FEDERAL COMMUNICATIONS COMMISSION

### Washington, D.C. 20554

September 22, 2000

Mr. Michael Glover

Senior Vice President & Deputy General Counsel

Verizon Communications, Inc.

1310 North Courthouse Road -- 4^th^ Floor

Arlington, VA 22201

RE: *Bell Atlantic/GTE Merger Order*, CC Docket No. 98-184, ASD File No.
00-30

Dear Mr. Ward:

This letter addresses a September 8, 2000 request for clarification
sought by Verizon Communications, Inc. ("Verizon") regarding the *Merger
Conditions* adopted in *the Bell Atlantic/GTE Merger Order*.[^1]
Specifically, Verizon seeks a clarification of the company's obligation
to continue to make available unbundled network elements ("UNEs") in
accordance with certain Commission Orders.[^2]

In the *Bell Atlantic/GTE Merger Order*, the Commission adopted a
commitment that requires Verizon to continue to make available UNEs and
UNE combinations required in the *Local Competition Third Report and
Order* and the *Line Sharing Order* "in accordance with those Orders
until the date of a final, non-appealable judicial decision."[^3] In the
Order, the Commission explained that compliance with this *Merger
Condition* includes pricing UNEs in accordance with the forward-looking
cost methodology articulated by the Commission in the *Local Competition
Order*.[^4] In that Order, the Commission adopted the total element
long-run incremental cost ("TELRIC") methodology. Since that time,
Verizon and other parties have contested the merits of the TELRIC
pricing methodology, and appeals are currently pending.[^5]

In its letter, Verizon requests clarification concerning the effect of
this *Merger Condition* in the event the Supreme Court issues a ruling
that vacates the TELRIC rules established in the *Local Competition
Order*. In particular, Verizon asserts that the *Merger Conditions* do
not establish an independent basis for requiring Verizon to use the
TELRIC pricing methodology in the event the Supreme Court finds that it
is inconsistent with the law of the land.[^6]

The *Merger Conditions* require Verizon's incumbent local exchange
carriers ("LECs") to comply with certain Commission rules "until the
date of any final and non-appealable judicial decision" [^7] concluding
the litigation concerning those rules by invalidating them. The relevant
"final and non-appealable judicial decision," for purposes of the
obligation to follow the TELRIC pricing rules (as opposed to the
obligation to follow the substantive rules in the *Local Competition
Third Report and Order* and the *Line Sharing Order*), would be a final
decision of the Supreme Court concluding the TELRIC litigation either by
denying certiorari outright or by invalidating given pricing rules on
the ground that they are inconsistent with the Telecommunications Act of
1996 or the Constitution. In the event of such a decision, the *Merger
Conditions* would not independently impose an obligation to follow any
finally invalidated pricing rules after the conclusion of that
litigation.

Please do not hesitate to contact me if I can be of further assistance.
You may also contact Anthony Dale in the Common Carrier Bureau at (202)
418-2260 for further information on this matter.

Sincerely,

Dorothy T. Attwood

> Chief, Common Carrier Bureau

CC:

Mr. Jeffrey Ward, Corporate Compliance Officer

[^1]: GTE Corporation, Transferor, and Bell Atlantic Corporation,
    Transferee, For Consent to Transfer Control of Domestic and
    International Sections 214 and 310 Authorizations and Application to
    Transfer Control of a Submarine Cable Landing License, *Memorandum
    Opinion and Order*, FCC 00-221 (rel. Jun. 16, 2000) *("Bell
    Atlantic/GTE Merger Order*"). The *Merger Conditions* are contained
    in Appendix D.

[^2]: *See* Letter from Michael E. Glover, Senior Vice President &
    Deputy General Counsel, Verizon Communications, Inc. to Dorothy T.
    Attwood, Chief, Common Carrier Bureau, FCC (Sept. 8, 2000)
    ("*Verizon Letter*").

[^3]: *Bell Atlantic/GTE Merger Order* at Appendix D, para. 39.

[^4]: *See id.* at para. 316.

[^5]: *See Iowa Util. Bd. v. FCC*, 219 F.3d 744 (8^th^ Cir. 2000),
    *petition for stay filed*.

[^6]: *See Verizon Letter* at 1-2.

[^7]: *Bell Atlantic/GTE Merger Order* at para. 316; *see id.* at
    Appendix C, para. 39.