasonable and
    are not unjustly or unreasonably discriminatory' within the meaning
    of section 10(a)(1)."[^225]

77. The Commission went on to hold in the *Wireline Broadband Internet
    Access Services Order*, that "\[t\]he need to attract end user and
    ISP customers also makes clear that tariffing 'is not necessary for
    the protection of consumers' within the meaning of section
    10(a)(2)."[^226] In particular, the Commission found that regulatory
    relief would better enable carriers to offer innovative service
    arrangements than would be the case if tariffing obligations
    applied.[^227]

78. Finally, in the *Wireline Broadband Internet Access Services Order*,
    the Commission concluded that regulatory relief for broadband
    Internet access telecommunications offerings is in the public
    interest within the meaning of section 10(a)(3) because it gives
    carriers greater freedom in how they offer broadband Internet access
    transmission as a telecommunications service, promoting competitive
    market conditions.[^228]

79. We find no basis in the record for reaching a different conclusion
    here, and likewise find that the criteria of section 10 are met. We
    note that the evidence indicates that ACS already faces significant
    intermodal competition for broadband Internet access services today.
    Although the analysis of the market for broadband Internet access
    service does not hinge on static market share data, we note that the
    evidence regarding the Anchorage market supports the finding of
    significant intermodal broadband Internet access competition, with
    ACS possessing **\[REDACTED\]** of the broadband Internet access
    services market.

80. As discussed above, however, before a carrier may exercise the
    regulatory relief (beyond relief from tariffing obligations) granted
    in the *Wireline Broadband Internet Access Services Order*, the
    Commission identified an additional issue -- cost allocation -- that
    would need to be addressed by providers, such as rate-of-return
    carriers, for which an earnings determination is used for ratemaking
    purposes. We find that ACS has not addressed the cost allocation
    concerns here, given the continued rate of return regulation of its
    special access services, as well as its services outside of the
    Anchorage study area. Consequently, we require as a condition of
    forbearance that ACS file, and have approved by the Commission, a
    description of how it will address the cost allocation implications
    of this forbearance before it exercises this relief.[^229] Our
    evaluation of ACS's proposed cost allocation for these services thus
    will help to ensure that the rates for special access services will
    continue to be just and reasonable.

81. We note that ACS does not seek, nor do we grant in this order,
    forbearance from section 254(k) of the Act as it applies to ACS's
    mass market broadband Internet access services. That section
    provides that "\[a\] telecommunications carrier may not use services
    that are not competitive to subsidize services that are subject to
    competition, and that "\[t\]he Commission, with respect to
    interstate services, . . . shall establish any necessary cost
    allocation rules, accounting safeguards, and guidelines to ensure
    that services included in the definition of universal service bear
    no more than a reasonable share of the joint and common costs of
    facilities used to provide those services." We find that specifying
    ACS's responsibility prior to it availing itself of the forbearance
    relief for wireline broadband Internet access transmission service
    is necessary to fulfill section 254(k)'s mandate that the Commission
    "shall" ensure that telecommunications carriers comply with the
    requirements of section 254(k). We further observe that, were such
    legal obligations not to apply to ACS, forbearance would not be
    warranted.[^230] Rather than denying such forbearance relief,[^231]
    we find it consistent with the deregulatory goals of section
    10,[^232] and with Commission precedent,[^233] to clarify this legal
    precondition for ACS to avail itself of the forbearance for its DSL
    transmission service.[^234]

#### Regulation of Special Access Services 

82. ACS also seeks conditional forbearance from dominant carrier
    tariffing and rate-of-return pricing regulation for its interstate
    special access services as a whole.[^235] We are not persuaded by
    the record evidence that the standards of section 10 are satisfied
    with respect to such services. Therefore, we deny ACS's request for
    the conditional forbearance it seeks for its interstate special
    access services at this time.

83. As an initial matter, we note that, although ACS contends that the
    relief it seeks is consistent with the *Qwest Omaha Order*, the
    Commission in that order denied Qwest forbearance from dominant
    carrier regulation as it applies to any of Qwest's special access
    services. Specifically, the Commission denied that aspect of Qwest's
    petition because it found that "Qwest ha\[d\] not provided
    sufficient data for its service territory for the entire MSA to
    allow \[the Commission\] to reach a forbearance determination under
    section 10(a) for the enterprise market," which the Commission in
    that order took to include all special access services.[^236]
    Similarly here, we find that ACS has not provided sufficient data to
    convince us that granting ACS the conditional relief it seeks for
    special access services would be consistent with each of the
    standards of section 10.[^237] In particular, the data submitted do
    not enable us to conclude that there is sufficient competition with
    respect to interstate special access services generally, nor to
    conclude that forbearance would be justified under section 10
    notwithstanding our inability to make such a finding.

84. In conducting our forbearance analysis, and consistent with the
    Commission's prior decisions, we examine the status of competition
    in the retail and wholesale markets.[^238] As described above, the
    available data do not allow us to calculate precise market shares
    for retail special access services in the Anchorage study
    area.[^239] More significantly, although the record contains general
    information about the scope of GCI's facilities deployment,[^240] as
    discussed in greater detail above, those data do not enable us to
    adequately determine market shares.[^241] The absence of such market
    share evidence to use as a starting point for our analysis
    significantly hinders our ability to analyze on this record whether
    there is sufficient competition for interstate special access
    services throughout the Anchorage MSA.[^242] This has implications
    for retail enterprise services provided using special access inputs,
    as well. Although the data on the record do not permit us to draw
    definitive conclusions based on market shares for retail special
    access services, the record suggests that a substantial amount of
    retail competition is based on special access inputs from ACS.[^243]

85. Thus, in contrast to the relief from dominant carrier regulation
    granted in the *Qwest Omaha Order* and granted elsewhere in this
    order, we are unable to rely on the findings of our competitive
    analysis to justify forbearance from dominant carrier regulation of
    special access services. However, although the traditional market
    power inquiry informs our forbearance analysis, the inability to
    fully perform such an analysis is not necessarily dispositive in and
    of itself.[^244] Rather, we proceed to evaluate the evidence in the
    record to determine if forbearance nonetheless is justified in this
    particular instance under the specific factors identified in
    section 10. As explained above, ACS has proposed certain forbearance
    conditions, such as capping its prices for special access services
    at current rates, that it contends are sufficient to satisfy the
    criteria of section 10 and entitle it to forbearance relief. In this
    case, however, we find such evidence insufficient to demonstrate
    that forbearance from dominant carrier regulation is
    warranted.[^245]

86. As explained above, ACS has proposed capping tariffed special access
    rates, and continuing to tariff special access services (albeit on
    the same basis as competing carriers) as conditions of granting
    forbearance from dominant carrier regulation pricing and tariffing
    regulation of ACS's special access services as a whole.[^246] It
    claims that these proposed conditions are sufficient to satisfy the
    criteria of section 10 and entitle it to forbearance relief. We are
    not persuaded, however, that the conditions proposed by ACS are
    sufficient to ensure that ACS's rates and practices would be just,
    reasonable, and not unjustly or unreasonably discriminatory as
    required to satisfy section 10(a)(1).

87. First, assuming *arguendo* that the conditions ACS proposes would be
    sufficient to ensure that the rates for ACS's interstate special
    access services would be just and reasonable, ACS would still have
    the incentive and ability to increase its rivals' costs by
    manipulating the terms and conditions under which it offered and
    provisioned such services.[^247] ACS's proposed condition, while it
    precludes it from increasing tariffed special access rates, does not
    protect against any non-price ability to raise rivals' costs, and
    thus does not fully ameliorate competitive concerns.

88. Second and relatedly, we find ACS's proposal that it continue to
    tariff its special access services, but on one day's notice, to be
    insufficient to ensure that the rates, terms, and conditions of
    ACS's special access tariffs will be just, reasonable, and not
    unjustly or unreasonably discriminatory.[^248] Specifically, with a
    one-day tariff notice period, the Commission would be unable to
    ensure that ACS did not include unreasonable or discriminatory terms
    in its tariffs. Where the Commission has allowed the filing of
    tariffs on one day's notice it has been predicated on evidence of
    competition, which the Commission expected to constrain the
    carrier's behavior.[^249] The lack of a comparable competitive
    showing here, combined with the concerns expressed above regarding
    ACS's incentive and ability to engage in non-price discrimination to
    raise its rivals' costs, leads us to conclude that ACS's proposal to
    tariff its special access services on one day's notice is not
    sufficient to ensure that its special access practices are not
    unjust, unreasonable, or unjustly or unreasonably discriminatory.
    Thus, we are not persuaded that ACS would no longer have the ability
    to raise rivals' costs by virtue of its proposed conditions.

89. As support for our conclusion, we also note that none of the
    commenters in this proceeding support ACS's conditional request for
    forbearance to the extent it applies to special access services as a
    whole, notwithstanding that ACS's largest competitor in the
    enterprise market -- GCI -- supports the conditional forbearance
    relief we grant in this order for switched access and other
    services.[^250] This reinforces our conclusion that the competitive
    concerns raised by ACS's conditional forbearance request preclude a
    finding that dominant carrier pricing and tariffing regulations are
    not necessary to ensure that ACS's special access services are
    offered on a just, reasonable, and not unjustly or unreasonably
    discriminatory basis under section 10(a)(1).

90. For similar reasons, we also conclude that ACS has not demonstrated
    that these requirements are not necessary for the protection of
    consumers under section 10(a)(2). To the extent that ACS retains the
    ability to raise rivals' costs through the provisioning of its
    special access services, end-user prices may rise, and consumers may
    be harmed as a result.[^251] We find that the dominant carrier
    regulations at issue are still necessary to ensure competition in
    this market and ultimately to protect consumers.

91. Finally, ACS has not demonstrated that the requested forbearance
    relief is consistent with the public interest, as required by
    section 10(a)(3).[^252] In considering whether the requested relief
    is consistent with the public interest, section 10(a)(3) requires us
    to consider whether the requested relief "will promote competitive
    market conditions, including the extent to which such forbearance
    will enhance competition among providers of telecommunications
    services."[^253] We find that granting ACS relief from dominant
    carrier regulation with respect to its provision of special access
    services would not enhance competition in the Anchorage study area
    as contemplated in section 10(a)(3), but would likely reduce
    competition. As explained above, the record indicates that ACS could
    engage in non-price discrimination even if the Commission accepted
    ACS's proposed conditions.[^254] We are not willing, nor are we able
    under the Act, to forbear from dominant carrier regulations when to
    do so would be inconsistent with the public interest and would not
    promote competitive market conditions. Thus, we find that ACS has
    not made the required showing, and we therefore deny its request.

92. We therefore deny ACS's Petition to the extent it seeks conditional
    forbearance from the dominant carrier regulation that applies to
    interstate special access services. For the reasons explained above,
    we are unable to find on the present record that ACS has satisfied
    any of the three criteria of section 10 with respect to its
    requested relief for interstate special access services.

## Requested Forbearance Relief Similar to Forbearance Granted Verizon by Operation of Law

93. In addition to ACS's request for similar forbearance relief to that
    granted in the Qwest Omaha Order, ACS also seeks relief comparable
    to that granted to Verizon by operation of law on March 19,
    2006.[^255] Specifically, as noted above, ACS seeks relief from
    regulation as a common carrier or telecommunications service
    provider for any packetized broadband services it offers or may
    offer in Anchorage.[^256] ACS seeks the ability to offer all these
    services on a non-common carrier basis.[^257] ACS states that it
    does not seek relief from universal service contribution obligations
    "to the extent \[it\] offers broadband services that remain subject
    to the obligation to contribute to universal service as
    'telecommunications.'"[^258] As discussed below, we grant in part
    ACS's request for forbearance from certain dominant carrier and
    Computer Inquiry obligations for specified existing enterprise
    broadband services.[^259] As with the broadband forbearance
    discussed above, we condition this forbearance on the requirement
    that ACS must file, and have approved by the Commission, the cost
    allocation analysis described above, specifying how it will address
    the cost-shifting concerns arising from this forbearance action in
    light of its continuing to offer other interstate special access
    services on a rate-of-return basis.[^260]

### Dominant Carrier Regulation

#### Charges, Practices, Classifications, and Regulations

94. Section 10(a)(1) of the Act requires that we analyze whether the
    application of dominant carrier regulation to any broadband services
    ACS offers or may offer in Anchorage is necessary to ensure that the
    "charges, practices, classifications, or regulations . . . for \[\]
    or in connection with \[those\] . . . telecommunications
    service\[s\] are just and reasonable and are not unjustly or
    unreasonably discriminatory."[^261] Our section 10(a)(1) analysis
    takes into account the effect of dominant carrier regulation on
    ACS's rates and practices by considering the overall marketplace for
    the services for which relief is sought and the customers that use
    them.[^262] As discussed below, we conclude that it is appropriate
    to forbear from dominant carrier regulation as it applies to these
    services. In particular, mandating that ACS, but not its nondominant
    competitors, comply with requirements that directly limit the
    ability of customers to secure the most flexible service
    arrangements for the ACS-specified broadband services is unnecessary
    to prevent unjust, unreasonable, or unjustly or unreasonably
    discriminatory rates, terms, and conditions for these services.

95. We begin our analysis by looking at the existing broadband services
    identified by ACS --Transparent LAN Service, Transparent LAN Service
    Lite, LAN Extension Networking Service, and Video Transmission
    Services. These types of services are high-speed, high-volume
    services that enterprise customers, including some wholesale
    customers, use primarily to transmit large amounts of data.
    Specifically, ACS's Transparent LAN, Transparent LAN Lite, and LAN
    Extension Networking Services use fiber optic or copper facilities
    to provide high-speed, Ethernet-based, point-to-point or multi-point
    interconnectivity for LANs and wide area networks (WANs).[^263]
    Similarly, ACS's Video Transmission Services provide high-speed
    transmission links for teleconferencing, video jukeboxes, and
    programming distribution.[^264] We find insufficient information to
    precisely define the existing boundaries for ACS's broadband
    transmission services offerings, and we thus focus our analysis on
    the services ACS identified in the record here generally.[^265]

96. We note that the relief we grant ACS in Anchorage excludes
    TDM-based, DS-1 and DS-3 special access services,[^266] and that
    such special access services for other incumbent LECs likewise
    remain rate regulated, regardless of the specific geographic market.

97. We find that a number of entities currently provide enterprise
    broadband services.[^267] With respect to the Anchorage study area
    specifically, we note the presence of GCI as a competitor in the
    enterprise market[^268] as well as AT&T, which the evidence
    indicates is a significant provider for such services
    nationwide.[^269]

98. We recognize that the record in this proceeding does not include
    detailed market share information for particular enterprise
    broadband services in the Anchorage MSA. However, we note that other
    available data suggest that there are a number of competing
    providers for these types of services and the marketplace appears
    highly competitive.[^270] Moreover, as we discuss below, we find
    that competitors either are providing, or readily could enter to
    provide, these services within Anchorage. In light of these factors,
    we do not find it essential to have such detailed information and
    would not give significant weight to static market share information
    in any event.[^271]

99. We also observe the sophistication of the enterprise customers that
    tend to purchase these types of services. The Commission
    consistently has recognized that customers that use specialized
    services similar to the existing ACS-specified services demand the
    most flexible service offerings possible, and that service providers
    treat them differently from other types of customers, both in the
    way they market their products and in the prices they charge.[^272]
    These users tend to make their decisions about communications
    services by using either communications consultants or employing
    in-house communications experts.[^273] This shows that such
    customers are likely to make informed choices based on expert advice
    about service offerings and prices and thus suggests that these
    users also are likely to be aware of the choices available to
    them.[^274] The Commission has further found that the large revenues
    these customers generate, and their need for reliable service and
    dedicated equipment, provide a significant incentive to suppliers to
    build their own facilities where possible, and to carry the traffic
    of these customers over the suppliers' own networks.[^275] These
    services equate to substantial telecommunications expenditures for
    large enterprise customers, which supports the notion that these
    customers will continue to deal at the most sophisticated level with
    the providers of these services. Smaller enterprise customers, whose
    telecommunications requirements do not warrant the deployment of new
    facilities, tend to purchase less sophisticated services.

100. We recognize, of course, that the marketplace for enterprise
     broadband telecommunications services in the Anchorage study area
     is more modest than many other parts of the country as a whole,
     both in terms of enterprise customers' demands and in terms of the
     services the competing providers offer to meet those demands. We
     believe, however, that the customers that would typically purchase
     Transparent LAN Service, Transparent LAN Service Lite, LAN
     Extension Networking Service, and Video Transmission Services
     within Anchorage, like enterprise customers in other parts of the
     nation, are the type of sophisticated purchasers of communications
     services that would be more than willing to switch service
     providers to obtain lower prices and/or improved service. [^276]
     Many enterprise customers, moreover, have national, multi-location
     operations and thus seek the best-priced alternatives from multiple
     potential providers having national market presences. Other
     enterprise customers, including most of the enterprise customers in
     the Anchorage study area, have more regional or localized
     operations. But even the limited number of enterprise customers in
     Anchorage that might demand services of these types are able to
     solicit telecommunications services from other potential
     providers.[^277]

101. We further find that competitors can readily respond should ACS
     seek to impose unjust, unreasonable, or unjustly or unreasonably
     discriminatory rates, terms, or conditions for its Transparent LAN
     Service, Transparent LAN Service Lite, LAN Extension Networking
     Service, and Video Transmission Services. Even in situations where
     competitors do not have the option of self-deploying their own
     facilities or purchasing inputs from carriers other than the
     incumbent LEC, potential providers may rely on special access
     services purchased from ACS at rates subject to price
     regulation.[^278] In this regard, we note that the relief we grant
     ACS in this order excludes TDM-based, DS-1 and DS-3 special access
     services.[^279] Moreover, as we discuss in more detail below,
     competing carriers are able economically to deploy OCn-level
     facilities to the extent that there is demand for such services
     within the Anchorage study area.[^280]

102. We reject Time Warner Telecom's assertion that TDM-based loops
     cannot in many instances be used to provide packetized broadband
     services to enterprise customers.[^281] We find that assertion to
     be inconsistent with Time Warner Telecom's public statements that
     Time Warner Telecom can "cost-effectively deliver . . . Ethernet
     \[services\] to customers anywhere," even "where it may be
     uneconomical" to build facilities connecting Time Warner Telecom's
     network to the customers' premises.[^282] Indeed, we observe that
     Time Warner Telecom has been able to compete in the provision of
     Ethernet services by relying on special access TDM loops (in
     addition to its own facilities).[^283] We also are unpersuaded by
     Time Warner Telecom's concern that reliance on TDM special access
     inputs gives rise to service or performance problems that hinder
     competition.[^284] We agree that this argument is undercut by the
     fact that providers have been successfully competing for Ethernet
     services customers by relying on TDM inputs.[^285] In addition, we
     observe that all ways of obtaining transmission capacity have
     trade-offs, including purchasing transmission services at wholesale
     and self-provisioning network transmission facilities, and we
     anticipate that competitors will explore various options in seeking
     to provide enterprise broadband services. For example, obtaining
     wholesale TDM special access circuits and providing the Ethernet
     electronics can enable providers to exercise greater control over
     the traffic carried on those circuits.[^286] Further, any
     transmission services typically are offered in fixed capacity
     increments, which may not be the precise capacities particular
     customers prefer.[^287] Finally, to the extent that commenters have
     a desire for expanded access to section 251 UNEs under the
     Commission's generally applicable unbundling rules, we find it more
     appropriate to consider such concerns in the context of an
     industry-wide proceeding applicable to all similarly-situated
     carriers, rather than in the context of a forbearance
     proceeding.[^288]

103. In light of these findings, we conclude that dominant carrier
     tariffing and pricing regulation of ACS's Transparent LAN Service,
     Transparent LAN Service Lite, LAN Extension Networking Service, and
     Video Transmission Services is not necessary to ensure that ACS's
     rates and practices for those services are just, reasonable, and
     not unjustly or unreasonably discriminatory. The competitive
     conditions persuade us that the contribution of tariffing
     requirements, and the accompanying cost support and other
     requirements, to ensuring just, reasonable, and nondiscriminatory
     charges and practices for these services is negligible. The
     Commission has recognized that tariffs originally were required to
     protect consumers from unjust, unreasonable, and discriminatory
     rates in a virtually monopolistic market, and that they become
     unnecessary in a marketplace where the provider faces significant
     competitive pressure.[^289]

104. For the same reasons, we find that continuing to subject ACS to
     dominant carrier regulation in regard to its existing, identified
     non-TDM-based, packet-switched broadband services therefore is no
     longer appropriate in light of the market conditions. Such
     regulation is not necessary to ensure that ACS's charges,
     practices, or regulations in connection with these services are
     just, reasonable, and not unjustly or unreasonably discriminatory,
     so long as ACS is subject to the same regulatory obligations as its
     nondominant competitors that provide these services.[^290]

105. We also find that ACS faces sufficient competitive pressure, either
     from actual or potential competitors, in its provision of the
     existing ACS-specified services because competing carriers are able
     to economically deploy OCn-level facilities to compete with ACS's
     offerings to the extent that there is demand for such services
     within the Anchorage study area. Specifically, we find, consistent
     with the Commission's findings in the *Triennial Review* and the
     *Triennial Review Remand Orders*, that, to the extent there is a
     demand for fiber loops at OCn capacity within that study area,
     competitive carriers such as GCI will be able to economically
     deploy these facilities to meet that demand.[^291] We further find,
     consistent with this precedent, that OCn-level facilities produce
     revenue levels that can justify the high cost of loop
     construction.[^292] Our precedent also makes clear that large
     enterprise customers purchasing services over such facilities
     typically enter into long-term contracts that enable competing
     providers to recover their construction costs over lengthy
     periods.[^293] Thus, we find it no longer appropriate to subject
     ACS to dominant carrier regulation for its specified, existing
     non-TDM-based, optical services.

106. Given the costs associated with dominant carrier regulation, we
     find that customers would benefit by our granting ACS relief from
     that regulation as it applies to the existing ACS-specified
     broadband services. In particular, the Commission has long
     recognized that tariff regulation may create market inefficiencies,
     inhibit carriers from responding quickly to rivals' new offerings,
     and impose other unnecessary costs.[^294] We find that continuing
     to apply dominant carrier regulation to ACS's existing broadband
     services would have each of these effects. Specifically, tariffing
     these services reduces ACS's ability to respond in a timely manner
     to its customers' demands for innovative service arrangements
     tailored to each customer's individualized needs.[^295] In
     addition, by mandating that ACS provide advance notice of changes
     in its prices, terms, and conditions of service for these services,
     tariffing allows ACS's competitors to counter innovative product
     and service offerings even before they are made available to the
     public. In contrast, detariffing of these services will facilitate
     innovative integrated service offerings designed to meet changing
     market conditions and will increase customers' ability to obtain
     service arrangements that are specifically tailored to their
     individualized needs. Moreover, relief from advance notice
     requirements and cost-based pricing requirements would enable ACS
     to respond quickly and creatively to competing service offers. We
     find that tariff regulation simply is not necessary to ensure that
     the rates, terms, and conditions for the existing ACS-specified
     broadband services are just, reasonable, and not unjustly or
     unreasonably discriminatory. The better policy for consumers is to
     allow ACS to respond to technological and market developments
     without the Commission reviewing in advance the rates, and terms,
     and conditions under which ACS offers these services.[^296]

107. We find that eliminating these requirements would make ACS a more
     effective competitor for these services, which in turn we
     anticipate will increase even further the amount of competition in
     the marketplace, thus helping ensure that the rates and practices
     for these services overall are just, reasonable, and not unjustly
     or unreasonably discriminatory. Forbearing from dominant carrier
     regulation of the ACS-specified broadband services will permit
     customers to take advantage of a more market-based environment for
     these highly-specialized services and allow petitioners the
     flexibility necessary to respond to dynamic price and service
     changes often associated with the competitive bidding process. In
     such a deregulated environment, the Commission's enforcement
     authority, along with market forces, will serve to safeguard the
     rights of consumers. ACS will continue to be subject to sections
     201 and 202 of the Act in its provision of its existing specified
     broadband services, which, among other things, mandate that ACS
     provide interstate telecommunications services upon reasonable
     request and prohibit it from acting in an unjust or unreasonable
     manner or otherwise favoring itself in the provision of "like"
     services provided to unaffiliated entities.[^297]

108. However, as with forbearance for wireline broadband Internet access
     transmission, discussed above, we find that forbearance from
     pricing regulation of these enterprise broadband services has
     implications for ACS's special access services generally, which
     remain subject to rate-of-return regulation.[^298] In particular,
     the ratemaking process must account for the fact that, for example,
     the costs and revenues associated with ACS's provision of these
     services no longer should be included in its interstate
     rate-of-return calculations. ACS has not submitted a proposal for
     how these cost allocation issues would be addressed, nor do we find
     any other basis in the record for addressing these concerns. Thus,
     as with wireline broadband Internet access transmission service,
     discussed above, we condition forbearance on ACS filing, and having
     approved by the Commission, the cost allocation analysis described
     above, specifying how it will allocate its costs associated with
     the provision of the specified enterprise broadband services for
     ratemaking purposes.[^299]

109. We also find that continued application of our dominant carrier
     discontinuance rules to ACS's existing specified broadband services
     is not necessary to ensure that the charges, practices, or
     regulations in connection with these services are just, reasonable,
     and not unjustly or unreasonably discriminatory, so long as ACS is
     subject to the same treatment as nondominant carriers in relation
     to these services.[^300] We conclude that subjecting ACS to a
     60-day automatic grant period for discontinuance of its existing
     specified broadband services, and a 30-day comment period for
     notice to affected customers, is not necessary under section
     10(a)(1), where nondominant carriers providing those same services
     are subject to a 30-day automatic grant period and 15-day comment
     period. However, to maintain sufficient customer protection and
     ensure the justness and reasonableness of ACS's practices in
     connection with these services, we predicate this finding upon
     ACS's compliance with the discontinuance rules that apply to
     nondominant carriers in the event it seeks to discontinue, reduce,
     or impair any of the non-TDM-based, packet-switched broadband
     services and non-TDM-based, optical transmission services for which
     we grant relief.[^301] Similarly, we forbear from applying our
     domestic streamlined transfer of control rules to ACS as a dominant
     carrier of these services, conditioned upon treatment of ACS as a
     nondominant carrier for these services.[^302]

110. We disagree with commenters that argue that forbearance should be
     denied because ACS controls bottleneck special access facilities
     and services that its competitors must access in order to provide
     their own broadband services.[^303] As an initial matter, those
     commenters' concerns generally arise from the fact that ACS
     requested far greater forbearance relief than we grant in this
     order.[^304] Here, we deny ACS's requested relief from dominant
     carrier regulation of its special access services generally,
     ensuring that they remain subject to the full range of dominant
     carrier tariffing, pricing, and other regulatory obligations.[^305]
     In particular, our forbearance excludes TDM-based, DS1 and DS3
     special access services. This will ensure that ACS's competitors
     will continue to be able to obtain these services for use as inputs
     to their own retail broadband services.[^306]

111. Further, while we do grant forbearance from dominant carrier
     regulations for the existing enterprise broadband services
     identified by ACS, we do not grant forbearance from Title II as a
     whole, but instead ensure that ACS remains subject to the same
     regulatory obligations applicable to other nondominant
     telecommunications carriers.[^307] As the Commission concluded in
     the *Qwest Section 272 Sunset Forbearance Order*, "dominant carrier
     regulation is not the most effective and cost-efficient way to
     address exclusionary market power concerns resulting from \[an
     incumbent LEC's\] control of any bottleneck access facilities that
     \[the incumbent LEC's\] competitors must access in order to provide
     competing services."[^308] We find that to the extent dominant
     carrier regulation of ACS's existing specified broadband services
     addresses any exclusionary market power ACS may have in relation to
     those services, the burdens imposed by that regulation exceed its
     benefits.[^309]

112. Our forbearance grant also is restricted to the identified
     broadband services that ACS presently offers, specifically its
     Transparent LAN Service, Transparent LAN Service Lite, LAN
     Extension Networking Service, and Video Transmission Services. We
     find that limiting our forbearance grant to existing services is
     appropriate because we cannot, on the record before us, conclude
     that ACS will lack market power with regard to any theoretical
     broadband telecommunications services that it might offer in the
     future, since both the precise nature of those services and the
     competitive conditions existing at that future time are
     unknown.[^310]

113. In sum, subject to the precondition we identify above, we find that
     dominant carrier regulation of the specified, existing enterprise
     broadband services is not necessary to ensure that the charges,
     practices, classifications, and regulations in connection with
     these services will be just, reasonable, and not unreasonably
     discriminatory within the meaning of section 10(a)(1).

#### Protection of Consumers

114. Section 10(a)(2) of the Act requires us to determine whether
     dominant carrier regulation of ACS's existing and future broadband
     service offerings in Anchorage is necessary to protect
     consumers.[^311] For reasons similar to those that persuade us that
     these regulations are not necessary within the meaning of section
     10(a)(1), we also determine that their application to the existing
     ACS-specified services is not necessary for the protection of
     consumers. As we found above, ACS faces sufficient pressure from
     actual and potential competition to protect consumers, and to give
     ACS incentives to offer innovative services. In light of these
     conclusions, we find that the combination of dominant carrier
     tariffing requirements and the accompanying cost support can
     hinder, instead of protect, consumers' ability to secure better
     service offerings. Finally, as we explain below,[^312] we are not
     forbearing from any public policy obligations applicable to these
     services, including those related to 911, emergency preparedness,
     customer privacy, or universal service, and consumers therefore do
     not lose protections in these important areas.

115. Conversely, we find that restricting our forbearance grant to those
     services ACS specified in its petition that it currently offers is
     necessary to protect consumers. ACS has not provided sufficient
     information regarding any broadband services, other than those
     specifically identified in its petition, and that it currently
     offers, to allow us to reach a forbearance determination under
     section 10(a).[^313] Because the record before us does not indicate
     that ACS will face sufficient competitive pressure for future
     services if and when it ultimately offers them,[^314] we cannot
     conclude that dominant carrier regulation of these as yet unoffered
     services is not necessary to protect consumers.

#### Public Interest

116. Section 10(a)(3) of the Act requires us to determine whether
     forbearance from dominant carrier regulation for ACS's existing and
     future broadband service offerings in Anchorage is consistent with
     the public interest.[^315] In making this determination, section
     10(b) of the Act directs us to consider whether forbearance from
     enforcing the provisions at issue will promote competitive market
     conditions, including the extent to which forbearance will enhance
     competition among providers of telecommunications services. If we
     determine that forbearance will promote competition among providers
     of telecommunications services, that determination may be a basis
     for finding that forbearance is in the public interest.[^316]

117. We agree with ACS that a deregulatory approach for its provision of
     the existing ACS-specified broadband services will serve the public
     interest by eliminating the market distortions that asymmetrical
     regulation of these services causes.[^317] In particular, we find
     that dominant carrier regulation impedes ACS's efforts to compete
     effectively with nondominant providers of these services. Such
     regulation keeps ACS from responding efficiently and in a timely
     manner to any market-based pricing promotions, including volume and
     term discounts, or special arrangements that its competitors may
     offer. In particular, dominant carrier regulation of the existing
     ACS-specified broadband services makes it unnecessarily difficult
     for ACS to negotiate arrangements tailored to the needs of its
     enterprise customers, because its tariff filings necessarily
     provide competitors with notice of their pricing strategies and
     competitive innovations.

118. Forbearance from the application of dominant carrier regulation to
     the existing ACS-specified broadband services also will promote the
     public interest by furthering the deployment of advanced
     services.[^318] Indeed, forbearance in this case is entirely
     consistent with section 706 of the Act and Congress' express goals
     of "promot\[ing\] competition and reduc\[ing\] regulation in order
     to secure lower prices and higher quality services for American
     telecommunications consumers and encourage the rapid deployment of
     new telecommunications technologies."[^319] Forbearance also is
     consistent with section 7(a) of the Act, which establishes a
     national policy of "encourag\[ing\] the provision of new
     technologies and services to the public."[^320] In addition, for
     the reasons described above, we conclude that granting ACS this
     relief will help promote competitive market conditions and enhance
     competition among providers of telecommunications services as
     contemplated by section 10(b). By allowing ACS to compete more
     effectively in the provision of the broadband transmission services
     that it currently offers, forbearance from dominant carrier
     regulation of these services will enhance competition among
     providers in a manner consistent with the public interest.  For
     these reasons, we disagree with commenters that contend that
     forbearing from the application of dominant carrier regulation to
     the petitioners' existing, non-TDM-based, packet-switched broadband
     services and existing, non-TDM-based, optical transmission services
     would be inconsistent with the public interest.[^321]

119. Consistent with our determinations under sections 10(a)(1) and
     10(a)(2),[^322] we find that extending our forbearance from
     dominant carrier regulation to services that ACS does not presently
     offer would be contrary to the public interest. Specifically,
     because the record before us is insufficient to support a finding
     that ACS will lack market power with regard to these as yet
     unoffered services, we cannot conclude that forbearance in this
     instance would be consistent with the public interest.

### *Computer Inquiry* Requirements

120. As stated previously,[^323] we construe ACS's petition as
     requesting relief from the *Computer Inquiry* obligations that
     apply to ACS in connection with any broadband information service
     it may provide in Anchorage. The *Computer Inquiry* rules require
     that ACS: (a) offer as telecommunications services the basic
     transmission services underlying its enhanced services; (b) offer
     those telecommunications services on a nondiscriminatory basis to
     all enhanced service providers, including its own enhanced services
     operations;[^324] and (c) offer those telecommunications services
     pursuant to tariff.[^325] For ease of exposition, we refer to these
     requirements as the transmission access requirement, the
     nondiscrimination requirement, and the tariffing requirement,
     respectively.

121. For the reasons described above, we find that forbearance from
     these requirements satisfies sections 10(a)(1) and 10(a)(2). In
     particular, as found above, providers of these types of
     transmission services face significant competitive pressure from
     providers that can deploy their own facilities or rely on regulated
     special access inputs. We find that these competitive pressures are
     sufficient to ensure that ACS's rates and practices are just,
     reasonable, and not unjustly or unreasonably discriminatory and to
     protect consumers absent the *Computer Inquiry* requirements.

122. We conclude, however, that forbearance is not warranted with
     respect to the transmission access requirement or the
     nondiscrimination requirement because such forbearance would not be
     in the public interest pursuant to section 10(a)(3). These
     requirements apply to all non-BOC, facilities-based wireline
     carriers, including ACS's nondominant facilities-based competitors
     in the Anchorage study area, in their provision of enhanced
     services.[^326] ACS itself asserts that removing any "regulatory
     asymmetry" under which ACS currently operates in that study area
     and subjecting it "to no less regulation than any competitive
     \[LEC\] providing interstate access services" will "promote the
     public interest."[^327] Given this assertion, we find that
     forbearance from the *Computer Inquiry* transmission access and
     nondiscrimination requirements is not in the public interest within
     the meaning of section 10(a)(3), as it would confer a regulatory
     advantage on ACS in Anchorage vis-a-vis its facilities-based
     competitors offering information services.

123. In contrast, the reasons that persuade us to forbear from dominant
     carrier regulation generally with regard to ACS's existing
     specified broadband services also persuade us to forbear from the
     *Computer Inquiry* tariffing requirement to the extent ACS provides
     information services within the Anchorage study area in conjunction
     with those broadband services. [^328] Therefore, like its
     non-incumbent LEC competitors, ACS will be free to offer any
     information service that incorporates its Transparent LAN Service,
     Transparent LAN Service Lite, LAN Extension Networking Service, and
     Video Transmission Services without, by virtue of such offering,
     being required to tariff the underlying telecommunications
     component of those services.[^329]

124. This forbearance from the *Computer Inquiry* tariffing requirement
     does not extend to ACS's information services to the extent they
     incorporate telecommunications components other than ACS's
     Transparent LAN Service, Transparent LAN Service Lite, LAN
     Extension Networking Service, and Video Transmission Services. As
     with our analysis of dominant carrier regulation of ACS's broadband
     services,[^330] we find that restricting our forbearance from
     *Computer Inquiry* obligations to services that incorporate these
     existing broadband telecommunications services is appropriate
     because we cannot conclude, on the record before us, that ACS will
     lack market power with regard to any as yet unoffered broadband
     telecommunications services. We also cannot find, on this record,
     that additional forbearance from the *Computer Inquiry* rules would
     meet the statutory forbearance criteria.

### General Title II Economic Regulation 

125. As part of its request for similar relief to that granted to
     Verizon by operation of law, ACS seeks forbearance from any
     economic regulation that would apply to it, under Title II and the
     Commission's implementing rules, in connection with its existing
     and future broadband services offerings in the Anchorage study
     area.[^331] We first address this regulation as it applies to ACS
     as a common carrier or LEC. We then turn to this regulation as it
     applies to ACS as an incumbent LEC or independent incumbent LEC.

#### Regulation Applied to ACS as a Common Carrier or LEC

126. Title II and the Commission's implementing rules impose economic
     regulation on common carriers or LECs generally, regardless of
     whether they are incumbents or competing carriers. This regulation,
     though much less burdensome than the regulation imposed on dominant
     carriers, has been thought to provide important protections against
     unjust, unreasonable, and unjustly or unreasonably discriminatory
     treatment of consumers.[^332] For example, section 201 of the Act
     mandates that all carriers engaged in the provision of interstate
     or foreign communications service provide such service upon
     reasonable request, and that all charges, practices,
     classifications, and regulations for such service be just and
     reasonable.[^333] Section 202 of the Act makes it unlawful for any
     common carrier to make any unjust or unreasonable discrimination in
     charges, practices, classifications, regulations, facilities, or
     services, or to make or give any undue or unreasonable preference
     or advantage to any person or class of persons.[^334] All
     telecommunications carriers are obligated under section 251(a)(1)
     of the Act to "interconnect directly or indirectly with the
     facilities and equipment of other telecommunications
     carriers."[^335] Section 251(b), moreover, imposes a number of
     duties on LECs, including the duty not to impose unreasonable or
     discriminatory conditions or limitations on resale of their
     telecommunications services,[^336] the duty to implement number
     portability,[^337] and the duty to provide competing
     telecommunications service providers with access to the LECs'
     poles, ducts, and conduits under just and reasonable rates, terms,
     and conditions.[^338]

127. Although, as discussed above,[^339] the Commission has relaxed
     tariffing, transfer of control, and discontinuance regulation for
     carriers that lack market power, nondominant carriers are still
     subject to limited regulation in these areas. In particular,
     section 214 of the Act requires common carriers to obtain
     Commission authorization before constructing, acquiring, operating
     or engaging in transmission over lines of communications, or
     discontinuing, reducing or impairing telecommunications service to
     a community.[^340] The Commission's discontinuance rules for
     nondominant carriers require such carriers to file applications
     with the Commission and provide notice to the affected
     customers.[^341] These applications are automatically granted on
     the 31^st^ day unless the Commission notifies the applicant
     otherwise.[^342] Moreover, to the extent they are permitted to file
     interstate tariffs, nondominant carriers must comply with the
     streamlined tariffing and notice requirements of part 61, subpart C
     of the Commission's rules.[^343]

128. We conclude that ACS has failed to demonstrate that forbearance
     from these, and other, economic regulations that apply generally to
     nondominant telecommunications carriers and to LECs would meet the
     statutory forbearance criteria. Indeed, with respect to its
     interstate broadband telecommunications services, ACS seems to ask
     us to go beyond the relief the Commission has granted any
     competitive LEC or nondominant interexchange carrier and allow it
     to offer certain broadband telecommunications services free of
     Title II regulation, thus creating a disparity in regulatory
     treatment between ACS and its competitors.[^344] We find, based on
     the record before us, that granting ACS such preferential treatment
     would be inconsistent with the market opening policies and consumer
     protection goals that led Congress and the Commission to impose
     these economic regulations on carriers that lack individual market
     power. For example, the protections provided by sections 201 and
     202(a), coupled with our ability to enforce those provisions in a
     complaint proceeding pursuant to section 208, provide essential
     safeguards that ensure that relieving ACS of tariffing obligations
     in relation to the ACS-specified broadband services will not result
     in unjust, unreasonable, or unreasonably discriminatory rates,
     terms, and conditions in connection with those services.[^345]
     Accordingly, we cannot find that enforcement of these statutory and
     regulatory requirements is not necessary to ensure that the
     "charges, practices, classifications, or regulations . . . for\[\]
     or in connection with \[the broadband services at issue in this
     proceeding\] are just and reasonable and are not unjustly or
     unreasonably discriminatory" within the meaning of section
     10(a)(1).[^346]

129. ACS also has not shown how continued enforcement of these economic
     regulation requirements in connection with the ACS-specified
     broadband services is not necessary for the protection of consumers
     within the meaning of section 10(a)(2) or how forbearance is
     consistent with the public interest within the meaning of section
     10(a)(3).[^347] On the contrary, disparate treatment of carriers
     providing the same or similar services is not in the public
     interest as it creates distortions in the marketplace that may harm
     consumers.[^348] In particular, many of the obligations that Title
     II imposes on carriers or LECs generally, including interconnection
     obligations under section 251(a)(1) and pole attachment obligations
     under sections 224 and 251(b)(4), foster the open and
     interconnected nature of our communications system, and thus
     promote competitive market conditions within the meaning of section
     10(b). Allowing ACS, but not its competitors, to avoid these
     obligations would undermine, rather than promote, competition among
     telecommunications services providers within the meaning of that
     provision. Moreover, in originally subjecting nondominant carriers
     to streamlined transfer of control, discontinuance, and tariffing
     requirements, the Commission necessarily determined that these
     requirements were needed to protect the public interest and
     competitive markets in situations where a carrier lacks market
     power.[^349] Granting ACS, but not its competitors, forbearance
     from these and the other obligations that apply generally to common
     carriers, LECs, or nondominant carriers would result in disparate
     regulatory treatment for the same or similar services, create
     market distortions, and fail to protect consumers within the
     meaning of section 10(a)(2).[^350] Accordingly, we deny ACS's
     forbearance request to the extent it seeks forbearance from Title
     II economic obligations, including those discussed above, that
     apply generally to telecommunications carriers or LECs.

#### Regulation Applied to ACS as an Incumbent LEC or Independent Incumbent LEC

130. Title II and the Commission's implementing rules also impose
     regulation on ACS in its capacities as an incumbent LEC and an
     independent incumbent LEC. For example, section 251(c) of the Act
     imposes interconnection, unbundling, and resale obligations on ACS
     in its capacity as an incumbent LEC. In addition, like other
     independent incumbent LECs, ACS is subject to structural separation
     requirements if it wishes to provide in-region, interstate,
     interexchange telecommunications services other than through
     resale.[^351]

131. We conclude that the record before us does not show that
     forbearance from these, and other, economic regulations that apply
     generally to incumbent LEC or independent incumbent LECs would meet
     the statutory forbearance criteria. Indeed, the record contains no
     specific information regarding whether application of these
     regulatory requirements is not necessary to ensure that the
     "charges, practices, classifications, or regulations . . . for\[\]
     or in connection with \[the ACS-specified broadband services\] are
     just and reasonable and are not unjustly or unreasonably
     discriminatory" within the meaning of section 10(a)(1).[^352] Nor
     does the record suggest how continued enforcement of these
     requirements in connection with the ACS-specified broadband
     services is not necessary for the protection of consumers or
     inconsistent with the public interest. We therefore deny ACS's
     forbearance request to the extent it seeks forbearance from Title
     II economic obligations, including those discussed above, that
     apply generally to incumbent LECs or independent incumbent
     LECs.[^353]

### Public Policy Regulation

132. As part of its request for similar relief to that granted to
     Verizon by operation of law, ACS seeks forbearance from any public
     policy regulation that would apply to it, under Title II and the
     Commission's implementing rules, in connection with its existing
     and future broadband services offerings in the Anchorage study
     area. We now turn to this request.

133. Title II and the Commission's implementing rules set forth numerous
     public policy requirements that apply generally to all carriers,
     regardless of whether they are incumbents or competing carriers.
     These requirements advance critically important national
     objectives, such as ensuring the sufficiency of universal service
     support mechanisms, promoting access to telecommunications services
     by individuals with disabilities, protecting customer privacy, and
     increasing the effectiveness of emergency services, among other
     objectives. For example, section 254(b) of the Act states that
     "\[t\]here should be specific, predictable, and sufficient Federal
     and State mechanisms to preserve and advance universal
     service."[^354] Section 254(d) of the Act states that "\[e\]very
     telecommunications carrier that provides interstate
     telecommunications services shall contribute" to universal
     service.[^355] These universal service provisions ensure that all
     Americans, including consumers living in high-cost areas, low
     income consumers, eligible schools and libraries, and rural health
     care providers, have access to affordable telecommunications
     services.[^356]

134. Similarly, Congress enacted section 225 of the Act to require each
     common carrier offering voice telephone service to also provide
     telecommunications relay service (TRS) so that individuals with
     disabilities will have equal access to the carrier's
     telecommunications network.[^357] Moreover, section 255 sets forth
     disability access network requirements, and 251(a)(2) prohibits
     telecommunications carriers from installing any "network features,
     functions, or capabilities" that do not comply with the disability
     access requirements in section 255.[^358] With regard to customer
     privacy, certain provisions in section 222 of the Act restrict
     telecommunications carriers' use and disclosure of customer
     proprietary network information (CPNI).[^359] In these provisions,
     Congress recognized that telecommunications carriers are in a
     unique position to collect sensitive personal information and that
     consumers maintain an important privacy interest in protecting this
     information from disclosure and dissemination.[^360] Other section
     222 provisions increase the effectiveness of emergency services by
     facilitating the provision of vital caller location and subscriber
     identification information to emergency service providers.[^361] We
     note that ACS's obligations under the Communications Assistance for
     Law Enforcement Act (CALEA) are governed by the CALEA
     statute,[^362] and ACS remains obligated to comply with those
     statutory requirements.

135. We find that ACS has not shown that forbearance from these and the
     other public policy requirements in Title II and the Commission's
     implementing rules meets the statutory forbearance criteria. We
     note that ACS does not seek forbearance from any universal service
     contribution obligations that arise from its provision of broadband
     services that include "telecommunications."[^363] We believe that
     by excluding this relief from its forbearance request, ACS
     recognized that the public interest requires it to maintain its
     universal service support obligations. Nevertheless, we include
     those obligations in our forbearance analysis to ensure that there
     is no ambiguity with regard to ACS's continuing duty to include
     revenues from each of the ACS-specified broadband services in its
     federal universal service support calculations.

136. In particular, we conclude on the record before us that forbearing
     from the public policy requirements in Title II and the
     Commission's implementing rules would be inconsistent with the
     critical national goals that led to the adoption of these
     requirements. Neither ACS nor other parties have submitted evidence
     demonstrating that enforcement of these requirements is unnecessary
     to ensure that the "charges, practices, classifications, or
     regulations . . . for\[\] or in connection with \[the ACS-specified
     broadband services\] are just and reasonable and are not unjustly
     or unreasonably discriminatory" within the meaning of section
     10(a)(1) of the Act,[^364] or is not necessary for the protection
     of consumers within the meaning of section 10(a)(2) of the
     Act.[^365] On the contrary, we believe that consumers will continue
     to receive essential protections from the continued application of
     these requirements in connection with ACS's packet-switched and
     optical broadband telecommunications services.

137. We further conclude based on the record that removing ACS's public
     policy obligations would be contrary to the public interest within
     the meaning of section 10(a)(3) of the Act. ACS itself asserts that
     removing any "regulatory asymmetry" under which ACS currently
     operates in the Anchorage study area and subjecting it "to no less
     regulation than any competitive \[LEC\] providing interstate access
     services" will "promote the public interest."[^366] The Commission
     likewise has found that disparate treatment of carriers providing
     the same or similar services is not in the public interest as it
     creates distortions in the marketplace that may harm
     consumers.[^367] Thus, exempting ACS from public policy obligations
     that apply to ACS's actual and potential competitors for the
     specified broadband services would undermine the public policy
     goals behind those obligations, and would fail to promote
     competitive market conditions in the manner contemplated by section
     10(b) of the Act. Moreover, the Commission recently has found it in
     the public interest to extend a number of these obligations to
     entities that have not been classified as "telecommunications
     carriers" to protect competition and consumers.[^368] In the face
     of these recent conclusions, we find no basis in the record to
     demonstrate why it is not in the public interest to retain these
     obligations for ACS. For these reasons, we deny ACS's forbearance
     request to the extent it seeks forbearance from the public policy
     requirements in Title II and our implementing rules.

# EFFECTIVE DATE

138. Consistent with Section 10 of the Act and our rules, the
     Commission's forbearance decision shall be effective on Monday,
     August 20, 2007.[^369] The time for appeal shall run from the
     release date of this order.[^370]

# ORDERING CLAUSES

139. Accordingly, IT IS ORDERED that, pursuant to section 10 of the
     Communications Act of 1934, as amended, 47 U.S.C. § 160, ACS's
     Petition for forbearance IS GRANTED to the extent described herein
     and otherwise IS DENIED.

140. IT IS FURTHER ORDERED that, pursuant to sections 1, 2, 4(i), 4(j),
     201, 202, 203, 205, 218, and 403 of the Communications Act of 1934,
     as amended, 47 U.S.C. §§ 151, 152, 154(i), 154(j), 201, 202, 203,
     205, 218, and 403, and section 1.3 of the Commission's rules, 47
     C.F.R. § 1.3, sections 54.901(a), 54.903 and 69.3(e)(9) of the
     Commission's rules, 47 C.F.R. §§ 54.901(a), 54.903 and 69.3(e)(9)
     ARE WAIVED to the extent provided herein.

141. IT IS FURTHERED ORDERED that, pursuant to section 10 of the
     Communications Act of 1934, 47 U.S.C. § 160, and section 1.103(a)
     of the Commission's rules, 47 C.F.R. § 1.103(a), this Order SHALL
     BE EFFECTIVE on August 20, 2007. Pursuant to sections 1.4 and 1.13
     of the Commission's rules, 47 C.F.R. §§ 1.4 and 1.13, the time for
     appeal shall run from the release date of this Order.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

APPENDIX

LIST OF COMMENTERS

**Comments in WC Docket No. 06-109**

  ----------------------------------- -----------------------------------
  **[Comments]{.underline}**          **[Abbreviation]{.underline}**

  ACS of Anchorage, Inc.              ACS

  General Communication, Inc.         GCI

  Time Warner Telecom, Inc., Cbeyond  Time Warner Telecom
  Communications, LLC, and One        
  Communications Corp                 
  ----------------------------------- -----------------------------------

  ----------------------------------- -----------------------------------
  **[Replies]{.underline}**           **[Abbreviation]{.underline}**

  ACS of Anchorage, Inc.              ACS

  Broadview Networks, Covad           Broadview
  Communications, Eschelon Telecom,   
  Inc., Nuvox Communications, XO      
  Communications, Inc., Xspedium      
  Management Company LLC, and Yipes   
  Enterprise Services Inc.            

  General Communication, Inc.         GCI

  Sprint Nextel Corporation           Sprint Nextel
  ----------------------------------- -----------------------------------

**Replies in WC Docket No. 06-109**

**STATEMENT OF**

**CHAIRMAN KEVIN J. MARTIN**

*Re: Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the
Communications Act of 1934, as Amended (47 U.S.C. § 160(c)), for
Forbearance from Certain Dominant Carrier Regulation of Its Interstate
Access Services, and for Forbearance from Title II Regulation of Its
Broadband Services, in the Anchorage, Alaska, Incumbent Local Exchange
Carrier Study Area, Docket No. WC 06-109*

Broadband access is essential to an expanding Internet-based information
economy. Promoting broadband deployment is one of the highest priorities
of the FCC. To accomplish this goal, the Commission seeks to establish a
policy environment that facilitates and encourages broadband investment,
allowing market forces to deliver the benefits of broadband to
consumers. Today, we take another step in establishing a regulatory
environment that encourages such investments and innovation by granting
ACS's petition for regulatory relief of its broadband infrastructure and
fiber capabilities. This relief will enable ACS to have the flexibility
to further deploy its broadband services and fiber facilities without
overly burdensome regulations.

The relief afforded to ACS is consistent with and similar to the relief
provided in Commission decisions regarding broadband services, packet
switching, and fiber facilities. In those decisions, the Commission
determined to relax regulations where competition was significant and
where regulations acted as a disincentive to deploy new broadband
technologies. Accordingly, based on the specific market facts that have
been placed before us, we are compelled under the "pro-competitive,
deregulatory" framework established by Congress, as well as under
section 10's forbearance criteria, to grant ACS relief from the
continued application of legacy regulations.

**JOINT STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS AND\
COMMISSIONER JONATHAN S. ADELSTEIN,**

**CONCURRING IN PART, DISSENTING IN PART**

Re: *Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the
Communications Act of 1934, as Amended, for Forbearance from Certain
Dominant Carrier Regulation of Its Interstate Access Services, and for
Forbearance from Title II Regulation of Its Broadband Services, in the
Anchorage, Alaska, Incumbent Local Exchange Carrier Study Area, WC
Docket No. 06-109*.

In today's decision, the Commission addresses a wide-ranging forbearance
petition concerning the appropriate regulation of the incumbent local
exchange carrier in the unique circumstances of Anchorage, Alaska.
Anchorage is a relatively small market, geographically removed from the
lower 48 states. Moreover, a competitive facilities-based carrier has
extensively built out its network and has taken significant market share
for certain services from the incumbent provider. Because we find that
this Order is inconsistent in its consideration of these factors, we
concur in part and dissent in part.

We support this Order's decision to grant conditional relief in
Anchorage for certain services where there is clear evidence of a
vigorous rivalry between the incumbent cable and wireline provider;
where there are few, if any, other competitors seeking to enter the
market; and where the principal competitors previously reached a
long-term commercial agreement that may in fact foster competition in
the mass market. However, we continue to have concerns with a general
approach that suggests that consumers should be satisfied with only two
providers. The goal of the Telecommunications Act of 1996 is to
establish a competitive and de-regulatory telecommunications
environment. While today's order reduces regulation by eliminating some
incumbent obligations and demonstrates that the Commission can respond
to a dynamic marketplace, the Commission relies on the intermodal
efforts of a single alternative provider to conclude that sufficient
competition exists. While we concur in the forbearance of certain
regulations based on the aforementioned factors that affect the unique
Anchorage market, we believe the statute contemplates more than just
competition between a wireline and cable provider.

Moreover, the Commission is forced to craft a novel litany of conditions
in order to grant forbearance in this case. While we appreciate the
efforts of the parties and the Bureau to limit potential adverse effects
of this decision on universal service, access charges, consumer prices,
and for cost allocation purposes, here we create an almost entirely new
regulatory structure out of whole cloth. It will be important for the
Commission to monitor the effects of these safeguards, and we encourage
the Commission to diligently verify whether its predictions about their
sufficiency are accurate.

For business customers, this Order is a particularly mixed bag. We
support the decision to deny relief from the Commission's existing
pricing rules for "traditional TDM-based" special access services, for
which relief the Order finds a lack of evidence about market shares and
the development of competitive forces. Yet, in an inexplicable turn, the
Commission forbears from the pricing rules for other special access
services, referred to in this Order as enterprise broadband services.
While we appreciate the Commission's effort not to rely explicitly on
generalized marketplace conditions for these services or to characterize
explicitly the marketplace as nationwide, in doing so it is left with an
Order that it is devoid of virtually any analysis. The Order readily
admits "that the record in this proceeding does not include detailed
market information for particular enterprise broadband services in the
Anchorage MSA." Much of the data pointed to for support is in fact for
services offered by providers everywhere but Anchorage. In addition, the
Commission finds that "potential" competition is sufficient to forbear
from regulation. In places where substantial competition does not
demonstrably exist, it seems that forbearance actually can make the
problem worse as "potential" competitors will have even less ability to
successfully compete. These kinds of decisions are too important to be
made without the in-depth market analysis that might support them.
Recent Congressional hearings have demonstrated to us a growing
impatience with policymaking via analysis-poor forbearance decisions.
The Commission needs to mend its ways.

While we certainly appreciate the Order's decision to retain key
interconnection, universal service, privacy, disabilities access, and
other Congressionally-mandated provisions \-- forbearance from which
would have been devastating for consumers and competition \-- we cannot
support this Order's decision to forbear from rules that provide
critical pricing protection. We hope that the grant of forbearance here,
without analysis of specific market forces and conditions, is not an
ominous sign for customers in other regions of the country, many who
have fewer options than those available in Anchorage.

**STATEMENT OF**

**COMMISSIONER DEBORAH TAYLOR TATE**

*Re: Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the
Communications Act of 1934, as Amended (47 U.S.C. § 160(c)), for
Forbearance from Certain Dominant Carrier Regulation of Its Interstate
Access Services, and for Forbearance from Title II Regulation of Its
Broadband Services, in the Anchorage, Alaska, Incumbent Local Exchange
Carrier Study Area, Docket No. WC 06-109*.

In this decision we once again recognize the significant
facilities-based competition that exists in the Anchorage market between
the incumbent local exchange carrier, ACS of Anchorage, Inc. (ACS) and
other carriers such as General Communications, Inc. (GCI). I support
moving away from regulation where the record shows that a competitive
market exists, rendering those regulations unnecessary. Today's Order
takes a carefully balanced approach, providing regulatory relief to the
incumbent ACS in areas in which GCI has captured significant market
share and is capable of serving a significant proportion of the
consumers in the market over its own network, but denying relief where
the state of facilities-based competitive entry does not yet warrant
regulatory forbearance. Accordingly, I support today's Order removing
legacy regulations where robust competition has rendered those
regulations no longer necessary to maintain a competitive market.

**STATEMENT OF**

**COMMISSIONER ROBERT M. McDOWELL**

*Re:* *In the Matter of Petition of ACS of Anchorage, Inc. Pursuant to
Section 10 of the Communications Act of 1934, as Amended (47 U.S.C. §
160(c)), for Forbearance from Certain Dominant Carrier Regulation of Its
Interstate Access Services, and for Forbearance from Title II Regulation
of Its Broadband Services, in the Anchorage, Alaska, Incumbent Local
Exchange Carrier Study Area,* *WC Docket No. 06-109*

I support the relief from regulation that is granted in this forbearance
petition filed by ACS of Anchorage, Inc. (ACS). The Anchorage, Alaska
study area is a unique market, where the incumbent local exchange
carrier, ACS, faces significant facilities-based competition from other
carriers, primarily General Communication Inc. (GCI). For instance, GCI
purportedly has over one-half of the exchange access market and 60
percent of the high-speed Internet market in Alaska. In addition, the
geographic location of Anchorage contributes to the special
characteristics of that market that are not duplicated in any other
market in the country. With regard to ACS's enterprise broadband
services, forbearance from regulating those services is appropriate
based on the level of competition it faces in the Anchorage market, not
only from GCI but also from AT&T and other providers. I believe that a
local market analysis, rather than a national market analysis, is the
correct basis for determining whether this type of relief is warranted.

The competitive situation facing ACS, a rate-of-return carrier, in the
Anchorage market provides a poster child for deregulation of the
services covered in this order. Forbearance from regulation in this
instance is good for everybody and should reap benefits for all
concerned, including customers of the deregulated services, particularly
in light of the conditions we impose.

[^1]: Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the
    Communications Act of 1934, as Amended (47 U.S.C. § 160(c)), for
    Forbearance from Certain Dominant Carrier Regulation of Its
    Interstate Access Services, and for Forbearance from Title II
    Regulation of Its Broadband Services, in the Anchorage, Alaska,
    Incumbent Local Exchange Carrier Study Area, WC Docket No. 06-109
    (filed May 22, 2006) (ACS Petition or Petition).

[^2]: 47 U.S.C. § 160. Section 10 was added to the Communications Act by
    the Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat.
    56 (1996) (1996 Act).

[^3]: ACS Petition at 3; *see also Petition of Qwest Corporation for
    Forbearance Pursuant to 47 U.S.C. § 160(c) in the Omaha Metropolitan
    Statistical Area*, WC Docket No. 04-223, Memorandum Opinion and
    Order, 20 FCC Rcd 19415, 19424-38, paras. 15-50 (2005) (*Qwest Omaha
    Order*), *aff'd, Qwest Corp. v. FCC*, 482 F.3d 471 (D.C. Cir. 2007).

[^4]: ACS Petition at 6; *see also Verizon Telephone Companies' Petition
    for Forbearance from Title II and Computer Inquiry Rules with
    Respect to Their Broadband Services Is Granted by Operation of Law*,
    News Release, WC Docket No. 04-440 (rel. Mar. 20, 2006)
    (Verizon-Related News Release); Petition of the Verizon Telephone
    Companies for Forbearance Under 47 U.S.C. §160(c) from Title II and
    Computer Inquiry Rules with Respect to Their Broadband Services, WC
    Docket No. 04-440 (filed Dec. 20, 2004) (Verizon Forbearance
    Petition); Letter from Edward Shakin, Vice President and Associate
    General Counsel, Verizon, to Marlene H. Dortch, Secretary, FCC, WC
    Docket No. 04-440 (filed Feb. 7, 2006) (Verizon WC Docket No. 04-440
    Feb. 7, 2006 *Ex Parte* Letter); Letter from Susanne Guyer, Senior
    Vice President, Federal Regulatory Affairs, Verizon, to Marlene H.
    Dortch, Secretary, FCC, WC Docket No. 04-440 (filed Feb. 17, 2006)
    (Verizon WC Docket No. 04-440 Feb. 17, 2006 *Ex Parte* Letter).
    Appeals of this result currently are pending in the United States
    Court of Appeals for the District of Columbia Circuit. *See* *Sprint
    Nextel Corp. v. FCC*, Docket No. 06-1111 (D.C. Cir. filed Mar. 29,
    2006).

[^5]: 47 U.S.C. § 254(k).

[^6]: *See*, *e.g.*, *Appropriate Framework for Broadband Access to the
    Internet over Wireline Facilities; Universal Service Obligations of
    Broadband Providers; Review of Regulatory Requirements for Incumbent
    LEC Broadband Telecommunications Services; Computer III Further
    Remand Proceedings: Bell Operating Company Provision of Enhanced
    Services; 1998 Biennial Regulatory Review -- Review of Computer III
    and ONA Safeguards and Requirements; Conditional Petition of the
    Verizon Telephone Companies for Forbearance Under 47 U.S.C. § 160(c)
    with Regard to Broadband Services Provided via Fiber to the
    Premises; Petition of the Verizon Telephone Companies for
    Declaratory Ruling or, Alternatively, for Interim Waiver with Regard
    to Broadband Services Provided via Fiber to the Premises; Consumer
    Protection in the Broadband Era*, CC Docket Nos. 02-33, 01-337,
    95-20, 98-10, WC Docket Nos. 04-242, 05-271, Report and Order and
    Notice of Proposed Rulemaking, 20 FCC Rcd 14853, 14926-27, paras.
    135-38 (2005) (*Wireline Broadband Internet Access Services Order*),
    *petitions for review pending, Time Warner Telecom v. FCC*, No.
    05-4769 (and consolidated cases) (3rd Cir. filed Oct. 26, 2005). The
    rates of price cap carriers are governed by their price cap index
    and actual price index calculations, which are unrelated to the
    carriers' earnings. Additionally, when a price cap carrier exercises
    pricing flexibility, it is prohibited thereafter from making a
    low-end adjustment in any portion of its service region. 47 C.F.R. §
    69.731. This prohibition limits the ability of such carrier to use a
    reduction in earnings to increase its price cap index and
    consequently its rates. We note that, although extremely rare, price
    cap carriers retain the right to make an above cap filing. *Id*. §
    61.45(g). Any such filing would have to be justified with a cost
    showing that demonstrated a reasonable allocation of regulated costs
    among the services granted Title II relief in the *Wireline
    Broadband Internet Access Services Order* and a carrier's other
    regulated services. *See Wireline Broadband Internet Access Services
    Order*, 20 FCC Rcd at 14927, para. 137.

[^7]: ACS Petition at 54.

[^8]: *ATU Telecommunications Request for Waiver of Sections 69.106(b)
    and 69.124(b)(1) of the Commission's Rules*, CPD 98-40, Order, 15
    FCC Rcd 20655 (2000).

[^9]: We also find other conditions to be warranted, as described below.

[^10]: As explained below, if ACS files tariffs on seven or 15 days
    notice, it will receive deemed lawful treatment for those rates,
    similar to competitive LECs.

[^11]: In addition, ACS must comply with our nondominant discontinuance
    and transfer of control rules with respect to its enterprise
    broadband services.

[^12]: *See* 47 U.S.C. §§ 203(b), 204(a)(3); 47 C.F.R. §§ 61.38, 61.41,
    61.58; *Implementation of Section 402(b)(1)(A) of the
    Telecommunications Act of 1996*, CC Docket No. 96-187, Report and
    Order, 12 FCC Rcd 2170, 2182, 2188, 2191-92, 2202-03, paras. 19, 31,
    40, 67 (1997); *see also Access Charge Reform*, CC Docket Nos.
    96-262, 94-1, 98-157, CCB/CPD File No. 98-63, Fifth Report and Order
    and Further Notice of Proposed Rulemaking, 14 FCC Rcd 14221, 14241,
    para. 40 (1999) (allowing price cap LECs to file tariffs for new
    services on one day's notice), *aff'd WorldCom, Inc. v. FCC*, 238
    F.3d 449 (D.C. Cir. 2001).

[^13]: 47 C.F.R. §§ 1.773(a)(ii) and 61.23(c); *Tariff Filing
    Requirements for Nondominant Carriers*, CC Docket No. 93-36, Order,
    10 FCC Rcd 13653, 13653-54, paras. 3-4 (1995) (*Nondominant Tariff
    Filing Order*).

[^14]: 47 C.F.R. § 63.71(c).

[^15]: *Id*. § 63.03(b).

[^16]: 47 U.S.C. §§ 201, 202.

[^17]: *Id*. § 251(a)(1).

[^18]: 47 U.S.C. § 251(b)(1).

[^19]: *Id*. §§ 224, 251(b)(4).

[^20]: 47 U.S.C. § 251(c).

[^21]: *See* 47 C.F.R. § 64.1903.

[^22]: 47 U.S.C. § 254(d).

[^23]: *Id*. § 225.

[^24]: *Id*. § 222(a)-(c), (f).

[^25]: *Id*. § 222(d)(4), (g).

[^26]: *Id*. § 208.

[^27]: *Amendment of Section 64.702 of the Commission's Rules and
    Regulations* (*Second* *Computer Inquiry*), Docket No. 20828, 77 FCC
    2d 384 (1980) (*Computer II Final Decision*), *recon*., 84 FCC 2d 50
    (1980) (*Computer II Reconsideration Order*), *further recon*., 88
    FCC 2d 512 (1981) (*Computer II Further Reconsideration Order*),
    *aff'd sub nom. Computer and Commc'ns Indus. Ass'n v. FCC*, 693 F.2d
    198 (D.C. Cir. 1982) (*CCIA v. FCC*), *cert. denied*, 461 U.S. 938
    (1983) (collectively referred to as *Computer II*).

[^28]: The Commission defined basic services as the offering of "a pure
    transmission capability over a communications path that is virtually
    transparent in terms of its interaction with customer supplied
    information." *Computer II Final Decision*, 77 FCC 2d at 415-16,
    420, paras. 83, 96. Enhanced services, in turn, were defined as
    services that "combine\[\] basic service with computer processing
    applications that act on the format, content, code, protocol or
    similar aspects of the subscriber's transmitted information, or
    provide the subscriber additional, different, or restructured
    information, or involve subscriber interaction with stored
    information." *Id.* at 387, para. 5. In other words, an "enhanced
    service is any offering over the telecommunications network which is
    more than a basic transmission service." *Id.* at 420, para. 97.
    Although the Commission used the term "enhanced service" in its
    *Computer Inquiry* decisions and the Act uses the term "information
    service," the Commission has determined that "Congress intended the
    categories of 'telecommunications service' and 'information service'
    to parallel the definitions of 'basic service' and 'enhanced
    service' developed in \[the\] *Computer II* proceeding . . . ."
    *Nat'l Cable & Telecomms Ass'n v. Brand X Internet Servs.*, 545 U.S.
    967, 992-94 (2005) (*NCTA v. Brand X*); *Federal-State Joint Board
    on Universal Service*, CC Docket No. 96-45, Report to Congress, 13
    FCC Rcd 11501, 11511, para. 21 (1998).

[^29]: *See*, *e.g.*, *Computer II Final Decision*, 77 FCC 2d at 435,
    para. 132.

[^30]: *Id.* at 475, para. 231; *see id.* at 435, para. 132 (discussing
    jurisdictional basis for the Commission's *Computer II* actions);
    *see also CCIA v. FCC*, 693 F.2d at 211-14 (affirming the
    Commission's reliance on its ancillary jurisdiction in imposing
    structural safeguards on AT&T's provision of enhanced services);
    *NCTA v. Brand X*, 545 U.S. at 995-97 (describing *Computer II* and
    stating that the Commission "remains free to impose special
    regulatory duties on facilities-based ISPs under its Title I
    ancillary jurisdiction").

[^31]: *See CCIA v. FCC*, 693 F.2d at 205; *see also* *Computer II Final
    Decision*, 77 FCC 2d at 474-75, para. 231. We note that the
    *Computer II* "unbundling" of basic services requirement is separate
    and distinct from the obligation, in section 251(c)(3) of the
    Communications Act, that incumbent LECs to provide access to
    unbundled network elements (UNEs). 47 U.S.C. § 251(c)(3).

[^32]: *See*, *e.g.*, *Wireline Broadband Internet Access Services
    Order*, 20 FCC Rcd at 14866-71, paras. 21-29.

[^33]: *See*, *e.g.*, *Qwest Omaha Order,* 20 FCC Rcd at 19416, para. 2;
    *see also* Petition of Qwest Corporation for Forbearance Pursuant to
    47 U.S.C. § 160(c) in the Omaha Metropolitan Statistical Area, WC
    Docket No. 04-223 (filed June 21, 2004).

[^34]: *Qwest Omaha Order*, 20 FCC Rcd at 19440, para. 53 (concluding
    that section 251(c) is "fully implemented" because the Commission
    has issued rules implementing section 251(c) and those rules have
    gone into effect).

[^35]: *See id.* at 19446, para. 62; *see also* 47 U.S.C. §§ 251(c)(4)
    (resale obligation), 271(c)(2)(B) (competitive checklist).

[^36]: *See Qwest Omaha Order,* 20 FCC Rcd at 19424, para. 15.

[^37]: *Id.* at 19426, para. 19.

[^38]: Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the
    Communications Act of 1934, as Amended, for Forbearance from
    Sections 251(c)(3) and 252(d)(1) in the Anchorage Study Area, WC
    Docket No. 05-281 (filed Sept. 30, 2005).

[^39]: *Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the
    Communications Act of 1934, as Amended, for Forbearance from
    Sections 251(c)(3) and 252(d)(1) in the Anchorage Study Area*, WC
    Docket No. 05-281, Memorandum Opinion and Order, 22 FCC Rcd 1958,
    1959, para. 1 (2007) (*ACS UNE Order*), *appeals dismissed*, *Covad
    Communications Group, Inc. v. FCC*, Nos. 07-70898, 07-71076,
    07-71222 (9th Cir. 2007) (dismissing appeals for lack of standing);
    *see also* *Wireline Competition Bureau Discloses Cable Coverage
    Threshold in Memorandum Opinion and Order Granting ACS of Anchorage,
    Inc. Forbearance Relief in the Anchorage, Alaska Study Area*, WC
    Docket No. 05-281, Public Notice, DA 07-3041 (rel. July 6, 2007)
    (ACS Coverage Public Notice) (noting that the Commission targeted
    relief to wire centers where GCI had at least 75 percent coverage).

[^40]: *ACS UNE Order*, 22 FCC Rcd at 1960, para. 2.

[^41]: Letter from Karen Brinkmann, Counsel for ACS of Anchorage, Inc.,
    to Marlene H. Dortch, Secretary, FCC, WC Docket No. 06-109 at 2
    (filed May 24, 2007) (ACS May 24, 2007 *Ex Parte* Letter); *see
    also* Letter from Karen Brinkmann *et al.*, Counsel for ACS of
    Anchorage, Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket No.
    06-109 at 2 (filed June 29, 2007) (ACS June 29, 2007 *Ex Parte*
    Letter).

[^42]: *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*,
    CC Docket Nos. 01-338, 96-98, 98-147, Report and Order and Order on
    Remand and Further Notice of Proposed Rulemaking, 18 FCC Rcd 16978,
    17141-53, 17321-23, paras. 272-95, 537-41 (2003) (*Triennial Review
    Order*), *corrected by Triennial Review Order Errata*, 18 FCC Rcd
    19020, 19022, para. 26, *vacated and remanded in part*, *aff'd in
    part,* *U.S. Telecom Ass'n v. FCC*, 359 F.3d 554, 564-93 (D.C. Cir.
    2004), *cert. denied, National Ass'n Regulatory Util. Comm'rs v.
    U.S. Telecom Ass'n,* 125 S. Ct. 313, 316, 345 (2004), *on remand*,
    *Unbundled Access to Network Elements, Review of the Section 251
    Unbundling Obligations of Incumbent Local Exchange Carriers*, WC
    Docket No. 04-313, CC Docket No. 01-338, Order on Remand, 20 FCC Rcd
    2533, 2541, para. 12 (2004) (*Triennial Review Remand Order*),
    *aff'd sub nom.*, *Covad Commc'ns. Co. v. FCC*, 450 F.3d 528 (D.C.
    Cir. 2006).

[^43]: *Triennial Review Order*, 18 FCC Rcd at 17125-27, paras. 242-44.
    Section 706 states, in pertinent part:

    > The Commission and each State commission with regulatory
    > jurisdiction over telecommunications services shall encourage the
    > deployment on a reasonable and timely basis of advanced
    > telecommunications capability to all Americans (including, in
    > particular, elementary and secondary schools and classrooms) by
    > utilizing in a manner consistent with the public interest,
    > convenience, and necessity, price cap regulation, regulatory
    > forbearance, measures that promote competition in the local
    > telecommunications market, or other regulating methods that remove
    > barriers to infrastructure investment.

    "Advanced telecommunications capability" is defined . . .

    > without regard to any transmission media or technology, as
    > high-speed, switched, broadband telecommunications capability that
    > enables users to originate and receive high-quality voice, data,
    > graphics, and video telecommunications using any technology.

    47 U.S.C. § 157 nt.

[^44]: *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*,
    CC Docket Nos. 01-338, 96-98, 98-147, Order on Reconsideration, 19
    FCC Rcd 15856, 15859-61, paras. 7-9 (2004); *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*, CC Docket Nos.
    01-338, 96-98, 98-147, Order on Reconsideration, 19 FCC Rcd 20293,
    20297-303, paras. 9-19 (2004).

[^45]: *Petition for Forbearance of the Verizon Telephone Companies
    Pursuant to 47 U.S.C. § 160(c); SBC Communications Inc.'s Petition
    for Forbearance Under 47 U.S.C. § 160(c); Qwest Communications
    International Inc. Petition for Forbearance Under 47 U.S.C. §
    160(c); BellSouth Telecommunications, Inc. Petition for Forbearance
    Under 47 U.S.C. § 160(c)*, WC Docket Nos. 01-338, 03-235, 03-260,
    04-48, Memorandum Opinion and Order, 19 FCC Rcd 21496 (2004)
    (*Broadband 271 Forbearance Order*), *aff'd sub nom. EarthLink, Inc.
    v. FCC*, 462 F.3d 1 (D.C. Cir. 2006) (*EarthLink v. FCC*).

[^46]: 47 U.S.C. § 157 nt.

[^47]: *Wireline Broadband Internet Access Services Order*, 20 FCC Rcd
    at 14872-915, paras. 32-111.

[^48]: *Id.* at 14860, n.15.

[^49]: *Id.*

[^50]: *Id*.; *see* 47 U.S.C. § 153(43), (46). We note that issues
    relating to this framework are pending before the Commission in a
    number of proceedings. *See*, *e.g.*, *Special Access Rates for
    Price Cap Local Exchange Carriers; AT&T Corp. Petition for
    Rulemaking to Reform of Incumbent Local Exchange Carrier Rates for
    Interstate Special Access Services*, WC Docket No. 05-25, RM-10593,
    Order and Notice of Proposed Rulemaking, 20 FCC Rcd 1994 (2005)
    (examining the regulatory framework to apply to price cap LECs'
    interstate special access services, including whether to maintain or
    modify the Commission's pricing flexibility rules); *Parties Asked
    to Refresh Record in the Special Access Notice of Proposed
    Rulemaking*, WC Docket No. 05-25, RM-10593, Public Notice, FCC
    07-123 (rel. July 9, 2007); *Review of Regulatory Requirements for
    Incumbent LEC Broadband Telecommunications Services*, CC Docket No.
    01-337, Notice of Proposed Rulemaking, 16 FCC Rcd 22745 (2001)
    (*Incumbent LEC Broadband NPRM*) (examining what regulatory
    safeguards under Title II of the Act, if any, should apply when a
    carrier that is dominant in the provision of traditional local
    exchange and exchange access services provides broadband services);
    *Computer III Further Remand Proceedings: Bell Operating Company
    Provision of Enhanced Services*, CC Docket No. 95-20, Further Notice
    of Proposed Rulemaking, 13 FCC Rcd 6040, 6046, para. 6 (1998)
    (inviting comment on whether the Commission should eliminate the
    open network architecture, comparably efficient interconnection, and
    other *Computer III* requirements).

[^51]: *See* Verizon Forbearance Petition at 24. Subsequently, Verizon
    clarified the scope of forbearance relief that remained pending in
    light of the relief already granted in the *Wireline Broadband
    Internet Access Services Order*. *See* Verizon WC Docket No. 04-440
    Feb. 17, 2006 *Ex Parte* Letter; Verizon WC Docket No. 04-440 Feb.
    7, 2006 *Ex Parte* Letter, Attach. 1.

[^52]: 47 U.S.C. § 160(c); *Petition for Forbearance Filed by the
    Verizon Telephone Companies with Respect to Their Broadband
    Services*, WC Docket No. 04-440, Order, 20 FCC Rcd 20037 (WCB 2005).

[^53]: 47 U.S.C. § 160(c).

[^54]: Verizon-Related News Release, *supra* note Error: Reference
    source not found.

[^55]: Joint Statement of Chairman Kevin J. Martin and Commissioner
    Deborah Taylor Tate, Petition of the Verizon Telephone Companies for
    Forbearance under 47 U.S.C. § 160(c) from Title II and *Computer
    Inquiry* Rules with Respect to Their Broadband Services, WC Docket
    No. 04-440 (rel. Mar. 20, 2006) (Verizon WC Docket No. 04-440
    Martin/Tate Statement); Statement of Commissioner Michael J. Copps
    in Response to Commission Inaction on Verizon's Forbearance
    Petition, Petition of the Verizon Telephone Companies for
    Forbearance under 47 U.S.C. § 160(c) from Title II and *Computer
    Inquiry* Rules with Respect to Their Broadband Services, WC Docket
    No. 04-440 (rel. Mar. 20, 2006) (Verizon WC Docket No. 04-440 Copps
    Statement); Statement of Commissioner Jonathan S. Adelstein in
    Response to Commission Inaction on Verizon's Forbearance Petition,
    Petition of the Verizon Telephone Companies for Forbearance under 47
    U.S.C. § 160(c) from Title II and *Computer Inquiry* Rules with
    Respect to Their Broadband Services, WC Docket No. 04-440 (rel. Mar.
    20, 2006) (Verizon WC Docket No. 04-440 Adelstein Statement).

[^56]: 47 U.S.C. § 160(a).

[^57]: *Id*. § 160(b).

[^58]: *Qwest Omaha Order,* 20 FCC Rcd at 19423, para. 14; *Petition of
    Qwest Communications International Inc. for Forbearance from
    Enforcement of the Commission's Dominant Carrier Rules as They Apply
    After Section 272 Sunsets*, WC Docket No. 05-333, Memorandum Opinion
    and Order, 22 FCC Rcd 5207, 5214, para. 11 (2007) (*Qwest Section
    272 Sunset Forbearance Order*).

[^59]: ACS Petition at 3, App. A. ACS's Petition states that ACS would
    continue to be classified as an incumbent LEC in the Anchorage
    market. ACS further states it is not seeking a declaratory ruling
    that it is nondominant, but, by virtue of its requested forbearance,
    ACS nonetheless generally would be subject to the same regulatory
    treatment as nondominant carriers. ACS Petition at 3-4, App. A at 1.
    ACS provides two specific examples of the nondominant treatment to
    which it would be subject: (1) ACS "would accept" a ceiling on
    terminating interstate switched access rates similar to the ceiling
    the Commission imposed on Qwest in the *Qwest Omaha Order* under
    section 61.26 of the Commission's rules; and (2) like Qwest, ACS
    would be subject to nondominant carrier regulation of service
    discontinuance and transfer of control. ACS Petition at 4; *Qwest
    Omaha Order*, 20 FCC Rcd at 19434-36, paras. 39-41, 43.

[^60]: ACS June 29, 2007 *Ex Parte* Letter at 6 n.17.

[^61]: *See* ACS Petition at 6-7; ACS June 29, 2007 *Ex Parte* Letter at
    7-8 & Exh. A at 5; *see also* Letter from Karen Brinkmann and
    Elizabeth R. Park, Counsel for ACS Anchorage, Inc., to Marlene H.
    Dortch, Secretary, FCC, WC Docket No. 06-109 at 4-6 & Exh. C
    (revising Exhibit C to ACS's June 29, 2007 *Ex Parte* Letter) (filed
    July 25, 2007) (ACS July 25, 2007 *Ex Parte* Letter). For
    convenience, we refer to these as "enterprise broadband services."

[^62]: ACS June 29, 2007 *Ex Parte* Letter at 7.

[^63]: *Id.* at 2 n.2, 7; ACS July 25, 2007 *Ex Parte* Letter at 4-6.

[^64]: ACS Petition at 6. Although we do not address in this order the
    scope of the relief granted Verizon through operation of law, we
    construe this part of ACS's petition as requesting relief from the
    *Computer Inquiry* obligations that apply to ACS in connection with
    any broadband information service it may provide in Anchorage. *Cf.*
    Verizon Forbearance Petition at 1, 20-23 (seeking relief from the
    application of *Computer Inquiry* obligations with regard to
    Verizon's broadband services).

[^65]: *See* ACS Petition at 7.

[^66]: *See id.*; ACS June 29, 2007 *Ex Parte* Letter at 7; ACS July 25,
    2007 *Ex Parte* Letter at 4-5 (stating that ACS does not seek
    "enterprise broadband services" forbearance with respect to
    "traditional TDM-based special access services used to service
    business customers, such as DS1 and DS3 special access circuits").

[^67]: ACS June 29, 2007 *Ex Parte* Letter at Exh. C, *as revised*, ACS
    July 25, 2007 *Ex Parte* Letter at Exh. C; ACS Tariff FCC No. 1,
    §§ 7.6, 7.10, 7.11. Although ACS's list of its broadband services
    offerings also includes "Optical Transport Service," ACS July 25,
    2007 *Ex Parte* Letter, Exh. C at 2, these services appears to
    consist of Shared Sonet Ring Interoffice Transport Services offered
    at speeds of less than 200 kbps. *See* ACS Tariff FCC No. 1,
    § 16.4.5. These services therefore fall outside of the scope of
    ACS's petition, which seeks broadband relief only for "packetized
    offerings of at least 200 kbps in each direction." ACS July 25, 2007
    *Ex Parte* Letter at 4.

[^68]: *See* ACS June 29, 2007 *Ex Parte* Letter at Exh. C, *as
    revised*, ACS July 25, 2007 *Ex Parte* Letter at Exh. C.

[^69]: *See*, *e.g.*, ACS July 25, 2007 *Ex Parte* Letter at 6 (stating
    that ACS seeks forbearance with respect to broadband services
    meeting the definition above "whether offered by ACS now or in the
    future" and that ACS has listed particular services it may offer in
    the future "only as examples of types of services for which ACS is
    seeking forbearance").

[^70]: *See* GCI Motion to Dismiss at 1; Time Warner Telecom Comments at
    2. Other commenters endorse GCI and Time Warner Telecom's positions
    regarding the lack of clarity. *See*, *e.g.*, Sprint Nextel Reply at
    1-2 (sharing the concerns of GCI and Time Warner Telecom that the
    scope of forbearance sought in the Petition is unclear); Broadview
    Reply at 2 n.5 (concurring in the arguments of GCI and Time Warner
    Telecom that ACS has not defined the relief it seeks with sufficient
    precision).

[^71]: For the reasons described above, we deny GCI's Motion to Dismiss.
    We therefore do not reach the question of whether a petitioner's
    subsequent submissions can enlarge the scope of its initial section
    10 forbearance petition. We note, however, that, although a
    forbearance petitioner of course may clarify or narrow the scope of
    a forbearance request through subsequent submissions, it would raise
    difficult questions if a forbearance petitioner's subsequent
    submissions could enlarge the scope of its initial section 10
    forbearance petition to include whole categories of additional
    services like special access if they were not encompassed in its
    initial petition. *See*, *e.g.*, ACS May 24, 2007 *Ex Parte* Letter
    at 2 ("The Petition unambiguously seeks relief as to the Anchorage
    market"); ACS Reply at 14 (identifying special access services as
    part of ACS's request for relief); ACS June 29, 2007 *Ex Parte*
    Letter at 4, 8.

[^72]: GCI Motion to Dismiss at 4 (citing ACS Petition, App. A at 5;
    Verizon WC Docket No. 04-440 Martin/Tate Statement; Verizon WC
    Docket No. 04-440 Copps Statement; Verizon WC Docket No. 04-440
    Adelstein Statement); *see also* Time Warner Telecom Comments at 2.

[^73]: *See* ACS Petition at 3-4; ACS Reply at 13-14; ACS June 29, 2007
    *Ex Parte* at 3.

[^74]: We address separately ACS's request for forbearance relief for
    enterprise broadband services comparable to what Verizon was granted
    by operation of law. *See infra* Part IV.E.

[^75]: *See*, *e.g.*, ACS June 29, 2007 *Ex Parte* Letter at 3 (stating
    that ACS has not requested a finding that it is nondominant).

[^76]: We are mindful that, when determining whether a carrier has
    market power in conducting a dominance analysis, the Commission must
    not limit itself to market share, but instead must look to all four
    factors that the Commission traditionally considers, or explain its
    departure from this traditional analysis. *See AT&T v. FCC*, 236
    F.3d 729, 736-37 (D.C. Cir. 2001). Because we do not undertake a
    stand-alone market power inquiry in this proceeding, this
    four-factor test does not bind our section 10 forbearance analysis.
    *See Qwest Omaha Order*, 20 FCC Rcd at 19425, para. 17 n.52. We
    therefore reject commenters' arguments to the contrary. *See* Time
    Warner Telecom Comments at 6.

[^77]: 47 U.S.C. § 160(a).

[^78]: *See Qwest Omaha Order*, 20 FCC Rcd at 19425, para. 17 n.52.

[^79]: ACS Petition at 20-21; *Qwest Omaha Order,* 20 FCC Rcd at
    19426-28, paras. 20-22.

[^80]: We also separately identify and analyze enterprise broadband
    services for purposes of our analysis of ACS's request for
    forbearance comparable to what Verizon was granted by operation of
    law.

[^81]: *Qwest Omaha Order*, 20 FCC Rcd at 19427-28, para. 22.

[^82]: Unlike prior market power decisions, which included local
    exchange service and exchange access services in the same product
    market, here we only examine exchange access services because
    section 10(a) focuses our inquiry on the target services to which
    our regulations apply, consistent with the Commission's approach in
    the *Qwest Omaha Order*. *Id.* at 19427, para. 22 n.64.

[^83]: ACS Petition at 22; *SBC Communications Inc. and AT&T Corp.
    Applications for Approval of Transfer of Control*, WC Docket No.
    05-65, Memorandum Opinion and Order, 20 FCC Rcd 18290, 18342, para.
    91 n.282 (2005) (*SBC/AT&T Order*); *Verizon Communications Inc. and
    MCI, Inc. Application for Approval of Transfer of Control*, WC
    Docket No. 05-75, Memorandum Opinion and Order, 20 FCC Rcd 18433,
    18484, para. 92 n.282 (2005) (*Verizon/MCI Order*).

[^84]: *Qwest Omaha Order*, 20 FCC Rcd at 19438, para. 50.

[^85]: *See*, *e.g.*, *AT&T Inc. and BellSouth Corporation, Application
    for Transfer of Control*, WC 06-74, Memorandum Opinion and Order, 22
    FCC Rcd 5662, 5678, 5697-98, paras. 28, 63-64 (2007)
    (*AT&T/BellSouth Order*) (separately analyzing special access
    services and other enterprise services).

[^86]: *See*, *e.g.*, GCI Comments at 7 (identifying residential
    service, small business service, and medium and large business
    telecommunications service as separate retail product markets);
    *id*. at 11 (arguing that carrier-to-carrier switched access
    services should be separated from carrier-to-carrier special access
    services). Although we disaggregate on the basis of service
    categories here, we reserve the right to grant or deny a section 10
    forbearance petition in its entirety based on analysis of an entire
    class of services as pled. *See* *Qwest Omaha Order*, 20 FCC Rcd at
    19445, para. 61 n.161 ("We are under no statutory obligation to
    evaluate Qwest's Petition other than as pled . . . .").

[^87]: For example, GCI contends that from the perspective of a retail
    customer, switched services and special access services are not
    fully substitutable. GCI Comments at 7. In addition, participants in
    this proceeding submitted market share data distinguishing between
    switched and special access services. ACS May 24, 2007 *Ex Parte*
    Letter, Attach. at 1-2.

[^88]: *See generally* 47 C.F.R. § Part 69, Subparts C and D (setting
    forth a separate special access category to which investments and
    expenses of providing special access are allocated).

[^89]: GCI Comments at 7-8.

[^90]: *See*, *e.g.*, *AT&T/BellSouth Order*, 22 FCC Rcd at 5676, para.
    27 (defining wholesale special access services as a product market);
    *Verizon/MCI Order*, 20 FCC Rcd at 18447, para. 24 (same).

[^91]: *See*, *e.g.*, *AT&T/BellSouth Order*, 22 FCC Rcd at 5676-77,
    para. 27 (stating that entities "needing dedicated transmission
    links essentially have three choices: to deploy their own
    facilities, to buy special access service from incumbent LECs, or to
    purchase such service from a competing special access provider").
    *See also* Letter from John T. Nakahata, Counsel for General
    Communication Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket
    No. 06-109 at 5 (filed Aug. 10, 2007) (GCI Aug. 10, 2007 *Ex Parte*
    Letter) (explaining that GCI's ability to compete for enterprise
    customers "is largely dependent on its continued access to the
    underlying UNE and/or special access facilities").

[^92]: We note that ACS also separately seeks different, additional
    forbearance relief for a subset of its special access services. We
    analyze that distinct request for relief below. *See infra* para.
    94.

[^93]: ACS Petition at 13.

[^94]: *Id*.

[^95]: *Qwest Omaha Order,* 20 FCC Rcd at 19428, para. 24.

[^96]: *Id.*

[^97]: *See* GCI Comments at 9; Broadview Reply at 6.

[^98]: GCI Comments at 9.

[^99]: We also note that the forbearance was conditioned on ACS's
    continued offering of certain loop and subloop access alternatives.
    *See* *ACS UNE Order*, 22 FCC Rcd at 1983-85, para. 39.

[^100]: ACS May 24, 2007 *Ex Parte* Letter, Exh. Interconnection
    Agreement at 40. We recognize that the Commission used wire centers
    as the geographic areas of focus in its analysis of whether granting
    ACS forbearance from unbundling obligations was warranted under
    section 10. *See* *ACS UNE Order*, 22 FCC Rcd at 1967-69, paras.
    14-16. As the Commission held in the *Qwest Omaha Order*, when
    determining whether to grant forbearance from unbundling
    obligations, that inquiry is informed by our unbundling precedent,
    rather than our dominant carrier precedent. *See Qwest Omaha Order*,
    20 FCC Rcd at 19438-39, para. 50 n.129. The Commission's relevant
    high-capacity loop and transport UNE obligations are determined on a
    wire center basis. *See*, *e.g.*, *Triennial Review Remand Order*,
    20 FCC Rcd at 2581-85, paras. 79-85 (analyzing dedicated transport
    impairment at the "very detailed level" of specific routes between
    wire centers); *see also id*. at 2619-25, paras. 155-65 (conducting
    a wire center-based impairment analysis for high-capacity loops). In
    contrast, the Commission's approach when evaluating forbearance from
    dominant carrier regulations is independent of the framework used in
    the Commission's unbundling precedent. For the reasons described
    above, we do not evaluate data on the wire center basis for purposes
    of that distinct analysis.

[^101]: These findings apply to our analysis here of special access
    services as a whole. The evidence persuades us that a different
    approach is warranted for the narrow subset of special access
    services addressed under ACS's additional forbearance request below.
    *See infra* para. 94.

[^102]: *See* *AT&T/BellSouth Order*, 22 FCC Rcd at 5678, para. 31;
    *SBC/AT&T Order,* 20 FCC Rcd at 18307, para. 28; *Verizon/MCI
    Order,* 20 FCC Rcd at 18449, para. 28.

[^103]: GCI Comments at 9-13 (stating that defining a broader geographic
    market for special access would be inappropriate because UNEs often
    are not available as a substitute for such services).

[^104]: ACS Petition at 19. We recognize that in other contexts such as
    rulemaking proceedings it could be entirely appropriate for the
    Commission to rely on information regarding broader geographic
    areas, based on administrability concerns or other factors.

[^105]: GCI Comments, Declaration of Gina Borland (GCI Borland Decl.)
    Exh. B at 6, 12. GCI's cable plant footprint covers most, but not
    all, of the ACS Anchorage study area.

[^106]: ACS Petition at 21.

[^107]: *See* GCI Borland Decl. at 3; ACS Petition at 17-18.

[^108]: *See supra* para. 28.

[^109]: ACS also contends that Eyecom provides cable service in outlying
    areas of the Anchorage study area where GCI's broadband cable modem
    service is not available today, and that there is no reason to
    believe that Eyecom could not offer broadband service. ACS Petition
    at 26. We find that ACS does not appear to be subject to significant
    competition for broadband services from Eyecom, given ACS's
    admission that Eyecom does not currently offer broadband services
    and the lack of any record evidence that Eyecom is planning in the
    near future to provide such services.

[^110]: ACS Petition at 26, 31.

[^111]: *Id.* at 14 (stating that GCI deployed "urban and long-haul
    fiber optic cable to serve the Anchorage enterprise market").

[^112]: GCI Comments, Declaration of Blaine Brown (GCI Brown Decl.) Exh.
    F at 2; *ACS UNE Order*, 22 FCC Rcd at 1981, para. 36 ("GCI also has
    deployed a fiber optic network which gives GCI additional
    capabilities to serve a significant number of additional end user
    locations in the Anchorage study area with high-capacity or more
    complex telecommunications services.").

[^113]: ACS Petition at 24.

[^114]: *See infra* note Error: Reference source not found (stating that
    the record is virtually silent regarding the extent to which AT&T
    Alascom has deployed its own special access facilities).

[^115]: *ACS UNE Order*, 22 FCC Rcd at 1975, para. 28; *see also* GCI
    Comments at 6.

[^116]: ACS Petition at 21-22.

[^117]: *See* ACS June 29, 2007 *Ex Parte* Letter at Exh. D (detailing
    line numbers as of April 30, 2007); Letter from John T. Nakahata *et
    al.*, Counsel for General Communication Inc., to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 06-109 at Exh. V (filed July 12, 2007)
    (GCI July 12, 2007 *Ex Parte* Letter) (detailing residential
    switched voice lines as of September 2006). Although GCI includes
    "ACS UNE-L" in its provisioning methods as of September 2006, the
    Commission has forborne from requiring ACS to unbundle loops in five
    of the 11 wire centers in the Anchorage study area. We expect that
    these lines are now provisioned pursuant to the commercially
    negotiated arrangement ACS and GCI reached, and so continue to count
    these lines as part of GCI's market share. Since no carriers other
    than ACS and GCI provided switched access data on our record, we are
    unable to calculate market share figures precisely. *See* GCI
    Borland Decl. at 3 (stating that AT&T Alascom competes in the
    residential mass market solely using resold services obtained from
    ACS, and that although TelAlaska offered service in the Anchorage
    business market for a brief period, recent inactivity suggests it
    may no longer do so).

[^118]: *Qwest Omaha Order*, 20 FCC Rcd at 19430, para. 28 n.78. As the
    Commission explained in the *Qwest Omaha Order* in a similar
    situation, because the parties submitted their customer data grouped
    in categories of "residential" customers and "business" customers,
    and because the economic considerations that lead to the provision
    of service to a residential customer are similar to the economic
    considerations that lead to the provision of service to a very small
    business customer, we find it reasonable to treat the data ACS and
    GCI have submitted regarding residential customers as a proxy for
    the number of mass market customers served by each carrier. *See
    id*.; ACA Petition at 29-30 n.120 ("ACS believes the residential
    customer information it submits is a reasonable proxy for the mass
    market.").

[^119]: *Access Charge Reform, Reform of Access Charges Imposed by
    Competitive Local Exchange Carriers*, CC Docket No. 96-262, Seventh
    Report and Order and Further Notice of Proposed Rulemaking, 16 FCC
    Rcd 9923, 9938, para. 38 (2001) (*CLEC Access Charge Reform Order*).

[^120]: *Motion of AT&T Corp. to Be Reclassified as a Non-Dominant
    Carrier*, Order, 11 FCC Rcd 3271, 3305, para. 63 (1995) (*AT&T
    Reclassification Order*).

[^121]: *See Qwest Omaha Order*, 20 FCC Rcd at 19432, para. 33; *CLEC
    Access Charge Reform Order*, 16 FCC Rcd at 9926-27, paras. 10-11.

[^122]: We note that although GCI is now migrating its customers to its
    own last-mile facilities, GCI relied on UNEs as a way to enter the
    local exchange marketplace. *See* GCI Comments at 22 (noting that
    competition in the Anchorage study area "exists largely due to
    UNEs"); *see also ACS UNE Order*, 22 FCC Rcd at 1980, para. 36 n.117
    (discussing GCI's migration of customers from ACS's facilities to
    GCI's facilities). We also note that in wire centers where UNEs are
    not available, ACS remains obligated under the *ACS UNE Order* to
    make available access to certain loops and subloops.

[^123]: ACS Petition at 14-15.

[^124]: *See*, *e.g.*, ACS June 29, 2007 *Ex Parte* at 11; *ACS UNE
    Order*, 22 FCC Rcd at 1981-82, para. 36.

[^125]: *See* ACS June 29, 2007 *Ex Parte* Letter at Exh. D (detailing
    line numbers as of April 30, 2007); GCI July 12, 2007 *Ex Parte*
    Letter at Exh. V (detailing voice lines as of September 2006 based
    on the average number of switched voice lines per UNE or wholesale
    T1 leased from ACS). All figures are based on DS0 voice-grade
    equivalents.

[^126]: Particularly in light of the Anchorage enterprise market, where
    there is modest demand for high capacity services, and the fact that
    that the switched access services supplied to enterprise customers
    are relatively homogenous, we do not draw distinctions among the
    enterprise customers with respect to their purchase of switched
    access services. *See*, *e.g.*, *ACS UNE Order*, 22 FCC Rcd at 1981,
    para. 36.

[^127]: For example, ACS states that 525 local exchange customers
    switched to GCI in a single day following an ACS price increase. ACS
    Petition at 32. *See also Qwest Section 272 Sunset Forbearance
    Order*, 22 FCC Rcd at 5228, para. 38.

[^128]: *ACS UNE Order*, 22 FCC Rcd at 1979-82, paras. 35-36.

[^129]: *See id.* at 1972, para. 23.

[^130]: *Wireline Broadband Internet Access Services Order*, 20 FCC Rcd
    at 14880-81, para. 50.

[^131]: *Id. Cf.* *Application of Worldcom, Inc. and MCI Communications
    Corporation for Transfer of Control of MCI Communications
    Corporation to Worldcom, Inc*., Memorandum Opinion and Order, 13 FCC
    Rcd 18025, 18036-37, paras. 17-18 (1998) (*Worldcom/MCI Order*);
    *cf.* *also* Horizontal Merger Guidelines, issued by the U.S.
    Department of Justice and the Federal Trade Commission, § 1.521
    (Apr. 2, 1992, revised Apr. 8, 1997) (*DOJ/FTC Horizontal Merger
    Guidelines*) ("Market concentration and market share data of
    necessity are based on historical evidence. However, recent or
    ongoing changes in the market may indicate that the current market
    share of a particular firm either understates or overstates the
    firm's future competitive significance.").

[^132]: *See* GCI Comments at 6 ("There is no question that the
    Anchorage market is currently highly competitive with respect to
    *retail* services.").

[^133]: ACS Petition at 30-31; ACS Petition, Statement of Robert G.
    Doucette (ACS Doucette Decl.) Exh. A at 2-3 (detailing market share
    of ACS's "Mass Market Broadband Connections"); ACS Petition,
    Statement of Howard A. Shelanski (ACS Shelanski Decl.) Exh. C at
    4-5. *See also* ACS June 29, 2007 *Ex Parte* Letter at 9-10 & Exh. E
    (submitting that GCI has a **\[REDACTED\]** percent market share of
    the broadband market).

[^134]: *See* ACS July 25, 2007 *Ex Parte* Letter at 7. ACS explains
    that its estimate of GCI's market share of the broadband market in
    the Anchorage study area is based on the assumption that market
    shares on a statewide basis also reflect the relative market shares
    in Anchorage. *See id*. We find no support for this assumption in
    the record, nor for other assumptions ACS makes in attempting to
    disaggregate residential and business broadband customers.

[^135]: *ACS UNE Order*, 22 FCC Rcd at 1980, para. 36; *see also id.* at
    para. 36 n.122 (citing Letter from Karen Brinkman, Counsel for ACS
    of Anchorage, Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket
    No. 05-281 at 2 (filed Dec. 6, 2006) (showing that GCI has
    approximately twice as many broadband Internet access services lines
    in Alaska as ACS); Letter from Brad Mutschelknaus and Thomas Cohen,
    Counsel for XO Communications, to Marlene H. Dortch, Secretary, FCC,
    WC Docket No. 05-281, Attach. at 3 (filed Dec. 18, 2006) (stating
    that GCI dominates the broadband Internet access services market in
    the Anchorage study area)).

[^136]: *See Qwest Omaha Order*, 20 FCC Rcd at 19432, para. 34;
    *Broadband 271 Forbearance Order*, 19 FCC Rcd at 21506, para. 22;
    *Incumbent LEC Broadband NPRM,* 16 FCC Rcd at 22748, para. 5;
    *Applications of Nextel Communications, Inc. and Sprint Corporation
    for Consent to Transfer Control of Licenses and Authorizations*, WT
    Docket No. 05-63, Memorandum Opinion and Order, 20 FCC Rcd 13967,
    14029, para. 167 (2005).

[^137]: *ACS UNE Order*, 22 FCC Rcd at 1982, para. 36.

[^138]: *Id*. at 1977, para. 30.

[^139]: *See* ACS June 29, 2007 *Ex Parte* Letter at 9.

[^140]: *See* *id*. at 22.

[^141]: *See* *id*. at Exh. D. The data above include the intrastate
    special access circuits GCI purchases from ACS as well as the
    special access ACS provides to retail customers. Although the
    Commission's dominant carrier regulations do not extend to
    intrastate special access services, those services are relevant to
    the state of competition for interstate special access services.
    *See*, *e.g.*, ACS June 29, 2007 *Ex Parte* Letter at 9 (stating
    that ACS is unable to determine whether the intrastate special
    access circuits GCI orders from ACS are used to provide special
    access services to end-user customers or for wholesale purposes, but
    that they most likely are used for interexchange access rather than
    as a substitute for UNEs). Based on the specific data presented on
    the record, neither our analyses nor conclusions in this order would
    be different if intrastate data were excluded.

[^142]: We also note that CMRS carriers typically depend on wholesale
    special access services to connect their CMRS networks to the
    wireline telephone network. ACS has not submitted evidence
    explaining whether the CMRS carriers in the Anchorage study area
    rely on special access inputs that do not depend either directly or
    indirectly on ACS's wholesale special access offerings. *See*,
    *e.g.*, ACS June 29, 2007 *Ex Parte* Letter at Exh. D (stating that
    ACS provides **\[REDACTED\]** DS1 special access circuits in the
    Anchorage study area to CMRS carriers). Relevant to our analysis is
    that UNEs are not available solely to provide CMRS service. *See* 47
    C.F.R. § 51.309(b).

[^143]: *See* ACS June 29, 2007 *Ex Parte* Letter at Exh. D.

[^144]: GCI Brown Decl. at 3. We also note that GCI responds that there
    are only **\[REDACTED\]** buildings in Anchorage for which GCI
    provides all of the facilities. GCI Brown Decl. at 8.

[^145]: GCI Comments at 9-10. GCI goes on to claim that, where its
    hybrid fiber coaxial plant passes business customers, it does not
    have the capability of providing DS1 services today. *Id*. Further,
    GCI asserts that, even when it has fully upgraded its cable plant
    for telephony, its loop facilities will not reach over a third of
    business locations in Anchorage. GCI Comments at 24, 28.

[^146]: ACS Petition at 41-42. We note that although ACS cites the
    "guaranteed value" contract term as enabling customers to get the
    best price for services, it is not clear why such terms would not
    tend to entrench the current provider. This particularly could be
    possible in the event that the current provider was able to rely on
    its own facilities to serve a customer and its competitor would need
    to rely on wholesale inputs, such as special access, from the
    current provider -- inputs for which ACS seeks forbearance from
    dominant carrier regulation. However, given that we deny the
    requested forbearance for special access services in any event, we
    need not resolve this issue here.

[^147]: *See*, *e.g.*, ACS Doucette Decl. at 2 ("Special access
    connections greater than DS-1 are not included \[in the estimates\],
    but are unlikely to be of sufficient quantity to materially affect
    the market share figures."); ACS Reply at 20 n.85 ("DS3 loops are
    not needed in Anchorage"); GCI Brown Decl. at 4 (stating that
    "\[o\]nly a very few of the largest businesses in the Anchorage
    study area have the service demand to justify" the cost of extending
    fiber and installing equipment necessary to provide DS1 services,
    and that "\[t\]he average business in the Anchorage markets has 6.36
    lines"). To the extent that there are a few larger, sophisticated
    enterprise customers in the Anchorage study area that demand more
    sophisticated enterprise services, we find that our analysis of
    enterprise broadband services below adequately addresses those
    customers and services.

[^148]: ACS Petition at 41-42.

[^149]: *See supra* text accompanying note Error: Reference source not
    found.

[^150]: *See*, *e.g.*, ACS June 29, 2007 *Ex Parte* Letter at Exh. D.

[^151]: *See infra* note Error: Reference source not found.

[^152]: ACS Reply at 12 (citing *Qwest Omaha Order*, 20 FCC Rcd at
    19435, para. 41).

[^153]: *See*, *e.g.*, ACS Petition at 2. ASC seeks the opportunity to
    compete on the same terms as competitive LECs for switched access
    customers "through freedom from a prescribed rate structure and the
    ability to file tariffs on one-day's notice without cost support, on
    the condition that ACS cap its access rates at current levels and
    does not detariff switched or special access services." ACS June 29,
    2007 *Ex Parte* Letter at 2. ASC states that it does not seek
    permissive detariffing of any common carrier services; it agrees to
    continue to file tariffs for switched access services, including
    contract tariffs, effective on one day's notice. *Id.* at 2, 5. ACS
    also agrees to exit the NECA pool. *See* ACS Reply at 13.

[^154]: ACS June 29, 2007 *Ex Parte* Letter at 1.

[^155]: *Id*. at 2. ACS asserts that it will be unable to seek an
    increase in rates based on changes in costs or earnings. *Id.* ACS
    further asserts that if the "downward-only pricing flexibility"
    relief it seeks through forbearance is granted, it would not be able
    to raise some rates by decreasing others, its "rates would be
    divorced from its costs, and the earnings review requirement for
    rate of return carriers would no longer be necessary." *Id*. at 6.
    We note, however, that ACS is still subject to the statutory
    requirement that its rates be just and reasonable. 47 U.S.C. § 201.
    If ACS's rates are challenged, it may be necessary for the
    Commission to consider its costs and earnings in assessing the
    reasonableness of its rates.

[^156]: ACS June 29, 2007 *Ex Parte* Letter at 2, 4; ACS Petition at 50
    (citing *Qwest Omaha Order*, 20 FCC Rcd at 19434-35, paras. 40-41);
    *see also* ACS Reply at 3.

[^157]: ACS June 29, 2007 *Ex Parte* Letter at 2, 6.

[^158]: *See* 47 U.S.C. § 160(a)(1).

[^159]: *See* ACS Petition at 29-45.

[^160]: *See*, *e.g.*, *id*. at 29.

[^161]: *Id.;* *see also* ACS Reply at 11.

[^162]: Specifically, we forbear from applying the following rules only
    to the extent they apply to dominant carrier switched access and
    end-user rates and on the condition ACS complies with provisions
    applicable to nondominant carriers: 47 C.F.R. §§ 1.773(a)(iii),
    61.38, 61.54, 61.58, 61.59, 63.03(b)(2), 63.71, Part 65, Part 69,
    Subparts A and B.

[^163]: *CLEC Access Charge Reform Order*, 16 FCC Rcd at 9938, para. 38.

[^164]: *Id*. at 9935-36, para. 31.

[^165]: *Id*. at 9925, para. 3; *see also* 47 C.F.R. § 61.26.

[^166]: *CLEC Access Charge Reform Order*, 16 FCC Rcd at 9938, para. 40.

[^167]: *Id*. at 9938, para. 39.

[^168]: We cap each rate element so rates for some services may not be
    raised to recapture revenue lost from other services. *See* ACS June
    29, 2007 *Ex Parte* Letter at 4. However, we decline to require ACS
    to cap the rates for its special construction tariffs, which ACS
    explains are based on "time and materials" charges that have no
    preset rates. *See id.* at 2 n.1. We find that a cap on special
    construction tariffs would be difficult to administer in light of
    the manner in which ACS's special construction rates are determined,
    and is unnecessary as a condition to satisfy the criteria of section
    10, particularly in the switched access market given the ubiquity of
    ACS's network facilities.

[^169]: ACS may also file tariffs on seven or 15 days' notice and
    receive deemed lawful treatment for those rates, similar to
    competitive LECs.

[^170]: *Qwest Omaha Order,* 20 FCC Rcd at 19435, para. 41; ACS Petition
    at 50.

[^171]: ACS June 29, 2007 *Ex Parte* Letter at 2.

[^172]: *See* Letter from Brita D. Strandberg, Counsel for General
    Communication Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket
    No. 06-109 at 3 (filed June 6, 2007) (GCI June 6, 2007 *Ex Parte*
    Letter). We note that ACS agrees to this condition. ACS June 29,
    2007 *Ex Parte* Letter at 5.

[^173]: *See* GCI June 6, 2007 *Ex Parte* Letter at 3.

[^174]: *Id*. at 3 n.4 (citing Multi-Association Group (*MAG) Plan for
    Regulation of Interstate Services of Non-Price Cap Incumbent
    Carriers and Interexchange Carriers*, 19 FCC Rcd 4122, 4143-44
    (2004)).

[^175]: *See* GCI Comments at 29.

[^176]: *See* 47 U.S.C. 204(a)(3).

[^177]: ACS July 25, 2007 *Ex Parte* Letter at 2.

[^178]: 47 C.F.R. § 63.71(a)(5), (b)(4), (c).

[^179]: *See* *id*. § 63.71. We note that ACS also proposes to condition
    forbearance from dominant carrier regulation of its special access
    services generally on ACS being prohibited from withdrawing any
    currently available interstate access service absent GCI's approval.
    *See* ACS July 25, 2007 *Ex Parte* Letter at 3 ( "If GCI is using
    any interstate access service that ACS wishes to discontinue, ACS
    will leave that service in place and fulfill new orders for that
    service for GCI at the then-effective rate until GCI chooses to
    discontinue the service." ). We further note that GCI asserts that
    this condition, in conjunction with the other conditions in the
    record, would be sufficient to ameliorate its concerns about special
    access forbearance. *See* Letter from John T. Nakahata, Counsel for
    General Communication Inc., to Marlene H. Dortch, Secretary, FCC, WC
    Docket No. 06-109 at 2 (filed July 30, 2007) (GCI July 30, 2007 *Ex
    Parte* Letter). Nonetheless, we do not find that condition
    sufficient or appropriate to address the concerns discussed above
    that lead us to conclude that the requested special access
    forbearance does not satisfy section 10. In particular, even if the
    additional proposed condition addresses the concerns of GCI, it does
    not address ACS's other special access customers. Thus, we find it
    insufficient, even in conjunction with other conditions in the
    record, to satisfy any of the prongs of section 10(a) with respect
    to ACS's special access services generally. Moreover, the condition
    would appear to favor GCI over other competitors, which we find
    inconsistent with the public interest under section 10(a)(3).

[^180]: 47 C.F.R. § 63.03(b)(2).

[^181]: 47 U.S.C. § 160(a)(2).

[^182]: ACS Reply at 23; *see also* ACS Petition at 45-51.

[^183]: *See* ACS Reply at 24. Section 201 of the Act mandates that
    carriers engaged in the provision of interstate or foreign
    communication service provide service upon reasonable request, and
    that all charges, practices, classifications, and regulations for
    such service be just and reasonable. 47 U.S.C. § 201. Section 201
    also empowers the Commission to require physical connections with
    other carriers, to establish through routes, and to determine
    appropriate charges for such actions. *Id*. Section 202 states that
    it is unlawful for any common carrier to make any unjust or
    unreasonable discrimination in charges, practices, classifications,
    regulations, facilities, or services, or to make or give any undue
    or unreasonable preference or advantage to any person or class of
    persons. *Id*. § 202.

[^184]: ACS Petition at 2-3.

[^185]: *See* ACS June 29, 2007 *Ex Parte* Letter at 4, 6.

[^186]: *See supra* paras. 58, 63.

[^187]: *See supra* para. 39.

[^188]: *See supra* para. 43.

[^189]: 47 U.S.C. § 160(a)(3).

[^190]: *Id*. § 160(b).

[^191]: ACS Petition at 52.

[^192]: *Id.* (citing *Qwest Omaha Order*, 20 FCC Rcd at 19437, para. 46
    nn.116-17). ACS states that the 15-day tariff notice requirement
    that applies to it gives competitive LECs the opportunity to respond
    to ACS's filed rate or service changes or to get to market first
    with a new price or service offering before ACS tariff becomes
    effective. *Id.* ACS further states that this loss of the "first
    mover advantage" deprives ACS "of any incentive to file for reduced
    prices because GCI always can beat it to the market," thus depriving
    consumers of the benefits of greater competition. *Id.*

[^193]: *See*, *e.g.*, ACS Shelanski Decl. at 14.

[^194]: 47 U.S.C. § 160(a)(3).

[^195]: Congress has directed us to consider, in making our
    determination under section 10(a)(3), whether forbearance will
    promote competitive market conditions, including the extent to which
    forbearance will enhance competition among providers of
    telecommunications services. *See* 47 U.S.C. § 160(b). As discussed
    above, our forbearance from applying certain dominant carrier
    regulation to ACS will enhance the vigorous competition in the
    Anchorage market.

[^196]: *See supra* para. 65.

[^197]: *Qwest Omaha Order,* 20 FCC Rcd at 19437, para. 47.

[^198]: We again rely on the benchmark condition described above to
    correct for the fact that the access service market otherwise does
    not allow competition to discipline rates.

[^199]: 47 C.F.R. § 61.38.

[^200]: ACS requests forbearance from section 69.3(e)(9) of the
    Commission's rules to allow it to exit the NECA pool for the
    Anchorage study area but to keep its remaining study areas in the
    NECA pool. ACS July 25, 2007 *Ex Parte* Letter at 2; *see* 47 C.F.R.
    § 69.3(e)(9)(requiring that a telephone company and its affiliates
    participate in the NECA common line tariff pool with respect to all
    study areas). We find that to avoid disruption to customers in ACS's
    study areas outside Anchorage and because a condition of the
    forbearance granted by this order requires ACS to exit the NECA pool
    for the Anchorage study area, there is good cause to waive this
    rule. 47 *id*. § 1.3; *see also WAIT Radio v. FCC*, 418 F.2d 1153,
    1159 (D.C. Cir. 1969) (*WAIT Radio*), *cert. denied*, 409 U.S. 1027
    (1972). We thus deny as moot ACS's request that we forbear from
    application of this rule.

[^201]: GCI Comments at 24.

[^202]: *Id*. at 24-25.

[^203]: ACS June 29, 2007 *Ex Parte* Letter at 8.

[^204]: *Multi-Association Group (MAG) Plan for Regulation of Interstate
    Services of Non-Price Cap Incumbent Local Exchange Carriers and
    Interexchange Carriers; Federal-State Joint Board on Universal
    Service; Access Charge Reform for Incumbent Local Exchange Carriers
    Subject to Rate-of-Return Regulation; Prescribing the Authorized
    Rate of Return for Interstate Services of Local Exchange Carriers*,
    Second Report and Order and Further Notice of Proposed Rulemaking in
    CC Docket No. 00-256, Fifteenth Report and Order in CC Docket No.
    96-45, and Report and Order in CC Docket Nos. 98-77 and 98-166, 16
    FCC Rcd 19613, 19667, para. 128 (2001) (*MAG Order*).

[^205]: 47 C.F.R. § 69.104. Section 69.104 is in subpart B of the
    Commission's Part 69 rules. 47 C.F.R. Part 69, Subpart B. ACS seeks
    forbearance from subparts A and B of the Commission's Part 69 rules.
    ACS Petition, App. A at 5.

[^206]: ACS June 29, 2007 *Ex Parte* Letter at 2 (stating that "all
    regulated interstate access rates will be capped at current rate
    levels, such that ACS will be unable to increase the price of any
    individual access service").

[^207]: The Commission has adopted ACS's commitment to cap its
    interstate switched access rates, including its SLCs, as a condition
    of forbearance. ACS's SLC caps, therefore, cannot be eliminated or
    modified absent future Commission action.

[^208]: 47 C.F.R. § 54.901.

[^209]: *Id*. § 54.901(a) (providing that ICLS for rate-of-return ETCs
    is based on their common line revenue requirements per study area,
    minus certain enumerated amounts).

[^210]: *Id.*

[^211]: GCI Reply Comments at 26; ACS Reply Comments at 13; 47 C.F.R. §
    54.901(b). ACS requests forbearance from the revenue requirement
    calculations in section 54.901(a) of the Commission's rules, and
    from section 54.903 of the Commission's rules, to the extent it
    requires ACS to file FCC Forms 508 and 509. ACS July 25, 2007 *Ex
    Parte* Letter at 4; *see* 47 C.F.R. §§ 54.901(a), 54.903 (requiring
    rate-of-return carriers to file FCC Form 508 - ICLS Projected Annual
    Common Line Revenue Requirement, and FCC Form 509 - ICLS Annual
    Common Line Actual Cost Data Collection). We find that, because a
    condition of the forbearance granted by this order requires ACS to
    receive ICLS at the existing per-line rate, rather than based on the
    rate-of-return regulated carrier requirements in section 54.901(a),
    there is good cause to waive these rules. 47 C.F.R. § 1.3; *see also
    WAIT Radio v. FCC*, 418 F.2d 1153, 1159 (D.C. Cir. 1969) (*WAIT
    Radio*), *cert. denied*, 409 U.S. 1027 (1972). We thus deny as moot
    ACS's request that we forbear from application of these rules.

[^212]: We note that the per-line ICLS amount must be based on actual
    common line cost and revenue data pursuant to section 54.903(a)(4)
    of the Commission's rules. 47 C.F.R. § 54.903(a)(4). Because the
    effective date of this order falls during the last two quarters of
    the calendar year, the per-line ICLS in Anchorage is based on the
    actual common line cost and revenue data filed by ACS on December
    31, 2006. *Id.* Therefore, we find it appropriate to set ICLS
    support at this rate.

[^213]: *See* 47 C.F.R. §§ 54.706, 54.709. 

[^214]: *See* Telecommunications Reporting Worksheet, FCC Form 499-A,
    Instructions at 25 (2007).

[^215]: ACS July 25, 2007 *Ex Parte* Letter at 4.

[^216]: *See* 47 C.F.R. § 54.709 (contributions to the universal service
    fund are based on end-user telecommunications revenues).

[^217]: *See* *id*. § 54.712.

[^218]: *See supra* para. 65.

[^219]: *Qwest Omaha Order*, 20 FCC Rcd at 19435, para. 42.

[^220]: We note that although the *Wireline Broadband Internet Access
    Services Order* was adopted before the *Qwest Omaha Order,* the
    *Wireline Broadband Internet Access Services Order* relief did not
    take effect until November 16, 2005, which was after the Qwest Omaha
    forbearance statutory deadline. *See* *Appropriate Framework for
    Broadband Access to the Internet over Wireline Facilities*, 70 Fed.
    Reg. 60222 (Oct. 17, 2005).

[^221]: *Wireline Broadband Internet Access Services Order*, 20 FCC Rcd
    at 14927, para. 138.

[^222]: *See id.*

[^223]: *Id*. at 14927, para. 137.

[^224]: *Id*. at 14926, para. 135.

[^225]: *Id*. at 14902, para. 91.

[^226]: *Id*. at 14902, para. 92.

[^227]: *Id*.

[^228]: *Id*. at 14902, para. 93.

[^229]: To comply with this requirement in the event ACS intends to
    offer these services directly on a non-common carrier basis, ACS
    must file with the Commission a detailed description of the methods
    it will use to ensure that the costs and revenues of its wireline
    broadband Internet access transmission operations are excluded from
    the ratemaking calculations for those services that are still
    subject to Title II regulation. In particular, ACS must address in
    its filing how it will allocate relevant costs between those
    services it will offer on a non-Title II basis and those services
    that remain subject to Title II regulation. Additionally, ACS shall
    identify in its cost support for all future interstate tariff
    filings, the costs and revenues it has removed from its interstate
    ratemaking computations for those of its wireline broadband Internet
    access transmission services that are classified as regulated for
    cost allocation purposes, but are not subject to Title II regulation
    as a result of this forbearance relief. In particular, without
    deciding here what an appropriate allocation would be, any
    allocation of costs and revenues proposed by ACS should not result
    in an increase in special access rates due to the relief granted
    herein. Alternatively, if ACS chooses to offer wireline broadband
    Internet access transmission on a non-common carrier basis through a
    nonregulated affiliate, it must comply with the affiliate
    transactions rules for any transactions it has with that affiliate
    in connection with those transmission services. *See* 47 C.F.R.
    § 32.27.

[^230]: As an initial matter, we find that the forbearance sought by ACS
    would not be in the public interest under section 10(a)(3) absent
    this action by ACS. We find that the *Wireline Broadband Internet
    Access Services Order*'s framework struck the appropriate balance
    between deregulation, in light of the competition in the emerging
    market for wireline broadband Internet access services, and the
    mandates of section 254(k). *See generally Wireline Broadband
    Internet Access Services Order*, 20 FCC Rcd 14853. Although the
    evidence in this proceeding is *consistent* with the findings in the
    *Wireline Broadband Internet Access Services Order*, we find no
    basis in this record to deviate from that framework with respect to
    the necessity of addressing cost allocation issues before providers,
    such as rate-of-return carriers, for which an earnings determination
    is used for ratemaking purposes could avail themselves of regulatory
    relief. Thus, in light of the Commission's prior determination that
    its *Wireline Broadband Internet Access Services Order* framework
    struck the proper public interest balance, including both the relief
    granted and its identification of the cost allocation concerns that
    must be addressed, we find that deviation from that framework would
    not be in the public interest. *Fones4all Corp. Petition for
    Expedited Forbearance Under 47 U.S.C. § 160(c) and Section 1.53 from
    Application of Rule 51.319(d) to Competitive Local Exchange Carriers
    Using Unbundled Local Switching to Provide Single Line Residential
    Service to End Users Eligible for State or Federal Lifeline
    Service*, WC Docket No. 05-261, Memorandum Opinion and Order, 21 FCC
    Rcd 11125, 11132-22, para. 14 (2006) (concluding that it would not
    be in the public interest for the Commission to forbear from its
    unbundling rules where the petitioner had not presented any new
    evidence or change in circumstances that would warrant revisiting
    the Commission's carefully calibrated balancing test under section
    251(d)(2)(B) to determine the appropriate amount of unbundling). We
    likewise find that, absent this action by ACS, ACS's requested
    forbearance does not satisfy sections 10(a)(1) or (a)(2). As noted
    above, because ACS's wireline broadband Internet access transmission
    revenues are treated as regulated for accounting purposes, they
    would be included as part of a ACS's special access revenues for
    purposes of rate-of-return calculations, and thus an allocation
    would be necessary. Therefore, absent an appropriate allocation of
    the carrier's costs for wireline broadband Internet access
    transmission service, those costs could be recovered through
    increases in the rates for other interstate special access services
    that remain subject to rate-of-return regulation. Such rates would
    not be "just and reasonable" as required by section 10(a)(1) to
    justify forbearance, and the increased rates would harm consumers,
    including wholesale customers that rely on those special access
    inputs for their retail services, in contravention of the standard
    in section 10(a)(2).

[^231]: Such denial would necessitate that ACS file one or more
    additional forbearance petitions until such time as ACS, or other
    commenters, provide an adequate basis in the record for the
    Commission to address the cost allocation issues in that proceeding.
    Of course, ACS is free to do so, if it so chooses.

[^232]: 47 U.S.C. § 160. *See*, *e.g.*, *AT&T v. FCC*, 452 F.3d 830, 832
    (D.C. Cir. 2006) ("Critical to Congress's deregulation strategy, the
    \[1996\] Act added section 10 to the Communications Act of 1934.");
    *2000 Biennial Regulatory Review*, IB Docket No. 00-202, Notice of
    Proposed Rule Making, 15 FCC Rcd 20008, 20010, para. 1 (2000) ("The
    major purpose of the 1996 Act is to establish 'a pro-competitive,
    deregulatory national policy framework' designed to make available
    to all Americans advanced telecommunications and information
    technologies and services 'by opening all telecommunications markets
    to competition.' Congress empowered the Commission with an important
    tool to realize this goal in Section 10 of the Act.") (citations
    omitted).

[^233]: *See*, *e.g.*, *Qwest Communications International, Inc. and U S
    WEST, Inc., Applications for Transfer of Control, Memorandum Opinion
    and Order*, CC Docket No. 99-272, 15 FCC Rcd 5376, 5407, para. 64
    (2000) (approving the proposed merger between Qwest and U S WEST
    subject to the condition that the merger could not be consummated
    until the issuance by the Commission of a subsequent order stating
    that the proposed divestiture \[of Qwest's interLATA assets and
    services within the U S WEST region\] results in a merger that
    complies with section 271).

[^234]: For these reasons, we find that this holding is not at odds with
    section 10's statutory deadline. *See* 47 U.S.C. § 160(c).

[^235]: *See supra* para. 20.

[^236]: *See Qwest Omaha Order*, 20 FCC Rcd at 19438, para. 50; *see
    also id*. at 19428, para. 22 n.66 (stating that all special access
    services are addressed in the enterprise section).

[^237]: However, unlike the Qwest Omaha proceeding, for the reasons
    explained elsewhere in this order, we are able to grant ACS the
    relief it seeks regarding enterprise switched access services. *See
    supra* Part IV.a.

[^238]: *See ACS UNE Order*, 22 FCC Rcd at 1974, paras. 26-27; *see
    also* *Qwest Omaha Order*, 20 FCC Rcd at 19447-52, paras. 65-72;
    *Broadband 271 Forbearance Order*, 19 FCC Rcd at 21505, para. 21
    (considering the wholesale market in conjunction with the retail
    market given the nature of relief requested).

[^239]: *See supra* at paras. 50-Error: Reference source not found.

[^240]: *See supra* at Part IV.d.

[^241]: *See supra* text accompanying note Error: Reference source not
    found.

[^242]: We recognize that market share data are not the sole evidence
    considered as part of the traditional market power analysis. *See*,
    *e.g.*, *AT&T v. FCC*, 236 F.3d 729, 736-37 (D.C. Cir. 2001)
    (criticizing the Commission's failure to consider factors in
    addition to market share). However, an evaluation of market share
    data typically is the starting point for, and a important component
    of, that analysis.

[^243]: *See*, *e.g.*, ACS June 29, 2007 *Ex Parte* Letter at Exh. D
    (showing that GCI and AT&T Alascom each purchase **\[REDACTED\]**
    wholesale special access circuits from ACS **\[REDACTED\]**). We
    note that the record is virtually silent regarding the extent to
    which AT&T Alascom has deployed its own special access facilities.

[^244]: As the Commission stated in the *Qwest Omaha Order*, although it
    "look\[s\] to the Commission's previous caselaw on dominance for
    guidance," the traditional market power inquiry does not "bind \[the
    Commission's\] section 10 *forbearance* analysis." *Qwest Omaha
    Order*, 20 FCC Rcd at 19423-25, paras. 14, 17 n.52.

[^245]: We note that elsewhere in this order, we find that similar
    proposed conditions, in conjunction with evidence suggesting that
    ACS lacks market power for the relevant services, warrant
    forbearance from dominant carrier regulation. *See* Part IV.a.

[^246]: *See* ACS June 29, 2007 *Ex Parte* Letter at 1-2; *see also
    supra*, para. 56.

[^247]: *See*, *e.g.*, *Qwest Section 272 Sunset Forbearance Order*, 22
    FCC Rcd at 5234-35, para. 54 (concluding that, given the
    Commission's assumption for purposes of that proceeding that Qwest
    continued to possess exclusionary market power by virtue of its
    local network, it could have the incentive and ability to engage in
    non-price discrimination against competitors absent the conditions
    adopted in that order and other remaining regulatory requirements).

[^248]: *See*, *e.g*., ACS June 29, 2007 *Ex Parte* Letter at 5.

[^249]: *See*, *e.g.*, *Tariff Filing Requirements for Non-Dominant
    Carriers*, CC Docket No. 93-36, Memorandum Opinion and Order, 8 FCC
    Rcd 6752, 6756, para. 23 (2003) (holding that in light of
    "significant competition that has developed since the adoption of
    the Commission's Competitive Carrier decision, advance scrutiny of
    the interstate tariffs of nondominant carriers is unnecessary to
    protect the public interest . . . because by definition nondominant
    carriers cannot exercise market power, unlawful tariffs should be
    rare"), *vacated* *on other grounds*, *Southwestern Bell v. FCC*, 43
    F.3d 1515 (D.C. Cir. 1995); *Nondominant Tariff Filing Order*, 10
    FCC Rcd at 13653-54, paras. 3-4 (reinstating tariff filing on one
    day's notice).

[^250]: *See*, *e.g.*, GCI Comments at ii-iii (opposing all special
    access relief and stating that "GCI does not oppose all, or even
    most, of ACS's request for relief with respect to switched access
    services"); Sprint Nextel Reply at 2-3 (arguing that forbearance is
    unwarranted because ACS retains market power over special access
    services necessary for competitors to provide their own retail
    services); Time Warner Telecom Comments at 10-11 (noting the
    insufficiency of the data regarding special access services and
    arguing that even if such insufficiencies are overlooked,
    forbearance is unwarranted for special access services given
    competitors dependence on ACS for wholesale special access inputs).
    Moreover, as GCI notes, in contrast to the switched access context,
    UNEs are frequently not available as an alternative for wholesale
    special access services. *See* GCI Comments at 12 (stating that use
    restrictions on UNEs limit their utility as a special access
    replacement); GCI June 6, 2007 *Ex Parte* Letter at 1-2 (same); *see
    also* 47 U.S.C. § 51.309(b) (stating that a requesting
    telecommunications carrier may not access UNEs for the exclusive
    provision of interexchange services or CMRS services). Late in the
    proceeding, GCI stated that if the Commission would adopt all of the
    conditions ACS proposed, GCI would not object to the requested
    forbearance, including for special access. GCI July 30, 2007 *Ex
    Parte* Letter at 2. We have not adopted each of the conditions GCI
    proposed. In particular, we do not adopt a condition ACS proposes to
    condition forbearance from dominant carrier regulation of its
    special access services generally on ACS being prohibited from
    withdrawing any currently available interstate access service absent
    GCI's approval. *See supra* note Error: Reference source not found.
    As GCI explained, if the Commission were "unable to adopt each of
    the conditions to the forbearance requested by ACS, then for all the
    reasons previously set forth in detail in this record, GCI's
    opposition to the grant stands." GCI Aug. 10, 2007 *Ex Parte* Letter
    at 2.

[^251]: 47 U.S.C. § 160(a)(1), (2). *See*, *e.g.*, Sprint Nextel Reply
    at 3.

[^252]: 47 U.S.C. § 160(a)(3).

[^253]: *Id*. § 160(b).

[^254]: *See supra* para. 87.

[^255]: ACS Petition at 6; *see also* Verizon-Related News Release,
    *supra* note Error: Reference source not found; Verizon Forbearance
    Petition; Verizon WC Docket No. 04-440 Feb. 7, 2006 *Ex Parte*
    Letter; Verizon WC Docket No. 04-440 Feb. 17, 2006 *Ex Parte*
    Letter.

[^256]: ACS June 29, 2007 *Ex Parte* Letter at 7; ACS July 25, 2007 *Ex
    Parte* Letter at 4-5.

[^257]: ACS June 29, 2007 *Ex Parte* Letter at 2 n.2 & 7.

[^258]: *See* ACS Petition at 7; ACS June 29, 2007 *Ex Parte* Letter at
    7.

[^259]: Specifically, we grant ACS this relief for its interstate
    Transparent LAN Service, Transparent LAN Service Lite, LAN Extension
    Networking Service, and Video Transmission Services and otherwise
    deny ACS's request for relief similar to that granted Verizon
    through operation of law. GCI states that "the scope of relief
    requested by Verizon is not clear," and thus asks that we deny ACS's
    request on that basis. GCI Motion to Dismiss at 4. We find instead
    that these circumstances counsel in favor of analyzing and clearly
    addressing ACS's request in the present Order.

[^260]: *See* GCI Reply at 2; *see also supra* Part IV.D.3.c (denying
    forbearance relief for certain special access services).

[^261]: 47 U.S.C. § 160(a)(1).

[^262]: *Broadband* *271 Forbearance Order*, 19 FCC Rcd at 21505, para.
    21.

[^263]: *See* ACS Tariff FCC No. 1, §§ 7.10.1; 7.11.1; ACS July 25, 2007
    *Ex Parte* Letter at Exh. C.

[^264]: *See* ACS Tariff FCC No. 1, § 7.6.1; ACS July 25, 2007 *Ex
    Parte* Letter at Exh. C.

[^265]: *See, e.g.* *AT&T/BellSouth Order*, 22 FCC Rcd at 5698, para. 65
    (explaining that the Commission was unable to define the precise
    boundaries of relevant transmission service markets due to
    insufficient evidence).

[^266]: ACS excludes "traditional TDM-based special access services used
    to serve business customers, such as DS1 and DS3 special access
    circuits," from the scope of its broadband relief request. ACS July
    25, 2007 *Ex Parte* Letter at 4-5.

[^267]: *See AT&T/BellSouth Order,* 22 FCC Rcd at 5708, para. 82*;
    SBC/AT&T Order,* 20 FCC Rcd at 18332-33, para. 75*; Verizon/MCI
    Order,* 20 FCC Rcd at 18474-75, para. 76; *Qwest Section 272 Sunset
    Forbearance Order*, 20 FCC Rcd at 5244, para. 30; *see also* Verizon
    WC Docket No. 04-440 Feb. 7, 2006 *Ex Parte* Letter at 7-9.

[^268]: *See*, *e.g.*, ACS Petition at 40-44; GCI Comments at 19; ACS
    Reply, Statement of Mark Enzenberger, Exh. D.

[^269]: *See* ACS June 29, 2007 *Ex Parte* Letter at 3 (stating ACS
    faces significant competition from GCI and other providers of
    broadband services in Anchorage); Verizon WC Docket No. 04-440 Feb.
    7, 2006 *Ex Parte* Letter at 7. We do not have data that allow us to
    evaluate more precisely AT&T's market shares for these or other
    services in the Anchorage study area. *See supra* Part IV.D.2.d.

[^270]: *See*, *e.g.*, Verizon WC Docket No. 04-440 Feb. 7, 2006 *Ex
    Parte* Letter at 7 n.13 (citing a June 2005 analyst's estimated
    market shares for "primary" providers of enterprise data services:
    AT&T 35%, MCI 28%, Sprint 12%, ILEC 7%, Other 19%); *id*. at 7 n.14
    (citing a June 2005 analyst's estimated market shares for
    "secondary" providers of enterprise data services: Sprint 31%, AT&T
    16%, ILEC 16%, MCI 6%, Qwest 6%, Other 25%); *see generally* *id*.
    Attach. 2 (November 2003 analyst report estimating market shares of
    top providers of services to large enterprise customers: AT&T 26%,
    MCI 14%, Sprint 8%; and forecasting anticipated market shares for
    subsequent years). Although these data are not ideal, for example
    because they predate the recent BOC/interexchange carrier mergers,
    and the underlying information and methodologies are not available,
    as noted above, we do not give significant weight to such static
    market share information in any event.

[^271]: *See*, *e.g.*, *Worldcom/MCI Order,* 13 FCC Rcd at 18036-37,
    paras. 17-18; *see also* *DOJ/FTC Horizontal Merger Guidelines*, §
    1.521 ("Market concentration and market share data of necessity are
    based on historical evidence. However, recent or ongoing changes in
    the market may indicate that the current market share of a
    particular firm either understates or overstates the firm's future
    competitive significance.").

[^272]: *See*, *e.g.*, *AT&T/BellSouth Order*, 22 FCC Rcd at 5699, para.
    66; *SBC/AT&T Order*, 20 FCC Rcd at 18323, para. 60; *Verizon/MCI
    Order*, 20 FCC Rcd at 18465, para. 60; *Policy and Rules Concerning
    the Interstate, Interexchange Marketplace; Implementation of Section
    254(g) of the Communications Act of 1934, as Amended; 1998 Biennial
    Regulatory Review -- Review of Customer Premises Equipment and
    Enhanced Services Unbundling Rules in the Interexchange, Exchange
    Access and Local Exchange Markets*, CC Docket Nos. 96-61, 98-183,
    Report and Order, 16 FCC Rcd 7418, 7426, para. 17 (2001); *AT&T
    Reclassification Order*, 11 FCC Rcd at 3306, para. 65 (citing
    *Competition in the Interstate, Interexchange Marketplace*, CC
    Docket No. 90-132, Report and Order, 6 FCC Rcd 5880, 5887, para. 39
    (1991)).

[^273]: *See* *AT&T/BellSouth Order*, 22 FCC Rcd at 5708-09, paras.
    81-82; *SBC/AT&T Order*, 20 FCC Rcd at 18332-33, paras. 74-75; *see
    also* *Verizon/MCI Order*, 20 FCC Rcd at 18474-75, para. 76.

[^274]: *See* *AT&T/BellSouth Order*, 22 FCC Rcd at 5708-09, para. 82;
    *SBC/AT&T Order*, 20 FCC Rcd at 18332-33, para. 75; *see also*
    *Verizon/MCI Order*, 20 FCC Rcd at 18474-75, para. 76.

[^275]: *Triennial Review Order*, 18 FCC Rcd at 17063, para. 129.

[^276]: *See*, *e.g.*, Verizon WC Docket No. 04-440 Feb. 7, 2006 *Ex
    Parte* Letter, Attach. at 3.

[^277]: *See*, *e.g.*, ACS Petition at 41-42.

[^278]: *See*, *e.g.*, Sprint Nextel Reply at 2; Broadview Reply,
    Attach. 1 at 25-26 (noting the use of incumbent LEC special access
    services as inputs to competing enterprise broadband services);
    Verizon WC Docket No. 04-440 Feb. 7, 2006 *Ex Parte* Letter at 14.

[^279]: Indeed, we do not grant ACS forbearance for TDM-based, DS1 and
    DS3 special access services or for other of its special access
    services more generally. *Supra* Part IV.D.3.c; *infra* para. 110.
    We note that the cost allocation conditions imposed on the
    forbearance relief granted for wireline broadband Internet access
    transmission service and enterprise broadband services will help the
    Commission to ensure that the rates for these inputs remain just and
    reasonable. Moreover, the rate regulation that will continue to
    apply to ACS's special access services provides protection against
    unreasonable rate increases by requiring carriers that seek rate
    increases to justify such increases by providing cost and other
    supporting data in the tariff review process. ACS bases its petition
    on the contention that the market for access services in the
    Anchorage study area is competitive and, in particular, on its need
    to be able to offer lower rates to meet competition. Accordingly, if
    ACS should seek to raise its generally available tariffed rates for
    its TDM-based special access services, such a filing would be
    reviewed with particular scrutiny.

[^280]: *See infra* para. 105.

[^281]: Time Warner Telecom Comments at 13-15; *see also* Broadview
    Reply, Attach. 2 at 7-8.

[^282]: *Time Warner Telecom and Overture Networks Provide Ethernet
    Anywhere*, Time Warner Telecom Press Release (June 6, 2006),
    *available at*
    <http://www.twtelecom.com/Documents/Announcements/News/2006/Overture.pdf>.

[^283]: Specifically, Time Warner Telecom cites two declarations filed
    in the AT&T/BellSouth merger proceedings. *See* Time Warner Telecom
    Comments at 12-15 (citing Letter from Thomas Jones, Counsel, Time
    Warner Telecom, to Marlene H. Dortch, Secretary, FCC, WC Docket No.
    06-74, Attach. Reply Decl. of Graham Taylor (Taylor WC Docket No.
    06-74 Reply Decl.); Joint Opposition of AT&T Inc. and BellSouth
    Corp. to Petitions to Deny and Reply to Comments, WC Docket No.
    06-74, Attach. Reply Decl. of Parley C. Casto (Casto WC Docket No.
    06-74 Reply Decl.)). These declarations indicate that Time Warner
    Telecom, among others, can use TDM special access services to offer
    retail Ethernet services. *See* Taylor WC Docket No. 06-74 Reply
    Decl. at para. 9 ("To the extent that TWTC has been able to deploy
    Ethernet services at retail in AT&T's region, it has done so
    using 1) its on-net facilities; 2) TDM loops purchased from AT&T;
    and 3) an extremely limited number of competitive facilities.")
    *cited in* Time Warner Telecom Comments; Casto WC Docket No. 06-74
    Reply Decl. at para. 10 ("Numerous Ethernet providers, including
    TWTC, AT&T, and others, offer retail Ethernet services" by using
    "basic DS1 or DS3 special access circuits.").

[^284]: *See*, *e.g.*, Time Warner Telecom Comments at 14-15.

[^285]: *See*, *e.g.*, Casto WC Docket No. 06-74 Reply Decl. at para.
    22.

[^286]: *See id*.

[^287]: For example, Time Warner Telecom notes that it would need to
    obtain two DS3s to provide a 50 Mbps Ethernet loop because DS3s
    provide approximately 45 Mbps of bandwidth. Time Warner Telecom
    Comments at 14. However, Ethernet supports data transfer rates in
    specific increments of 10 Mbps, 100 Mbps, and 1 Gbps. *See* [Harry
    Newton]{.smallcaps}, [Newton's Telecom Dictionary]{.smallcaps}, 363,
    364 (22nd ed., 2006). Thus, depending upon the capacity of service
    desired by a particular customer, it could well be necessary to
    purchase excess capacity of a wholesale Ethernet service, as well.

[^288]: *See*, *e.g.*, Broadview Reply, Attach. 2 at 7-8; *see also* 47
    C.F.R. §§ 1.401-1.407 (providing for petitions for rulemaking).

[^289]: *Policy and Rules Concerning the Interstate, Interexchange
    Marketplace*, CC Docket No. 96-61, Second Report and Order, 11 FCC
    Rcd 20730, 20738-68, paras. 14-66 (1996) (*IXC Forbearance Order*).

[^290]: *See Qwest Omaha Order*, 20 FCC Rcd at 19434-35, paras. 39, 42.
    As stated above, we expect ACS to make a showing that adequately
    addresses cost shifting concerns arising from this forbearance
    action in light of its continuing to offer other interstate special
    access services on a rate-of-return basis.

[^291]: *Triennial Review Order*, 18 FCC Rcd at 17169, 17221, paras.
    315, 389 (finding that requesting carriers are not impaired without
    OCn or SONET interface transport); *Triennial Review Remand Order*,
    20 FCC Rcd at 2634, para. 183.

[^292]: *Triennial Review Order,* 18 FCC Rcd at 17169, para. 316.

[^293]: *Id*.

[^294]: *See*, *e.g.*, *AT&T Reclassification Order*, 11 FCC Rcd at
    3288, para. 27.

[^295]: *See IXC Forbearance Order*, 11 FCC Rcd at 20760-61, para. 53.

[^296]: *See Review of Regulatory Requirements for Incumbent LEC
    Broadband Telecommunications Services*, CC Docket No. 01-337,
    Memorandum Opinion and Order, 17 FCC Rcd 27000, 27012-13, para. 22
    (2002) (*SBC Advanced Services Forbearance Order*).

[^297]: 47 U.S.C. §§ 201-02. Specifically, we forbear from the following
    requirements with regard to ACS's provision of the specified
    existing broadband services within the Anchorage study area: (1)
    section 203 of the Act to the extent it requires ACS to file tariffs
    for these services as offered within that study area; and sections
    61.31-61.38 of our rules to the extent they require ACS to file
    tariffs for these services as offered within that study area. *See
    IXC Forbearance Order*; *Policy and Rules Concerning the Interstate,
    Interexchange Marketplace, Implementation of Section 254(g) of the
    Communications Act of 1934*, CC Docket No. 96-61, Order on
    Reconsideration, 12 FCC Rcd 15014 (1997); *Policy and Rules
    Concerning the Interstate, Interexchange Marketplace, Implementation
    of Section 254(g) of the Communications Act of 1934*, CC Docket No.
    96-61, Second Order on Reconsideration and Erratum, 14 FCC Rcd 6004
    (1999); 47 C.F.R. §§ 61.31-61.38 (tariffing requirements for
    dominant carriers).

[^298]: *See*, *e.g.*, GCI Reply at 2 (stating that "unlike price cap
    regulation, rate-of-return regulation allows \[incumbent LECs\] to
    cross-subsidize and 'shift nonregulated costs to regulated services'
    with potentially disastrous consequences for competition" and that
    ACS "fails to even mention the potential for cost-shifting").

[^299]: For the same reasons discussed in the context of wireline
    broadband Internet access transmission service, we find that, absent
    this legal requirement, we would deny ACS's request for forbearance
    based on these cost allocation concerns. Thus, we likewise find that
    this is consistent with the statutory deadline imposed by section
    10.

[^300]: 47 C.F.R. §§ 63.03(b)(2), 63.71(a)(5), (b)(4), (c).

[^301]: *Id*. § 63.71; *see Qwest Omaha Order*, 20 FCC Rcd at 19435-36,
    para. 43.

[^302]: *See Qwest Omaha Order*, 20 FCC Rcd at 19435-36, para. 43.
    Specifically, we forbear from applying sections 63.03, 63.19, 63.21,
    63.23, and 63.60-63.90 of our rules to ACS's provision of the
    specified existing broadband services within the Anchorage study
    area to the extent that, and only to the extent that, ACS would be
    treated as a dominant carrier under these rules for no reason other
    than its provision of those services within that study area. 47
    C.F.R. § 63.03 (procedures for domestic transfer of control
    applications); *id*. §§ 63.60-63.90 (definitions, rules, and
    procedures that apply to the discontinuance, reduction, outage, and
    impairment of services). To the extent that ACS otherwise would be
    treated as a dominant carrier under these rules, that treatment
    shall continue. *See* *Qwest Section 272 Sunset Forbearance Order,*
    22 FCC Rcd at 5235-39, paras. 55-62.

[^303]: Time Warner Telecom Comments at 2, 11-15 (arguing that ACS still
    controls certain bottleneck facilities necessary to serve enterprise
    customers); GCI Comments at 4 (claiming that forbearance would
    injure competition in the retail market for broadband services
    because ACS would be able to engage in a price squeeze on customers
    that rely on its special access facilities); Broadview Reply at 4
    (claiming that "ACS's dominance over the transmission facilities
    needed to provide end users competitive broadband services is
    unquestionable"); Sprint Nextel Reply at 2 (arguing that ACS
    controls the access services necessary to compete in the wholesale
    and enterprise markets).

[^304]: *See*, *e.g.*, Time Warner Telecom Comments at 5 n.7 ("For
    purposes of this opposition, the Joint Commenters assume the most
    expansive interpretation of ACS's request for relief with respect to
    the market for broadband transmission services provided to the
    enterprise market: that ACS seeks relief from Title II and dominant
    carrier regulation for both its packetized and TDM based broadband
    services sold to both retail and wholesale enterprise customers in
    the Anchorage MSA."); GCI Comments at 3-4 (stating that "ACS claims
    to seek forbearance from regulation of broadband services
    'consistent with that granted to Verizon Telephone Companies,' but
    fails to acknowledge that, unlike Verizon, ACS simultaneously seeks
    forbearance from regulations of its circuit-switched special access
    transmission facilities"); Broadview Reply at 4 (stating that "any
    current retail competition in Anchorage exists at the mercy of
    regulatory requirements that ensure that competitors have access to
    *wholesale* inputs that currently only ACS can make available in the
    vast majority of locations throughout Anchorage"); Sprint Nextel
    Reply at 2 (noting that ACS's request for forbearance is "far
    broader than the limited forbearance granted to Qwest in the Omaha
    MSA and broader than the forbearance sought by Verizon and deemed
    granted last March").

[^305]: *See supra* Part IV.D.3.c. We find that concerns about the
    sufficiency of the Commission's existing regulation of the incumbent
    LECs' special access services are better addressed in the rulemaking
    context, where we can develop a comprehensive approach based on a
    full record that applies to all similarly-situated incumbent LECs.
    *See*, *e.g.*, Broadview Reply, Attach. 1 at 26.

[^306]: In addition, ACS remains subject to either section 251
    unbundling obligations or the loop and subloop access condition by
    virtue of the *ACS UNE Order*, 22 FCC Rcd at 1960, para. 2
    (conditioning forbearance relief from certain unbundling
    requirements on ACS's making loops and certain subloops available in
    certain wire centers in Anchorage at rates, terms, and conditions
    negotiated with GCI for Fairbanks, Alaska by the end of the
    established transition period until commercially negotiated rates
    are reached).

[^307]: *See* *infra* Parts IV.E.3 & IV.E.4.

[^308]: *Qwest Section 272 Sunset Forbearance Order,* 22 FCC Rcd at
    5233, para. 52.

[^309]: *Id.*

[^310]: *See* ACS June 25, 2007 *Ex Parte* Letter at 5-6 (including
    within the scope of relief sought certain broadband services
    "whether offered by ACS now or in the future" and listing particular
    services ACS may offer in the future "only as examples of types of
    services for which ACS is seeking forbearance").

[^311]: 47 U.S.C. § 160(a)(2).

[^312]: *See infra* parts IV.E.3, IV.E.4.

[^313]: *Qwest Omaha Order*, 20 FCC Rcd at 19438, para. 50 (denying
    Qwest's petition with respect to the enterprise market because Qwest
    had failed to provide sufficient data for its service territory for
    the entire MSA to allow the Commission to make a forbearance
    determination).

[^314]: *See supra* para. 112.

[^315]: 47 U.S.C. § 160(a)(3).

[^316]: *Id*. § 160(b).

[^317]: *See*, *e.g.*, ACS June 29, 2007 *Ex Parte* Letter at 7.

[^318]: Section 706(c)(1) of the 1996 Act, *codified at* 47 U.S.C. § 157
    nt. The Commission has concluded that section 706 is not an
    independent grant of forbearance authority. *Deployment of Wireline
    Services Offering Advanced Telecommunications Capability*, *et al*.,
    CC Docket No. 98-147, Memorandum Opinion and Order and Notice of
    Proposed Rulemaking, 13 FCC Rcd 24012, 24044-48, paras. 69-77
    (1998), *recon. denied*, 15 FCC Rcd 17044 (2000).

[^319]: 1996 Act Preamble, 110 Stat. at 56; *see* 47 U.S.C. § 157 nt. In
    section 706 of the 1996 Act, Congress directed the Commission to
    encourage, without regard to transmission media or technology, the
    deployment of advanced telecommunications capability to all
    Americans on a reasonable and timely basis through, among other
    things, removing barriers to infrastructure investment. Section 706
    is reproduced in the notes to section 157 of the Act. *See* 47
    U.S.C. § 157 nt. As we found in the *Wireline Broadband Internet
    Access Services Order*, regulation that constrains incentives to
    invest in and deploy the infrastructure needed to deliver broadband
    services is not in the public interest. *Wireline Broadband Internet
    Access Services Order*, 20 FCC Rcd at 14878, para. 45.

[^320]: 47 U.S.C. § 157(a).

[^321]: *See*, *e.g.*, Time Warner Telecom Comments at 11-15; Broadview
    Reply at 6; Sprint Nextel Reply at 1-3.

[^322]: *See supra* Parts IV.E.1.a and IV.E.1.b.

[^323]: *See supra* para. 112.

[^324]: *Computer II Final Decision*, 77 FCC 2d at 474-75, para. 231;
    *see CCIA v. FCC*, 693 F.2d 198, 205 (D.C. Cir. 1982).

[^325]: *Computer II Final Decision*, 77 FCC 2d at 475, para. 231. We
    note that, under the Commission's *Hyperion Forbearance Order*,
    which granted non-dominant carriers permissive detariffing of
    interstate interexchange access services, non-incumbent LECs,
    including ACS's competitors within the Anchorage study area, need
    not offer the basic transmission services underlying their enhanced
    services pursuant to tariff. *See Hyperion Telecommunications, Inc.
    Petition Requesting Forbearance, Time Warner Communications Petition
    for Forbearance, Complete Detariffing* *for Competitive Access
    Providers and Competitive Exchange Carriers*, CCB/CPD Nos. 96-3 and
    96-7 and CC Docket No. 97-146, Memorandum Opinion and Order and
    Notice of Proposed Rulemaking, 12 FCC Rcd 8596 (1997) (*Hyperion
    Forbearance Order*).

[^326]: *Computer II Final Decision*, 77 FCC 2d at 474-75, para. 231.

[^327]: ACS Petition at 56.

[^328]: *See supra* Part IV.E.1.

[^329]: *See supra* note 334. As a practical matter, however, we note
    that the existing specified broadband services all appear to be
    transmission services that ACS chooses to offer on a common carrier
    basis today, and thus remain subject to the same Title II regulation
    applicable to nondominant carriers.

[^330]: *See supra* Part IV.E.1.

[^331]: In its June 25, 2007 *Ex Parte* Letter, ACS asserts that "\[i\]n
    this proceeding, ACS has used the phrase 'forbearance from Title II
    regulation' as shorthand for forbearance from classification as a
    'telecommunications service' under the Communications Act." ACS June
    25, 2007 *Ex Parte* Letter at 5. As an initial matter, ACS has not
    explained how a *classification* of its services is, in itself, a
    "regulation" or "provision of this Act" from which the Commission
    can forbear under section 10. 47 U.S.C. § 160(a). We note that
    certain "regulation\[s\]" and "provision\[s\] of this Act" do apply
    by virtue of a particular classification. With respect to such
    requirements, we find forbearance for enterprise broadband services
    is warranted in part, subject to the conditions discussed above. We
    otherwise deny forbearance for ACS's enterprise broadband services.
    *See* Parts IV.E.3, IV.E.4. We conclude that this analysis
    appropriately addresses ACS's request for forbearance for its
    enterprise broadband services.

[^332]: *See Personal Communications Industry Association's Broadband
    Personal Communications Services Alliance's Petition for Forbearance
    for Broadband Personal Communications Services*, WT Docket No.
    98-100, Memorandum Opinion and Order and Notice of Proposed
    Rulemaking, 13 FCC Rcd 16857, 16865-72, paras. 15-31 (1998) (*PCIA
    Forbearance Order*) (denying PCIA's request for forbearance from
    sections 201 and 202 of the Act and noting that these provisions
    "codify\[\] the bedrock consumer protection obligations of a common
    carrier").

[^333]: 47 U.S.C. § 201.

[^334]: *Id*. § 202.

[^335]: *Id*. § 251(a)(1).

[^336]: *See*, *e.g.*, *id*. § 251(b)(1).

[^337]: *Id*. § 251(b)(2).

[^338]: *See*, *e.g.*, *id*. §§ 224, 251(b)(4).

[^339]: *See supra* para. 7.

[^340]: 47 U.S.C. § 214. *See*, *e.g.*, *Verizon Telephone Companies
    Section 63.71 Application to Discontinue Expanded Interconnection
    Service Through Physical Collocation*, WC Docket No. 02-237, Order,
    18 FCC Rcd 22737, 22742, para. 8 (2003) (applying five factors to
    determine whether "reasonable substitutes are available" to
    consumers). In 1999, the Commission granted all carriers blanket
    authority under section 214 to provide domestic interstate services
    and to construct, acquire, or operate any domestic transmission
    line. *See Implementation of Section 402(b)(2)(A) of the
    Telecommunications Act of 1996, Petition for Forbearance of the
    Independent Telephone & Telecommunications Alliance*, Report and
    Order in CC Docket No. 97-11, Second Memorandum Opinion and Order in
    AAD File No. 98-43, 14 FCC Rcd 11364, 11372, para. 12 (1999); 47
    C.F.R. § 63.01(a). We also note that, in certain instances, the
    Commission has granted conditional blanket discontinuance authority
    to carriers under section 214. *See Wireline Broadband Internet
    Access Services Order*, 20 FCC Rcd at 14907-08, paras. 100-101.

[^341]: 47 C.F.R. § 63.71(c).

[^342]: *Id*.

[^343]: *See id*. §§ 61.18 *et seq*.

[^344]: We note that this request appears inconsistent with ACS's
    arguments that asymmetric regulation of its telecommunications
    services is impeding competition and that it should "be subject to
    no less regulation than any competitive local exchange carrier."
    *See* ACS Petition at 52, 56; *see* ACS June 29, 2007 *Ex Parte*
    Letter at 7 (arguing that ACS should be permitted to discontinue
    services using the streamlined procedures available to nondominant
    carriers).

[^345]: *See*, *e.g.*, *SBC Advanced Services Forbearance Order*, 17 FCC
    Rcd at 27010, 27012, paras. 18, 21 (citing 47 U.S.C. §§ 201-02,
    208); *PCIA Forbearance Order*, 13 FCC Rcd at 16865-72, paras.
    15-31.

[^346]: 47 U.S.C. § 160(a)(1).

[^347]: *Id*. §§ 160(a)(2), (a)(3).

[^348]: *See*, *e.g.*, *Wireline Broadband Internet Access Services
    Order*, 20 FCC Rcd at 14865, para. 17 (creating a regulatory and
    analytical framework that is consistent across different platforms
    that supports competing services).

[^349]: *See*, *e.g.*, *IXC Forbearance Order*, 11 FCC Rcd at 20776-77,
    paras. 84-85.

[^350]: 47 U.S.C. § 160(a)(2).

[^351]: 47 C.F.R. § 64.1903.

[^352]: 47 U.S.C. § 160(a)(1).

[^353]: We note that in the *ACS UNE Order*, the Commission granted ACS
    conditional forbearance from the unbundling requirements of section
    251(c) in certain wire centers in the Anchorage study area. *See*
    *ACS UNE Order*, 22 FCC Rcd at 1959-60, paras. 1-2. Nothing in the
    present order contravenes the conditional forbearance in place as a
    result of the *ACS UNE Order*.

[^354]: 47 U.S.C. § 254(b)(5). The Commission has emphasized that
    maintaining the long-term viability of universal service programs is
    a fundamental goal that must continue to be met in an evolving
    telecommunications marketplace in which customers are migrating to
    broadband service platforms. *Federal-State Joint Board on Universal
    Service*, CC Docket No. 96-45, Report and Order and Second Further
    Notice of Proposed Rulemaking, 17 FCC Rcd 24952, 24954-56, paras.
    1-5 (2002).

[^355]: 47 U.S.C. § 254(d).

[^356]: *See generally* *id*. § 254.

[^357]: *Id*. § 225. TRS enables an individual with a hearing or speech
    disability to communicate by telephone or other device with a
    hearing individual. This is accomplished through TRS facilities that
    are staffed by specially trained communications assistants (CAs)
    using special technology. The CA relays conversations between
    persons using various types of assistive communication devices and
    persons who do not require such assistive devices. *See generally
    Telecommunications Relay Services and Speech-to-Speech Services for
    Individuals with Hearing and Speech Disabilities,* CC Docket No.
    98-67, Report and Order and Further Notice of Proposed Rulemaking,
    15 FCC Rcd 5140, para. 2 (2000)*.*

[^358]: 47 U.S.C. §§ 251(a)(2), 255.

[^359]: *Id*. § 222(a)-(c), (f). CPNI is defined to include "(A)
    information that relates to the quantity, technical configuration,
    type, destination, location, and amount of use of a
    telecommunications service subscribed to by any customer of a
    telecommunications carrier, and that is made available to the
    carrier by the customer solely by virtue of the carrier-customer
    relationship; and (B) information contained in the bills pertaining
    to telephone exchange service or telephone toll service received by
    a customer of a carrier." *Id*. § 222(h)(1).

[^360]: *See generally* *id*. § 222.

[^361]: *Id*. § 222(d)(4), (g).

[^362]: *Id*. § 229; *see also* Pub. L. No. 103-414, 108 Stat. 4279
    (codified as amended in sections of 18 U.S.C. and 47 U.S.C.).

[^363]: ACS Petition at 7; ACS June 29, 2007 *Ex Parte* Letter at 7
    n.22; *see* 47 U.S.C. § 254(a) (directing that "any other provider
    of interstate telecommunications \[*i.e.*, any interstate
    telecommunications provider that does not provide interstate
    telecommunications services\] may be required to contribute to"
    federal universal service support).

[^364]: 47 U.S.C. § 160(a)(1).

[^365]: *Id*. § 160(a)(2).

[^366]: ACS Petition at 56.

[^367]: *Wireline Broadband Internet Access Services Order*, 20 FCC Rcd
    at 14865, para. 17 (creating a regulatory and analytical framework
    that is consistent across different platforms that support competing
    services).

[^368]: *See Universal Service Contribution Methodology*, WC Docket No.
    06-122; CC Docket Nos. 96-45, 98-171, 90-571, 92-237; NSD File No.
    L-00-72; CC Docket Nos. 99-200, 95-116, 98-170; WC Docket No. 04-36,
    Report and Order and Notice of Proposed Rulemaking, 21 FCC Rcd 7518,
    7538-43, paras. 38-49 (2006), *aff'd in part, vacated in part*,
    *Vonage Holdings Corp. v. FCC*, No. 06-1276 (D.C. Cir. June 1,
    2007); *Implementation of the Telecommunications Act of 1996:
    Telecommunications Carriers' Use of Customer Proprietary Network
    Information and Other Customer Information; IP-Enabled Services*, CC
    Docket No. 96-115, WC Docket No. 04-36, Report and Order and Further
    Notice of Proposed Rulemaking, 22 FCC Rcd 6927, 6954-57, paras.
    54-59 (2007); *IP-Enabled Services*, WC Docket No, 04-36, WT Docket
    No. 96-198, CG Docket No. 03-123, CC Docket No. 92-105, Report and
    Order, FCC 07-110 at paras. 17-31 (rel. Jun. 15, 2007).

[^369]: *See* 47 U.S.C. § 160(c) (deeming the petition granted as of the
    forbearance deadline if the Commission does not deny the petition
    within the time period specified in the statute); 47 C.F.R. §
    1.103(a).

[^370]: *See* 47 C.F.R. §§ 1.4, 1.13.