**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | WC Docket No. 05-261         |
|                                  | * |                              |
| 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                          | * |                              |
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+----------------------------------+---+------------------------------+

MEMORANDUM OPINION AND ORDER

**Adopted: September 28, 2006 Released: September 29, 2006**

By the Commission: Commissioners Copps and Adelstein concurring and
issuing separate statements; Commissioner McDowell not participating.

# INTRODUCTION

1.  In this Order, we deny a petition filed by Fones4All Corporation
    (Fones4All or Petitioner) requesting that the Commission expand
    incumbent local exchange carriers' (LECs) unbundling obligations by
    forbearing from specific aspects of the Commission's unbundling
    rules under section 251(d)(2) of the Communications Act of 1934, as
    amended (the Act).[^1] Specifically, Petitioner requests forbearance
    from the application of section 51.319(d) of the Commission's rules
    to requesting carriers serving particular customers.[^2] For the
    reasons set forth below, we find that the request is improper and
    inconsistent with section 10 of the Act, and we therefore deny
    Fones4All's petition.[^3]

# Background

2.  Congress passed section 251 of the Act as one of the cornerstone
    provisions to stimulate the opening of telecommunications markets.
    Section 251(c)(3) imposes upon incumbent LECs "the duty to provide,
    to any requesting telecommunications carrier for the provision of a
    telecommunications service, nondiscriminatory access to network
    elements on an unbundled basis."[^4] In directing the Commission to
    determine which network elements must be unbundled, section
    251(d)(2) states that the Commission must "consider, at a minimum,
    whether \[failing\] to provide access to such network elements would
    impair the ability of the telecommunications carrier seeking access
    to provide the services that it seeks to offer."[^5] On February 4,
    2005, the Commission released the *Triennial Review Remand Order*
    and issued rules concerning the unbundled network elements (UNEs)
    that incumbent LECs must provide to other carriers. The Commission
    clarified and modified its impairment framework in several respects,
    pursuant to section 251(d)(2)(B) of the Act, including drawing
    reasonable inferences about the prospects for competition in one
    geographic market from the state of competition in other, similar
    markets.[^6] In making such inferences for mass market local circuit
    switching, the Commission found that competitive LECs have deployed
    a significant and growing number of their own switches, often using
    newer, more efficient technology. These switches can be used to
    serve the mass market in many areas, and similar deployment is
    possible in other geographic markets.[^7] For all of these reasons,
    the Commission concluded that a section 251 unbundling obligation
    was no longer appropriate for mass market local circuit switching.
    The *Triennial Review Remand Order* adopted the rule effectuating
    this finding, as well as a 12-month transition period for competing
    LECs to convert their customers from unbundled circuit switching to
    alternative arrangements.[^8]

3.  On July 1, 2005, Fones4All filed its petition seeking forbearance
    from application of this rule in certain circumstances.[^9]
    Specifically, Petitioner asks the Commission "to forbear from
    applying the rules restricting the availability of ULS \[unbundled
    local circuit switching\] in instances where a CLEC requests ULS for
    the sole purpose of providing, under a state or Federal Lifeline
    program, service to a single line residential end user."[^10]
    Fones4All claims that application of the Commission's rule
    eliminating access to unbundled local circuit switching "effectively
    precludes most CLECs from serving Lifeline eligible customers."[^11]
    In particular, Petitioner requests that the Commission "forbear from
    application of its rules eliminating UNE-P availability for single
    line residential service."[^12]

4.  On June 8, 2006, the Wireline Competition Bureau (Bureau) extended
    by ninety (90) days, to September 28, 2006, the date by which the
    Fones4All Forbearance Petition shall be deemed granted in the
    absence of a Commission decision.[^13] Fones4All filed an
    application for review of the *Bureau Extension Order* on June 28,
    2006.[^14]

5.  For the Commission to grant the forbearance requested by Fones4All,
    we must determine that the three elements of section 10 of the Act
    are satisfied. In particular, section 10(a) provides that:

    The Commission shall forbear from applying any regulation or any
    provision of this Act to a telecommunications carrier or
    telecommunications service, or class of telecommunications carriers
    or telecommunications services, in any or some of its or their
    geographic markets, if the Commission determines that --

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(1) enforcement of such regulation or provision 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;

(2) enforcement of such regulation or provision is not necessary for the
    protection of consumers; and

(3) forbearance from applying such provision or regulation is consistent
    with the public interest.[^15]

# discussion

6.  As a preliminary concern, we deny Fones4All\'s application for
    review of the *Bureau Extension Order* pursuant to section 1.115(g)
    of the Commission\'s rules and section 5(c)(5) of the Act.[^16]
    Extensions of time do not raise "novel questions of fact, law or
    policy," as Fones4All asserts, and therefore the Bureau is within
    its discretion to extend by 90 days the date by which a forbearance
    petition shall be deemed granted on behalf of the Commission.[^17]

## General Basis for Denial

7.  As an initial matter, we conclude that forbearance from rule
    51.319(d) would not give the Petitioner the relief it seeks, and we
    therefore deny the Petition as procedurally defective. The Fones4All
    Forbearance Petition seeks to use the section 10 forbearance
    provision to create new section 251 unbundling obligations \--
    attempting to revisit, in effect, the *Triennial Review Remand
    Order*'s section 251 unbundling determinations. The Commission
    cannot, consistent with the statute as interpreted by the Supreme
    Court and the Court of Appeals for the D.C. Circuit, expand section
    251 unbundling through section 10 forbearance. The result Petitioner
    seeks is unavailable in this context.[^18] Moreover, because the
    Commission is required to analyze impairment before making a network
    element available, forbearing from section 51.319(d) of the
    Commission's rules results in a void rather than an unbundled local
    circuit switching requirement.

8.  Petitioner suggests that under section 251(c)(3), incumbent LECs
    have a "default obligation" to unbundle, and that section 51.319 of
    the Commission's rules creates an exception to that default
    unbundling obligation.[^19] Petitioner thus apparently believes that
    forbearing from this "exception" will expand incumbent LECs'
    unbundling obligation. Petitioner is incorrect on all counts. First,
    there is no "default unbundling obligation."[^20] Rather, sections
    251(c)(3) and 251(d)(2) require an *affirmative* Commission decision
    to require unbundling. As the Supreme Court explained, "\[s\]ection
    251(d)(2) does not authorize the Commission to create isolated
    exemptions from some underlying duty to make all network elements
    available, it requires the Commission to determine on a rational
    basis *which* network elements must be made available" before
    imposing an unbundling requirement.[^21] Furthermore, that
    determination *must* include an analysis of whether impairment
    exists.[^22] In other words, the impairment analysis must precede
    unbundling.

9.  In key part, Petitioner critically misunderstands the result of a
    decision to forbear from rule 51.319(d). If we were to forbear from
    the local circuit switch unbundling prohibition in the suggested
    situations, for all the reasons explained above, such forbearance
    would still not result in a Commission decision to require incumbent
    LECs to unbundle that network element. There would be no analysis of
    impairment, as required by section 251 of the Act, with regard to
    carriers serving Lifeline customers; no incumbent LEC obligation to
    make unbundled local circuit switching available in only those
    situations; and no rule or Commission decision that would make
    competing carriers eligible for these UNEs to serve these particular
    customers. Forbearing from the rule that prohibits local circuit
    switch unbundling would simply create a vacuum rather than confer
    any rights upon requesting carriers or obligations upon incumbent
    LECs.[^23] Accordingly, because the relief Petitioner requests would
    not bring about the rights it seeks and is unavailable through
    section 10, we find the Petition to be procedurally flawed.

## Application of the Section 10 Forbearance Criteria

### Sections 10(a)(1) and (2)

10. The Fones4All Forbearance Petition does not meet either of the first
    two prongs of the section 10 forbearance test. The fundamental
    purpose of the Act is "\[t\]o promote competition and reduce
    regulation in order to secure lower prices and higher quality
    services for American telecommunications consumers and encourage the
    rapid deployment of new telecommunications technologies."[^24]
    Section 251 allows the Commission to foster that competition in
    local markets -- facilities-based competition, in particular --
    thereby increasing consumer benefits through the measured
    implementation of unbundling requirements. The Commission's recently
    completed comprehensive analysis of the competitive impacts of
    unbundling local circuit switching in the *Triennial Review Remand
    Order*, and the unbundling decisions reached as a result of that
    analysis, were calculated to promote reasonable charges for
    consumers and investment by carriers in new facilities. Enforcement
    of this regulation is therefore necessary to foster competition and
    protect consumers. As shown below, that analysis supports our
    conclusion here that the Fones4All petition does not satisfy the
    requirements of sections 10(a)(1) and (2) and must be denied.

11. Specifically, we find that Petitioner has not presented any
    arguments or changed circumstances that would justify modifying the
    analysis in the *Triennial Review Remand Order*. In the *Triennial
    Review Remand Order,* the Commission thoroughly analyzed the actual
    and potential effects on consumers and competitors when it made its
    impairment finding for mass market local circuit switching. The
    Commission found, in light of the successful deployment of
    non-incumbent LEC switches by competing carriers, that it would not
    require the unbundling of mass market circuit switching "even if
    some limited impairment might exist in some markets."[^25] Further,
    the Commission explained that continued unbundling of local circuit
    switches would seriously undermine infrastructure investment and
    hinder development of genuine, facilities-based competition, as
    envisioned by the Act.[^26] Balancing this significant disincentive
    to investment against the limited number of cases in which
    requesting carriers may be impaired without access to unbundled
    switching, the Commission concluded that the costs associated with
    unbundling mass market local circuit switching outweigh the
    benefits.[^27] The resulting rule that incorporates this balance is
    consistent with the direction provided to the Commission by the
    court in *USTA II* and was affirmed by the court in *Covad v.
    FCC*.[^28] Petitioner presents no changed circumstances that would
    justify forbearance from this rule or any change to the
    determinations made in the *Triennial Review Remand Order*.

12. Consistent with this competitive assessment, forbearance from
    applying rule 51.319(d) is not necessary to ensure that the relevant
    charges, practices, classifications, or regulations are just and
    reasonable and are not unjustly or unreasonably discriminatory under
    section 10(a)(1).[^29]

13. Finally, Fones4All has not provided any indication of how customers
    have been harmed by Fones4All's departure from the market, if that
    is indeed the case.[^30] We do not agree that enforcement of this
    rule is not necessary for the protection of consumers under section
    10(a)(2), as consumers benefit most from the balance between
    UNE-based competitive entry and facilities investment struck in the
    Commission's unbundling rule.[^31] Petitioner provides no evidence
    to refute the analysis in the *Triennial Review Remand Order* of the
    competitive and consumer benefits of the local circuit switching
    unbundling rule, and those findings support our conclusion here that
    the first two prongs of the forbearance test are not met.

### Section 10(a)(3)

14. We also conclude that granting forbearance in this instance would
    not be "consistent with the public interest" as required by the
    Act.[^32] Because, as discussed, forbearance from rule 51.319(d)
    would not provide Petitioner the unbundling relief it seeks,
    Petitioner has not offered any basis to show that granting
    forbearance is in the public interest. In addition, even if the
    Commission could require unbundling in this proceeding, Petitioner
    has not demonstrated how the public's interest is furthered by
    revisiting the Commission's carefully calibrated approach to
    unbundling or by evaluating one carrier's particular business
    strategy. In the *Triennial Review Remand Order*, the Commission
    adopted a carefully calibrated balancing test under section
    251(d)(2)(B) to determine the appropriate amount of unbundling,
    based on an extensive record of alternative facilities deployment,
    and the guidance contained in three judicial opinions. [^33] With
    its request for forbearance, and without presenting any new evidence
    or change in circumstances, Petitioner effectively seeks vacatur of
    one of the Commission's unbundling determinations that the court
    specifically affirmed.[^34] As "proof of the critical need" for
    forbearance from rule 51.319(d), Petitioner offers only the general
    claim that it has been compelled to scale back its efforts to seek
    out new customers along with assertions regarding "the disturbing
    trend of declining telephone penetration in the U.S."[^35]
    Petitioner presents no new evidence regarding how competitive LECs
    are constrained without access to unbundled local circuit switching,
    but instead cites to arguments presented and already carefully
    assessed by the Commission in the *Triennial Review Remand
    Order*.[^36] There, the Commission determined that not only are
    competitive LECs not impaired in the deployment of local circuit
    switches, but that it is feasible for competitive LECs to use
    competitively deployed switches to service mass market customers
    nationwide.[^37] For any impairment that may still exist, Petitioner
    does not address how such impairment outweighs the disincentives to
    investment posed by the availability of unbundled local circuit
    switching. Because Petitioner presents no new evidence supporting
    the need to dismantle the nationwide bar on unbundled local circuit
    switching, and in light of the careful assessments the Commission
    has made in implementing this statutory provision, as upheld by the
    court, we find that the result Petitioner seeks would not be in the
    public interest.

15. We also find unpersuasive Petitioner's arguments that retaining rule
    51.319(d) is contrary to the public's interest because applying it
    to carriers seeking to provide federal Lifeline service to a single
    line residential customer runs counter to the Act's universal
    service goals. According to Fones4All, its proposal is in the public
    interest because the availability of unbundled local circuit
    switching would allow requesting carriers to provide competitive
    alternatives for single-line, Lifeline customers.[^38] Petitioner
    explains that its business focus is to provide basic local telephone
    service to low income end users who qualify for universal service
    support, that it has relied on UNE-P to serve low income customers,
    and that the Commission ignored substantial evidence in the
    *Triennial Review Remand Order* record that UNE-P availability is
    necessary.[^39] Although we acknowledge that the object of
    Petitioner's business plan is a laudable one, namely to serve
    low-income consumers, this pursuit alone does not justify an
    affirmative finding of impairment. Again, nothing in the record here
    provides any basis to reconsider the local circuit switching
    unbundling decision or to forbear from its application to
    Petitioner. Similarly, although Petitioner is correct that a goal of
    the Act is to promote universal service, and universal service is
    clearly in the public interest, that fact alone does not compel the
    relief requested here.[^40] We disagree with Fones4All's assertion
    that the Commission's *TracFone* decision supports its Petition
    here. *TracFone* did not concern section 251(c)(3) and thus the
    Commission was not required to confront forbearance from a "no
    impairment" determination.[^41]

# effective date

16. Consistent with section 10 of the Act and our rules, the
    Commission's forbearance decision shall be effective on Thursday,
    September 28, 2006.[^42] The time for appeal shall run from the
    release date of this Order.[^43]

# ordering clauses

17. Accordingly, IT IS ORDERED, pursuant to section 10(c) of the
    Communications Act of 1934, as amended, 47 U.S.C. § 160(c), that the
    petition for forbearance of Fones4All IS DENIED as set forth herein.

18. IT IS FURTHER ORDERED, pursuant to section 10 of the Communications
    Act of 1934, as amended, 47 U.S.C. § 160, and section 1.103(a) of
    the Commission's rules, 47 C.F.R. § 1.103(a), that the Commission's
    forbearance decision SHALL BE EFFECTIVE on September 28, 2006.
    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.

19. IT IS FURTHER ORDERED, pursuant to section 1.3 of the Commission's
    rules, 47 C.F.R. § 1.3, that the emergency petition for interim
    waiver of Fones4All IS DISMISSED AS MOOT as set forth herein.

20. IT IS FURTHER ORDERED, pursuant to section 5(c)(5) of the
    Communications Act of 1934, as amended, 47 U.S.C. § 155(c)(5), and
    section 1.115(g) of the Commission's rules, 47 C.F.R. § 1.115(g),
    that the application for review of Fones4All IS DENIED as set forth
    herein.

> FEDERAL COMMUNICATIONS COMMISSION
>
> Marlene H. Dortch
>
> Secretary

APPENDIX

List of Commenters

**Comments in WC Docket No. 05-261**

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

  BellSouth Corporation               BellSouth

  SBC Communications Inc.             SBC

  United States Telecom Association   USTelecom

  Verizon Telephone Companies         Verizon
  ----------------------------------- -----------------------------------

**Reply Comments in WC Docket No. 05-261**

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

  CompTel                             CompTel

  Fones4All Corporation               Fones4All
  ----------------------------------- -----------------------------------

**CONCURRING STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

Re: *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*, Memorandum Opinion and Order, WC Docket
No. 05-261 (Sept. 28, 2006).

This Commission makes its most difficult decisions when two important
and conflicted interests must be balanced. In the case before us, the
petitioner seeks forbearance from rules that it contends will enable it,
and similarly situated communications providers, to offer more
affordable telephone service to a wider swath of low income telephone
consumers. The record is replete with evidence that such services would
be welcome news. According to our own data, the percentage of households
that subscribe for telephone service hit its lowest point in 2005 in
over fifteen years. The importance of home telephone service is
self-evident as consumers, particularly low income consumers, rely
heavily on home phones to stay connected with their families, make
important calls to employers and doctors, and in an emergency to make
that life-saving call. The importance of the services being offered by
the petitioner cannot be understated, particularly at a time when the
universal service fund's Lifeline/Link-Up program assists only one-third
of eligible households.

While allowing a default judgment -- a pocket veto of sorts -- is
possible, it is not the responsible choice here. This is the second time
in recent months that we have been faced with a forbearance petition and
a Commission that lacks a majority on the issue at hand. On the previous
occasion, I observed that failure to act in a forbearance petition is
not the way to make sound policy or, in effect, to change current law. I
don't believe the process is significantly different here, much as I
might find the policy outcome appealing. For these reasons, I am
unwilling to permit a default judgment to become new communications law.
I therefore concur in this Order, not because the rules in place are of
my choosing or my liking, nor because I agree with the analysis in the
Order, but because sound policy dictates that rules are to be created or
forborne from through reasoned decisions made by this Commission.

**CONCURRING STATEMENT OF\
COMMISSIONER JONATHAN S. ADELSTEIN**

Re: *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*, Memorandum Opinion and Order, WC Docket
No. 05-261 (Sept. 28, 2006).

In this Order, the Commission denies the petitioner's request that we
forbear from applying our rules so that the petitioner may use unbundled
network elements, specifically the platform of elements known as UNE-P,
to serve consumers participating in the Lifeline program. While I
believe the Commission can and must do more to promote service to low
income consumers, I concur in this Order because I have serious
questions about whether allowing a default grant of this forbearance
petition is the appropriate means to advance that goal.

Congress made clear in Section 254 of the Act that "consumers in all
regions of the Nation, including low-income consumers . . . should have
access to telecommunications and information services" and I have
repeatedly supported efforts to expand the availability of our Lifeline
and Link-Up programs. Access to basic telephone service has long since
moved from the category of luxury to necessity, yet there remains much
more work to be done. As the Commission recently found, only
approximately one third of eligible low income households actually
subscribe to the Lifeline program.

I have also consistently supported efforts to encourage the development
of competitive choice for consumers and, in this case, I am concerned
that the Commission has not done all that it can to encourage providers
to serve low income consumers. The prospect of competitive providers
that will actively market to Lifeline consumers holds real promise for
increasing telephone penetration among low income consumers. Although I
do not believe we reach the optimal outcome and I have concerns about
the analysis in this Order, I cannot support a default grant of this
petition. The petition seeks relief from rules that do not reflect the
balance I would have struck, but the public, the industry, and this
Commission are far better served when we make decisions through reasoned
fact-finding and analysis. As I have stated in the past, Section 10
forbearance is a powerful tool and the Commission must wield this tool
responsibly. For these reasons, I concur in this decision.

[^1]: 47 U.S.C. § 251(d)(2). Fones4All filed its petition on July 1,
    2005. 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 (filed July 1, 2005) (Fones4All Forbearance Petition). On
    August 15, 2005, the Commission released a Public Notice
    establishing a pleading cycle for comments on the Fones4All
    Forbearance Petition. *Pleading Cycle Established for Comments on
    Petition for Forbearance of Fones4All Corp*. *Pursuant to 47 U.S.C.
    § 160(c),* WC Docket No. 05-261, Public Notice, DA 05‑2288 (rel.
    Aug. 15, 2005). The Appendix contains the list of parties filing
    comments in this proceeding.

[^2]: 47 C.F.R. § 51.319(d). The Commission adopted these mass market
    local circuit switching rules as part of the *Triennial Review
    Remand Order.* *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 (2005) (*Triennial Review Remand Order*),
    *aff'd, Covad Communications Co. v. Federal Communications
    Commission*, 450 F.3d 528 (D.C. Cir. 2006) (*Covad v. FCC*).

[^3]: 47 U.S.C. § 160.

[^4]: 47 U.S.C. § 251(c)(3).

[^5]: 47 U.S.C. § 251(d)(2)(B).

[^6]: *See, e.g., Triennial Review Remand Order*, 20 FCC Rcd at 2546,
    para. 22 (clarifying the impairment standard and modifying the
    unbundling framework).

[^7]: *Id.* at 2641-42, para. 199. In addition, the Commission found
    that there had been significant improvements in hot cut processes
    (the largely manual process by which an incumbent LEC transfers a
    customer's loop from its circuit switch to the switch of a
    competitive LEC, while simultaneously reassigning the customer's
    telephone number from the incumbent LEC switch to the competitive
    LEC switch). *Id.* The Commission found that the concerns expressed
    in the *Triennial Review Order* about local circuit switching
    impairment were mitigated by these factors, and that "the continued
    availability of unbundled mass market switching would impose
    significant costs in the form of decreased investment incentives."
    *Triennial Review Remand Order*, 20 FCC Rcd at 2641-42, 2647, paras.
    199, 210 (citing *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 17265-74, 17277, paras. 466-471, 476 (2003) (*Triennial
    Review Order)*, *corrected* *by* Errata, 18 FCC Rcd 19020 (2003),
    *aff'd in part, vacated and remanded in part, United States Telecom
    Ass'n v. FCC,* 359 F.3d 554 (D.C. Cir. 2004) (*USTA II*), *cert.
    denied*, 125 S. Ct. 313, 316, 345 (2004)). Competitive LECs used
    unbundled local circuit switching in combination with incumbent LEC
    loops and shared transport in an arrangement known as the unbundled
    network element platform (UNE-P).

[^8]: 47 C.F.R. § 51.319(d)(2)(i) ("An incumbent LEC is not required to
    provide access to local circuit switching on an unbundled basis to
    requesting telecommunications carriers for the purpose of serving
    end-user customers using DS0 capacity loops."); 47 C.F.R.
    § 51.319(d)(2)(ii) ("Each requesting telecommunications carrier
    shall migrate its embedded base of end-user customers off of the
    unbundled local circuit switching element to an alternative
    arrangement within 12 months of the effective date of the *Triennial
    Review Remand Order*.").

[^9]: In addition to its petition for forbearance, on February 24, 2006,
    Fones4All filed an emergency petition for interim waiver of section
    51.319(d) of the Commission's rules as applied in the state of
    California pending Commission action on the Fones4All Forbearance
    Petition. *See* 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; Unbundled
    Access to Network Elements; Review of the Section 251 Unbundling
    Obligations of Incumbent Local Exchange Carriers; Fones4All Corp.
    Emergency Petition for Interim Waiver of Section 51.319(d) of the
    Commission's Rules in the State of California, WC Docket Nos.
    05-261, 04-313, CC Docket No. 01-338 (filed February 24, 2006)
    (Fones4All Emergency Petition). Given our resolution of the
    Fones4All Forbearance Petition in this Order, the Fones4All
    Emergency Petition is now moot and therefore is dismissed.

[^10]: Fones4All Forbearance Petition at 13. The Commission's Lifeline
    program provides low-income consumers with discounts off of the
    monthly cost of telephone service for a single line in their
    principal residence. *See* *Lifeline and Link-Up*, WC Docket No.
    03-109, Report and Order and Further Notice of Proposed Rulemaking,
    19 FCC Rcd 8302, 8306, paras. 4-5 (2004). Under the Commission's
    rules, states also have the authority to establish their own
    Lifeline programs to provide additional support to low-income
    consumers and to recognize the unique characteristics of each state.
    *See* 47 C.F.R. § 54.409.

[^11]: Fones4All Forbearance Petition at 13.

[^12]: *Id*. at 1, 4 (citing 47 C.F.R. § 51.319(d)).

[^13]: *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, Order, DA 06-1240 (WCB, rel. June 8, 2006) (*Bureau
    Extension Order*).

[^14]: 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, Application for Review (filed June 28, 2006) (Fones4All
    Application). On July 13, 2006, Verizon filed an opposition to the
    Fones4All Application. Opposition of Verizon to Application for
    Review, WC Docket No. 05-261 (filed July 13, 2006) (Verizon
    Application Opposition). Fones4All filed a responsive letter on
    September 5, 2006. Letter from Ross A. Buntrock, Womble Carlyle
    Sandridge & Rice, Attorney for Fones4All, to Marlene H. Dortch,
    Secretary, Federal Communications Commission, WC Docket No. 05-261
    (filed Sept. 5, 2006) (Fones4All Sept. 5 *Ex Parte* Letter).

[^15]: 47 U.S.C. § 160(a). With regard to the public interest
    determination required by section 10(a)(3), section 10(b) requires
    the Commission to "consider whether forbearance from enforcing the
    provision or regulation will promote competitive market conditions,
    including the extent to which such forbearance will enhance
    competition among providers of telecommunications services." 47
    U.S.C. § 160(b). Further, "\[i\]f the Commission determines that
    such forbearance will promote competition among providers of
    telecommunications services, that determination may be the basis for
    a Commission finding that forbearance is in the public interest."
    *Id*.

[^16]: 47 C.F.R. § 1.115(g); 47 U.S.C. § 155(c)(5) ("In passing upon
    applications for review \[of orders issued on delegated authority\],
    the Commission may grant, in whole or in part, or deny such
    applications without specifying any reasons therefore.").

[^17]: Fones4All argues that the Bureau had no authority to issue the
    *Bureau Extension Order* and that even if it did, it did not
    adequately explain the rationale for its action. Fones4All
    Application at 4-5. Fones4All's argument falls short. Section
    0.91(m) of the Commission's rules authorizes the Bureau to
    "\[c\]arry out the functions of the Commission under the
    Communications Act of 1934, as amended, except as reserved to the
    Commission." 47 C.F.R. § 0.91. Section 0.291 of the Commission's
    rules lists the powers reserved to the Commission and it does *not*
    reserve the right to grant extensions of time. 47 C.F.R. § 0.291.
    Extensions of time do not raise "novel questions of fact, law or
    policy" as Fones4All asserts. Fones4All Application at 4. Rather,
    the extension of time involves a routine and well-adjudicated
    procedural question and does not address the substance of the issues
    raised by the Fones4All Forbearance Petition or any other novel
    question. *See* Verizon Application Opposition at 4. Moreover, we
    also reject Fones4All's contention that the *Order* is insufficient
    because it fails to use the word "necessary" and to offer any
    analysis why such an extension is necessary. Fones4All Sept. 5 *Ex
    Parte* Letter at 2. The Bureau needs only to satisfy the substantive
    criteria of section 10(c) rather than to quote any particular
    statutory text from section 160(c), and the *Order* easily meets
    this threshold. *See Bureau Extension Order* at para. 2 & para. 2
    n.3 (explaining that the Fones4All Petition raises significant
    questions whether forbearance would meet the section 10(a) statutory
    requirements for the extension, and that another pending forbearance
    petition raises complex issues similar to those raised in this
    proceeding). Accordingly, we find that in the circumstances of this
    proceeding, the Bureau justification for this extension was adequate
    and that the Fones4All Application is denied.

[^18]: *USTA II*, 359 F.3d at 579 (explaining that forbearance
    "obviously comes into play only for requirements that exist").

[^19]: Fones4All asserts that "it is clear that the 'default obligation'
    to provide unbundled local switching exists," relying on the
    requirements of section 271 of the Act and the Commission's
    retention of the section 251 definition of local circuit switching.
    Letter from Ross A. Buntrock, Womble Carlyle Sandridge & Rice,
    Attorney for Fones4All, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, WC Docket No. 05-261 at 2 (filed June 9,
    2006) (Fones4All June 9 *Ex Parte* Letter) (citing Letter from Dee
    May, Vice President, Verizon, to Marlene H. Dortch, Secretary,
    Federal Communications Commission, WC Docket No. 05-261 at 1-2
    (filed May 30, 2006)).

[^20]: *See United States Telecom Ass'n v. FCC*, 290 F.3d 415, 425 (D.C.
    Cir. 2002) (*USTA I*) (holding that Congress did not authorize so
    open-ended a judgment that more unbundling in this area is better);
    *USTA II*, 359 F.3d at 571‑72 (noting that the Commission's
    impairment rule must take the costs of unbundling into account);
    *see also CompTel v. FCC*, 309 F.3d 3 (D.C. Cir. 2002). Fones4All
    argues that the Commission's determination to retain the definition
    of local circuit switching reflects the existence of a default
    obligation. Such a reading overlooks other regulatory goals advanced
    by keeping those rules. Not only did the preservation of the
    definition of local circuit switching serve the purpose of
    identifying which element must be made available for the 12-month
    transition for the embedded base of mass market customers using
    local circuit switching, but this definition also clearly identifies
    the network element for which there is no longer any unbundling
    obligation. *See* 47 C.F.R. § 51.319(d)(2)(i)-(iii). The Commission
    also explained that it retained the section 51.319(c) definitions of
    local circuit switching and associated network elements because they
    were not challenged in the *Triennial Review Order* proceeding.
    *Triennial Review Remand Order*, 20 FCC Rcd at 2642, para. 200
    n.529. Finally, while we agree that section 271 certainly does
    require the unbundling of local circuit switching pursuant to that
    provision, that obligation has no bearing on this proceeding.
    *Triennial Review Order*, 18 FCC Rcd at 17384-86, paras. 653-59 &
    n.1990; *see also* *USTA II*, 359 F.3d at 588-90. We thus reject
    Fones4All's definitional argument. Fones4All June 9 *Ex Parte*
    Letter at 2 (citing *Triennial Review Remand Order*, 20 FCC Rcd at
    2642, para. 200 n.529).

[^21]: *AT&T v. Iowa Utils. Bd.*, 525 U.S. 366, 391-92 (1999); *see* SBC
    Comments at 2 ("the petition . . . ignores the Supreme Court's
    holding that unbundling obligations require an affirmative finding
    of impairment"); *see also* Verizon Comments at 5.

[^22]: 47 U.S.C. §§ 251(c)(3), 251(d)(2); *see, e.g.*, *USTA I*, 290
    F.2d at 425 (concluding that Congress "made 'impairment' the
    touchstone").

[^23]: Petitioner misses the mark by relying on the *Qwest Omaha
    Forbearance Order* to support its argument that no impairment
    findings are required to grant the relief requested. *See* Fones4All
    June 9 *Ex Parte* Letter at 3 (citing *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, 19446-47, para. 63 (2005)
    (*Qwest Omaha Forbearance Order*)). Unlike the proceeding before us,
    removing Qwest's section 251(c)(3) unbundling obligation did not
    require any affirmative finding and thus, did not leave a void in
    regulation. In contrast, as noted above, removal of the local
    circuit switching prohibition does not amount to an obligation on
    the part of incumbent LECs to provide switching as there is no such
    obligation today. Further, in removing Qwest's unbundling
    obligation, the Commission indicated that while its unbundling
    analysis did not bind its forbearance review, it was "instructive."
    *Id.*

[^24]: Preamble, Telecommunications Act of 1996, Pub. L. No. 104-104,
    110 Stat. 56 (1996) (Preamble to the 1996 Act).

[^25]: *Triennial Review Remand Order*, 20 FCC Rcd at 2646-47, 2652-53,
    paras. 209, 218; *see also supra* para. 2. The Commission did not
    ignore "substantial evidence in the record" as Petitioner asserts.
    Fones4All Forbearance Petition at 2. All of the facts presented to
    the Commission were carefully weighed in arriving at the
    determination that competition would be encouraged, and thus
    consumers would benefit and the public interest would be served, if
    there was no requirement to unbundle local circuit switching.
    Indeed, in upholding the Commission's local circuit switching
    findings, the court found that competing carriers "failed to offer
    any explanations or contrary evidence" to refute the record of
    competitive switch deployment, and they "failed to offer evidence
    that it is 'uneconomic' to serve mass market customers with switches
    that were originally deployed to serve enterprise customers." *Covad
    v. FCC*, 450 F.3d at 547-48. Petitioner does not offer those
    explanations or that evidence here either.

[^26]: *Triennial Review Remand Order*, 20 FCC Rcd at 2652-53, paras.
    218-19.

[^27]: *Id.* at 2653-55, para. 220. The court affirmed these
    conclusions, finding that 'the Commission reasonably concluded that
    CLECs are not 'impaired' without unbundled access to \[mass market
    local circuit switching\]" and thus, that "the Commission reasonably
    eliminated switch unbundling." *Covad v. FCC*, 450 F.3d at 547-48.

[^28]: *Triennial Review Remand Order*, 20 FCC Rcd at 2655-56, para. 221
    ("In reaching the decision not to unbundle mass market switching, we
    follow the D.C. Circuit's admonition to promote deployment of
    competitors' facilities and to reserve access to UNEs for situations
    where competitors are providing a real alternative to parts of the
    incumbent's network." (citing *USTA II,* 359 F.3d at 563, 572,
    581-82, 584; *USTA I,* 290 F.3d at 424-26)); *Covad v. FCC*, 450
    F.3d at 547-48.

[^29]: Fones4All Forbearance Petition at 13-14.

[^30]: Just as many other competitive carriers have already done,
    Fones4All may still negotiate access to local circuit switching
    similar to UNE-P through commercial agreements with incumbent LECs
    and remain in the market. *See*, *e.g.*, *Triennial Review Remand
    Order*, 20 FCC Rcd at 2651, para. 215.

[^31]: *Id*. at 14-15.

[^32]: 47 U.S.C. § 160(a)(3).

[^33]: *See AT&T v. Iowa Utils. Bd*., 119 S. Ct. 721 (1999); *USTA I*,
    290 F.3d at 415; *USTA II*, 359 F.3d 554.

[^34]: *See Covad v. FCC*, 450 F.3d at 547-48.

[^35]: Fones4All Forbearance Petition at 4. Petitioner argues that in
    order to address universal service mandates and a "downward trend"
    in telephone penetration, the Commission should exercise its
    forbearance authority to provide unbundled local circuit switching
    for Lifeline supported customers for a single residential line.
    Doing so, asserts Petitioner, ensures "that the USF tax remains a
    positive value proposition." *Id.* at 7.

[^36]: Fones4All Forbearance Petition at 2, 9, 11, 13-14, 15.

[^37]: *Triennial Review Remand Order*, 20 FCC Rcd at 2644, para. 204.

[^38]: Fones4All Forbearance Petition at 13.

[^39]: *Id.* at 2-4.

[^40]: *See* Fones4All Reply at 7, 16-17 (citing *Federal-State Joint
    Board on Universal Service, Petition of TracFone Wireless, Inc. for
    Forbearance from 47 U.S.C. § 214(e)(1)(A) and 47 C.F.R. §
    54.201(i)*, CC Docket No. 96-45, Order, 20 FCC Rcd 15095, 15100-101,
    paras. 10, 12 (2005) (*TracFone*)).

[^41]: *TracFone*, 20 FCC Rcd at 15098-15106, paras. 6-26 (forbearing
    from section 214(e) of the Act and sections 54.201(d) and 54.201(i)
    of the Commission's rules).

[^42]: 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). We note that on July 3, 2006, Fones4All filed a letter
    asserting that the Fones4All Forbearance Petition was deemed granted
    on July 1, 2006 because the Commission had not denied it or extended
    the statutory deadline for Commission action on the petition. *See*
    Letter from Ross A. Buntrock, Womble Carlyle Sandridge & Rice,
    Attorney for Fones4All, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, WC Docket No. 05-261 at 1 (filed July 3,
    2006) (Fones4All July 3 *Ex Parte* Letter). The Fones4All July 3 *Ex
    Parte* Letter does not acknowledge the *Bureau Extension Order*
    (which extended by ninety days the date by which the Fones4All
    Forbearance Petition would be deemed granted in the absence of
    Commission action) or the Fones4All Application (which questioned
    the legality of the Bureau Extension Order), but apparently assumes
    that the Fones4All Application was correct and that it was
    effectively granted when filed. Neither assumption is valid and the
    Fones4All Forbearance Petition was not deemed granted. *See supra*
    n.Error: Reference source not found.

[^43]: 47 C.F.R. §§ 1.4 and 1.13.