Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matter of                 | * | CC Docket No. 01-138         |
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| Application of Verizon           | ) |                              |
| Pennsylvania Inc., Verizon Long  | * |                              |
| Distance, Verizon Enterprise     | * |                              |
| Solutions, Verizon Global        |   |                              |
| Networks Inc., and Verizon       | * |                              |
| Select Services Inc. for         | * |                              |
| Authorization To Provide         | ) |                              |
| In-Region, InterLATA Services in | * |                              |
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**MEMORANDUM OPINION AND ORDER**

**Adopted:** **September 19, 2001 Released: September 19, 2001**

By the Commission: Commissioner Copps dissenting and issuing a
statement.

**TABLE OF CONTENTS**

Paragraph

I. Introduction 1

II\. Background 4

III\. CHECKLIST COMPLIANCE 9

A. Primary Issues In Dispute 9

1\. Checklist Item 2 -- Unbundled Network Elements 11

2\. Checklist Item 4 -- Unbundled Local Loops 76

3\. Checklist Item 14 -- Resale 93

B. Other Items 99

1\. Checklist Item 1 -- Interconnection 99

2\. Checklist Item 5 -- Unbundled Transport 109

3\. Checklist Item 8 -- White Pages Directory Listings 114

C. Checklist Item 13 -- Reciprocal Compensation 118

D. Remaining Checklist Items (3, 6, 7, and 9-12) 120

IV\. COMPLIANCE WITH SECTION 271(c)(1)(A) 121

V. Section 272 Compliance 124

VI\. PUBLIC INTEREST ANALYSIS 125

A. Assurance of Future Compliance 127

B. Other Public Interest Issues 133

VII\. Section 271(d)(6) Enforcement Authority 135

VIII\. Conclusion 139

IX\. Ordering clauses 140

APPENDIX a -- lIST OF cOMMENTERS

Appendix b -- pENNSYLVANIA pERFORMANCE DATA

aPPENDIX c -- statutory Requirements

# Introduction

1.  On June 21, 2001, Verizon Pennsylvania Inc., Verizon Long Distance,
    Verizon Enterprise Solutions, Verizon Global Networks Inc., and
    Verizon Select Services Inc. (Verizon) filed this application
    pursuant to section 271 of the Communications Act of 1934, as
    amended,[^1] for authority to provide in-region, interLATA service
    originating in the state of Pennsylvania. We grant the application
    in this Order based on our conclusion that Verizon has taken the
    statutorily required steps to open its local exchange markets in
    Pennsylvania to competition.

2.  According to Verizon, competing carriers in Pennsylvania serve
    approximately one million lines, one-third of which are residential,
    using all three entry paths available under the Act.[^2] Across the
    state, competitors serve more than 600,000 lines solely over their
    own facilities; more than 385,000 lines through unbundled network
    elements; and more than 160,000 lines through resale. In addition,
    Verizon asserts that competitors exchange approximately two billion
    minutes of traffic each month with Verizon over local
    interconnection facilities that are more than three-fourths the size
    of Verizon's own local interoffice network. Verizon also states that
    competitors have access to more than 90 percent of Verizon's access
    lines in Pennsylvania through approximately 2,000 collocation
    arrangements.[^3]

3.  In granting this application, we recognize the hard work of the
    Pennsylvania Public Utility Commission (Pennsylvania Commission) in
    laying the foundation for approval of this application. The
    Pennsylvania Commission conducted extensive proceedings concerning
    Verizon's section 271 compliance, which were open to participation
    by all interested parties. In addition, the Pennsylvania Commission
    adopted a broad range of performance measures and standards as well
    as a Performance Assurance Plan (PAP) designed to create a financial
    incentive for post-entry compliance with section 271.[^4] Moreover,
    the Pennsylvania Commission will continue its oversight of Verizon's
    performance through ongoing state proceedings.[^5] As the Commission
    has recognized, state proceedings demonstrating a commitment to
    advancing the pro-competitive purposes of the Act serve a vitally
    important role in the section 271 process.[^6]

# Background

4.  In the 1996 amendments to the Communications Act, Congress required
    that the Bell Operating Companies (BOCs) demonstrate compliance with
    certain market-opening requirements contained in section 271 of the
    Act before providing in-region, interLATA long distance service.[^7]
    Congress provided for Commission review of BOC applications to
    provide such service in consultation with the affected state and the
    Attorney General.[^8]

5.  On January 8, 2001, Verizon filed a preliminary application for
    section 271 approval with the Pennsylvania Commission (the
    Compliance Filing).[^9] A majority of the Pennsylvania Commission
    conditionally approved Verizon's Compliance Filing on June 6,
    2001.[^10] Specifically, the Pennsylvania Commission found that
    Verizon demonstrated compliance with the statutory requirements of
    section 271 in most respects, but that further action would be
    necessary to demonstrate that the local exchange and access markets
    in Pennsylvania were fully and irreversibly open to
    competition.[^11] Verizon filed a letter with the Pennsylvania
    Commission on June 7, 2001 accepting the terms of the June 6, 2001
    conditional approval.[^12] Verizon thereafter filed its application
    for section 271 authority in Pennsylvania with this Commission on
    June 21, 2001.[^13] Comments concerning the instant application were
    filed on July 11, 2001, and reply comments were filed on August 6,
    2001.[^14] The Pennsylvania Commission filed both comments and a
    reply in this proceeding, supporting Verizon's application in both
    instances.[^15]

6.  The Department of Justice does not oppose Verizon's section 271
    application for Pennsylvania, but states that it is unable fully to
    endorse it due to concerns about Verizon's wholesale billing
    systems.[^16] The Department of Justice also states, however, that
    local markets in Pennsylvania show a substantial amount of
    competitive entry, and does not foreclose the possibility that this
    Commission may be able to approve Verizon's application.[^17] The
    evaluation explains that, due to the timing of the application,
    "Verizon has not been able to demonstrate that its billing system
    modifications have fully resolved its billing problems in actual
    commercial operations."[^18] The Department of Justice recognizes
    that the Commission may gather additional information on this issue
    during the pendency of this proceeding, and "may therefore be able
    to assure itself that Verizon's billing problems have been
    resolved."[^19] As discussed below, in reviewing this application,
    we do consider additional information regarding Verizon's billing
    performance that was not available to the Department of Justice at
    the time it prepared its evaluation.

7.  In reviewing this application, which was filed on June 21, 2001, we
    examine performance data as reported in carrier-to-carrier reports
    reflecting service in the period from February through June 2001. We
    examine Verizon's June performance data for the purpose of
    confirming acceptable performance or a trend of improvement shown in
    earlier months' data. We also examine data reflecting Verizon's June
    billing performance to verify that the billing system fixes
    implemented by Verizon in June were effective. Although as a general
    rule we do not rely on factual evidence that post-dates the
    application in assessing checklist compliance,[^20] the Commission
    has previously considered performance that covered a time period
    slightly beyond the comment filing date,[^21] and we believe it is
    appropriate to do so here. Verizon's application was submitted a few
    days after Verizon implemented changes to its billing process to
    address problems with electronic bills. Neither the June
    carrier-to-carrier performance data nor the data reflecting
    Verizon's June billing performance, however, could be generated
    until the end of the calendar month. We believe it is reasonable,
    therefore, to consider both Verizon's June carrier-to-carrier and
    billing data and do not believe that any party to this proceeding is
    prejudiced by such consideration.

8.  We also note that the Act does not require Verizon to make a showing
    of checklist compliance with respect to the former GTE operating
    company it acquired in Pennsylvania in order to obtain section 271
    authorization for this state.[^22] Section 271(c) establishes the
    checklist requirements that a BOC must meet in order to provide
    in-region interLATA services.[^23] Section 271(c) applies only to
    BOCs themselves, and not to BOC affiliates.[^24] The Act defines
    "Bell operating company" to include 20 companies specifically named
    in the statute, and "any successor or assign of such company that
    provides wireline telephone exchange service," but expressly
    excludes "an affiliate of such company" other than one of the
    specifically named companies or their successors or assigns.[^25]
    Although the former GTE operating company became an affiliate of
    Verizon as a result of the parent company merger, it is neither a
    BOC nor a successor or assign of Verizon. Thus, we find that Verizon
    is not required to show checklist compliance for GTE North, the
    former GTE LEC, to receive section 271 authorization for the state
    of Pennsylvania.

# CHECKLIST COMPLIANCE

## Primary Issues In Dispute

9.  In a number of prior orders, the Commission discussed in
    considerable detail the analytical framework and particular legal
    showing required to establish checklist compliance.[^26] In this
    Order, we rely upon the legal and analytical precedent established
    in those prior orders. Additionally, as in the *Verizon Connecticut
    Order*, we include comprehensive appendices containing performance
    data and the statutory framework for approving section 271
    applications.[^27]

10. As in our most recent orders on section 271 applications, we focus
    in this Order on the issues in controversy in the record.[^28]
    Accordingly, we begin by addressing checklist item numbers 2, 4, and
    14, which encompass access to unbundled network elements, access to
    unbundled local loops, and resale of Verizon's service offerings,
    respectively. Next, we address checklist item numbers 1, 5, 8, and
    13, which cover interconnection and collocation issues, access to
    unbundled transport, directory listings, and reciprocal
    compensation, respectively. The remaining checklist requirements are
    then discussed briefly, as they received little or no attention from
    commenting parties, and our own review of the record leads us to
    conclude that Verizon has satisfied these requirements. We then
    consider whether Verizon has satisfied the requirements for Track A
    in Pennsylvania. Finally, we discuss issues concerning compliance
    with section 272 and the public interest requirement.

### Checklist Item 2 -- Unbundled Network Elements

11. Checklist item 2 of section 271 states that a BOC must provide
    "\[n\]ondiscriminatory access to network elements in accordance with
    the requirements of sections 251(c)(3) and 252(d)(1)" of the
    Act.[^29] Based on the record, we agree with the conclusions of the
    Pennsylvania Commission and find that Verizon has satisfied the
    requirements of checklist item 2.[^30] In this section, we address
    those aspects of this checklist item that raised significant issues
    concerning whether Verizon's performance demonstrated compliance
    with the Act: (1) Operations Support Systems (OSS), particularly
    billing; (2) UNE pricing; and (3) provisioning of UNE combinations.

#### OSS

12. Under checklist item 2, a BOC must demonstrate that it provides
    non-discriminatory access to the five OSS functions: (1)
    pre-ordering; (2) ordering; (3) provisioning; (4) maintenance and
    repair; and (5) billing.[^31] In addition, a BOC must show that it
    has an adequate change management process in place to accommodate
    changes made to its systems.[^32] We find that Verizon provides
    non-discriminatory access to its OSS. Consistent with prior
    Commission orders, we do not address each OSS element in detail
    where our review of the record satisfies us there is little or no
    dispute that Verizon meets the nondiscrimination requirements.[^33]
    Rather, we focus our discussion on those issues in controversy,
    which, in this instance, primarily involve certain elements of
    Verizon's billing systems. We also specifically address issues
    related to loop qualification and flow-through.

##### Billing

13. In previous section 271 decisions, the Commission has held that,
    pursuant to checklist item 2, BOCs must provide competitive LECs
    with two essential billing functions: (i) complete, accurate and
    timely reports on the service usage of competing carriers' customers
    and (ii) complete, accurate and timely wholesale bills.[^34]
    Service-usage reports and wholesale bills are issued by incumbent
    LECs to competitive LECs for two different purposes. Service-usage
    reports generally are issued to competitive LECs that purchase
    unbundled switching and measure the types and amounts of incumbent
    LEC services that a competitive LEC's end-users use for a limited
    period of time, usually one day. In contrast, wholesale bills are
    issued by incumbent LECs to competitive LECs to collect compensation
    for the wholesale inputs, such as unbundled elements, used by
    competitive LECs to provide service to their end users. Generally,
    wholesale bills are issued on a monthly basis.[^35] Service-usage
    reports are essential because they allow competitors to track and
    bill the types and amounts of services their customers use.[^36]
    Wholesale bills are essential because competitive LECs must monitor
    the costs they incur in providing services to their customers.[^37]
    We discuss both elements of billing below.

###### Service Usage

14. Consistent with prior section 271 orders, a BOC must demonstrate
    that it provides competing carriers with complete, accurate and
    timely reports on the service usage of their customers in
    substantially the same time and manner that a BOC provides such
    information to itself.[^38] We find that Verizon provides timely and
    accurate service usage data to competitive LECs. Specifically,
    Verizon provides competitive LECs with a cumulative record of their
    customers' usage called the Daily Usage File (DUF).[^39] Competitive
    LECs then are able to reconcile Verizon's DUF with their own usage
    records to ensure Verizon only charges them for their customers'
    usage.[^40] If the Verizon DUF and the competitive LEC's internal
    usage records adequately match, the competitive LEC may use the DUF
    as one means of calculating its own end-user bills by multiplying
    its customers' total daily usage against the rates it charges end
    users for service.[^41] Verizon generally delivers the DUF to
    competitive LECs in a timely and accurate manner.[^42] Few
    competitive LECs dispute that Verizon consistently provides accurate
    and timely DUF information to its wholesale customers.[^43] Finally,
    an independent, third-party test that KPMG performed for the
    Pennsylvania Commission provides additional assurance that Verizon's
    DUF is delivered in a timely and accurate manner.[^44] Based on the
    evidence in the record, we conclude that Verizon provides its
    competitors with non-discriminatory access to service usage data.

###### Wholesale Bills

15. Consistent with prior section 271 orders, a BOC must demonstrate
    that it provides competing carriers with wholesale bills in a manner
    that gives competing carriers a meaningful opportunity to
    compete.[^45] In this case, despite some historical problems in
    producing a readable, auditable and accurate wholesale bill, we find
    that Verizon now provides a wholesale bill that gives competitive
    LECs a meaningful opportunity to compete.[^46] Although as an
    evidentiary matter this finding is a close call, we believe that
    Verizon ultimately satisfies its evidentiary burden for wholesale
    billing and, in combination with its strong DUF performance,
    complies with the OSS billing requirements under checklist item 2.

16. We begin our analysis with an overview of Verizon's wholesale
    billing systems and summarize the various steps Verizon has taken to
    provide a BOS BDT wholesale bill. Next, we describe the commercial
    performance of Verizon's wholesale billing systems. We then analyze
    the results of third-party reviews of Verizon's billing systems. We
    also discuss the sufficiency of the evidence presented to
    demonstrate that Verizon provides complete, accurate and timely
    wholesale bills. Finally, we discuss various measures that Verizon
    has undertaken to ensure that Verizon's wholesale billing practices
    will not deteriorate in the future.

17. [Background.]{.underline} In Pennsylvania, Verizon uses one of two
    systems to generate monthly wholesale bills for competitors,
    depending upon the type of service the competitive LEC uses. Verizon
    relies on the Customer Record Information System (CRIS) to generate
    bills for some UNEs, UNE-P and resale offerings.[^47] Verizon relies
    on the Carrier Access Billing System (CABS) to generate bills for
    access services, collocation, and the remaining UNEs, such as
    interoffice facilities and switching.[^48] Once Verizon generates a
    competitive LEC's wholesale bills using the CRIS or CABS systems,
    Verizon can provide a competitive LEC with its bill in two formats:
    a "retail-formatted" bill or a "BOS BDT" bill.[^49] A
    retail-formatted bill appears in the same type of end-user format
    that a Verizon retail customer would receive.[^50] Although Verizon
    can transmit a retail-formatted bill to competitive LECs in a
    variety of mediums, such as CD-ROM or magnetic tape, Verizon usually
    prints its retail-formatted wholesale bills on paper.[^51] A BOS BDT
    bill, by contrast, appears in the industry-standard Billing Output
    Specification (BOS) Bill Data Tape (BDT) format that allows a
    wholesale carrier to use computer software to readily audit the
    data.[^52] As with the retail-formatted bills, Verizon can transmit
    a BOS BDT bill to competitive LECs across various mediums, including
    Verizon's "Connect:Direct" electronic transmission system, but
    Verizon usually provides BOS BDT bills on magnetic tape.[^53]

18. Since the introduction of local competition in Pennsylvania, Verizon
    has offered retail-formatted bills to competitive LECs. In December
    2000, KPMG issued a report that found that the retail-formatted
    bills KPMG received from Verizon during the course of its testing
    were accurate.[^54] Despite KPMG's findings, competitive LECs
    contested the accuracy of the retail-formatted bills before and
    after KPMG's tests.[^55] Common errors included charges for lines
    and services not provided, misrated charges for services received,
    double billing for services which were incorporated in other
    charges, assessments of taxes when Verizon is not the remitting
    carrier or on accounts on which no taxes are due, subtotaled charges
    that could not be reconciled with totaled charges, and miscrediting
    or unidentifiable crediting of earlier billing errors.[^56] Over
    time, Verizon has taken a number of steps to eliminate the
    inaccuracies contained in the retail-formatted bills.[^57]

19. Verizon first offered BOS BDT bills in January 2000 as a supplement
    to its retail-formatted bills.[^58] Verizon, however, experienced
    problems with its BOS BDT bills and suspended BOS BDT billing after
    four months to allow for system corrections.[^59] When Verizon
    reintroduced BOS BDT billing in October 2000, Verizon and various
    competitive LECs identified a number of problems that required
    correction.[^60] In response, Verizon began modifying its BOS BDT
    billing system to correct these problems and at least one
    competitive LEC has acknowledged that Verizon's BOS BDT billing
    performance improved, albeit unevenly, over the next several
    months.[^61]

20. In April 2001, Verizon implemented a process, which it continues to
    rely on at least on an interim basis, to manually review and adjust
    the BOS BDT bills to match them to the retail-formatted bills and to
    reconcile internal inconsistencies.[^62] During the manual review
    process, a "BDT Quality Team" comprised of Verizon employees uses
    computer software to determine whether the BDT balances internally
    and to flag any inconsistencies.[^63] A "Validation Group" comprised
    of Verizon employees then investigates and resolves any errors that
    the BDT Quality Team finds.[^64] Once the Validation Group enters
    the manual adjustments necessary to balance the retail-formatted
    bill and the BOS BDT bill, the BDT Quality Team then re-examines the
    BOS BDT bill to ensure that the Validation Group's adjustments
    correct the imbalance.[^65] In addition, a "Wholesale Billing
    Services Group" (WBSG) comprised of Verizon employees runs its own
    independent computer program on the BOS BDT bill to provide
    additional verification of the Validation Group's work.[^66] If the
    WBSG finds errors, it can return the BOS BDT bill to the Validation
    Group for further review.[^67]

21. After adopting the manual review process, Verizon then contracted
    with PriceWaterhouseCoopers (PWC) to review whether Verizon's BOS
    BDT bills were comparable to its retail-formatted bills and to test
    the readability and auditability of the BOS BDT bill.[^68] With a
    few noted exceptions, PWC concluded that the BOS BDT bill matches
    the retail-formatted bill for key billing elements and summarization
    points; that the dollar amounts charged on the BOS BDT bill for
    those billing elements and summarization points match the
    retail-formatted bill; that the BOS BDT bill contains enough
    information for a third party to recalculate the charges; and that
    the BOS BDT bill is in balance.[^69] Verizon did not ask PWC to test
    the completeness or accuracy of the billing information on the BOS
    BDT bill because KPMG had already done so for the retail-formatted
    bill.[^70] After the PWC test ended, Verizon announced that
    competitive LECs could elect to treat either the retail-formatted
    bill or the BOS BDT bill as the "bill of record" beginning on May
    22, 2001.[^71] Verizon continued to make additional software
    modifications to the BOS BDT billing system after the PWC review,
    including modifications in March, April, May and June that,
    according to Verizon, resolved all but a handful of minor issues
    with the BOS BDT bill.[^72]

22. [Discussion.]{.underline} Based on the record, there appear to be a
    number of issues related to the quality of Verizon's wholesale
    bills, particularly the BOS BDT bill generated by Verizon's CRIS
    system. As an initial matter, we note that, while we agree with
    Verizon that the appropriate standard to apply to the wholesale
    billing function is the "meaningful opportunity to compete"
    standard, we disagree with Verizon's assertion that we should
    dismiss any problems that competitive LECs experience with their
    wholesale bills because the wholesale bill does not directly affect
    a competitive LEC's ability to bill its end-user customers.[^73]
    Rather, we agree with the competitive LECs that the BOC must
    demonstrate that it can produce a readable, auditable and accurate
    wholesale bill in order to satisfy its nondiscrimination
    requirements under checklist item 2.[^74]

23. Inaccurate or untimely wholesale bills can impede a competitive
    LEC's ability to compete in many ways.[^75] First, a competitive LEC
    must spend additional monetary and personnel resources reconciling
    bills and pursuing bill corrections.[^76] Second, a competitive LEC
    must show improper overcharges as current debts on its balance sheet
    until the charges are resolved, which can jeopardize its ability to
    attract investment capital.[^77] Third, competitive LECs must
    operate with a diminished capacity to monitor, predict and adjust
    expenses and prices in response to competition.[^78] Fourth,
    competitive LECs may lose revenue because they generally cannot, as
    a practical matter, back-bill end users in response to an untimely
    wholesale bill from an incumbent LEC.[^79] Accurate and timely
    wholesale bills in both retail and BOS BDT formats thus represent a
    crucial component of OSS.[^80]

24. In past section 271 orders, the Commission has determined checklist
    compliance for OSS functions primarily by relying on performance
    data that reflects actual commercial usage.[^81] Although the
    Commission has never required applicants to provide particular forms
    of evidence to demonstrate checklist compliance, it has consistently
    held that commercial performance data is the most persuasive form of
    evidence.[^82] In this case, however, we cannot rely exclusively on
    past commercial performance data because, among other things,
    Verizon has made significant changes to its wholesale billing
    systems in the most recent months leading up to this
    application.[^83] Therefore, although we are able to rely on some
    evidence reflecting commercial usage from Verizon's most recent
    billing cycles, we must supplement our analysis by relying on
    third-party testing to find that Verizon's current systems provide
    competitors with a meaningful opportunity to compete. Despite the
    historical problems that competitors have experienced with Verizon's
    billing system, we find that Verizon has satisfied the wholesale
    billing component of checklist item 2.

25. *Commercial Usage.* A number of commenters challenge the commercial
    reliability of Verizon's wholesale bill. Competitors contend that
    Verizon has not clearly demonstrated its ability to deliver a BOS
    BDT bill that is readable, accurate and auditable. These commenters
    recount Verizon's history of billing inaccuracies in 2000 and
    2001.[^84]

26. While Verizon concedes past problems, particularly with its BOS BDT
    bill, Verizon contends that recent data show significantly improved
    performance.[^85] Verizon notes that it allowed competitors to
    designate the BOS BDT bill as the bill of record in May and
    implemented a series of software fixes, including changes in March,
    April, May and June of this year.[^86] Verizon also implemented a
    series of system fixes, including changes in March, April, May and
    June of this year that addressed major systemic problems.[^87] As
    evidence that these fixes have improved its performance, Verizon
    notes that the total dollar amounts in dispute in Pennsylvania for
    each month from January through June 2001 show a steady positive
    trend: from 26.59 percent of total charges in February, to 13.08
    percent of total charges in March, to 9.47 percent of total charges
    in April, to 2.36 percent of total charges in May, to 2.21 percent
    of total charges in June.[^88] Moreover, for Verizon's historic
    problem areas, such as the appearance of incorrect tax charges, the
    creation of improper stand-alone bills and the inclusion of improper
    directory advertising charges, the error rate has dropped steadily
    to the point where, as of June, the amounts under dispute are
    relatively nominal both in dollar value and as a percentage of
    current charges billed.[^89] Specifically, the value of incorrect
    taxes on both retail-formatted and BOS BDT bills now represents less
    than one tenth of one percent of current billed charges;[^90] the
    number of new improperly issued stand-alone bills now measures less
    than one-hundredth of one percent of the number of component
    accounts;[^91] and the improper assessment of inter-exchange carrier
    directory advertising charges now constitutes well under one tenth
    of one percent of current charges.[^92] In short, recent commercial
    data demonstrates that Verizon has steadily improved its wholesale
    billing systems to the point where error rates no longer differ
    materially from wholesale billing data for those states in which
    BOCs have already received section 271 authority.[^93]

27. One competitive LEC concedes that Verizon's fixes have resulted in a
    marked improvement in recent bills and another LEC reports receiving
    bills with few, if any, errors.[^94] In addition, Z-Tel, which
    continues to dispute a higher proportion of its monthly bills from
    Verizon Pennsylvania than it does in other Verizon states, such as
    New York and Massachusetts, acknowledges that, once cumulative
    disputes are accounted for, the percentage of the bill under dispute
    diminishes greatly. Although Z-Tel initially stated that various
    billing problems have not been fixed,[^95] it later clarified that
    much of its current billing disputes with Verizon are cumulative and
    span multiple billing periods other than the month in which Z-Tel
    filed the dispute.[^96] Thus, while Z-Tel reports disputing 36.51
    percent of its total June bill from Verizon, it acknowledges that
    only 11.33 percent of its total June bill arose from errors that
    actually appeared on the June bill.[^97]

28. To the extent that other competitive LECs report errors, these
    errors do not appear to reflect systemic wholesale billing problems
    that are likely to recur. WorldCom, for example, attributes the
    majority of its total billing disputes with Verizon for May and June
    to just two items: erroneous port-charge rates and questionable late
    fees.[^98] Verizon acknowledges that the erroneous port-charge rates
    result from its failure to enter a state-mandated additional port
    charge into its billing systems.[^99] Verizon asserts that it has
    corrected this problem and its billing system now contains the two
    port-charge rates available in Pennsylvania.[^100] Although Verizon
    acknowledges that it owes WorldCom for past improperly billed port
    charges, WorldCom and Verizon continue to disagree about whether
    WorldCom is entitled to a credit based on the relatively small
    number of ports that Verizon actually billed to WorldCom or on the
    much larger number of ports that WorldCom ordered from
    Verizon.[^101] Similarly, WorldCom's late-fee dispute originally
    arose from WorldCom's decision to withhold payment for bills issued
    in the winter and early spring.[^102] As with the port-charge issue,
    the late-fee dispute does not stem from any systemic flaws in
    Verizon's billing systems or processes, but rather from a
    still-unsettled disagreement between WorldCom and Verizon about
    whether WorldCom could rightfully withhold payment on its bills when
    it was experiencing its most acute problems with Verizon's
    bills.[^103] While these disputes reflect past performance problems
    with Verizon's billing system, they do not demonstrate that
    Verizon's current wholesale billing systems are flawed today or were
    flawed at the time Verizon filed its application.

29. As described above, moreover, improper retail charges have declined
    to extremely low levels.[^104] Verizon also claims that many of the
    remaining charges listed as "resale" or "retail" on a wholesale bill
    may actually represent properly billed charges.[^105] For instance,
    Verizon may have properly applied charges to a UNE-P account, but
    incorrectly listed those charges as "resale" items when Verizon
    produced the BOS BDT bill.[^106] Although Verizon acknowledges that
    it continues to improperly assess a small number of retail charges
    on UNE-P bills, it has scheduled system corrections to fix this
    problem for August and, in the meantime, has initiated a new policy
    of not requiring competitive LECs to pay these charges from their
    BOS BDT bills while Verizon investigates the improper resale
    charges.[^107] In any case, Verizon seems to exercise reasonable
    diligence in crediting improper resale charges.[^108] Thus, while
    the BOS BDT bills do not precisely balance and mirror the
    retail-formatted bills,[^109] we find that the minor remaining
    differences between the retail-formatted and BOS BDT bills are
    nominal, credited in a reasonable time frame and, thus, not
    competitively significant.

30. In addition to the extensive comments regarding Verizon's wholesale
    billing accuracy, a few parties have commented on the timeliness of
    Verizon's wholesale bills.[^110] Indeed, some competitive LECs claim
    that these temporary delays constitute an independent basis to find
    Verizon does not comply with checklist item 2.[^111] For its part,
    Verizon notes that some of the solutions it implemented to correct
    wholesale billing issues temporarily created a backlog of BOS BDT
    bills, which decreased BOS BDT bill timeliness for a discrete and
    isolated time period.[^112] Verizon, however, states that "\[a\]s of
    June 20, Verizon has cleared virtually the entire backlog" and can
    deliver a large volume of electronic \[BOS BDT\] bills, which
    require a certain amount of manual processing, on time.[^113]
    Performance data indicate that any delay associated with BOS BDT
    bills was temporary, associated with on-going improvements to the
    billing process and not indicative of a larger, systemic problem
    with delivering timely bills.[^114]

31. *Third-Party Testing.* Third-party studies of Verizon's billing
    systems, processes and performance bolster Verizon's recent
    commercial data. For Verizon's retail-formatted bills, KPMG issued a
    report in December 2000 that found that the retail-formatted bills
    KPMG received from Verizon during the course of its testing were
    accurate and timely.[^115] During the test period, KPMG issued 67
    observations and exceptions concerning Verizon's retail-formatted
    bill and Verizon implemented the necessary fixes for all competitive
    LEC accounts.[^116] Using military-style testing techniques, KPMG
    then re-tested Verizon's billing system after Verizon modified its
    system and found in its final December 2000 report that Verizon had
    satisfied all test points.[^117]

32. For Verizon's BOS BDT bills, PWC, with a few exceptions, concluded
    that the BOS BDT bill matches the retail-formatted bill for key
    billing elements and summarization points, that the dollar amounts
    charged on the BOS BDT bill for those billing elements and
    summarization points match the retail-formatted bill, that the BOS
    BDT bill contains enough information for a third party to
    recalculate the charges, and that the BOS BDT bill is in
    balance.[^118] PWC also determined that the absolute value of the
    manual adjustments needed to match the BOS BDT bill to the
    retail-formatted bill decreased by more than half from the April-May
    billing cycle to the May-June billing cycle.[^119]

33. Several competitive LECs, however, assert that we should not rely on
    the KPMG and PWC studies in assessing Verizon's wholesale billing
    performance.[^120] We do not find these arguments persuasive.
    Although we acknowledge, consistent with prior section 271 orders,
    that third-party studies are not the most probative evidence of a
    BOC's compliance with section 271[^121] and that a third-party test
    alone cannot outweigh reliable commercial data,[^122] the Commission
    has held that third-party studies nevertheless can provide valuable,
    relevant evidence of OSS performance.[^123] In this case, both
    KPMG's and PWC's studies provide relevant evidence of Verizon's
    billing performance that supplement the commercial performance data
    that Verizon has presented in this proceeding.

34. We also reject arguments that the KPMG study is flawed. KPMG used a
    "military-style" test in which it tested various billing functions,
    identified exceptions and re-tested until Verizon had eliminated the
    exceptions.[^124] While some of the wholesale billing errors that
    KPMG identified continued to occur for a time after the KPMG study
    ended, we find that the recurrence of some errors does not diminish
    the value of the KPMG study.[^125] Verizon made three types of
    software changes in response to KPMG's study: (i) changes affecting
    bill calculation input; (ii) changes affecting the bill calculation
    logic; and (iii) changes affecting bill output (i.e.,
    formatting).[^126] Verizon could make relatively straightforward
    software changes to implement changes to the bill calculation logic
    and the bill output. For these problems, one software change would
    correct the errors for all competitive LECs. Verizon could not make
    simple software changes to correct errors in bill calculation input,
    however, because the errors vary by individual competitive LEC
    account. For these problems, Verizon had to address each existing
    competitive LEC account individually. According to Verizon, many of
    the wholesale billing problems competitive LECs have experienced --
    improper resale charges, inappropriate stand-alone bills and
    improper tax charges -- stemmed from errors embedded in competitive
    LECs' existing accounts.[^127] Verizon asserts that such embedded
    errors in existing accounts now have been repaired.[^128] In any
    case, as explained above, remaining errors as of the date of filing
    were at *de minimis* levels.

35. PWC's two reports also provide additional assurance that the BOS BDT
    bill is largely comparable to the retail-formatted bill and that the
    BOS BDT bill was readable and auditable. Although we agree with the
    Department of Justice and several commenters that PWC's reports
    should carry less weight than the KPMG study that the Pennsylvania
    Commission oversaw and in which the competitive LECs could
    participate,[^129] we do not discredit PWC's reports in their
    entirety because the authors qualified some of their results,[^130]
    conducted their studies at different times from KPMG, [^131] or
    could have conducted a more comprehensive study of Verizon's BOS BDT
    billing.[^132] As the commenters observe, PWC's first report did not
    "test the completeness or accuracy of the billing information on the
    BDT."[^133] Rather, PWC's first report determined whether Verizon's
    BOS BDT bills were comparable to Verizon's retail-formatted bills,
    which KPMG's nineteen-month study had already established as
    accurate.[^134]

36. PWC's second report establishes that a competitive LEC could use
    commercially available software to read and audit the vast majority
    of charges on the BOS BDT bill.[^135] Given that the commercial
    experience on this point appears to be mixed, [^136] we rely on the
    PWC report to confirm that Verizon's BOS BDT bills appear to conform
    to the industry standard and can be loaded, read and audited
    electronically. PWC's second report also found that the absolute
    value of manual adjustments made to the BOS BDT bills have declined
    by about half following certain improvements to Verizon's BOS BDT
    billing systems.[^137] WorldCom asserts that a reduction in the
    level of manual adjustments might just as likely result from Verizon
    employees under-reporting billing errors in Verizon's wholesale
    bills, which would artificially reduce the absolute value of manual
    adjustments.[^138] We disagree with WorldCom's assertion. First,
    increased error seems unlikely to account for a full fifty-percent
    reduction in the absolute value of manual adjustments, particularly
    in light of the well-defined procedure that Verizon has established
    to correct errors and issue manual adjustments.[^139] Second, the
    record contains no evidence of accidental or intentional
    under-reporting from any party. Third, Verizon's June commercial
    performance data is consistent with the PWC results.[^140] Thus,
    despite their limited scope, the two PWC reports add to the record
    of Verizon's BOS BDT billing performance.

37. *Sufficiency of Evidence.* Ultimately, the competitive LECs
    challenging Verizon's wholesale billing performance contend that,
    despite improved performance in billing accuracy, Verizon's recent
    improvements to its BOS BDT billing system have not been
    sufficiently commercially tested.[^141] According to these parties,
    we should insist on reviewing several months of commercial
    performance evidence to determine whether Verizon's latest
    modifications have sufficiently improved the manner in which Verizon
    bills its wholesale customers.[^142] As stated above, although we
    acknowledge that the evidentiary showing that Verizon relies on
    makes this issue a close call, we find the evidence minimally
    sufficient, especially in light of the showing it has made for
    billing as a whole.

38. Rather than wait for several months of commercial data, Verizon
    sought to bolster its limited commercial showing in two ways. First,
    as discussed above, Verizon engaged PWC to examine the comparability
    of the BOS BDT bill to the retail-formatted bill, both with respect
    to the amount of detail provided on the BOS BDT bill and with
    respect to the actual dollar amounts charged to the competitive LECs
    at each level of detail. Although the PWC study is not dispositive,
    we find that it provides valuable evidence that helps bolster
    Verizon's limited commercial performance data since the results from
    the study and the data from Verizon's commercial performance are
    consistent. Second, as explained above, while Verizon was
    implementing its software fixes, it began a manual review and
    balancing process for the BOS BDT bills to ensure that the BOS BDT
    bill balances internally and that it matches the retail-formatted
    bill.[^143]

39. Competitive LECs assert that, as a result of these manual
    adjustments, they can no longer audit Verizon's BOS BDT bill by
    tallying the detailed credits and debits on Verizon's bill, reaching
    a total and comparing that total with the total that Verizon
    provides.[^144] While we agree that the manual adjustments prevent a
    precise accounting for all possible charges, we reject competitive
    LEC requests that we find the manual adjustment process results in
    an inadequately accurate wholesale bill. First, the overall amounts
    involved in Verizon's manual adjustment process are nominal and have
    been consistently decreasing over time.[^145] Second, Verizon
    continues to implement software fixes to its BOS BDT billing system
    that ultimately should eliminate the need for the manual adjustment
    process.[^146] Third, despite the manual nature of this workaround
    process for reducing errors in Verizon's wholesale BOS BDT bills,
    Verizon claims, and PWC affirms, that Verizon could handle many more
    BOS BDT bills than the current demand of approximately 110 BOS BDT
    bills per month.[^147] As a result, we do not find competitive LEC
    criticisms of the manual-adjustment process persuasive. Under these
    particular circumstances, we agree with the Pennsylvania Commission
    that delaying our decision on Verizon's application for several
    additional months to obtain new wholesale billing data is
    unnecessary.[^148]

40. In addition to the evidence Verizon has advanced in this record to
    prove the efficacy of its billing systems, Verizon has made several
    clarifications on the record to explain the existing procedures it
    follows to resolve billing disputes. These clarifications give us
    assurance that any remaining issues with Verizon's BOS BDT bills
    will be handled in a manner that reduces the burden on competitive
    LECs to initiate and resolve disputes. First, Verizon states that
    competitive LECs do not need to submit end-user-level detail to file
    disputes they believe to be of a systemic nature. Instead,
    competitive LECs only need to provide "an indication of why the
    \[competitive LEC\] is questioning the charge" and some minimal
    amount of information to allow Verizon to investigate the issue,
    such as a single billing account number.[^149] Second, Verizon does
    not require competitive LECs to pay disputed amounts until the
    dispute is settled.[^150] Third, if Verizon does not render a bill
    to a competitive LEC within the ten business days provided for in
    the Pennsylvania Carrier-to-Carrier guidelines, Verizon will
    automatically extend the payment period in which the competitive LEC
    can pay the bill by the number of days the bill arrives late.[^151]
    We fully expect Verizon to closely adhere to its official policies
    so that its dispute-resolution procedures are clearly articulated
    and consistently applied to all parties.

41. Finally, while Verizon has maintained its position that its
    wholesale billing systems comply with checklist item 2, we take
    additional comfort that Verizon has responded to the concerns raised
    in the record by voluntarily committing to a series of undertakings
    aimed at ensuring continued acceptable performance and curing past
    deficiencies. Although we do not rely on these undertakings in
    finding that Verizon provides non-discriminatory access to its OSS
    billing functions, they give us additional confidence that Verizon
    will continue to deliver timely and accurate wholesale bills and
    endeavor to remedy past wholesale billing problems expeditiously.
    First, Verizon has engaged PWC again to conduct an additional test
    of its BOS BDT billing system without the exclusions that commenters
    found objectionable in the April-May study.[^152] Second, Verizon
    has made significant resources immediately available for additional
    competitive LEC training on using the BOS BDT bill
    effectively.[^153] To the extent competitive LECs continue to
    experience problems loading and using the BOS BDT bill, Verizon also
    has offered to send technical teams to certain competitive LEC sites
    on request.[^154] Third, Verizon has adopted a policy of proactively
    forgiving certain late fees and other mischarges that competitive
    LECs may have incurred during the period in which the BOS BDT bill
    underwent significant modifications.[^155] Fourth, Verizon will work
    with competitive LECs that did not receive the BOS BDT bill prior to
    May 22, 2001 to help them analyze their bills and to provide
    information in a file format that could be used with a standard
    spreadsheet program.[^156] Finally, Verizon has voluntarily offered
    to allow competitors to opt into the latest performance metrics for
    billing currently being developed in the New York collaborative as
    an alternative to the current Pennsylvania metric for wholesale
    billing accuracy.[^157] These new performance measurements -- for
    dispute-acknowledgement timeliness and dispute-resolution timeliness
    -- represent important new steps to discourage wholesale billing
    errors and to ensure that any errors that occur are resolved as
    quickly as possible.[^158] We are encouraged by the efforts Verizon
    is making to continue to improve its business-to-business
    relationship with competitive LECs.

42. Taken together, Verizon's proof of system performance through both
    commercial evidence and third-party testing as well as its record of
    steady improvement demonstrate that Verizon's wholesale billing
    systems provide competing carriers a meaningful opportunity to
    compete. Working in concert with the Pennsylvania Commission, we
    intend to monitor Verizon's post-approval compliance to ensure that
    Verizon does not "cease \[\] to meet any of the conditions required
    for \[section 271\] approval."[^159] If Verizon's performance
    deteriorates, we will not hesitate to invoke our enforcement
    authority to ensure that Verizon continues to provide
    non-discriminatory access to its wholesale billing functions.[^160]

##### Billing Notifiers

43. We find that Verizon provides Billing Completion Notifiers (BCNs) to
    its competitors in a non-discriminatory manner. BCNs inform
    competitors that all provisioning and billing activities necessary
    to migrate an end user from one carrier to another are complete and
    thus the competitor can begin to bill the customer for
    service.[^161] Premature, delayed or missing BCNs can cause
    competitors to double-bill, fail to bill or lose their
    customers.[^162] As a preliminary matter, we note that the
    Pennsylvania Commission currently does not require Verizon to track
    the timeliness and accuracy of BCNs.[^163] However, the absence of a
    particular performance metric is not, in and of itself, fatal to the
    ability of the applicant to demonstrate checklist compliance.
    Instead, we rely on a variety of performance measurements to examine
    a BOCs compliance with the competitive checklist.

44. In this case, Verizon has committed to implement a BCN timeliness
    metric in Pennsylvania in the future[^164] and, for the purposes of
    this application, has provided BCN timeliness information in
    Pennsylvania based upon the New York BCN metric.[^165] The New York
    BCN metric measures the time elapsed from the moment that Verizon's
    Service Order Processor (SOP) records a service order as complete to
    the moment Verizon's gateway system generates a BCN.[^166] According
    to Verizon, the SOP does not transmit information to the gateway
    system instantaneously.[^167] In New York, this cycle generally
    ranges from two to three days.[^168] In Pennsylvania, however, this
    cycle generally ranges from three to four days.[^169] Accordingly,
    while the New York BCN timeliness metric uses a benchmark of three
    business days, Verizon uses a benchmark of four business days to
    demonstrate that it provides BCNs to competitors in a
    non-discriminatory manner for purposes of this application.[^170]
    Using the four-day benchmark to account for Pennsylvania's different
    billing cycles, Verizon reports 98.1% and 98.55% performance levels
    for May and June 2001, respectively.[^171] Significantly, it appears
    that at least one of the competitive LECs that alleged untimely and
    inaccurate BCNs in the past now acknowledges that Verizon has
    demonstrated significantly improved performance in recent
    months.[^172] For purposes of this application, therefore, we find
    that Verizon's reliance on the four-day benchmark is reasonable and
    that Verizon delivers BCNs in a timely manner.

##### Access to Loop Qualification Information

45. In the *UNE Remand Order*, the Commission concluded that all
    incumbent LECs must provide nondiscriminatory access to the same
    loop information that is available to the incumbent.[^173] We find
    that Verizon provides competitive LECs with access to loop
    qualification information in a manner consistent with the
    requirements of the *UNE Remand Order.* We note that the
    Pennsylvania Commission also found that Verizon provides
    nondiscriminatory access to loop qualification information.[^174] In
    our *Verizon Massachusetts Order*, the Commission concluded that
    Verizon's interim process for access to loop qualification
    information, coupled with Verizon's work in the formal change
    management process to implement enhanced permanent loop
    qualification processes, was sufficient for checklist
    compliance.[^175] In addition, we are encouraged by Verizon's
    indication, in the instant application, that it is on track to
    provide access to loop qualification information through the
    permanent fix described in its Massachusetts application by October
    2001.[^176] After October 2001, therefore, in future section 271
    applications, we would expect to review Verizon's permanent OSS
    process for access to loop qualification information.

46. POCA complains that Verizon has not yet included in its loop
    qualification database information on all loops in its network
    inventory.[^177] We note that under our current rules Verizon does
    not have an affirmative duty to create additional loop qualification
    information but rather an obligation to share with requesting
    carriers all such information that exists anywhere in Verizon's back
    office and can be accessed by any of Verizon's personnel.[^178] We
    do not find any evidence in the record to support allegations that
    Verizon is not in compliance with our rules.

47. We find unpersuasive Covad's assertion that a recent Arthur Anderson
    audit of Verizon found evidence that Verizon possesses loop make-up
    information that it only makes available to itself.[^179] As Verizon
    explains, this audit reviewed its provision of loop qualification
    information prior to its implementation of the interim process
    approved by the Commission in the *Verizon Massachusetts
    Order*.[^180] The record contains no evidence to suggest that
    Verizon's current OSS process for access to loop qualification
    information have not addressed any section 271 concerns raised by
    the audit Covad cites. Moreover, we note that audit findings do not
    contain legal determinations and, accordingly, find that they do not
    necessarily warrant a finding of checklist noncompliance.

##### Flow-Through 

48. Verizon provides adequate electronic processing of orders.
    Flow-through measures the percentage of orders that pass through an
    incumbents' ordering systems without the need for manual
    intervention. Flow-through rates are not an end in themselves, but
    rather a tool used to indicate a wide range of possible deficiencies
    in a BOC's OSS that may deny an efficient competitor a meaningful
    opportunity to compete in the local market.[^181] Contrary to the
    claims of some commenters, [^182] we do not specifically require
    Verizon to provide data on its achieved flow-through rate[^183] to
    determine that Verizon's OSS are capable of offering high
    flow-through.[^184]

49. Some parties complain that Verizon's flow-through rates for
    Pennsylvania are low, but there is no further evidence that there
    are OSS deficiencies related to an insufficient level of
    flow-through in OSS access for competitive LECs in the state.[^185]
    In Pennsylvania, Verizon measures "total" and "simple" flow
    through.[^186] Although Verizon's commercial data show relatively
    low average total flow-through rates -- ranging from about 54 to
    66.5 percent from February 2001 through June 2001[^187] -- we agree
    with the Pennsylvania Commission and conclude that Verizon's OSS is
    capable of flowing through competing carriers' orders in
    substantially the same time and manner as Verizon's own
    orders.[^188] We reach this conclusion for several reasons. First,
    since April 2001, Verizon has demonstrated a steady improvement in
    its flow-through performance.[^189] Second, Verizon's accuracy in
    processing orders is on par with the performance levels that we
    found acceptable in the New York and Massachusetts section 271
    applications.[^190] Third, Verizon's carrier-specific performance
    reports show that some competing carriers in Pennsylvania attain
    much higher flow-through rates than others.[^191] Because all
    competing carriers interface with the same Verizon system, we find,
    on this record, that it would not be appropriate to attribute this
    wide range of results entirely to Verizon.[^192] Finally, our
    conclusion that Verizon's systems are capable of achieving high
    overall levels of order flow-through is reinforced by KPMG's
    testing, which found that Verizon satisfied all test criteria for
    flow-through performance.[^193] In these circumstances, we do not
    find competitive LEC arguments concerning flow-through rates
    persuasive and conclude that Verizon provides sufficient
    flow-through of orders to meet checklist item 2.[^194]

##### Other OSS Issues

50. Commercial data demonstrates that Verizon electronic interfaces
    support a robust volume of commercial activity in
    Pennsylvania.[^195] Nevertheless, some commenters allege that
    Verizon's Electronic Data Interchange (EDI) interface has serious
    shortcomings[^196] and others claim to have experienced problems
    with Verizon's Web-based Graphical User Interface (Web GUI).[^197]
    According to AT&T, for example, KPMG tested the wrong version of
    Verizon's EDI interface.[^198] AT&T adds that Verizon's pre-ordering
    metrics fail to capture long response times and outages and that
    certain other metrics for ordering are similarly flawed.[^199] We do
    not find these arguments persuasive. KPMG tested LSOG 2, which was
    the current EDI version deployed by Verizon when KPMG began its
    test.[^200] Moreover, KPMG's testing involved more than seven times
    the number of transactions that AT&T's testing did.[^201] In
    addition, Verizon has provided convincing information concerning EDI
    implementation, jeopardy notices over the EDI interface and the
    processing of Local Service Requests with multiple blocking
    options.[^202] Verizon also has demonstrated that most of the
    remaining competitive LEC claims regarding its OSS interfaces result
    in large part from errors in compiling data.[^203] Under these
    circumstances, we find that Verizon provides nondiscriminatory
    access to its electronic interfaces.

51. A few commenters also allege that Verizon's change-management
    performance is sub-standard. Some competitive LECs assert that
    Verizon makes improvements to its BOS BDT bill without notifying
    competitive LECs through the change management process.[^204]
    Verizon responds that the changes to the BOS BDT bill systems are
    "back-office" OSS changes that do not impact OSS interfaces, and
    therefore, are not subject to the same business rules and
    specification requirements as interface software releases.[^205]
    CompTel alleges that competitive LEC-initiated change management
    proposals languish compared to Verizon-initiated change management
    proposals.[^206] Even if we were to credit CompTel's claims,
    however, Verizon has shown that competing carriers can influence the
    change management process in many ways other than initiating new
    proposals.[^207] Based on Verizon\'s explanations, we agree with the
    Pennsylvania Commission and find that Verizon is not violating the
    principles of change management.[^208]

52. Finally, some commenters claim that Verizon's "line-loss"
    notifications are inaccurate.[^209] "Line loss" occurs when a
    competitive LEC loses a customer to another competitive LEC or back
    to the incumbent LEC. If a carrier does not receive complete, timely
    and accurate line-loss notifications, a carrier will continue to
    bill an end-user even though the end-user has discontinued service
    with that carrier.[^210] While Verizon notes that a line-loss
    reporting error did occur in the past, Verizon represents that it
    notified the industry, fixed the problem and provided competitive
    LECs with corrected files in a timely manner.[^211] In addition,
    Verizon represents that the percentage of working telephone numbers
    reported as missing or incorrect has averaged less than one percent
    across the entire Verizon South footprint and adds that this
    one-percent figure actually overstates the trouble ticket tally in
    Pennsylvania, of which Verizon asserts approximately one-third
    result from competitive LEC error.[^212] We are persuaded by
    Verizon's showing on this issue.

#### Pricing of Network Elements

##### Background

53. In setting UNE rates, the Pennsylvania Commission has conducted
    numerous proceedings that have culminated in three rate proceedings.
    On April 10, 1997, the Pennsylvania Commission released the MFS III
    Order, setting forth interim rates for unbundled elements.[^213] On
    August 7, 1997, the Commission made the rates in the MFS III Order
    permanent.[^214] The Pennsylvania Commission stated in the MFS III
    Order that its rates were set using Total Service Long-Run
    Incremental Cost (TSLRIC), a forward-looking costing methodology
    similar to TELRIC.[^215] Subsequently, a federal district court
    remanded for reconsideration the manner in which the Pennsylvania
    Commission established the pricing of UNEs in the MFS III
    Order.[^216] The court found that the Pennsylvania Commission had
    failed to demonstrate that the TSLRIC methodology it applied
    complies with TELRIC.[^217] The district court's order is currently
    on appeal.

54. In the Global Order, released on September 30, 1999, the
    Pennsylvania Commission ordered Verizon to adjust its rates to
    reflect modifications the Pennsylvania Commission made to its
    earlier decisions.[^218] On June 8, 2001, the Pennsylvania
    Commission released an interim order reviewing Verizon's
    implementation of the Global Order rates, and setting rates for
    unbundled elements related to DSL, line sharing, collocation in
    remote terminals, dark fiber, and sub-loops.[^219] Verizon has filed
    revisions to its tariff to implement most of these rates, and,
    pursuant to an order by the Pennsylvania Commission, will file the
    remainder on September 28, 2001.[^220]

##### Discussion

55. Based on the evidence in the record, we find that Verizon's charges
    for UNEs made available in Pennsylvania to other telecommunications
    carriers are just, reasonable, and nondiscriminatory in compliance
    with checklist item 2. The Pennsylvania Commission concludes that
    Verizon has satisfied the requirements of this checklist item.[^221]
    The Commission has previously held that it will not conduct a *de
    novo* review of a state's pricing determinations and will reject an
    application only if "basic TELRIC principles are violated or the
    state commission makes clear errors in factual findings on matters
    so substantial that the end result falls outside the range that the
    reasonable application of TELRIC principles would produce."[^222] In
    reviewing Verizon's Pennsylvania pricing, we find that the
    Pennsylvania Commission generally followed basic TELRIC principles,
    and that the resulting rates are within the range that reasonable
    application of TELRIC would produce.

56. As an initial matter, we find that the Pennsylvania Commission
    followed basic TELRIC principles. We reject AT&T's and WorldCom's
    assertion that the district court's findings demonstrate that the
    Pennsylvania Commission did not apply TELRIC in its MFS III cost
    proceeding.[^223] The Commission, in adopting the TELRIC
    methodology, specifically noted that TELRIC is "a version of the
    methodology commonly referred to as TSLRIC."[^224] Thus, the
    Pennsylvania Commission's use of TSLRIC does not necessarily result
    in UNE rates that violate TELRIC. Similarly, AT&T and WorldCom
    assert that Verizon's Pennsylvania UNE rates use an embedded cost
    methodology, and estimate the cost of replicating rather than
    replacing Verizon's network, in violation of our TELRIC
    methodology.[^225] We are unconcerned with labels and general
    characterizations of the approach a state commission uses in setting
    rates. Instead, we consider allegations of specific decisions in
    violation of a TELRIC approach, and the actual rates that are in
    effect.

57. The orders of the Pennsylvania Commission provide numerous indicia
    that it has followed a forward-looking approach that is consistent
    with TELRIC. In the MFS III Order, the Pennsylvania Commission made
    a decision to use Next Generation Digital Loop Carriers rather than
    existing Digital Loop Carriers.[^226] In the Final MFS III Order,
    the Pennsylvania Commission adjusted the common overhead factor to
    prevent Verizon from being made whole in the face of anticipated
    losses arising from competition.[^227] In the Global Order, the
    Pennsylvania Commission made adjustments to the cost of capital and
    the copper feeder fill factor to better reflect forward-looking
    levels.[^228] We note that these, as well as the vast majority of
    the specific decisions made by the Pennsylvania Commission, are
    consistent with the TELRIC methodology, and are not challenged here.

58. We also find that the Pennsylvania Commission properly applied the
    TELRIC methodology with respect to several issues disputed by the
    parties. First, WorldCom asserts that the fill factors for copper
    cable and DLCs are unreasonably low.[^229] A fill factor is the
    estimate of the proportion of a facility that will be used. In other
    words, the per-unit cost associated with a particular element should
    take into account the total cost associated with the element divided
    by a reasonable projection of the actual total usage of the
    element.[^230] In its Global Order, the Pennsylvania Commission set
    copper cable fill factors at eighty-five percent.[^231] We find
    nothing unreasonable in the copper cable fill factor adopted by the
    Pennsylvania Commission, and WorldCom has not presented any evidence
    in support of its contention that this fill factor was set too low.
    We also note that this fill factor is above what the Commission
    adopted in the Universal Service proceeding.[^232] In the MFS III
    Order, the Pennsylvania Commission set the DLC fill factor at
    eighty-five percent. The Pennsylvania Commission decided that
    Verizon's DLC fill factor struck the appropriate balance between
    necessary reserve capacity and efficient facility utilization, but
    that the ninety percent fill factor proposed by AT&T and MCI's
    witness failed to allow for unforeseen requirements.[^233] We find
    nothing unreasonable in this conclusion, and note that this fill
    factor adopted is only slightly below the ninety percent level
    adopted in the Universal Service proceeding.[^234]

59. Second, AT&T criticizes the fact that Verizon's loop rates
    improperly include the cost of a one hundred percent fiber network
    in anticipation of Verizon someday providing broadband services. We
    reject AT&T's concerns with respect to Verizon having twenty percent
    of all loops use one hundred percent fiber cable.[^235] The
    Commission has previously found that, even though fiber can be more
    expensive than copper in shorter loop lengths, the use of fiber can
    be consistent with TELRIC.[^236] In the *Bell Atlantic New York
    Order*, the Commission rejected the argument that Verizon "installed
    all-fiber feeder in order to subsidize its own broadband network for
    the provision of future services, and that competitors should not be
    required to subsidize such costs."[^237] Consistent with the New
    York Commission's findings, the Pennsylvania Commission also found
    that costs associated with fiber loops are likely to be lower than
    those of copper loops.[^238] The Pennsylvania Commission noted that
    in setting its loop rates, Verizon only included the voice-grade,
    narrowband costs, and not the costs of the electronics associated
    with broadband deployment.[^239] We believe that the Pennsylvania
    Commission's findings here are reasonable, and find that AT&T has
    not presented evidence sufficient to prove that the Pennsylvania
    Commission erred in this decision.

60. Third, we reject WorldCom's assertion that Verizon overstates
    switching costs in the manner by which it incorporates the cost of
    features. WorldCom claims that certain features are not included
    within the switching rates, and that Verizon has included the costs
    for features as if they were separate retail services.[^240] Verizon
    has provided two separate rates for switching ports: one that
    includes all features, set at \$2.67; and one that includes all
    except four features, set at \$1.90. The four features are priced
    separately.[^241] WorldCom provides no evidence that the rates for
    the full-featured switch port do not incorporate features using a
    TELRIC methodology, and fails to identify any features that are
    excluded from the higher switching port rate. The fact that Verizon
    offers a cheaper alternative with less than all the available
    features does not render the price for a switch port with all
    features unlawful.

61. We note that AT&T and WorldCom allege additional specific TELRIC
    violations not addressed above.[^242] Even assuming, *arguendo*,
    that all of AT&T\'s and WorldCom\'s pricing claims are correct and
    that the specific inputs do not comply with TELRIC, we conclude that
    the alleged errors do not yield an end result outside a TELRIC-based
    range. After comparing relevant rates and costs in Pennsylvania with
    those in New York, we conclude that the Pennsylvania Commission\'s
    calculations result in rates that a reasonable application of TELRIC
    would produce.

62. *Rate Comparison*. The Pennsylvania Commission has expended an
    enormous amount of effort in its ratemaking proceedings, and we
    applaud the Pennsylvania Commission for the tremendous amount of
    work it has done. The Pennsylvania Commission's approach is
    generally compliant with our TELRIC methodology. Indeed, of the
    literally hundreds of decisions the Pennsylvania Commission has had
    to make in setting rates, parties allege that only a handful of them
    are suspect. In examining the rates adopted by the Pennsylvania
    Commission, we must determine whether Pennsylvania loop and non-loop
    recurring UNE rates fall outside the range that a reasonable
    TELRIC-based ratemaking would produce.

63. The Commission has stated that when a state commission does not
    apply TELRIC or does so improperly (*e.g.,* there was a major
    methodological mistake or incorrect input or

    several smaller mistakes or incorrect inputs that collectively could
    render rates outside the reasonable range that TELRIC would permit),
    then we will look to rates in other section 271-approved states to
    see if rates nonetheless fall within the range that a reasonable
    TELRIC-based ratemaking would produce.[^243] In comparing the rates,
    the Commission has used its USF cost model to take into account the
    differences in the underlying costs between the applicant state and
    the comparison state. The Commission has stated that a comparison is
    permitted when the two states have a common BOC; the two states have
    geographic similarities; the two states have similar, although not
    necessarily identical, rate structures for comparison purposes; and
    the Commission has already found the rates in the comparison state
    to be reasonable.[^244]

64. We find that New York is a permissible state for comparison purposes
    here. New York is adjoining, has a similar rate structure, and has
    been found to have adopted reasonable rates in compliance with
    TELRIC. The Commission's previous orders did not make clear whether
    two states would be considered as having the same BOC if they were
    part of the same BOC upon divestiture, when the pricing dockets were
    considered, or at the time of application. New York and
    Pennsylvania, although both part of Verizon's service territory,
    were not part of the same original BOC. We find, however, that while
    a comparison state's rates must have been found reasonable,[^245]
    the remaining criteria previously set forth should be treated as
    indicia of the reasonableness of the comparison. This change in our
    test is mandated because, on review, it is clear that the most
    relevant factor of the four-part test is TELRIC compliance. Without
    a finding of TELRIC compliance for the benchmark state, a comparison
    loses all significance. The other criteria do not rise to such a
    level. They are useful to assure us that a comparison is meaningful,
    but the absence of any one of them does not render a comparison
    meaningless. In this instance, we find that given that New York
    meets at least three of the four indicia, we are confident that the
    comparison is sound. The cost model makes no distinction between
    data among BOCs, and we have no reason to suspect that such a
    comparison has been made less significant because different BOCs
    served the two states.[^246]

65. As the Commission has previously noted, our USF cost model provides
    a reasonable basis for comparing cost differences between
    states.[^247] For recurring charges,[^248] if the percentage
    difference between the applicant state's rates and the benchmark
    state's rates does not exceed the percentage difference between the
    applicant state's costs and the benchmark state's costs, as
    predicted by the USF model, then we will find that the applicant has
    met its burden to show that its rates are TELRIC-compliant.[^249]

66. We consider the reasonableness of loop and non-loop rates
    separately. Where the Commission finds that the state commission
    correctly applied TELRIC for one category of rates, it will only
    compare the rates of the other category. If, however, there are
    problems with the application of TELRIC for both loop and non-loop
    rates, as is the case with Verizon's rates here, then the same
    benchmark state must be used for all rate comparisons to prevent a
    BOC from choosing for its comparisons the highest of approved rates
    for both loop and non-loop UNEs.

67. We conclude that Pennsylvania recurring UNE rates fall within the
    range that TELRIC-based ratemaking would produce. Specifically, with
    respect to loops, in taking a weighted average in Pennsylvania and
    New York, we find that Pennsylvania's rates are roughly the same as
    those in New York,[^250] even though the USF cost model suggests
    that costs in Pennsylvania are roughly one-third more than the costs
    in New York.[^251] With respect to non-loop elements, we find that
    the rates in Pennsylvania are over forty-one percent less than the
    rates in New York,[^252] even though the USF cost model suggests
    that non-loop costs in Pennsylvania are around six percent more than
    the costs in New York.[^253] In approving Verizon's application in
    Massachusetts, we also relied on a comparison with New York rates.
    We note that the rates in Pennsylvania, in contrast to those in
    Massachusetts, are well below the cost-adjusted rates in New York.
    This fact gives us even greater confidence as to the reasonableness
    of the Pennsylvania recurring UNE rates.

68. *Non-recurring Charges*. We also conclude that based upon the
    evidence in the record, Verizon has demonstrated that its
    non-recurring UNE rates are in compliance with TELRIC. The
    Pennsylvania Commission has reached the same conclusion, and no
    party has raised allegations challenging these rates.

69. Because we find the rates currently in effect to fall within the
    range that TELRIC-based ratemaking would produce, we find the
    concerns of WorldCom regarding a potential delay to the pending UNE
    cost proceeding before the Pennsylvania Commission to be
    unwarranted.[^254] We also note that the Pennsylvania Commission
    recently issued an order requiring the UNE rate proceeding to begin
    on September 17, 2000, and requiring the presiding administrative
    law judge to issue a decision by April 30, 2002.[^255]

70. Finally, we reject WorldCom's and AT&T's contention that competitors
    lack a sufficient profit margin between Verizon's retail and
    wholesale rates to allow local residential competition over the
    UNE-P, which indicates that the UNE rates are not
    TELRIC-based.[^256] In the *SWBT Kansas/Oklahoma Order*, the
    Commission held that this profitability argument is not part of the
    section 271 evaluation of whether an applicant's rates are
    TELRIC-based.[^257] The Act requires that we review whether the
    rates are cost-based, not whether a competitor can make a profit by
    entering the market. In this case, we have conducted an analysis of
    Verizon's recurring UNE rates and concluded that their rates meet
    this requirement. Questions of profitability are independent of this
    determination.

71. In addition, conducting a profitability analysis would require us to
    consider the level of a state's retail rates, because such an
    analysis requires a comparison between the UNE rates and the state's
    retail rates. Retail rate levels, however, are within the state's
    jurisdictional authority, not the Commission's.[^258] Conducting
    such an analysis would further require a determination of what a
    "sufficient profit margin" is. We are hesitant to engage in such a
    determination. Moreover, even if this were a relevant consideration,
    WorldCom has not demonstrated that the rates set by the Pennsylvania
    Commission do not allow for profitable entry. WorldCom's own
    submission indicates that the state average rate provides a gross
    margin of roughly thirty percent for residential lines, and the
    margin is substantially higher for forty-six percent of the
    residential lines.[^259] WorldCom does not provide any evidence with
    respect to business lines, where we expect the profitability is even
    greater. WorldCom's contentions notwithstanding, we note that
    competition currently exists in Pennsylvania through the use of the
    UNE-P.[^260]

72. For these reasons, we conclude that Verizon meets its pricing
    obligations under the requirements of checklist item 2.

#### Provision of UNE Combinations

73. In order to comply with checklist item 2, a BOC also must
    demonstrate that it provides nondiscriminatory access to network
    elements in a manner that allows requesting carriers to combine such
    elements and that the BOC does not separate already-combined
    elements, except at the specific request of the competitive
    carrier.[^261] We conclude, based upon the evidence in the record,
    that Verizon demonstrates that it provides nondiscriminatory access
    to network element combinations as required by the Act and our
    rules. We note also that the Pennsylvania Commission found Verizon's
    provisioning of UNE combinations was compliant with the requirements
    of this checklist item.[^262]

74. In Pennsylvania, Verizon provides access to both combinations of the
    loop-switch-transport elements (UNE-platform) and the loop-transport
    elements (enhanced extended loop or EEL).[^263] At the time of its
    application, Verizon had provisioned over 220,000 UNE-platform
    combinations and 770 EELs, of which approximately 700 were
    conversions from existing special access circuits.[^264]

75. Although commenters do not raise any issues with Verizon's
    provisioning performance for UNE combinations,[^265] several
    commenters assert that contrary to our rules, Verizon refuses to
    convert special access circuits to EELs or charges unreasonable
    termination fees.[^266] In reply, Verizon states that it is
    providing conversions of special access circuits to EELs in
    compliance with its obligations under our rules and that any
    termination fees associated with such conversions are reasonable and
    allowed by our rules.[^267] We find that Verizon's position in
    regards to the conversion of special access circuits to EELs, as
    presented in this docket, complies with our current rules and that
    commenters have not presented evidence that Verizon has
    systematically deviated from its stated policies for such
    conversions. We further note that our current rules do not require
    incumbent LECs to waive tariffed termination fees for carriers
    requesting special access circuit conversion.[^268]

### Checklist Item 4 -- Unbundled Local Loops

76. Section 271(c)(2)(B)(iv) of the Act requires that a BOC provide,
    "\[l\]ocal loop transmission from the central office to the
    customer's premises, unbundled from local switching or other
    services."[^269] We conclude that Verizon demonstrates that it
    provides unbundled local loops in accordance with the requirements
    of section 271 and our rules. Our conclusion is based on our review
    of Verizon's performance for all loop types, which include, as in
    past section 271 orders, voice grade loops, hot cuts, xDSL-capable
    loops, digital loops, and high capacity loops, and our review of
    Verizon's processes for line sharing and line splitting.

77. In analyzing Verizon's compliance with this checklist item, we note
    first that the Pennsylvania Commission approved Verizon's
    performance as meeting the requirements of section 271.[^270] We
    also recognize that, as of the date of Verizon's application,
    competitors have acquired and placed into use over 164,000 loops
    from Verizon in Pennsylvania, which is significantly more than were
    provided by other applicants at the time previous section 271
    applications were filed with the Commission.[^271] Finally, we note
    that commenters have not raised any significant issues with voice
    grade loops, which comprise the overwhelming majority of loops
    ordered by competitive LECs.[^272] As in past section 271
    proceedings, in the course of our review, we look for patterns of
    systemic performance disparities that have resulted in competitive
    harm or that have otherwise denied new entrants a meaningful
    opportunity to compete.[^273] Isolated cases of performance
    disparity, especially when the margin of disparity is small,
    generally will not result in a finding of checklist noncompliance.

78. Upon review, we find that Verizon provides nondiscriminatory access
    to all loop types. We also find that Verizon has demonstrated that
    it adequately provisions line-sharing and line-splitting.
    Furthermore, as described above in Section A.1.a., we find that
    Verizon provides access to loop makeup information in compliance
    with our rules.

79. *xDSL-Capable Loops.* We find that Verizon demonstrates that it
    provides stand-alone xDSL-capable loops in accordance with the
    requirements of checklist item 4. Verizon makes available
    xDSL-capable loops in Pennsylvania through interconnection
    agreements and pursuant to tariffs approved by the Pennsylvania
    Commission.[^274] In analyzing Verizon's showing, we review
    performance measures comparable to those we have relied upon in
    prior section 271 orders: order processing timeliness, installation
    timeliness, missed installation appointments, installation quality,
    and the timeliness and quality of the maintenance and repair
    functions.[^275]

80. We find that Verizon demonstrates that it provisions xDSL-capable
    loops in a nondiscriminatory fashion. Five of the six performance
    measures listed above demonstrate that Verizon's performance for
    competitive LECs is generally in parity with benchmarks established
    in Pennsylvania.[^276] Specifically, Verizon provides responses to
    competing carrier requests for loop information in substantially the
    same time and manner as for itself and provides timely order
    confirmation notices to competitors.[^277] Further, Verizon has
    generally met the benchmark for installation timeliness and missed
    installation appointments for each month from February through
    May.[^278] Pennsylvania data for maintenance and repair timeliness
    and quality also show nondiscriminatory performance between
    competitors and Verizon's retail customers. Both the mean time to
    repair and the repeat trouble rate are in parity,[^279] and Verizon
    missed fewer repair appointments for competitors than for its own
    retail customers for most months reported.[^280] In addition, the
    overall level of trouble reports for stand-alone xDSL-capable loops
    in Pennsylvania is very low.[^281]

81. Upon initial review, Verizon's performance for installation quality
    appears to be out of parity. This is because the current benchmark
    in Pennsylvania for this metric is a comparison with Verizon's
    performance for its advanced services affiliate. Verizon explains
    that although it provides primarily stand-alone xDSL-capable loops
    to competitive LECs, which generally require the dispatch of a field
    technician, its advanced services affiliate has exclusively deployed
    line-sharing, which generally does not require a dispatch. Verizon
    asserts, therefore, that a more appropriate benchmark for its
    installation quality performance is its installation quality
    performance for POTS service orders that require a dispatch.[^282]
    Consistent with the Commission's analysis in previous section 271
    orders,[^283] we agree that this appears to be a more probative
    comparison. Viewed against this benchmark, Verizon's performance is
    in parity.[^284]

82. Covad alleges that Verizon excludes a majority of loop orders from
    its xDSL performance measures, providing an inaccurate picture of
    Verizon's performance.[^285] In its reply comments, Verizon
    acknowledges that a system programming error caused some competitive
    LEC orders to be excluded from its performance measures for
    xDSL.[^286] Verizon recalculated the affected metrics to include
    these improperly excluded orders and submitted this revised data in
    reply comments it filed in this proceeding.[^287] The inclusion of
    previously excluded orders in the revised data did not affect
    Verizon's performance under this measure. We find that the revised
    data supports our conclusion that Verizon's performance is in
    compliance.

83. Covad also alleges that Verizon designates a majority of Covad
    trouble reports as "no trouble found," permitting Verizon to exclude
    reported trouble from the performance metrics prior to final
    resolution of the trouble.[^288] In its reply comments, Verizon
    denies Covad's allegations, explaining that it does not exclude "no
    trouble found" orders from the performance measures and moreover, it
    attempts to contact the competitive LEC to verify the location of
    the trouble, often obtaining confirmation from the competitor that
    there was no trouble found.[^289] We note that trouble reports are a
    subject of ongoing dispute between Covad and Verizon.[^290] We find
    that a section 271 application is not an appropriate forum for the
    resolution of such inter-carrier disputes.

84. NAS asserts that Verizon has failed to conduct cooperative testing
    on a significant percentage of its xDSL-capable loop orders.[^291]
    Verizon states that it performs cooperative testing on NAS loop
    orders except in those circumstances where it is not possible to do
    so, such as when testing equipment is unavailable at the time
    Verizon installs the loop.[^292] Although we expect Verizon to
    continue to lower the percentage of orders in which it fails to
    engage in cooperative testing as it gains more experience with this
    relatively new process, we find that, even assuming that NAS's
    version of the facts is correct, the evidence presented by NAS is
    insufficient to show that Verizon's implementation of its corporate
    policy for cooperative loop testing is discriminatory.

85. *Digital Loops.* We find that Verizon provisions digital loops to
    competitors at an acceptable level of performance in Pennsylvania.
    Verizon's performance for competitive LECs is generally in parity
    with benchmarks established in Pennsylvania. In particular,
    Verizon's installation intervals and missed appointments metrics, as
    well as its repair and maintenance measurements, have shown parity
    or very low trouble rates in recent months.[^293] In addition, while
    Verizon's performance for installation quality has shown some
    limited disparity, we find this disparity is minor and therefore not
    competitively significant.[^294] Finally, we note that no commenter
    raises specific issues with digital loops and that the volume of
    digital loops ordered by competitors remains relatively low. [^295]

86. *Hot Cut Activity.* We find that Verizon is providing voice grade
    loops through hot-cuts in Pennsylvania in accordance with the
    requirements of checklist item 4. We note that no commenter has
    raised concerns with Verizon's hot-cut provisioning activity.
    Verizon has satisfied its benchmark for on-time performance for
    hot-cuts for every month since February 2001,[^296] and Verizon
    indicates that trouble reports received within seven days of
    installation have been fewer than one percent.[^297] In addition,
    since February, Verizon on average has provided all hot-cuts in just
    over one day longer than the six-day interval for ten or fewer
    lines.[^298] We note, however, that the data used to calculate
    Verizon's performance for hot-cuts includes orders of ten or fewer
    lines as well as orders of greater than ten lines. We, therefore,
    find that the difference between Verizon's overall hot-cut
    performance and the six-day benchmark is not competitively
    significant in these circumstances.

87. *Voice Grade Loops.* We find that Verizon provides new voice grade
    loops to competitors in Pennsylvania in accordance with the
    requirements of checklist item 4.[^299] Although Verizon's
    performance for installation quality has not met parity for each
    reported month, we find that the difference between the reported
    numbers for competitors and its own retail customers is nominal and
    thus, not competitively significant.[^300] Verizon's performance for
    installation intervals also appears out of parity, but in April
    2001, Verizon changed the manner in which it provisions voice grade
    loops for competitors to conform to the manner it provisions service
    to its own retail customers.[^301] Using the new process, Verizon's
    performance has improved.[^302] We also note that no commenter has
    raised an issue relating to voice grade loops.

88. *Line Sharing.* We find that Verizon demonstrates that it provides
    nondiscriminatory access to the high frequency portion of the loop,
    pursuant to its interconnection agreements and in accordance with
    our rules.[^303] Although ordering volumes have been low,
    Pennsylvania performance data demonstrate that Verizon's performance
    for provisioning and maintaining line-shared DSL loops to
    competitors is generally in parity.[^304]

89. *Line Splitting.* Based on the evidence in the record, we find that
    Verizon complies with its line-splitting obligations and that
    Verizon demonstrates it provides access to network elements
    necessary for competing carriers to provide line splitting.[^305]
    Verizon states that, since June 2001, it has accepted line-splitting
    orders through an interim process.[^306] Competitive LECs have
    raised no complaints about Verizon's interim process or its plan for
    permanent line-splitting OSS. We find, therefore, given the record
    before us, that Verizon's interim process for line-splitting orders
    is in compliance with the requirements of this checklist item. In
    addition, Verizon asserts that it will transition to a permanent OSS
    process for line splitting in Pennsylvania by October 2001.[^307] We
    expect Verizon to meet its commitment to implement permanent OSS for
    line splitting by October 2001.

90. *High Capacity Loops.* Given the totality of the evidence, we find
    that Verizon's performance with respect to high capacity loops does
    not result in a finding of noncompliance for checklist item 4.
    Verizon's performance data for installation quality and maintenance
    and repair functions demonstrate that it has been comparable for
    Verizon retail customers and competitors.[^308] We recognize,
    however, that Verizon's performance with respect to other
    performance measures for high capacity loops has been poor in
    Pennsylvania. Verizon's installation intervals for competitive LECs
    are consistently longer than those for its retail customers, and
    Verizon has missed a significant percentage of appointments to
    provision high capacity loops for competitors.[^309] High capacity
    loops, however, represent a small percentage of all loops ordered by
    competitors in Pennsylvania. Given the relatively low volume of
    orders for high capacity loops compared to all loop types, we cannot
    find that Verizon's performance for high capacity loops warrants a
    finding of checklist noncompliance for all loop types. [^310]

91. In addition to Verizon's performance-related issues, several
    competing carriers allege that Verizon refuses to provide high
    capacity loops as unbundled network elements unless all necessary
    equipment and electronics are present on the line and at the
    customer's premises. According to commenters, this practice violates
    Commission rules.[^311] Verizon responds that its policy is to
    provide unbundled high capacity loops when all facilities, including
    central office and end-user equipment and electronics, are currently
    available. [^312] Moreover, Verizon explains that, where facilities
    are currently unavailable, but Verizon has construction underway to
    meet its own future demand, it will provide competitive LECs with an
    installation date based on the anticipated completion date of the
    pending job.[^313] Further, when requisite electronics, such as line
    cards, have not been deployed but space exists for them in the
    multiplexers at the central office and end-user premises, Verizon
    will order and place the necessary line cards in order to provision
    the high capacity loop.[^314] Verizon will also perform the cross
    connection work between the multiplexers and the copper or fiber
    facility running to the end user.[^315] In the event that spare
    facilities and/or capacity on those facilities is unavailable,
    Verizon will not provide new facilities solely to complete a
    competitor's order for high-capacity loops.[^316] In those
    circumstances, Verizon will only provide a high-capacity facility
    pursuant to tariff.[^317]

92. We disagree with commenters that Verizon's policies and practices
    concerning the provisioning of high capacity loops, as explained to
    us in the instant proceeding, expressly violate the Commission's
    unbundling rules. Accordingly, we decline to find that these
    allegations warrant a finding of checklist non-compliance. To the
    extent that commenters have specific disputes with Verizon's actual
    practice in implementing these policies, such disputes are best
    addressed in an alternative forum. As we have stated in other
    section 271 orders, new interpretative disputes concerning the
    precise content of an incumbent LEC's obligations to its
    competitors, disputes that our rules have not yet addressed and that
    do not involve *per se* violations of the Act or our rules, are not
    appropriately dealt with in the context of a section 271
    proceeding.[^318]

### Checklist Item 14 -- Resale

93. Section 271(c)(2)(B)(xiv) of the Act requires that a BOC make
    "telecommunications services . . . available for resale in
    accordance with the requirements of section 251(c)(4) and section
    252 (d)(3)."[^319] Based on the record in this proceeding, we
    conclude that Verizon satisfies the requirements of this checklist
    item in Pennsylvania. In reaching this conclusion, we reaffirm our
    determination in the *Verizon Connecticut Order*[^320] concerning
    the scope of Verizon's DSL resale obligations after the United
    States Court of Appeals decision in *ASCENT v. FCC*.[^321] Thus, for
    the reasons set forth in the *Verizon Connecticut Order*, we
    conclude that, post-*ASCENT*, it would be unreasonable under
    sections 251(c)(4) and 252(d)(3) of the Act for Verizon to limit the
    resale of DSL to customers receiving retail voice service from
    Verizon.[^322] Accordingly, we cannot accept Verizon's contention
    that it is not required to permit the resale of DSL unless Verizon
    also provides voice service on the line involved.[^323]

94. We find that Verizon demonstrates that it is currently in compliance
    with the requirements of this checklist item in Pennsylvania.
    Verizon has a concrete and specific legal obligation in its
    interconnection agreements and tariffs to make its retail services
    available for resale to competing carriers at wholesale rates.[^324]
    None of the commenting parties question Verizon's showing of
    compliance with the requirements of this checklist item except in
    the area of DSL resale. Our review of the record confirms that
    Verizon clearly demonstrates checklist compliance in those areas not
    involving DSL.[^325]

95. We further conclude that Verizon demonstrates current compliance
    with the checklist requirements with regard to DSL resale. As
    discussed in more detail below, in reaching this conclusion, we
    waive our procedural requirements to permit consideration of
    information and events taking place after the deadline for filing
    comments. Verizon Advanced Data Inc.'s (VADI's) tariff revisions
    making expanded DSL resale available in the former Bell Atlantic
    areas in Pennsylvania became effective on September 1, 2001.[^326]
    This offering is the same as that in Connecticut except for certain
    implementation details. The tariff provides that VADI will process
    up to 100 orders for the expanded DSL resale offering per day until
    October 1, 2001. From October 1, 2001 through December 1, 2001, VADI
    will process up to 200 orders per day, with no cap on the number of
    orders the company will process per day thereafter. The tariff also
    states that there is no limit on the number of expanded DSL resale
    orders that carriers may submit, adding that the company will
    process all orders in the order in which they are received.[^327]

96. In light of this, we cannot agree with commenting parties that argue
    Verizon has failed to demonstrate present compliance with the
    requirements of this checklist item.[^328] Based on the current
    record before us, we conclude that the order processing obligations
    in the tariff are sufficient to accommodate reasonably anticipated
    current commercial demand for the expanded DSL resale offering. In
    particular, we conclude that VADI's obligation to process up to 100
    orders per day is sufficient to address initial demand based on the
    current record, and thus demonstrate current compliance with its
    resale obligations. [^329] We also note that the obligation to
    process up to 200 orders per day beginning on October 1, 2001, and
    to eliminate this limit on December 1, 2001, should ensure that
    Verizon remains in compliance with its section 271 resale
    obligations. In particular, these steps appear reasonably calculated
    to address increases in demand that are likely to occur in the
    future as resellers expand their marketing efforts and increase the
    availability of resold DSL to consumers.

97. Moreover, we cannot agree with commenting parties[^330] arguing that
    Verizon must permit resale of DSL service in conjunction with voice
    service provided using the UNE loop or UNE-P in order to demonstrate
    compliance with this checklist item. As stated in the *Verizon
    Connecticut Order*, we continue to believe that resale of DSL in
    this context "raises significant additional issues concerning the
    precise extent of an incumbent LEC's resale obligations."[^331] Such
    issues would require additional proceedings to resolve, and we do
    not consider them in the context of this application.[^332]

98. As previously stated, we waive the Commission's general procedures
    restricting the submission of late filed information and the
    consideration of developments that occur after the date for filing
    comments.[^333] This will allow us to rely on VADI's tariff filing
    offering expanded DSL resale that became effective on September 1,
    2001 and the information contained in Verizon's August 31 *Ex Parte*
    Letter.[^334] We recognize that "a waiver is appropriate only if
    special circumstances warrant a deviation from the general rule and
    such deviation will serve the public interest."[^335] Under the
    present circumstances, however, we conclude that this test is
    satisfied. Special circumstances exist that satisfy the first prong
    of the waiver test. First, these tariff revisions are virtually
    identical to those previously filed for Connecticut, with the
    exception of the order processing provisions. As a result, they
    place a very limited additional analytical burden on the staff. The
    tariff revisions filed by VADI also constitute positive action that
    will actively facilitate the development of competition. In
    addition, modifying the VADI and Verizon internal order processing
    systems to accommodate these resale obligations is relatively
    complex, [^336] and the Commission did not address the extent of
    Verizon's DSL resale obligations in light of the *ASCENT* decision
    until after this application was filed.[^337] We also find that
    grant of this waiver to allow consideration of late-filed
    information and recent developments will serve the public interest
    under the present circumstances by avoiding the administrative delay
    inherent in rejecting an otherwise persuasive application for
    failure to demonstrate compliance with this checklist item. In light
    of the fact that Verizon now has ample notice of the Commission's
    determination concerning its DSL resale obligations, we do not
    expect to grant similar waivers to Verizon in the context of future
    section 271 applications.

## Other Items

### Checklist Item 1 -- Interconnection

99. Section 271(c)(2)(B)(i) requires the BOC to provide equal-in-quality
    interconnection on terms and conditions that are just, reasonable
    and nondiscriminatory in accordance with the requirements of
    sections 251 and 252.[^338] Based on our review of the record, we
    conclude that Verizon demonstrates that it is in compliance with the
    requirements of this checklist item.[^339] We also note that the
    Pennsylvania Commission found that Verizon satisfied this checklist
    item[^340] and that no commenters raised any issues concerning
    Verizon's performance for the provisioning of interconnection.

100. Although several commenters assert that Verizon does not permit
     interconnection at a single point per LATA, we conclude that
     Verizon's policies do not represent a violation of our existing
     rules.[^341] Verizon states that it does not restrict the ability
     of competitors to choose a single point of interconnection per LATA
     because it permits carriers to *physically* interconnect at a
     single point of interconnection (POI).[^342] Verizon acknowledges
     that its policies distinguish between the physical POI and the
     point at which Verizon and an interconnecting competitive LEC are
     responsible for the cost of interconnection facilities.[^343] The
     issue of allocation of financial responsibility for interconnection
     facilities is an open issue in our *Intercarrier Compensation
     NPRM*.[^344] We find, therefore, that Verizon complies with the
     clear requirement of our rules, i.e., that incumbent LECs provide
     for a single *physical* point of interconnection per LATA.[^345]
     Because the issue is open in our *Intercarrier Compensation NPRM*,
     we cannot find that Verizon's policies in regard to the financial
     responsibility for interconnection facilities fail to comply with
     its obligations under the Act.[^346]

101. Covad claims that Verizon's process for migrating virtual
     collocation arrangements to physical collocation arrangements
     violates section 251(c)(6) of the Act.[^347] Our collocation rules
     do not explicitly address the appropriate terms and conditions for
     collocation migration, but we note that the incumbent LEC has a
     statutory duty to provide for physical collocation at rates, terms,
     and conditions that are just, reasonable, and
     nondiscriminatory.[^348] The record before us is insufficient to
     show that Verizon's migration process violates section 251(c)(6),
     and thus in turn, affects section 271 compliance. Covad's claim is
     a fact-specific dispute concerning Verizon's statutory obligations.
     We find, therefore, that a complaint brought before the Commission
     through the section 208 complaint process is the more appropriate
     place for this allegation to be examined. As the Commission has
     found in past proceedings, given the time constraints, the section
     271 process simply could not function if we were required to
     resolve every interpretive dispute between a BOC and each
     competitive LEC about the precise content of the BOC's obligations
     to its competitors.[^349]

102. In addition, we reject Sprint's contention that Verizon
     impermissibly attempts to impose a collocation obligation on
     competitive LECs through the negotiation of interconnection
     agreements.[^350] Although the 1996 Act does not impose a
     collocation obligation on non-incumbent LECs,[^351] we find no
     evidence in the record that Verizon has conditioned its provision
     of collocation on a competitive LEC's agreement to provide
     collocation to Verizon.[^352]

103. Finally, parties assert that an independent audit report
     demonstrates that Verizon does not comply with all of the
     Commission's collocation rules.[^353] In response, Verizon states
     that it has modified and improved its collocation procedures to
     address the issues raised in the audit and by the commenters and is
     thus now in compliance with this checklist item.[^354] There is no
     evidence in the record to suggest that Verizon's current
     collocation procedures have not addressed any section 271 concerns
     raised by the audit cited by these commenters. Moreover, we note
     that audit results are not a legal determination of Verizon's
     section 271 compliance.[^355] Based on the record in this
     proceeding, we believe that Verizon has demonstrated compliance
     with this checklist item.

#### Pricing of Interconnection

104. Checklist item 1 requires a BOC to provide "interconnection in
     accordance with the requirements of sections 251(c)(2) and
     252(d)(1)."[^356] The Commission's pricing rules require, among
     other things, that in order to comply with its collocation
     obligations, an incumbent LEC provide collocation based on
     TELRIC.[^357] Based on the record, we find that Verizon offers
     interconnection in Pennsylvania to other telecommunications
     carriers at just, reasonable and nondiscriminatory rates and is
     therefore in compliance with checklist item 1. The Pennsylvania
     Commission concludes that Verizon currently provides collocation
     under approved interconnection agreements and tariffs, consistent
     with Commission and Pennsylvania Commission orders.[^358]

105. We find that the collocation pricing issue raised by Sprint does
     not cause Verizon to fail this checklist item. Sprint asserts that
     by charging per feed rather than based on the amount of power the
     feed actually drains, Verizon double charges competitive LECs for
     DC power. Sprint states that competitive LECs order double power
     feeds to ensure that at least one feed will be able to deliver the
     necessary amps should the other one fail.[^359] Sprint cites to an
     industry letter[^360] from Verizon stating that "Verizon East will
     provision and bill DC power applications in accordance with the
     prevailing tariff terms, conditions, and rates in effect."[^361]
     Sprint contends, however, that the "prevailing tariff terms,
     conditions and rates in effect" in Pennsylvania today allow Verizon
     to double charge for back-up power.[^362]

106. Verizon disputes Sprint's assertion that most competitive LECs
     configure their equipment to use either the primary feed or the
     back-up feed, but not both. Verizon contends that most competitive
     LECs have collocation equipment that is designed to draw power from
     two power feeds simultaneously. To support this statement, Verizon
     surveyed over 806 power feeds at collocation arrangements in
     Pennsylvania, and found that eighty-one percent were drawing power
     on both feeds at the time of the test.[^363] Verizon also asserts
     it does not require competitive LECs to take a primary feed and a
     back-up feed; rather, it is up to the competitive LEC to determine
     the number of feeds delivered.

107. Verizon asserts that it has worked cooperatively with competitive
     LECs, and has agreed to charge competitive LECs for the number of
     load amps actually ordered rather than the number of fused
     amps.[^364] Verizon filed the required tariff amendments on April
     2, 2001.[^365] Additionally, Verizon issued the above-mentioned
     industry letter clarifying how competitive LECs should order DC
     power.[^366] Verizon states that it provides competitive LECs with
     a way of purchasing only the power they want because, regardless of
     the number of power feeds requested by the competitive LEC, all
     power feeds in a central office draw power from the same power
     source. If that power source fails, none of the other power feeds
     to the competitive LECs or Verizon's telecommunications equipment
     will be able to supply power.[^367]

108. This issue was also raised in Massachusetts,[^368] and as was the
     case there, the issue is currently before the state
     commission.[^369] As we noted in the *SWBT Texas Order*, the Act
     authorizes the state commissions to resolve specific
     carrier-to-carrier disputes arising under the local competition
     provisions, and it authorizes the federal district courts to ensure
     that the results of the state arbitration process are consistent
     with federal law.[^370] Although we have an independent obligation
     to ensure compliance with the checklist, section 271 does not
     compel us to preempt the orderly disposition of intercarrier
     disputes by the state commissions, particularly now that the
     Supreme Court has restored our pricing jurisdiction and has thereby
     directed the state commissions to follow our pricing rules in their
     disposition of those disputes. As we do with respect to the
     Massachusetts Department, we have confidence in the Pennsylvania
     Commission's ability to resolve this matter consistent with our
     rules. Verizon has amended its collocation tariff to address the
     concerns of the parties, and parties have presented no evidence
     that Verizon is not fully cooperating with the efforts of the
     Pennsylvania Commission to resolve these issues. We therefore find
     that these disputes do not cause Verizon to fail this checklist
     item.

### Checklist Item 5 -- Unbundled Transport

109. Section 271(c)(2)(B)(v) of the competitive checklist requires a BOC
     to provide "\[l\]ocal transport from the trunk side of a wireline
     local exchange carrier switch unbundled from switching or other
     services."[^371] Verizon provides unbundled transport pursuant to
     interconnection agreements and tariffs.[^372] We conclude, based
     upon the evidence in the record, that Verizon demonstrates that it
     provides both shared and dedicated transport in compliance with the
     requirements of checklist item 5.[^373] We also note that the
     Pennsylvania Commission found that Verizon complies with this
     checklist item.[^374]

110. In prior section 271 orders, the Commission has reviewed the missed
     appointment rates for the provision of interoffice facilities to
     competitive LECs to determine compliance with checklist item
     5.[^375] On first examination, the missed appointment rate
     performance appears to depict a significant difference in the
     provision of interoffice facilities for competitive LECs compared
     to the retail analogue described in the carrier-to-carrier
     guidelines.[^376] All parties appear to agree, however, that the
     revised retail analogue used for this measure in New York and
     Massachusetts should be adopted in Pennsylvania.[^377] As we found
     in the *Verizon Connecticut Order*, we agree that the revised
     retail analogue provides a more appropriate standard to gauge
     Verizon's unbundled transport performance. Using the revised retail
     analogue, the weighted average for Verizon's missed installation
     appointment rate in Pennsylvania for retail DS-3 service was 19.27
     percent, as compared to the reported competitive LEC transport
     performance of 12.31 percent.[^378] Based on this data, we conclude
     that Verizon provides unbundled transport to competitive LECs in a
     nondiscriminatory manner.

111. Commenters also argue that Verizon attempts to mask poor transport
     provisioning performance by seeking to exclude from the performance
     measurements orders for which no facilities are available.[^379] As
     noted above, the revised retail analogue for missed transport
     provisioning appointments supports our conclusion that Verizon
     complies with this checklist item. We have not relied on Verizon's
     proposed exclusion of "no facilities" orders from the performance
     measurements in finding compliance with this checklist item.
     Commenters also assert that Verizon claims UNE transport facilities
     are unavailable in order to force requesting carriers to order
     transport circuits through Verizon's special access tariffs.[^380]
     The record does not offer sufficient evidence to support that
     claim. We do, however, expect Verizon to meet its obligations to
     take those steps necessary to make UNEs available to requesting
     carriers as required by our rules.[^381] We will continue to
     monitor Verizon's performance in this area, and will take swift and
     appropriate enforcement action in the event such action is
     warranted by the facts.

112. Verizon has established two trial programs to address commenters
     concerns regarding parallel provisioning under Verizon's current
     ordering systems for both dark fiber and transport facilities in
     general.[^382] One of the ongoing trials allows Cavalier to request
     collocation and the provision of dark fiber contemporaneously. If
     this trial is successful, the new provisioning process for dark
     fiber ordering will be expanded to all carriers, subject to the
     negotiation of interconnection agreement amendments, as
     necessary.[^383] Sprint and Verizon also have established a similar
     trial to test the technical and practical viability of implementing
     a parallel provisioning structure for DS-3 interoffice transport
     facilities and collocation arrangements.[^384] In light of these
     facts, we believe that commenters' transport and dark fiber
     ordering concerns have been adequately addressed.

113. Finally, we reject Yipes' arguments that the restrictions Verizon
     places on the provisioning of unbundled dark fiber deny competitors
     the opportunity to meaningfully compete.[^385] As both Yipes and
     Verizon acknowledge, the dark fiber issues raised by Yipes are
     currently before the Pennsylvania Commission for arbitration.[^386]
     Moreover, some of these issues now appear to be moot.[^387] We
     believe that Yipes' concerns are best resolved through the section
     252 negotiation and arbitration process, which Yipes has already
     invoked, or through the section 208 complaint process.

### Checklist Item 8 -- White Pages Directory Listings

114. Section 271(c)(2)(B)(viii) of the competitive checklist requires a
     BOC to provide\
     "\[w\]hite page directory listings for customers of the other
     carrier's telephone exchange service."[^388] Based on the evidence
     in the record, we conclude that Verizon satisfies the requirements
     of checklist item 8.[^389] Verizon asserts that KPMG found
     Verizon's performance acceptable[^390] and that Verizon provides
     directory listings to competitive LECs in Pennsylvania under the
     same business rules as the Commission previously approved in
     Verizon's New York and Massachusetts applications.[^391] We also
     note that the Pennsylvania Commission found that Verizon complies
     with this checklist item.[^392]

115. XO and CTSI allege that Verizon's accuracy rate for their
     customers' directory listings is higher than Verizon's accuracy
     rate for its own retail customers.[^393] XO states that Verizon
     committed several errors for individual listings in the Allentown/
     Bethlehem, Harrisburg, and Philadelphia directory listing
     verification report (LVR).[^394] Verizon, however, explains that
     the LVR is intended to provide an opportunity for competitors to
     detect and correct potential listings errors before publication and
     therefore the LVR is not representative of the accuracy of the
     published directory.[^395] Verizon further explains that it has
     established additional measures to further improve the accuracy of
     its order process.[^396] As the Commission has noted in prior
     orders, we require BOCs to implement procedures that are intended
     to minimize the potential for errors in the listings provisioned
     for the customers of competing LECs.[^397] We accept as reasonable
     Verizon's contention that the listing verification report and its
     quality-assurance procedures are designed to minimize potential
     directory listings errors and, based on our review of the record,
     we find that Verizon satisfies our requirements. Accordingly, we
     reject XO's contention that errors contained in an LVR are evidence
     of discriminatory treatment.

116. For similar reasons, we reject CTSI's contention that Verizon's
     error rate for two directories represents discriminatory treatment.
     The record indicates that Verizon failed to correct 87 out of 205
     errors CTSI identified in the Lancaster LVR and "approximately 188"
     out of 1004 errors it identified in the Wyoming Valley LVR.[^398]
     Verizon, however, contends that these LVR "error rates" are not
     representative of the actual accuracy rate for CTSI and overall
     competitive LEC entries in the published directories.[^399] We
     agree with Verizon that evidence concerning the number of
     corrections made to errors reported in an LVR does not necessarily
     reflect actual provisioning accuracy for published directories.
     Based on our review of the evidence in the record, we do not find
     that the number of errors present in the published directories
     cited by CTSI to be competitively significant.[^400]

117. Commenters also allege that Verizon's manual method for processing
     facilities-based competitors' directory listings orders
     unnecessarily introduces opportunity for additional error.[^401]
     Based on our conclusion above that Verizon meets this checklist
     item, we reject commenters contentions that such manual treatment
     is a per se violation. As we have concluded in previous orders, the
     Commission does not require incumbent LECs to provide a certain
     level of automation in the provision of wholesale services, rather
     incumbent LECs must undertake additional automation as necessary to
     ensure that it can provide nondiscriminatory treatment to
     competitive LECs in light of existing and reasonably foreseeable
     commercial volume.[^402] We nevertheless acknowledge commenters'
     concerns about Verizon's manual processing and the increased need
     for automation as competitive volumes increase in Pennsylvania.
     Therefore, while we do not rely on such evidence for our finding of
     present compliance, we take additional comfort that Verizon has
     committed to further automate many of the manual processes
     identified by commenters in this record.[^403]

## Checklist Item 13 -- Reciprocal Compensation

118. Section 271(c)(2)(B)(xiii) of the Act requires that a BOC enter
     into "\[r\]eciprocal compensation arrangements in accordance with
     the requirements of section 252(d)(2)."[^404] In turn, section
     252(d)(2)(A) specifies when a state commission may consider the
     terms and conditions for reciprocal compensation to be just and
     reasonable.[^405] Based on the record, we conclude that Verizon
     demonstrates that it provides reciprocal compensation as required
     by checklist item 13. We reject Sprint's contention that Verizon is
     not in compliance with the reciprocal compensation requirements of
     the Act. Sprint asserts that Verizon is characterizing all outbound
     operator services "00 minus" calls as access traffic, even though a
     user can dial "00 minus" to make a local call. Sprint argues that
     Verizon's decision to subject all "00 minus" calls to access
     charges is violative of the Act.[^406] We observe that Sprint's
     dispute over reciprocal compensation and access charges is
     currently before the Pennsylvania Commission in an arbitration
     proceeding.[^407] As the Commission noted in the *SWBT Texas
     Order*, the Act authorizes the state commissions to resolve
     specific carrier-to-carrier disputes arising under the local
     competition provisions, and it authorizes the federal district
     courts to ensure that the results of the state arbitration process
     are consistent with federal law.[^408] Although we have an
     independent obligation to ensure compliance with the checklist,
     section 271 does not compel us to preempt the orderly disposition
     of intercarrier disputes by the state commissions.

119. We also reject commenters' assertion regarding reciprocal
     compensation for ISP-bound traffic.[^409] Under a prior Commission
     order, ISP-bound traffic is not subject to the reciprocal
     compensation provisions of section 251(b)(5) and 252(d)(2).[^410]
     This decision was reaffirmed by the recent Commission order on
     remand, which found that ISP-bound traffic is information access
     traffic under section 251(g) and thus not subject to reciprocal
     compensation.[^411] Therefore, we continue to find that whether a
     carrier pays such compensation is "irrelevant to checklist item
     13."[^412] We therefore conclude that Verizon has met its
     obligations under Checklist Item 13.

## Remaining Checklist Items (3, 6, 7, and 9-12)

120. In addition to showing that it is in compliance with the
     requirements discussed above, an applicant under section 271 must
     demonstrate that it complies with checklist item 3 (access to
     poles, ducts, and conduits),[^413] item 6 (unbundled local
     switching),[^414] item 7 (911/E911 access and directory
     assistance/operator services),[^415] item 9 (numbering
     administration),[^416] item 10 (databases and associated
     signaling),[^417] item 11 (number portability),[^418] and item 12
     (local dialing parity).[^419] Based on the evidence in the record,
     we conclude that Verizon demonstrates that it is in compliance with
     checklist items 3, 6, 7, 9, 10, 11, and 12 in Pennsylvania.[^420]
     We also note that the Pennsylvania Commission concluded that
     Verizon complies with the requirements of each of these checklist
     items.[^421]

# COMPLIANCE WITH SECTION 271(c)(1)(A)

121. In order for the Commission to approve a BOC's application to
     provide in-region, interLATA services, a BOC must first demonstrate
     that it satisfies the requirements of either section 271(c)(1)(A)
     (Track A) or section 271(c)(1)(B) (Track B).[^422] To qualify for
     Track A, a BOC must have interconnection agreements with one or
     more competing providers of "telephone exchange service . . . to
     residential and business subscribers."[^423]

122. We conclude, as the Pennsylvania Commission did,[^424] that Verizon
     demonstrates that it satisfies the requirements of Track A based on
     the interconnection agreements it has implemented with competing
     carriers in Pennsylvania. In support of its Track A showing,
     Verizon relies on interconnection agreements with AT&T, WorldCom,
     RCN and Commonwealth Telephone Services (CTSI) in
     Pennsylvania.[^425] Specifically, Verizon contends that AT&T serves
     residential customers, WorldCom serves business customers and RCN
     and CTSI serve both residential and business customers.
     Collectively, these companies provide telephone exchange service,
     predominantly over their own facilities, to residential and
     business subscribers.

123. We conclude that a sufficient number of residential and business
     customers are being served by competing LECs through the use of
     their own facilities to demonstrate that there is an actual
     commercial alternative to Verizon in Pennsylvania.[^426] Verizon
     has shown that facilities-based competing carriers serve more than
     a *de minimis* number of residential customers in Pennsylvania. No
     carrier has challenged Verizon's evidence with regard to the level
     of facilities-based business competition.

# Section 272 Compliance

124. Section 271(d)(3)(B) provides that the Commission shall not approve
     a BOC's application to provide interLATA services unless the BOC
     demonstrates that the "requested authorization will be carried out
     in accordance with the requirements of section 272."[^427] Based on
     the record, we conclude that Verizon has demonstrated that it will
     comply with the requirements of section 272.[^428] Significantly,
     Verizon provides evidence that it maintains the same structural
     separation and nondiscrimination safeguards in Pennsylvania, as it
     does in Connecticut, New York and Massachusetts, states in which
     Verizon has already received section 271 authority.[^429] No party
     challenges Verizon's section 272 showing.[^430]

# PUBLIC INTEREST ANALYSIS

125. Separate from determining whether a BOC satisfies the competitive
     checklist and will comply with section 272, Congress directed the
     Commission to assess whether the requested authorization would be
     consistent with the public interest, convenience, and
     necessity.[^431] We conclude that approval of this application is
     consistent with the public interest.[^432] From our extensive
     review of the competitive checklist, which embodies the critical
     elements of market entry under the Act, we find that barriers to
     competitive entry in the local exchange markets have been removed
     and the local exchange markets today are open to competition. We
     further find that the record confirms our view, as noted in prior
     section 271 orders, that BOC entry into the long distance market
     will benefit consumers and competition if the relevant local
     exchange market is open to competition consistent with the
     competitive checklist.[^433]

126. We disagree with those commenters that assert under our public
     interest examination we must consider the level of competitive LEC
     market share, the financial strength of competitive LECs and the
     failure of other BOCs to enter the market in Pennsylvania as
     evidence that, despite checklist compliance, the local market is
     not yet truly open to competition.[^434] For example, one commenter
     argues that the relatively low percentage of residential customers
     served by competitive LECs indicates the market is not yet
     open.[^435] Another commenter suggests that the failure of other
     BOCs to compete with Verizon in Pennsylvania raises similar
     questions as to whether the market is truly open.[^436] Given an
     affirmative showing that the competitive checklist has been
     satisfied, low customer volumes or the failure of any number of
     companies to enter the market in and of themselves do not undermine
     that showing. Factors beyond the control of the BOC, such as
     individual competitive LEC entry strategies might explain a low
     residential customer base. We note that Congress specifically
     declined to adopt a market share or other similar test for BOC
     entry into long distance and we have no intention of establishing
     one here.[^437]

## Assurance of Future Compliance

127. As set forth below, we find that the existing performance assurance
     plan (\"PAP\") currently in place for Pennsylvania provides
     assurance that the local market will remain open after Verizon
     receives section 271 authorization. The plan in combination with
     the Pennsylvania Commission\'s active oversight of the PAP and its
     stated intent to adopt revised metrics and performance assurance
     remedies[^438] provides additional assurance the local market will
     remain open. In prior orders, the Commission has explained that one
     factor it may consider as part of its public interest analysis is
     whether a BOC would have adequate incentives to continue to satisfy
     the requirements of section 271 after entering the long distance
     market. Although it is not a requirement for section 271 authority
     that a BOC be subject to such performance assurance mechanisms, the
     Commission previously has stated that the existence of a
     satisfactory performance monitoring and enforcement mechanism would
     be probative evidence that the BOC will continue to meet its
     section 271 obligations after a grant of such authority.[^439]

128. In prior section 271 orders, the Commission has reviewed
     performance assurance plans modeled after either the New York Plan
     or the Texas Plan.[^440] Although similar in some respects, the
     current Pennsylvania plan, however, differs significantly from each
     of these two plans. As stated above, we do not require any
     monitoring and enforcement plan and therefore, we do not impose
     requirements for its structure if the state has chosen to adopt
     such a plan.[^441] We recognize that states may create plans that
     ultimately vary in their strengths and weaknesses as tools for
     post-section 271 authority monitoring and enforcement.[^442] We
     also recognize that the development of performance measures and
     appropriate remedies is an evolutionary process that requires
     changes to both measures and remedies over time. We anticipate that
     state commissions will continue to build on their own work and the
     work of other states in order for such measures and remedies to
     most accurately reflect actual commercial performance in the local
     marketplace.

129. We conclude that the Pennsylvania PAP provides incentives to foster
     post-entry checklist compliance.[^443] We note that the
     Pennsylvania PAP was developed in an open proceeding with
     participation by all sectors of the industry.[^444] We further note
     that the Pennsylvania Commission is presently conducting a
     proceeding intended to adopt revised metrics and performance
     assurance remedies.[^445] As in prior section 271 orders, our
     conclusions are based on a review of several key elements in any
     performance assurance plan: total liability at risk in the plan;
     performance measurement and standards definitions; structure of the
     plan; self-executing nature of remedies in the plan; data
     validation and audit procedures in the plan; and accounting
     requirements.[^446] We discuss only those elements that parties
     have raised substantial issues with in the record.

130. Commenters assert that although the PAP does not place a cap on
     total payments to competitive LECs, the actual amount Verizon is
     likely to pay for discriminatory performance to competitive LECs is
     insufficient to deter Verizon activity.[^447] In response we note
     that, the PAP is not the only means of ensuring that Verizon
     continues to provide nondiscriminatory service to competing
     carriers. In addition to the monetary payments at stake under this
     plan, Verizon faces other consequences if it fails to sustain an
     acceptable level of service to competing carriers, including:
     enforcement provisions in interconnection agreements, federal
     enforcement action pursuant to section 271(d)(6) and remedies
     associated with antitrust and other legal actions.[^448]

131. Commenters also argue that the effectiveness of the PAP is limited
     because of incomplete or missing important metrics, improper
     implementation of existing metrics, ineffective metrics and change
     management process and unverified performance results.[^449] We
     recognize that development and implementation of metrics and
     inclusion in a PAP is an ongoing process. During this year the
     Pennsylvania Commission already has updated the PAP by requiring
     Verizon to separately report line-sharing and DSL metrics, revise
     certain billing metrics, and increase the penalty for missing a
     metric for four months or more.[^450] We also note that Verizon has
     agreed to adapt the performance measurements and standards used in
     New York to Pennsylvania.[^451] In addition, commenters assert that
     New York metrics must be implemented in Pennsylvania by Verizon
     prior to section 271 approval.[^452] We disagree. As we stated
     above, we believe that in combination with the existing PAP, the
     ongoing work by the Pennsylvania Commission to revise the
     performance measurements and standards is sufficient to provide us
     with assurance that Verizon will continue to comply with its
     section 271 obligations after approval.

132. Finally, commenters assert that the public interest requires
     Verizon to commit not to challenge the Pennsylvania Commission's
     authority to implement or modify the PAP.[^453] We note that the
     Pennsylvania Commission was satisfied by Verizon's withdrawal of
     its previous lawsuit challenging the Pennsylvania Commission's
     authority to implement a PAP.[^454]

## Other Public Interest Issues

133. WorldCom asserts that Verizon's Local Service Provider Protection
     Service ("local freeze") is anti-competitive.[^455] We have
     previously stated, however, that a "local freeze" program is not a
     *per se* violation of our rules,[^456] but rather there must be
     some anti-competitive impact from the particular implementation of
     the program. Based on the record before us, we are not able to find
     this service to have such an anti-competitive impact as to raise
     public interest concerns necessitating withholding of section 271
     approval. WorldCom has taken appropriate action, that is, filed a
     complaint with the appropriate state commission[^457] and may do so
     with this Commission.

134. AT&T asserts that prior to a grant of section 271 authority for
     Pennsylvania, Verizon should be required to demonstrate that its
     affiliate, GTE North, complies with the checklist, or in the
     alternative, Verizon should not receive section 271 authority to
     provide interLATA services from GTE North's territory.[^458] As
     discussed in Section II above, the Act requires Verizon to
     demonstrate checklist compliance for the BOC or its successor or
     assign but not for its affiliates.[^459] GTE North is not a
     successor or assign of the BOC applicant described in the Act,
     namely "The Bell Telephone Company of Pennsylvania," but rather is
     an affiliate acquired as a result of the merger between Bell
     Atlantic and GTE.[^460] Once the requirements of section 271 are
     met, the statute provides for a grant of interstate authority to
     the BOC for the entire state. Nothing in the Act or the
     Commission's own review of the record supports a subsequent
     modification of the grant of authority to prohibit such service in
     the GTE North territory.

# Section 271(d)(6) Enforcement Authority 

135. Section 271(d)(6) of the Act requires Verizon to continue to
     satisfy the "conditions required for . . . approval" of its section
     271 application after the Commission approves its
     application.[^461] Thus, the Commission has a responsibility not
     only to ensure that Verizon is in compliance with section 271
     today, but also that it remains in compliance in the future. As the
     Commission has already described the post-approval enforcement
     framework and its section 271(d)(6) enforcement powers in detail in
     prior orders, it is unnecessary to do so again here.[^462]

136. Working in concert with the Pennsylvania Commission, we intend to
     closely monitor Verizon's post-approval compliance for Pennsylvania
     to ensure that Verizon does not "cease \[\] to meet any of the
     conditions required for \[section 271\] approval."[^463] We stand
     ready to exercise our various statutory enforcement powers quickly
     and decisively in appropriate circumstances to ensure that the
     local market remains open in Pennsylvania. Like many commenters in
     this proceeding[^464] and the Department of Justice,[^465] we have
     given close scrutiny to Verizon's billing system. Recent
     performance indicates that Verizon now delivers timely and accurate
     wholesale bills. We stress, however, that we are prepared to use
     our authority under section 271(d)(6) if evidence shows that recent
     improvements in Verizon's OSS performance have not been maintained.

137. The Pennsylvania Commission-approved UNE rates are within the range
     of what a reasonable application of TELRIC would produce.[^466]
     Because states have considerable flexibility in setting UNE rates,
     certain flaws in cost studies, by themselves, may not result in
     rates that are outside the reasonable range that a correct
     application of our TELRIC rules would produce. Collectively,
     however, the number of possible flaws in the cost studies, if
     repeated without adequate state-specific justification, may well
     result in prices outside the reasonable range of what TELRIC would
     produce. We observe that in any context in which prices are not set
     in accordance with our rules and the Act, we retain the ability to
     take appropriate enforcement action, including action pursuant to
     section 271(d)(6), and will not hesitate to do so.[^467]

138. We require Verizon to report to the Commission all Pennsylvania
     carrier-to-carrier performance metrics results and Performance
     Assurance Plan monthly reports beginning with the first full month
     after the effective date of this Order, and for each month
     thereafter for one year unless extended by the Commission. These
     results and reports will allow us to review, on an ongoing basis,
     Verizon's performance to ensure continued compliance with the
     statutory requirements. We are confident that cooperative state and
     federal oversight and enforcement can address any backsliding that
     may arise with respect to Verizon's entry into the Pennsylvania
     long distance market.[^468]

# Conclusion

139. For the reasons discussed above, we grant Verizon's application for
     authorization under section 271 of the Act to provide in-region,
     interLATA services in the state of Pennsylvania.

# Ordering clauses

140. Accordingly, IT IS ORDERED that, pursuant to sections 4(i), 4(j),
     and 271 of the Communications Act of 1934, as amended, 47 U.S.C. §§
     154(i), 154(j) and 271, Verizon's application to provide in-region,
     interLATA service in the state of Pennsylvania, filed on June 21,
     2001, IS GRANTED.

141. IT IS FURTHER ORDERED that this Order SHALL BECOME EFFECTIVE
     September 28, 2001.

     FEDERAL COMMUNICATIONS COMMISSION

     Magalie Roman Salas Secretary

DISSENTING OPINION OF COMMISSIONER MICHAEL J. COPPS

September 19, 2001

In the Matter of: Application by Verizon Pennsylvania Inc., Verizon Long
Distance, Verizon Enterprise Solutions, Verizon Global Networks Inc.,
and Verizon Select Services Inc. for Authorization To Provide In-Region,
InterLATA Services in Pennsylvania (CC Docket No. 01-138)

A primary purpose of the Telecommunications Act of 1996 was to eliminate
barriers to competition in the local telecommunications market. One of
the most important tools Congress created to achieve this goal was
Section 271 of the Communications Act.[^469] The combination of
competitive BOC entry into the interLATA market and competitive local
exchange carrier (CLEC) entry into the BOC's once-dominant local market,
Congress believed, would lead to significant consumer benefits in the
form of lower prices, better service, and investment in new
technologies. Continued BOC dominance of a state's local market,
however, could undermine consumer benefits if the BOC could leverage
this dominance upon entering the interLATA market.

I voted to approve Verizon's application to provide interLATA service in
Connecticut because I found that Verizon met its burden of proving that
it complied with section 271. I believe that Verizon has made great
strides in opening the local market in Pennsylvania as well. The company
should be commended for its hard work. Despite these efforts, however,
the record does not demonstrate that Verizon has satisfied the
requirements of section 271 in Pennsylvania.

The Application reveals that Verizon has worked diligently and
successfully on many of its section 271 responsibilities. We should all
be pleased that Verizon has demonstrated that problems seen in several
prior applications can be fixed. In Section 271, however, Congress did
not provide us with a balancing test, where we look to the quality of a
BOC's overall effort to meet its responsibilities. Congress insisted, as
the Commission has noted in previous Orders, that a BOC must meet *each
and every checklist item* before the Commission grants permission to
offer interLATA service.[^470] Additionally, we must not forget that the
granting of an application must be in the public interest.

The record before us fails to prove that Verizon provides competitors
with adequate wholesale bills. Verizon has therefore not yet met its
burden of proving that it complies with item 2 of the "competitive
checklist." Furthermore, the Commission's analysis and procedures
related to UNE rates were troubling. Additionally, I agree with the
United States Department of Justice's (DOJ) determination that "the
effectiveness of the Pennsylvania PAP \[Performance Assurance Plan\] may
be compromised not only by the lack of effective billing metrics, but
also by its structural remedies."[^471] This lack of effectiveness leads
me to conclude that the PAP does not provide adequate incentives to
ensure continued compliance with checklist items.

I deem approval of the Application at this point to be premature. It may
well be that with just a few months more time, and with additional
information about procedures recently put in place and presently at
work, this Application could gain my support. We are not quite there
yet, however. Because we lack the option of taking this brief time to
collect such additional information, I must respectfully, and somewhat
reluctantly, dissent.

# Background on Section 271

In 1996 Congress faced a telecommunications industry where local and
long distance companies were barred from competing against each other by
legal restrictions and economic forces. Judge Greene's Modified Final
Judgement (MFJ) prohibited the BOCs from offering long distance
services. The MFJ stated that the restriction was \"clearly necessary to
preserve free competition in the interexchange market.\"[^472] Judge
Greene's determination was based on the belief that BOCs could
discriminate against their interexchange rivals and . . .
cross-subsidize their interexchange ventures," if they offered interLATA
services while maintaining control of the local exchange market.[^473]

In order to promote competition in both the long distance and the local
market in this legal and economic landscape, Congress passed the
Telecommunications Act (the Act). In addition to the market-opening
mechanisms and requirements found in Sections 251, 252 and 253 of the
Act, Congress included Section 271. The Commission has stated that
Congress included Section 271 because "the BOCs . . . have little, if
any, incentive to assist new entrants in their efforts to secure a share
of the BOCs\' markets," and that Congress sought to create such an
incentive by "requir\[ing\] BOCs to demonstrate that they have opened
their local telecommunications markets to competition before they are
authorized to provide in-region long distance services."[^474]

In order to advance Congress's goal of promoting competition, the
Commission must ensure that a BOC fully complies with Section 271's
requirements before we approve an application to provide interLATA
services. As we have stated before, "unless the BOCs\' market power in
the local market was first demonstrably eroded by eliminating barriers
to local competition," BOC entry into the long distance market "would be
anticompetitive."[^475] I agree that "\[i\]n order to effectuate
Congress\' intent, we must make certain that the BOCs have taken real,
significant, and irreversible steps to open their markets."[^476]

The rewards for following Congress's direction by deregulating and
opening the local markets are substantial -- creation of consumer choice
of carriers, one-stop shopping, the competing away of implicit
subsidies, lower prices, better quality of service, and more
technological innovation in both the long distance and local markets.

# Verizon has not demonstrated that it satisfies competitive checklist item 2

In order to win approval of this Application Verizon must prove that it
has \"fully implemented the competitive checklist\" contained in section
271(c)(2)(B).[^477] Section 271 states that, among fourteen other
checklist items, "access or interconnection provided or generally
offered by a Bell operating company to another telecommunications
carrier \[must\] include\[\] . . . \[n\]ondiscriminatory access to
network elements in accordance with the requirements of sections
251(c)(3) and 252(d)(1)."[^478] This is checklist item 2.

As the Majority states, "\[u\]nder checklist item 2, a BOC must
demonstrate that it provides non-discriminatory access to . . .
billing."[^479] The Order also correctly states that "\[i\]n previous
section 271 decisions, the Commission has held that, pursuant to
checklist item 2, BOCs must provide competitive LECs with . . .
complete, accurate and timely wholesale bills,"[^480] and that "the BOC
must demonstrate that it can produce a readable, auditable and accurate
wholesale bill in order to satisfy its nondiscrimination requirements
under checklist item 2."[^481]

If Verizon's wholesale bills are not readable, auditable and accurate,
we must deny the Application because of the critical role these bills
play in local competition. The majority identifies four ways in which
"\[i\]naccurate or untimely wholesale bills can impede a competitive
LEC's ability to compete."[^482]

> "First, a competitive LEC must spend additional monetary and personnel
> resources reconciling bills and pursuing bill corrections. Second, a
> competitive LEC must show improper overcharges as current debts on its
> balance sheet until the changes are resolved, which can jeopardize its
> ability to attract investment capital. Third, competitive LECs must
> operate with a diminished capacity to monitor, predict and adjust
> expenses and prices in response to competition. Fourth, competitive
> LECs may lose revenue because they generally cannot, as a practical
> matter, back-bill end users in response to an untimely wholesale bill
> from and incumbent LEC. Accurate and timely wholesale bills in both
> retail and BOS BDT \[electronic\] formats thus represent a crucial
> component of OSS."[^483]

Verizon has the burden of proving that it has provided competitors with
adequate wholesale bills.[^484] "The BOC at all times bears the burden
of proof of compliance with section 271."[^485] In determining whether
Verizon has met its burden, the Commission uses a "preponderance of the
evidence" standard.[^486]

It is also worth noting that in the Commission's Public Notice
announcing procedures governing BOC section 271 applications, we
unequivocally stated that \"\[w\]e expect that a section 271
application, as originally filed, will include all of the factual
evidence on which the applicant would have the Commission rely in making
its findings thereon.\"[^487]

The Order does not waive this rule with respect to the billing issue in
the Verizon Application. The Commission must therefore rely only on
information received before the Application was filed in June. This is
particularly important with regard to billing, because it means that the
Commission only had the benefit of the June billing cycle for its
analysis of Verizon's last critical billing software fix. It also means
that the Commission did not have the benefit of the July and August
billing cycles, and that CLECs did not have adequate time to determine
whether the June bills had actually been fixed, as Verizon asserted.

In addition, it is important to note that, "a BOC\'s promises of future
performance to address particular concerns raised by commenters have no
probative value in demonstrating its present compliance with the
requirements of section 271. Paper promises do not, and cannot, satisfy
a BOC\'s burden of proof. In order to gain in-region, interLATA entry, a
BOC must support its application with actual evidence demonstrating its
present compliance with the statutory conditions for entry, instead of
prospective evidence that is contingent on future behavior." [^488] I
cannot, therefore, give any weight to assertions that Verizon's billing
practices will improve in the future.

CLECs have provided the Commission with evidence that Verizon's
wholesale bills include substantial errors.[^489] Errors include:
charging for lines that were not provided; assessing retail charges
where wholesale charges were appropriate; double billing; assessing
taxes improperly; including charges where subtotaled amounts were
inconsistent with totaled amounts; and miscrediting previous billing
errors, or crediting in ways that could not be identified.[^490]

The Majority admits that the question of whether Verizon's Application
should be denied because of these billing problems "is a close
call."[^491] The record demonstrates that Verizon's wholesale billing
system has serious flaws.[^492] The Pennsylvania Commission found the
presence of billing errors.[^493] While the Majority of the Pennsylvania
Commission approved the Application, two of the five Commissioners
dissented, finding that wholesale billing was too flawed to meet the
requirements of section 271. Commissioner Nora Mead Brownell stated that
"Verizon must implement adjustments to its electronic billing systems to
insure that CLECs are able to obtain timely and accurate electronic
bills. . . . Without confidence that the billing systems are absolutely
able to deliver adequate services and billing support to its customers,
I cannot see how the market can work."[^494] Commissioner Terrance J.
Fitzpatrick added that even after Verizon designated its electronic bill
as its bill of record that "the fact remains that the e-billing system
is unreliable."[^495]

As late as July 26, 2001, DOJ concluded that "the Department is unable
fully to endorse Verizon's application based on the current
record."[^496] DOJ was unable to find that Verizon satisfied section 271
because "Verizon filed its Pennsylvania application with the FCC without
sufficient evidence to show that numerous problems with its wholesale
billing systems have been corrected." More than a month after Verizon
submitted the last billing information on which the Commission may
legally rely, DOJ found that "insufficient time has elapsed to determine
whether Verizon's proposed fixes to its billing problems will be
effective."[^497]

The majority, nonetheless, finds that Verizon has proved that it
provides competitors with wholesale bills that satisfy item 2 of the
competitive checklist. They note that Verizon's evidentiary showing is
"minimally sufficient."[^498] I believe that the evidence that the
majority relies on is inadequate. The Order states that "\[i\]n past
section 271 orders, the Commission has determined checklist compliance
for OSS functions primarily by relying on performance data that reflects
actual commercial usage."[^499] Performance data is not the primary
source of evidence here, despite the fact that the Commission "has
consistently held that commercial performance data is the most
persuasive form of evidence."[^500] The majority explains that it
"cannot rely exclusively on past commercial performance data, because,
among other things, Verizon has made significant changes to its
wholesale billing systems in the most recent months leading up to this
application."[^501]

This means that Verizon's billing software update in May left the
Commission with only the June bill to analyze. The only commercial
performance data that the Majority relies on that satisfies checklist
item 2, therefore, is the June bill. Prior bills did not satisfy item 2.
Subsequent bills are not relied upon, because they are not part of the
record under the Commission's "complete when filed" rule.

Apart from the June bill, the Commission has only the KPMG and
PriceWaterhouseCoopers (PWC) studies as evidence that Verizon has
actually satisfied section 271. The KPMG study did not relate to the
electronic bill, only to the paper bill, and was completed months before
Verizon made significant billing changes.[^502] The PWC study was not
open for participation by third parties, and did not include an
assessment of billing accuracy.[^503] In addition, even if these studies
provided direct evidence of satisfactory billing practices, this type of
evidence is less probative than commercial performance data. The
Commission "has consistently held that commercial performance data is
the most persuasive form of evidence."[^504] DOJ points out that
"\[t\]he experience in Pennsylvania highlights the weakness of
third-party testing, as the CLECs' commercial experience with Verizon's
billing in the past, both paper and electronic, has revealed numerous
problems with both accuracy and auditability."[^505]

This evidence does not convince me that Verizon has met its burden.
Accurate and reliable bills, and the ability to uncover and dispute
billing errors are critical to competition. Verizon admits that billing
problems existed before the June billing cycle.[^506] These billing
problems persuaded DOJ and two Pennsylvania Commissioners that they
could not support the Application. While Verizon claims that software
changes corrected billing problems by the June billing cycle, there is
evidence that Verizon's software changes leave substantial billing
problems uncorrected. AT&T, Z-Tel, and MCI/WorldCom all state that the
June bill contained errors that negatively impacted their ability to
compete.[^507]

In addition, the software changes that are manifested in the June bills
do not leave the Commission with the ability to collect enough evidence
on whether Verizon successfully corrected billing problems. The June
bill was sent to competitors just before our "complete when filed"
deadline. That gave the Commission only one billing cycle to use in
analyzing the software corrections. In this case, given the long history
of billing problems, one billing cycle was not enough. Commissioner Nora
Mead Brownell stated that "the system must complete at least two billing
cycles \[to provide\] confidence that the billing systems are absolutely
able to deliver adequate services and billing support to customers."
Because of evidence of persistent billing problems, I believe that
without several months of evidence on the record that Verizon's bills
meet the requirements of section 271, the Commission should not approve
the Application.

Verizon, while it has obviously worked hard and has made strides in
correcting these problems, has not demonstrated that it has eliminated
the problems to the point that it provides complete, accurate and timely
wholesale bills, as section 271 requires.

I believe that the Commission is inviting future problems by relying so
heavily on late filed evidence and the subsequent flurry of *Ex Parte*
letters and meetings that were necessary to analyze this new information
in an already very complicated application. I fear such a precedent when
we are faced with multi-state 271 applications, or applications where
more checklist items are in dispute. Reliance on this information could
undermine the 271 process in the future and is an invitation to
litigation.

# The Commission's pricing analysis is troubling

Verizon must also prove that the pricing of network elements in
Pennsylvania does not violate competitive checklist item 2. Pricing of
network elements, like wholesale billing, is critical to BOC provision
of "\[n\]ondiscriminatory access to network elements in accordance with
the requirements of sections 251(c)(3) and 252(d)(1)."[^508]

Several commenters argued that Pennsylvania's cost methodology was not
TELRIC compliant.[^509] These commenters identified a long list of
potential TELRIC violations.[^510] The majority ignores much of this
evidence and finds instead that "Verizon's charges for UNEs made
available in Pennsylvania to other telecommunications carriers are just,
reasonable, and nondiscriminatory in compliance with checklist item
2.\"[^511] The majority specifically addresses only the three
allegations where they find no TELRIC violation, rejecting arguments
related to the fill factors for copper cable, fiber cable, and digital
loop carriers,[^512] and switching costs.[^513] It then, in a footnote,
"note\[s\] that AT&T and WorldCom allege additional specific TELRIC
violations" but strangely declines to analyze or even comment on why it
reacts only to two TELRIC allegations and ignores the majority of
allegations.[^514] I am troubled by the majority's reluctance to deal
with the full range of specific TELRIC issues.[^515] The majority argues
that it need not address the commenters' arguments because
Pennsylvania's rate calculations result in rates that a reasonable
application of TELRIC methodology would produce. If this is true, why
reveal analysis on only the allegations that support the majority
decision and ignore other allegations, leaving the question of pricing
adequacy so confused?

Commission precedent holds that the TELRIC analysis is important to the
271 process. I believe that the Commission should address these
potential TELRIC violations. And it should do so in a way that allows
the parties to the proceeding and the Commissioners to analyze this
information in an orderly and deliberate process, rather than in a last
minute change to the Order.

It is also important to note that because it does not rely on a finding
of TELRIC compliance, the majority turns to the Commission's practice of
"look\[ing\] to rates in other section 271-approved states to see if
rates nonetheless fall within the range that a reasonable TELRIC-based
ratemaking would produce," and bases its acceptance of Pennsylvania's
rates on a comparison to New York's rates.[^516] A New York
Administrative Law Judge has found the New York rates were
improper.[^517] The Commission does not know the results of the process
that will follow this determination, yet it relies on Pennsylvania's
comparability to New York prices that are likely to be reduced. I
therefore believe that the majority incorrectly relies so heavily on
Pennsylvania's comparability to New York's current, uncorrected rates.
The majority seems comfortable with this comparison, however, and
curiously fails even to note that if New York's rates were reduced so
that the comparison is no longer valid, Verizon might no longer be in
compliance with section 271. Our precedent holds that this would, in
fact, be a subject for Commission scrutiny.[^518]

# The "Performance Assurance Plan" does not adequately disincent backsliding

In addition to requiring a BOC to demonstrate that it has met all
fourteen competitive checklist items, Section 271 requires the
Commission to determine that a BOC\'s entry into the in-region interLATA
market is \"consistent with the public interest, convenience, and
necessity.\"[^519] The majority notes that "\[i\]n prior orders, the
Commission has explained that one factor it may consider as part of its
public interest analysis is whether a BOC would have adequate incentives
to continue to satisfy the requirements of section 271 after entering
the long distance market."[^520] The Commission has previously stated
that "\[i\]t is not enough that the BOC prove it is in compliance at the
time of filing a section 271 application; it is essential that the BOC
must also demonstrate that it can be relied upon to remain in
compliance."[^521] The Commission has therefore properly decided to
consider the Pennsylvania PAP under section 271's public interest
requirement.

The Majority concludes that the Pennsylvania PAP "provides incentives to
foster post-entry checklist compliance" and therefore is consistent with
the public interest.[^522] I believe that while Pennsylvania has begun a
process that may lead it to adopt a PAP that provides proper incentives
for post-entry checklist compliance, the current plan does not do so.

DOJ found that "the effectiveness of the Pennsylvania PAP may be
compromised not only by the lack of effective billing metrics, but also
by its structural remedies."[^523] The current PAP is quite different
from the PAPs used in the states where the Commission has approved
applications to provide interLATA service. First, performance incentives
are not tailored to the level of competitive harm caused by types of
performance failure or the gravity of the failure. Second, remedy
payments are too low to be effective. Third, the PAP does not provide
Pennsylvania State regulators with the flexibility needed to focus on
particularly insufficient performance. Fourth, by measuring
discrimination CLEC-by-CLEC instead of on a market-wide bass, the PAP
unreasonably increases the potential that pervasive discrimination will
be missed.

In response to arguments that the PAP is ineffective, the Majority
states that "\[w\]e recognize that the development and implementation of
metrics and inclusion in a PAP is an ongoing process," and that "Verizon
has agreed to adapt the performance measurements and standards used in
New York to Pennsylvania.\"" While Pennsylvania's process for altering
the PAP may result in a plan that is effective, the Commission has no
assurance that this will be the case. While there is some evidence that
Verizon has agreed that the PAP should follow the New York model,
Verizon has also proposed two plans with the Pennsylvania PUC that are
significantly different from the New York PAP in place when the
Commission approved Verizon's 271 application in that state.[^524] While
the PAP that results from this process may satisfy our public interest
standard, there is no guarantee that it will, despite Pennsylvania's
"rebuttable presumption." Because I find that the current PAP does not
provide adequate incentives to foster post-entry checklist compliance,
and because we lack convincing evidence that Pennsylvania's PAP revision
process will improve the situation, I must conclude that the PAP is
inadequate.

# Conclusion

The Commission has stated that:

> "Complying with the competitive checklist, ensuring that entry is
> consistent with the public interest, and meeting the other
> requirements of section 271 are realistic, necessary goals. That is
> not to say, however, that they are easy to meet or achievable
> overnight. Given the complexities of the task of opening these local
> markets to true, sustainable competition, it is not surprising that
> companies that are earnestly and in good faith cooperating in opening
> their local markets to competition have not yet completed the task. It
> is through such earnest, good faith efforts that BOCs will obtain
> authorization to provide in-region long distance service."[^525]

I believe that Verizon has worked hard to comply with Section 271 in
Pennsylvania. Continuing billing problems, and inadequate time and
evidence to properly analyze potential billing improvements, however,
mean that Verizon has not yet met its burden with respect to item 2 of
the competitive checklist. This alone should result in the Commission
denying this Application. In addition, troubling analysis and procedures
related to UNE rates and the fact that Pennsylvania's PAP process is
still unresolved add to my discomfort with this Order.

These are problems that can be solved. I believe that if the Commission
denied this application, and Verizon refiled it in the next few months,
the Commission would have access to critical new record evidence that
could result in compliance with section 271. My colleagues have decided
that there is enough evidence to approve the Application today, and that
the Pennsylvania PAP and the Commission's 271(d)(6) authority are
adequate to resolve any problems that may arise on the issues that are
"close calls" in this Order. I do not agree that this Application
justifies that confidence, nor do I believe that approving a "compliance
in the making" arrangement will help us deal successfully with future
271 applications. Given the Majority's reliance on the PAP and
271(d)(6), I hope that the Commission will closely and carefully monitor
and assess Verizon's continuing efforts to improve wholesale billing,
the New York pricing proceeding, and Pennsylvania's PAP process, and be
willing to act decisively if necessary to protect competition.

**Appendix A**

**Verizon Pennsylvania, Inc., Verizon Long Distance, Verizon Enterprise
Solutions, Verizon Global Networks Inc., and Verizon Select Services
Inc.,**

**271 Application to Provide In-Region, InterLATA Services in
Pennsylvania**

**CC Docket No. 01-138**

**COMMENTS**

[Commenter]{.underline} [Abbreviation]{.underline}

Association of Communications Enterprises ASCENT

AT&T Corp. AT&T

Broadslate Networks, Inc., CTSI, Inc., and Broadslate Joint Comments

XO Communications, Inc. (Joint filing)

Capsule Communications, Inc., Covista, Inc. Capsule Joint Comments

and US LEC Corp. (Joint filing)

Cavalier Telephone LLC & Cavalier Mid Atlantic, LLC Cavalier

Communications Workers of America CWA

Competitive Telecommunications Association CompTel

Covad Communications Company Covad

Curry Communications, Inc. Curry

U.S. Department of Justice Department of Justice

Keep America Connected, *et al*.

Network Access Solutions NAS

Pennsylvania Office of Consumer Advocate POCA

Pennsylvania Public Utility Commission Pennsylvania Commission

Sprint Communications Company Sprint

Telecommunications Research and Action Center TRAC

WorldCom, Inc. WorldCom

World Institute on Disability, *et al*.

Yipes Transmission, Inc. Yipes

Z-Tel Communications, Inc. Z-Tel

# REPLIES {#replies .unnumbered}

Association of Communications Enterprises ASCENT

Association for Local Telecommunications Services ALTS

AT&T Corp. AT&T

Broadslate Networks, Inc., Cavalier Telephone, LLC, Broadslate Joint
Reply

CTSI, Inc., Focal Communications Corporation, US

LEC Corp., and XO Communications, Inc.

(Joint filing)

Conestoga Enterprises, Inc., CEI

Keep America Connected, et al.

Pennsylvania Office of Small Business Advocate

Pennsylvania Public Utility Commission Pennsylvania Commission

Telecommunications Research and Action Center TRAC

WorldCom, Inc. WorldCom

Z-Tel Communications, Inc. Z-Tel

## Letter Commenters and Reply Commenters {#letter-commenters-and-reply-commenters .unnumbered}

Alred J. Ricci

Allegheny County, Pennsylvania

Andrea L. Stetler

Anthony J. Girifalco

Anthony G. Melf

Balayszis' Cafe

Berean Institute

Berwick Industrial Plan, Inc. & Spirit, Inc.

Brian C. Morris Custom Cabinets

Carlo DeMarco

Catherine McCollom

Central Credit Control

Central Property Search, Inc.

Central Westmoreland Chamber of Commerce

Charles DiSanto

Chester County Development Council

Clarion University

City of Greensburg

City of Philadelphia City Council

City of Philadelphia, Mayor's Commission on Services to the Aging

Cultural Alliance of York County

Dauphin County Department of Community & Economic Development

Dymond Associates

Dr. Theodore E. Fuller

Economic Development Council of Northeastern Pennsylvania

Edmonds & Associates

Gerald E. Depo

Greater Bridgeville Area Chamber of Commerce

Greater Hazelton Chamber of Commerce

Greater Philadelphia Urban Affairs Coalition

Greater Scranton Chamber of Commerce

Guiding Light for the Blind

Harrisburg Hello

Harrisburg Magazine

Hispanic Business Council of the Lehigh Valley

HJG Associates

John P. Durante

Karl Associates Inc.

Latrobe Area Chamber of Commerce

Laurel Business Institute

Lehigh Valley Economic Development Corporation

Lehigh County Senior Center

Martin's Potato Chips Inc.

Michael W. Krajovic

Millersville University

Montgomery County Association for the Blind

Montgomery County Cultural Center

Nash Communications, Ltd.

National Consumers League

North Penn Chamber of Commerce

North Penn Hospital

PABCOM (Paul A. Bennett Communications)

Partners for Small Business Development, Inc.

Patricia Giambrone

Penn's Northeast

Pennsylvania Downtown Center

Pennsylvania League of Cities and Municipalities

Pennsylvania Resources Council, Inc. (PRC)

Phillip Laplante

Philadelphia Opportunities Industrialization Center, Inc.

Pocono Northeast Development Fund

Senior Fest, Inc.

Squires Consulting

The Enterprise Center

The MBF Center

Three Rivers Center for Independent Living (TRCIL)

TRR & Associates

United Seniors Health Council

West Philadelphia Coalition of Neighborhoods

## Appendix B {#appendix-b .unnumbered}

## Pennsylvania Performance Data {#pennsylvania-performance-data .unnumbered}

Appendix C

Statutory Requirements

# STATUTORY FRAMEWORK

1.  The 1996 Act conditions BOC entry into the provision of in-region
    interLATA services on compliance with certain provisions of section
    271.[^526] BOCs must apply to the Federal Communications Commission
    (Commission or FCC) for authorization to provide interLATA services
    originating in any in-region state.[^527] The Commission must issue
    a written determination on each application no later than 90 days
    after receiving such application.[^528] Section 271(d)(2)(A)
    requires the Commission to consult with the Attorney General before
    making any determination approving or denying a section 271
    application. The Attorney General is entitled to evaluate the
    application "using any standard the Attorney General considers
    appropriate," and the Commission is required to "give substantial
    weight to the Attorney General's evaluation."[^529]

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142. In addition, the Commission must consult with the relevant state
     commission to verify that the BOC has one or more state-approved
     interconnection agreements with a facilities-based competitor, or a
     Statement of Generally Available Terms and Conditions (SGAT), and
     that either the agreement(s) or general statement satisfy the
     "competitive checklist."[^530] Because the Act does not prescribe
     any standard for the consideration of a state commission's
     verification under section 271(d)(2)(B), the Commission has
     discretion in each section 271 proceeding to determine the amount
     of weight to accord the state commission's verification.[^531] The
     Commission has held that, although it will consider carefully state
     determinations of fact that are supported by a detailed and
     extensive record, it is the FCC's role to determine whether the
     factual record supports the conclusion that particular requirements
     of section 271 have been met.[^532]

143. Section 271 requires the Commission to make various findings before
     approving BOC entry. In order for the Commission to approve a BOC's
     application to provide in-region, interLATA services, a BOC must
     first demonstrate, with respect to each state for which it seeks
     authorization, that it satisfies the requirements of either section
     271(c)(1)(A) (Track A) or 271(c)(1)(B) (Track B).[^533] In order to
     obtain authorization under section 271, the BOC must also show
     that: (1) it has "fully implemented the competitive checklist"
     contained in section 271(c)(2)(B);[^534] (2) the requested
     authorization will be carried out in accordance with the
     requirements of section 272;[^535] and (3) the BOC's entry into the
     in-region interLATA market is "consistent with the public interest,
     convenience, and necessity."[^536] The statute specifies that,
     unless the Commission finds that these criteria have been
     satisfied, the Commission "shall not approve" the requested
     authorization.[^537]

# PROCEDURAL AND ANALYTICAL FRAMEWORK

144. To determine whether a BOC applicant has met the prerequisites for
     entry into the long distance market, the Commission evaluates its
     compliance with the competitive checklist, as developed in the
     FCC's local competition rules and orders in effect at the time the
     application was filed. Despite the comprehensiveness of these
     rules, there will inevitably be, in any section 271 proceeding,
     disputes over an incumbent LEC's precise obligations to its
     competitors that FCC rules have not addressed and that do not
     involve *per se* violations of self-executing requirements of the
     Act. As explained in prior orders, the section 271 process simply
     could not function as Congress intended if the Commission were
     required to resolve all such disputes as a precondition to granting
     a section 271 application.[^538] In the context of section 271's
     adjudicatory framework, the Commission has established certain
     procedural rules governing BOC section 271 applications.[^539] The
     Commission has explained in prior orders the procedural rules it
     has developed to facilitate the review process.[^540] Here we
     describe how the Commission considers the evidence of compliance
     that the BOC presents in its application.

145. As part of the determination that a BOC has satisfied the
     requirements of section 271, the Commission considers whether the
     BOC has fully implemented the competitive checklist in subsection
     (c)(2)(B). The BOC at all times bears the burden of proof of
     compliance with section 271, even if no party challenges its
     compliance with a particular requirement.[^541] In demonstrating
     its compliance, a BOC must show that it has a concrete and specific
     legal obligation to furnish the item upon request pursuant to
     state-approved interconnection agreements that set forth prices and
     other terms and conditions for each checklist item, and that it is
     currently furnishing, or is ready to furnish, the checklist items
     in quantities that competitors may reasonably demand and at an
     acceptable level of quality.[^542] In particular, the BOC must
     demonstrate that it is offering interconnection and access to
     network elements on a nondiscriminatory basis.[^543] Previous
     Commission orders addressing section 271 applications have
     elaborated on this statutory standard.[^544] First, for those
     functions the BOC provides to competing carriers that are analogous
     to the functions a BOC provides to itself in connection with its
     own retail service offerings, the BOC must provide access to
     competing carriers in "substantially the same time and manner" as
     it provides to itself.[^545] Thus, where a retail analogue exists,
     a BOC must provide access that is equal to (*i.e.,* substantially
     the same as) the level of access that the BOC provides itself, its
     customers, or its affiliates, in terms of quality, accuracy, and
     timeliness.[^546] For those functions that have no retail analogue,
     the BOC must demonstrate that the access it provides to competing
     carriers would offer an efficient carrier a "meaningful opportunity
     to compete."[^547]

146. The determination of whether the statutory standard is met is
     ultimately a judgment the Commission must make based on its
     expertise in promoting competition in local markets and in
     telecommunications regulation generally.[^548] The Commission has
     not established, nor does it believe it appropriate to establish,
     specific objective criteria for what constitutes "substantially the
     same time and manner" or a "meaningful opportunity to
     compete."[^549] Whether this legal standard is met can only be
     decided based on an analysis of specific facts and circumstances.
     Therefore, the Commission looks at each application on a
     case-by-case basis and considers the totality of the circumstances,
     including the origin and quality of the information in the record,
     to determine whether the nondiscrimination requirements of the Act
     are met.

## Performance Data

147. As established in prior section 271 orders, the Commission has
     found that performance measurements provide valuable evidence
     regarding a BOC's compliance or noncompliance with individual
     checklist items. The Commission expects that, in its *prima facie*
     case in the initial application, a BOC relying on performance data
     will:

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a)  provide sufficient performance data to support its contention that
    the statutory requirements are satisfied;

b)  identify the facial disparities between the applicant's performance
    for itself and its performance for competitors;

c)  explain why those facial disparities are anomalous, caused by forces
    beyond the applicant's control (*e.g.*, competing carrier-caused
    errors), or have no meaningful adverse impact on a competing
    carrier's ability to obtain and serve customers; and

d)  provide the underlying data, analysis, and methodologies necessary
    to enable the Commission and commenters meaningfully to evaluate and
    contest the validity of the applicant's explanations for performance
    disparities, including, for example, carrier specific
    carrier-to-carrier performance data.

```{=html}
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```
148. The Commission has explained in prior orders that parity and
     benchmark standards established by state commissions do not
     represent absolute maximum or minimum levels of performance
     necessary to satisfy the competitive checklist. Rather, where these
     standards are developed through open proceedings with input from
     both the incumbent and competing carriers, these standards can
     represent informed and reliable attempts to objectively approximate
     whether competing carriers are being served by the incumbent in
     substantially the same time and manner, or in a way that provides
     them a meaningful opportunity to compete.[^550] Thus, to the extent
     there is no statistically significant difference between a BOC's
     provision of service to competing carriers and its own retail
     customers, the Commission generally need not look any further.
     Likewise, if a BOC's provision of service to competing carriers
     satisfies the performance benchmark, the analysis is usually done.
     Otherwise, the Commission will examine the evidence further to make
     a determination whether the statutory nondiscrimination
     requirements are met.[^551] Thus, the Commission will examine the
     explanations that a BOC and others provide about whether these data
     accurately depict the quality of the BOC's performance. The
     Commission also may examine how many months a variation in
     performance has existed and what the recent trend has been. The
     Commission may find that statistically significant differences
     exist, but conclude that such differences have little or no
     competitive significance in the marketplace. In such cases, the
     Commission may conclude that the differences are not meaningful in
     terms of statutory compliance. Ultimately, the determination of
     whether a BOC's performance meets the statutory requirements
     necessarily is a contextual decision based on the totality of the
     circumstances and information before the Commission.

149. Where there are multiple performance measures associated with a
     particular checklist item, the Commission would consider the
     performance demonstrated by all the measurements as a whole.
     Accordingly, a disparity in performance for one measure, by itself,
     may not provide a basis for finding noncompliance with the
     checklist. The Commission may also find that the reported
     performance data is affected by factors beyond a BOC's control, a
     finding that would make it less likely to hold the BOC wholly
     accountable for the disparity. This is not to say, however, that
     performance discrepancies on a single performance metric are
     unimportant. Indeed, under certain circumstances, disparity with
     respect to one performance measurement may support a finding of
     statutory noncompliance, particularly if the disparity is
     substantial or has endured for a long time, or if it is accompanied
     by other evidence of discriminatory conduct or evidence that
     competing carriers have been denied a meaningful opportunity to
     compete.

150. In sum, the Commission does not use performance measurements as a
     substitute for the 14-point competitive checklist. Rather, it uses
     performance measurements as valuable evidence with which to inform
     the judgment as to whether a BOC has complied with the checklist
     requirements. Although performance measurements add necessary
     objectivity and predictability to the review, they cannot wholly
     replace the Commission's own judgment as to whether a BOC has
     complied with the competitive checklist.

## Relevance of Previous Section 271 Approvals

151. In some section 271 applications, the volumes of the BOC's
     commercial orders may be significantly lower than they were in
     prior proceedings. In certain instances, volumes may be so low as
     to render the performance data inconsistent and inconclusive.[^552]
     Performance data based on low volumes of orders or other
     transactions is not as reliable an indicator of checklist
     compliance as performance based on larger numbers of observations.
     Indeed, where performance data is based on a low number of
     observations, small variations in performance may produce wide
     swings in the reported performance data. It is thus not possible to
     place the same evidentiary weight upon -- and to draw the same
     types of conclusions from -- performance data where volumes are
     low, as for data based on more robust activity.

152. In such cases, findings in prior, related section 271 proceedings
     may be a relevant factor in the Commission's analysis. Where a BOC
     provides evidence that a particular system reviewed and approved in
     a prior section 271 proceeding is also used in the proceeding at
     hand, the Commission's review of the same system in the current
     proceeding will be informed by the findings in the prior one.
     Indeed, to the extent that issues have already been briefed,
     reviewed and resolved in a prior section 271 proceeding, and absent
     new evidence or changed circumstances, an application for a related
     state should not be a forum for re-litigating and reconsidering
     those issues. Appropriately employed, such a practice can give us a
     fuller picture of the BOC's compliance with the section 271
     requirements while avoiding, for all parties involved in the
     section 271 process, the delay and expense associated with
     redundant and unnecessary proceedings and submissions.

153. However, the statute requires the Commission to make a separate
     determination of checklist compliance for each state and,
     accordingly, we do not consider any finding from previous section
     271 orders to be dispositive of checklist compliance in current
     proceedings. While the Commission's review may be informed by prior
     findings, the Commission will consider all relevant evidence in the
     record, including state-specific factors identified by commenting
     parties, the states, the Department of Justice. However, the
     Commission has always held that an applicant's performance towards
     competing carriers in an actual commercial environment is the best
     evidence of nondiscriminatory access to OSS and other network
     elements. [^553] Thus, the BOC's actual performance in the
     applicant state may be relevant to the analysis and determinations
     with respect to the 14 checklist items. Evidence of satisfactory
     performance in another state cannot trump convincing evidence that
     an applicant fails to provide nondiscriminatory access to a network
     element in the applicant state.

154. Moreover, because the Commission's review of a section 271
     application must be based on a snapshot of a BOC's recent
     performance at the time an application is filed, the Commission
     cannot simply rely on findings relating to an applicant's
     performance in an anchor state at the time it issued the
     determination for that state. The performance in that state could
     change due to a multitude of factors, such as increased order
     volumes or shifts in the mix of the types of services or UNEs
     requested by competing carriers. Thus, even when the applicant
     makes a convincing showing of the relevance of anchor state data,
     the Commission must examine how recent performance in that state
     compares to performance at the time it approved that state's
     section 271 application, in order to determine if the systems and
     processes continue to perform at acceptable levels.

# Compliance with entry requirements \-- Sections 271(c)(1)(A) & 271(c)(1)(B)

155. As noted above, in order for the Commission to approve a BOC's
     application to provide in-region, interLATA services, a BOC must
     first demonstrate that it satisfies the requirements of either
     section 271(c)(1)(A) (Track A) or 271(c)(1)(B) (Track B).[^554] To
     qualify for Track A, a BOC must have interconnection agreements
     with one or more competing providers of "telephone exchange service
     . . . to residential and business subscribers."[^555] The Act
     states that "such telephone service may be offered . . . either
     exclusively over \[the competitor's\] own telephone exchange
     service facilities or predominantly over \[the competitor's\] own
     telephone exchange facilities in combination with the resale of the
     telecommunications services of another carrier."[^556] The
     Commission concluded in the *Ameritech Michigan Order* that section
     271(c)(1)(A) is satisfied if one or more competing providers
     collectively serve residential and business subscribers.[^557]

156. As an alternative to Track A, Section 271(c)(1)(B) permits BOCs to
     obtain authority to provide in-region, interLATA services if, after
     10 months from the date of enactment, no facilities-based provider,
     as described in subparagraph (A), has requested the access and
     interconnection arrangements described therein (referencing one or
     more binding agreements approved under Section 252), but the State
     has approved an SGAT that satisfies the competitive checklist of
     subsection (c)(2)(B). Under section 271(d)(3)(A)(ii), the
     Commission shall not approve such a request for in-region,
     interLATA service unless the BOC demonstrates that, "with respect
     to access and interconnection generally offered pursuant to \[an
     SGAT\], such statement offers all of the items included in the
     competitive checklist\...."[^558] Track B, however, is not
     available to a BOC if it has already received a request for access
     and interconnection from a prospective competing provider of
     telephone exchange service.[^559]

# COMPLIANCE WITH The COMPETitive CHECKLIST -- SECTION 271(c)(2)(B)

## Checklist Item 1-- Interconnection

157. Section 271(c)(2)(B)(i) of the Act requires a section 271 applicant
     to provide "\[i\]nterconnection in accordance with the requirements
     of sections 251(c)(2) and 252(d)(1)."[^560] Section 251(c)(2)
     imposes a duty on incumbent LECs "to provide, for the facilities
     and equipment of any requesting telecommunications carrier,
     interconnection with the local exchange carrier's network . . . for
     the transmission and routing of telephone exchange service and
     exchange access."[^561] In the *Local Competition First Report and
     Order*, the Commission concluded that interconnection referred
     "only to the physical linking of two networks for the mutual
     exchange of traffic."[^562] Section 251 contains three requirements
     for the provision of interconnection. First, an incumbent LEC must
     provide interconnection "at any technically feasible point within
     the carrier's network."[^563] Second, an incumbent LEC must provide
     interconnection that is "at least equal in quality to that provided
     by the local exchange carrier to itself."[^564] Finally, the
     incumbent LEC must provide interconnection "on rates, terms, and
     conditions that are just, reasonable, and nondiscriminatory, in
     accordance with the terms of the agreement and the requirements of
     \[section 251\] and section 252."[^565]

158. To implement the equal-in-quality requirement in section 251, the
     Commission's rules require an incumbent LEC to design and operate
     its interconnection facilities to meet "the same technical criteria
     and service standards" that are used for the interoffice trunks
     within the incumbent LEC's network.[^566] In the *Local Competition
     First Report and Order*, the Commission identified trunk group
     blockage and transmission standards as indicators of an incumbent
     LEC's technical criteria and service standards.[^567] In prior
     section 271 applications, the Commission concluded that disparities
     in trunk group blockage indicated a failure to provide
     interconnection to competing carriers equal-in-quality to the
     interconnection the BOC provided to its own retail
     operations.[^568]

159. In the *Local Competition First Report and Order*, the Commission
     concluded that the requirement to provide interconnection on terms
     and conditions that are "just, reasonable, and nondiscriminatory"
     means that an incumbent LEC must provide interconnection to a
     competitor in a manner no less efficient than the way in which the
     incumbent LEC provides the comparable function to its own retail
     operations.[^569] The Commission's rules interpret this obligation
     to include, among other things, the incumbent LEC's installation
     time for interconnection service[^570] and its provisioning of
     two-way trunking arrangements.[^571] Similarly, repair time for
     troubles affecting interconnection trunks is useful for determining
     whether a BOC provides interconnection service under "terms and
     conditions that are no less favorable than the terms and
     conditions" the BOC provides to its own retail operations.[^572]

160. Competing carriers may choose any method of technically feasible
     interconnection at a particular point on the incumbent LEC's
     network.[^573] Incumbent LEC provision of interconnection trunking
     is one common means of interconnection. Technically feasible
     methods also include, but are not limited to, physical and virtual
     collocation and meet point arrangements.[^574] The provision of
     collocation is an essential prerequisite to demonstrating
     compliance with item 1 of the competitive checklist.[^575] In the
     *Advanced Services First Report and Order*, the Commission revised
     its collocation rules to require incumbent LECs to include shared
     cage and cageless collocation arrangements as part of their
     physical collocation offerings.[^576] To show compliance with its
     collocation obligations, a BOC must have processes and procedures
     in place to ensure that all applicable collocation arrangements are
     available on terms and conditions that are "just, reasonable, and
     nondiscriminatory" in accordance with section 251(c)(6) and the
     FCC's implementing rules.[^577] Data showing the quality of
     procedures for processing applications for collocation space, as
     well as the timeliness and efficiency of provisioning collocation
     space, helps the Commission evaluate a BOC's compliance with its
     collocation obligations.[^578]

161. As stated above, checklist item 1 requires a BOC to provide
     "interconnection in accordance with the requirements of sections
     251(c)(2) [and]{.underline} 252(d)(1)."[^579] Section 252(d)(1)
     requires state determinations regarding the rates, terms, and
     conditions of interconnection to be based on cost and to be
     nondiscriminatory, and allows the rates to include a reasonable
     profit.[^580] The Commission's pricing rules require, among other
     things, that in order to comply with its collocation obligations,
     an incumbent LEC provide collocation based on TELRIC.[^581]

162. To the extent pricing disputes arise, the Commission will not
     duplicate the work of the state commissions. As noted in the *SWBT
     Texas Order*, the Act authorizes the state commissions to resolve
     specific carrier-to-carrier disputes arising under the local
     competition provisions, and it authorizes the federal district
     courts to ensure that the results of the state arbitration process
     are consistent with federal law.[^582] Although the Commission has
     an independent statutory obligation to ensure compliance with the
     checklist, section 271 does not compel us to preempt the orderly
     disposition of intercarrier disputes by the state commissions,
     particularly now that the Supreme Court has restored the
     Commission's pricing jurisdiction and has thereby directed the
     state commissions to follow FCC pricing rules in their disposition
     of those disputes.[^583]

163. Consistent with the Commission's precedent, the mere presence of
     interim rates will not generally threaten a section 271 application
     so long as: (1) an interim solution to a particular rate dispute is
     reasonable under the circumstances; (2) the state commission has
     demonstrated its commitment to the Commission's pricing rules;
     and (3) provision is made for refunds or true-ups once permanent
     rates are set.[^584] In addition, the Commission has determined
     that rates contained within an approved section 271 application,
     including those that are interim, are reasonable starting points
     for interim rates for the same carrier in an adjoining state.[^585]

164. Although the Commission has been willing to grant a section 271
     application with a limited number of interim rates where the
     above-mentioned three-part test is met, it is clearly preferable to
     analyze a section 271 application on the basis of rates derived
     from a permanent rate proceeding.[^586] At some point, states will
     have had sufficient time to complete these proceedings. The
     Commission will, therefore, become more reluctant to continue
     approving section 271 applications containing interim rates. It
     would not be sound policy for interim rates to become a substitute
     for completing these significant proceedings.

## Checklist Item 2 -- Unbundled Network Elements. 

### Access to Operations Support Systems

165. Incumbent LECs use a variety of systems, databases, and personnel
     (collectively referred to as OSS) to provide service to their
     customers.[^587] The Commission consistently has found that
     nondiscriminatory access to OSS is a prerequisite to the
     development of meaningful local competition.[^588] For example, new
     entrants must have access to the functions performed by the
     incumbent's OSS in order to formulate and place orders for network
     elements or resale services, to install service to their customers,
     to maintain and repair network facilities, and to bill
     customers.[^589] The Commission has determined that without
     nondiscriminatory access to the BOC's OSS, a competing carrier
     "will be severely disadvantaged, if not precluded altogether, from
     fairly competing" in the local exchange market.[^590]

166. Section 271 requires the Commission to determine whether a BOC
     offers nondiscriminatory access to OSS functions. Section
     271(c)(2)(B)(ii) requires a BOC to provide "nondiscriminatory
     access to network elements in accordance with the requirements of
     sections 251(c)(3) and 252(d)(1)."[^591] The Commission has
     determined that access to OSS functions falls squarely within an
     incumbent LEC's duty under section 251(c)(3) to provide unbundled
     network elements under terms and conditions that are
     nondiscriminatory and just and reasonable, and its duty under
     section 251(c)(4) to offer resale services without imposing any
     limitations or conditions that are discriminatory or
     unreasonable.[^592] The Commission must therefore examine a BOC's
     OSS performance to evaluate compliance with section
     271(c)(2)(B)(ii) and (xiv).[^593] In addition, the Commission has
     also concluded that the duty to provide nondiscriminatory access to
     OSS functions is embodied in other terms of the competitive
     checklist as well.[^594] Consistent with prior orders, the
     Commission examines a BOC's OSS performance directly under
     checklist items 2 and 14, as well as other checklist terms.[^595]

167. As part of its statutory obligation to provide nondiscriminatory
     access to OSS functions, a BOC must provide access that
     sufficiently supports each of the three modes of competitive entry
     envisioned by the 1996 Act -- competitor-owned facilities,
     unbundled network elements, and resale.[^596] For OSS functions
     that are analogous to those that a BOC provides to itself, its
     customers or its affiliates, the nondiscrimination standard
     requires the BOC to offer requesting carriers access that is
     equivalent in terms of quality, accuracy, and timeliness.[^597] The
     BOC must provide access that permits competing carriers to perform
     these functions in "substantially the same time and manner" as the
     BOC.[^598] The Commission has recognized in prior orders that there
     may be situations in which a BOC contends that, although equivalent
     access has not been achieved for an analogous function, the access
     that it provides is nonetheless nondiscriminatory within the
     meaning of the statute.[^599]

168. For OSS functions that have no retail analogue, the BOC must offer
     access "sufficient to allow an efficient competitor a meaningful
     opportunity to compete."[^600] In assessing whether the quality of
     access affords an efficient competitor a meaningful opportunity to
     compete, the Commission will examine, in the first instance,
     whether specific performance standards exist for those
     functions.[^601] In particular, the Commission will consider
     whether appropriate standards for measuring OSS performance have
     been adopted by the relevant state commission or agreed upon by the
     BOC in an interconnection agreement or during the implementation of
     such an agreement.[^602] If such performance standards exist, the
     Commission will evaluate whether the BOC's performance is
     sufficient to allow an efficient competitor a meaningful
     opportunity to compete.[^603]

169. The Commission analyzes whether a BOC has met the nondiscrimination
     standard for each OSS function using a two-step approach. First,
     the Commission determines "whether the BOC has deployed the
     necessary systems and personnel to provide sufficient access to
     each of the necessary OSS functions and whether the BOC is
     adequately assisting competing carriers to understand how to
     implement and use all of the OSS functions available to
     them."[^604] The Commission next assesses "whether the OSS
     functions that the BOC has deployed are operationally ready, as a
     practical matter."[^605]

170. Under the first inquiry, a BOC must demonstrate that it has
     developed sufficient electronic (for functions that the BOC
     accesses electronically) and manual interfaces to allow competing
     carriers equivalent access to all of the necessary OSS
     functions.[^606] For example, a BOC must provide competing carriers
     with the specifications necessary for carriers to design or modify
     their systems in a manner that will enable them to communicate with
     the BOC's systems and any relevant interfaces.[^607] In addition, a
     BOC must disclose to competing carriers any internal business
     rules[^608] and other formatting information necessary to ensure
     that a carrier's requests and orders are processed
     efficiently.[^609] Finally, a BOC must demonstrate that its OSS is
     designed to accommodate both current demand and projected demand
     for competing carriers' access to OSS functions.[^610] Although not
     a prerequisite, the Commission continues to encourage the use of
     industry standards as an appropriate means of meeting the needs of
     a competitive local exchange market.[^611]

171. Under the second inquiry, the Commission examines performance
     measurements and other evidence of commercial readiness to
     ascertain whether the BOC's OSS is handling current demand and will
     be able to handle reasonably foreseeable future volumes.[^612] The
     most probative evidence that OSS functions are operationally ready
     is actual commercial usage.[^613] Absent sufficient and reliable
     data on commercial usage, the Commission will consider the results
     of carrier-to-carrier testing, independent third-party testing, and
     internal testing in assessing the commercial readiness of a BOC's
     OSS.[^614] Although the Commission does not require OSS testing, a
     persuasive test will provide us with an objective means by which to
     evaluate a BOC's OSS readiness where there is little to no evidence
     of commercial usage, or may otherwise strengthen an application
     where the BOC's evidence of actual commercial usage is weak or is
     otherwise challenged by competitors, The persuasiveness of a
     third-party review, however, is dependent upon the qualifications,
     experience and independence of the third party and the conditions
     and scope of the review itself.[^615] If the review is limited in
     scope or depth or is not independent and blind, the Commission will
     give it minimal weight. As noted above, to the extent the
     Commission reviews performance data, it looks at the totality of
     the circumstances and generally does not view individual
     performance disparities, particularly if they are isolated and
     slight, as dispositive of whether a BOC has satisfied its checklist
     obligations.[^616] Individual performance disparities may,
     nevertheless, result in a finding of checklist noncompliance,
     particularly if the disparity is substantial or has endured for a
     long time, or if it is accompanied by other evidence of
     discriminatory conduct or evidence that competing carriers have
     been denied a meaningful opportunity to compete.

#### Relevance of a BOC's Prior Section 271 Orders

172. The *Kansas/Oklahoma Order* specifically outlined a non-exhaustive
     evidentiary showing that must be made in the initial application
     when a BOC seeks to rely on evidence presented in another
     application.[^617] First, a BOC's application must explain the
     extent to which the OSS are "the same" -- that is, whether it
     employs the shared use of a single OSS, or the use of systems that
     are identical, but separate.[^618] To satisfy this inquiry, the
     Commission looks to whether the relevant states utilize a common
     set of processes, business rules, interfaces, systems and, in many
     instances, even personnel.[^619] The Commission will also carefully
     examine third party reports that demonstrate that the BOC's OSS are
     the same in each of the relevant states.[^620] Finally, where a BOC
     has discernibly separate OSS, it must demonstrate that its OSS
     reasonably can be expected to behave in the same manner.[^621]
     Second, unless an applicant seeks to establish only that certain
     discrete components of its OSS are the same, an applicant must
     submit evidence relating to *all* aspects of its OSS, including
     those OSS functions performed by BOC personnel.

#### Pre-Ordering

173. A BOC must demonstrate that: (i) it offers nondiscriminatory access
     to OSS pre-ordering functions associated with determining whether a
     loop is capable of supporting xDSL advanced technologies; (ii)
     competing carriers successfully have built and are using
     application-to-application interfaces to perform pre-ordering
     functions and are able to integrate pre-ordering and ordering
     interfaces; [^622] and (iii) its pre-ordering systems provide
     reasonably prompt response times and are consistently available in
     a manner that affords competitors a meaningful opportunity to
     compete.[^623]

174. The pre-ordering phase of OSS generally includes those activities
     that a carrier undertakes to gather and verify the information
     necessary to place an order.[^624] Given that pre-ordering
     represents the first exposure that a prospective customer has to a
     competing carrier, it is critical that a competing carrier is able
     to accomplish pre-ordering activities in a manner no less efficient
     and responsive than the incumbent.[^625] Most of the pre-ordering
     activities that must be undertaken by a competing carrier to order
     resale services and UNEs from the incumbent are analogous to the
     activities a BOC must accomplish to furnish service to its own
     customers. For these pre-ordering functions, a BOC must demonstrate
     that it provides requesting carriers access that enables them to
     perform pre-ordering functions in substantially the same time and
     manner as its retail operations.[^626] For those pre-ordering
     functions that lack a retail analogue, a BOC must provide access
     that affords an efficient competitor a meaningful opportunity to
     compete.[^627] In prior orders, the Commission has emphasized that
     providing pre-ordering functionality through an
     application-to-application interface is essential in enabling
     carriers to conduct real-time processing and to integrate
     pre-ordering and ordering functions in the same manner as the
     BOC.[^628]

##### Access to Loop Qualification Information

175. In accordance with the *UNE Remand Order*,[^629] the Commission
     requires incumbent carriers to provide competitors with access to
     all of the same detailed information about the loop that is
     available to the incumbents,[^630] and in the same time frame, so
     that a competing carrier can make an independent judgment at the
     pre-ordering stage about whether an end user loop is capable of
     supporting the advanced services equipment the competing carrier
     intends to install.[^631] Under the *UNE Remand Order*, the
     relevant inquiry is not whether a BOC's retail arm accesses such
     underlying information but whether such information exists anywhere
     in a BOC's back office and can be accessed by any of a BOC's
     personnel. [^632] Moreover, a BOC may not "filter or digest" the
     underlying information and may not provide only information that is
     useful in provisioning of a particular type of xDSL that a BOC
     offers.[^633] A BOC must also provide loop qualification
     information based, for example, on an individual address or zip
     code of the end users in a particular wire center, NXX code or on
     any other basis that the BOC provides such information to itself.
     Moreover, a BOC must also provide access for competing carriers to
     the loop qualifying information that the BOC can itself access
     manually or electronically. Finally, a BOC must provide access to
     loop qualification information to competitors within the same time
     intervals it is provided to the BOC's retail operations or its
     advanced services affiliate.[^634] As the Commission determined in
     the *UNE Remand Order*, however, "to the extent such information is
     not normally provided to the incumbent's retail personnel, but can
     be obtained by contacting back office personnel, it must be
     provided to requesting carriers within the same time frame that any
     incumbent personnel are able to obtain such information."[^635]

#### Ordering

176. Consistent with Section 271(c)(2)(B)(ii), a BOC must demonstrate
     its ability to provide competing carriers with access to the OSS
     functions necessary for placing wholesale orders. For those
     functions of the ordering systems for which there is a retail
     analogue, a BOC must demonstrate, with performance data and other
     evidence, that it provides competing carriers with access to its
     OSS systems in substantially the same time and manner as it
     provides to its retail operations. For those ordering functions
     that lack a direct retail analogue, a BOC must demonstrate that its
     systems and performance allow an efficient carrier a meaningful
     opportunity to compete. As in prior section 271 orders, the
     Commission looks primarily at the applicant's ability to return
     order confirmation notices, order reject notices, order completion
     notices and jeopardies, and at its order flow-through rate.[^636]

#### Provisioning

177. A BOC must provision competing carriers' orders for resale and
     UNE-P services in substantially the same time and manner as it
     provisions orders for its own retail customers. [^637] Consistent
     with the approach in prior section 271 orders, the Commission
     examines a BOC's provisioning processes, as well as its performance
     with respect to provisioning timeliness (*i.e.,* missed due dates
     and average installation intervals) and provisioning quality
     (*i.e.,* service problems experienced at the provisioning
     stage).[^638]

#### Maintenance and Repair

178. A competing carrier that provides service through resale or
     unbundled network elements remains dependent upon the incumbent LEC
     for maintenance and repair. Thus, as part of its obligation to
     provide nondiscriminatory access to OSS functions, a BOC must
     provide requesting carriers with nondiscriminatory access to its
     maintenance and repair systems.[^639] To the extent a BOC performs
     analogous maintenance and repair functions for its retail
     operations, it must provide competing carriers access that enables
     them to perform maintenance and repair functions "in substantially
     the same time and manner" as a BOC provides its retail
     customers.[^640] Equivalent access ensures that competing carriers
     can assist customers experiencing service disruptions using the
     same network information and diagnostic tools that are available to
     BOC personnel.[^641] Without equivalent access, a competing carrier
     would be placed at a significant competitive disadvantage, as its
     customer would perceive a problem with a BOC's network as a problem
     with the competing carrier's own network.[^642]

#### Billing

179. A BOC must provide nondiscriminatory access to its billing
     functions, which is necessary to enable competing carriers to
     provide accurate and timely bills to their customers.[^643] In
     making this determination, the Commission assesses a BOC's billing
     processes and systems, and its performance data. Consistent with
     prior section 271 orders, a BOC must demonstrate that it provides
     competing carriers with complete and accurate reports on the
     service usage of competing carriers' customers in substantially the
     same time and manner that a BOC provides such information to
     itself, and with wholesale bills in a manner that gives competing
     carriers a meaningful opportunity to compete.[^644]

#### Change Management Process

180. Competing carriers need information about, and specifications for,
     an incumbent's systems and interfaces to develop and modify their
     systems and procedures to access the incumbent's OSS
     functions.[^645] Thus, in order to demonstrate that it is providing
     nondiscriminatory access to its OSS, a BOC must first demonstrate
     that it "has deployed the necessary systems and personnel to
     provide sufficient access to each of the necessary OSS functions
     and . . . is adequately assisting competing carriers to understand
     how to implement and use all of the OSS functions available to
     them."[^646] By showing that it adequately assists competing
     carriers to use available OSS functions, a BOC provides evidence
     that it offers an efficient competitor a meaningful opportunity to
     compete.[^647] As part of this demonstration, the Commission will
     give substantial consideration to the existence of an adequate
     change management process and evidence that the BOC has adhered to
     this process over time.[^648]

181. The change management process refers to the methods and procedures
     that the BOC employs to communicate with competing carriers
     regarding the performance of, and changes in, the BOC's OSS
     system.[^649] Such changes may include updates to existing
     functions that impact competing carrier interface(s) upon a BOC's
     release of new interface software; technology changes that require
     competing carriers to meet new technical requirements upon a BOC's
     software release date; additional functionality changes that may be
     used at the competing carrier's option, on or after a BOC's release
     date for new interface software; and changes that may be mandated
     by regulatory authorities.[^650] Without a change management
     process in place, a BOC can impose substantial costs on competing
     carriers simply by making changes to its systems and interfaces
     without providing adequate testing opportunities and accurate and
     timely notice and documentation of the changes.[^651] Change
     management problems can impair a competing carrier's ability to
     obtain nondiscriminatory access to UNEs, and hence a BOC's
     compliance with section 271(2)(B)(ii).[^652]

182. In evaluating whether a BOC's change management plan affords an
     efficient competitor a meaningful opportunity to compete, the
     Commission first assesses whether the plan is adequate. In making
     this determination, it assesses whether the evidence
     demonstrates: (1) that information relating to the change
     management process is clearly organized and readily accessible to
     competing carriers;[^653] (2) that competing carriers had
     substantial input in the design and continued operation of the
     change management process;[^654] (3) that the change management
     plan defines a procedure for the timely resolution of change
     management disputes;[^655] (4) the availability of a stable testing
     environment that mirrors production;[^656] and (5) the efficacy of
     the documentation the BOC makes available for the purpose of
     building an electronic gateway.[^657] After determining whether the
     BOC's change management plan is adequate, the Commission evaluates
     whether the BOC has demonstrated a pattern of compliance with this
     plan.[^658]

### UNE Combinations*.*

183. In order to comply with the requirements of checklist item 2, a BOC
     must show that it is offering "\[n\]ondiscriminatory access to
     network elements in accordance with the requirements of section
     251(c)(3) . . . ."[^659] Section 251(c)(3) requires an incumbent
     LEC to "provide, to any requesting telecommunications carrier . . .
     nondiscriminatory access to network elements on an unbundled basis
     at any technically feasible point on rates, terms and conditions
     that are just, reasonable, and nondiscriminatory . . . ."[^660]
     Section 251(c)(3) of the Act also requires incumbent LECs to
     provide unbundled network elements in a manner that allows
     requesting carriers to combine such elements in order to provide a
     telecommunications service.[^661]

184. In the *Ameritech Michigan Order*, the Commission emphasized that
     the ability of requesting carriers to use unbundled network
     elements, as well as combinations of unbundled network elements, is
     integral to achieving Congress' objective of promoting competition
     in local telecommunications markets.[^662] Using combinations of
     unbundled network elements provides a competitor with the incentive
     and ability to package and market services in ways that differ from
     the BOCs' existing service offerings in order to compete in the
     local telecommunications market.[^663] Moreover, combining the
     incumbent's unbundled network elements with their own facilities
     encourages facilities-based competition and allows competing
     providers to provide a wide array of competitive choices.[^664]
     Because the use of combinations of unbundled network elements is an
     important strategy for entry into the local telecommunications
     market, as well as an obligation under the requirements of section
     271, the Commission examines section 271 applications to determine
     whether competitive carriers are able to combine network elements
     as required by the Act and the Commission's regulations.[^665]

### Pricing of Network Elements

185. Checklist item 2 of section 271 states that a BOC must provide
     "nondiscriminatory access to network elements in accordance with
     sections 251(c)(3) and 252(d)(1)" of the Act.[^666] Section
     251(c)(3) requires local incumbent LECs to provide
     "nondiscriminatory access to network elements on an unbundled basis
     at any technically feasible point on rates, terms, and conditions
     that are just, reasonable, and nondiscriminatory."[^667] Section
     252(d)(1) requires that a state commission's determination of the
     just and reasonable rates for network elements shall be based on
     the cost of providing the network elements, shall be
     nondiscriminatory, and may include a reasonable profit.[^668]
     Pursuant to this statutory mandate, the Commission has determined
     that prices for unbundled network elements (UNEs) must be based on
     the total element long run incremental cost (TELRIC) of providing
     those elements.[^669] The Commission also promulgated rule
     51.315(b), which prohibits incumbent LECs from separating already
     combined elements before providing them to competing carriers,
     except on request.[^670] The Commission has previously held that it
     will not conduct a *de novo* review of a state's pricing
     determinations and will reject an application only if "basic TELRIC
     principles are violated or the state commission makes clear errors
     in factual findings on matters so substantial that the end result
     falls outside the range that the reasonable application of TELRIC
     principles would produce."[^671]

186. Although the U.S. Court of Appeals for the Eighth Circuit stayed
     the Commission's pricing rules in 1996,[^672] the Supreme Court
     restored the Commission's pricing authority on January 25, 1999,
     and remanded to the Eighth Circuit for consideration of the merits
     of the challenged rules.[^673] On remand from the Supreme Court,
     the Eighth Circuit concluded that while TELRIC is an acceptable
     method for determining costs, certain specific requirements
     contained within the Commission's pricing rules were contrary to
     Congressional intent.[^674] The Eighth Circuit has stayed the
     issuance of its mandate pending review by the Supreme Court.[^675]
     Accordingly, the Commission's pricing rules remain in effect.

## Checklist Item 3 -- Poles, Ducts, Conduits and Rights of Way.

187. Section 271(c)(2)(B)(iii) requires BOCs to provide
     "\[n\]ondiscriminatory access to the poles, ducts, conduits, and
     rights-of-way owned or controlled by the \[BOC\] at just and
     reasonable rates in accordance with the requirements of section
     224."[^676] Section 224(f)(1) states that "\[a\] utility shall
     provide a cable television system or any telecommunications carrier
     with nondiscriminatory access to any pole, duct, conduit, or
     right-of-way owned or controlled by it."[^677] Notwithstanding this
     requirement, section 224(f)(2) permits a utility providing electric
     service to deny access to its poles, ducts, conduits, and
     rights-of-way, on a nondiscriminatory basis, "where there is
     insufficient capacity and for reasons of safety, reliability and
     generally applicable engineering purposes."[^678] Section 224 also
     contains two separate provisions governing the maximum rates that a
     utility may charge for "pole attachments."[^679] Section 224(b)(1)
     states that the Commission shall regulate the rates, terms, and
     conditions governing pole attachments to ensure that they are "just
     and reasonable."[^680] Notwithstanding this general grant of
     authority, section 224(c)(1) states that "\[n\]othing in \[section
     224\] shall be construed to apply to, or to give the Commission
     jurisdiction with respect to the rates, terms, and conditions, or
     access to poles, ducts, conduits and rights-of-way as provided in
     \[section 224(f)\], for pole attachments in any case where such
     matters are regulated by a State."[^681] As of 1992, nineteen
     states, including Connecticut, had certified to the Commission that
     they regulated the rates, terms, and conditions for pole
     attachments.[^682]

## Checklist Item 4 -- Unbundled Local Loops.

188. Section 271(c)(2)(B)(iv) of the Act, item 4 of the competitive
     checklist, requires that a BOC provide "\[l\]ocal loop transmission
     from the central office to the customer's premises, unbundled from
     local switching or other services."[^683] The Commission has
     defined the loop as a transmission facility between a distribution
     frame, or its equivalent, in an incumbent LEC central office, and
     the demarcation point at the customer premises. This definition
     includes different types of loops, including two-wire and four-wire
     analog voice-grade loops, and two-wire and four-wire loops that are
     conditioned to transmit the digital signals needed to provide
     service such as ISDN, ADSL, HDSL, and DS1-level signals.[^684]

189. In order to establish that it is "providing" unbundled local loops
     in compliance with checklist item 4, a BOC must demonstrate that it
     has a concrete and specific legal obligation to furnish loops and
     that it is currently doing so in the quantities that competitors
     demand and at an acceptable level of quality. A BOC must also
     demonstrate that it provides nondiscriminatory access to unbundled
     loops.[^685] Specifically, the BOC must provide access to any
     functionality of the loop requested by a competing carrier unless
     it is not technically feasible to condition the loop facility to
     support the particular functionality requested. In order to provide
     the requested loop functionality, such as the ability to deliver
     xDSL services, the BOC may be required to take affirmative steps to
     condition existing loop facilities to enable competing carriers to
     provide services not currently provided over the facilities. The
     BOC must provide competitors with access to unbundled loops
     regardless of whether the BOC uses digital loop carrier (DLC)
     technology or similar remote concentration devices for the
     particular loops sought by the competitor.

190. On December 9, 1999, the Commission released the *Line Sharing
     Order*, which introduced new rules requiring BOCs to offer
     requesting carriers unbundled access to the high-frequency portion
     of local loops (HFPL).[^686] HFPL is defined as "the frequency
     above the voiceband on a copper loop facility that is being used to
     carry traditional POTS analog circuit-switched voiceband
     transmissions." This definition applies whether a BOC's voice
     customers are served by cooper or by digital loop carrier
     equipment. Competing carriers should have access to the HFPL at
     either a central office or at a remote terminal, however, the HFPL
     network element is *only* available on a copper loop
     facility.[^687]

191. To determine whether a BOC makes line sharing available consistent
     with Commission rules set out in the *Line Sharing Order*, the
     Commission examines categories of performance measurements
     identified in the Bell Atlantic New York and SWBT Texas Orders.
     Specifically, a successful BOC applicant could provide evidence of
     BOC-caused missed installation due dates, average installation
     intervals, trouble reports within 30 days of installation, mean
     time to repair, trouble report rates, and repeat trouble report
     rates. In addition, a successful BOC applicant should provide
     evidence that its central offices are operationally ready to handle
     commercial volumes of line sharing and that it provides competing
     carriers with nondiscriminatory access to the pre-ordering and
     ordering OSS functions associated with the provision of line shared
     loops, including access to loop qualification information and
     databases.

192. Section 271(c)(2)(B)(iv) also requires that a BOC must demonstrate
     that it makes line splitting available to competing carriers so
     that competing carriers may provide voice and data service over a
     single loop"[^688] In addition, a BOC must demonstrate that a
     competing carrier, either alone or in conjunction with another
     carrier, is able to replace an existing UNE-P configuration used to
     provide voice service with an arrangement that enables it to
     provide voice and data service to a customer. To make such a
     showing, a BOC must show that it has a legal obligation to provide
     line splitting through rates, terms, and conditions in
     interconnection agreements and that it offers competing carriers
     the ability to order an unbundled xDSL-capable loop terminated to a
     collocated splitter and DSLAM equipment, and combine it with
     unbundled switching and shared transport.[^689]

## Checklist Item 5 -- Unbundled Local Transport.

193. Section 271(c)(2)(B)(v) of the competitive checklist requires a BOC
     to provide "\[l\]ocal transport from the trunk side of a wireline
     local exchange carrier switch unbundled from switching or other
     services."[^690] The Commission has required that BOCs provide both
     dedicated and shared transport to requesting carriers.[^691]
     Dedicated transport consists of BOC transmission facilities
     dedicated to a particular customer or carrier that provide
     telecommunications between wire centers owned by BOCs or requesting
     telecommunications carriers, or between switches owned by BOCs or
     requesting telecommunications carriers.[^692] Shared transport
     consists of transmission facilities shared by more than one
     carrier, including the BOC, between end office switches, between
     end office switches and tandem switches, and between tandem
     switches, in the BOC's network.[^693]

## Checklist Item 6 -- Unbundled Local Switching.

194. Section 271(c)(2)(B)(vi) of the 1996 Act requires a BOC to provide
     "\[l\]ocal switching unbundled from transport, local loop
     transmission, or other services."[^694] In the *Second BellSouth
     Louisiana Order,* the Commission required BellSouth to provide
     unbundled local switching that included line-side and trunk-side
     facilities, plus the features, functions, and capabilities of the
     switch.[^695] The features, functions, and capabilities of the
     switch include the basic switching function as well as the same
     basic capabilities that are available to the incumbent LEC's
     customers.[^696] Additionally, local switching includes all
     vertical features that the switch is capable of providing, as well
     as any technically feasible customized routing functions.[^697]

195. Moreover, in the *Second BellSouth Louisiana Order,* the Commission
     required BellSouth to permit competing carriers to purchase
     unbundled network elements, including unbundled switching, in a
     manner that permits a competing carrier to offer, and bill for,
     exchange access and the termination of local traffic.[^698] The
     Commission also stated that measuring daily customer usage for
     billing purposes requires essentially the same OSS functions for
     both competing carriers and incumbent LECs, and that a BOC must
     demonstrate that it is providing equivalent access to billing
     information.[^699] Therefore, the ability of a BOC to provide
     billing information necessary for a competitive LEC to bill for
     exchange access and termination of local traffic is an aspect of
     unbundled local switching.[^700] Thus, there is an overlap between
     the provision of unbundled local switching and the provision of the
     OSS billing function.[^701]

196. To comply with the requirements of unbundled local switching, a BOC
     must also make available trunk ports on a shared basis and routing
     tables resident in the BOC's switch, as necessary to provide access
     to shared transport functionality.[^702] In addition, a BOC may not
     limit the ability of competitors to use unbundled local switching
     to provide exchange access by requiring competing carriers to
     purchase a dedicated trunk from an interexchange carrier's point of
     presence to a dedicated trunk port on the local switch.[^703]

## Checklist Item 7 -- 911/E911 Access and Directory Assistance/Operator Services.

197. Section 271(c)(2)(B)(vii) of the Act requires a BOC to provide
     "\[n\]ondiscriminatory access to -- (I) 911 and E911
     services."[^704] In the *Ameritech Michigan Order,* the Commission
     found that "section 271 requires a BOC to provide competitors
     access to its 911 and E911 services in the same manner that a BOC
     obtains such access, *i.e.,* at parity."[^705] Specifically, the
     Commission found that a BOC "must maintain the 911 database entries
     for competing LECs with the same accuracy and reliability that it
     maintains the database entries for its own customers."[^706] For
     facilities-based carriers, the BOC must provide "unbundled access
     to \[its\] 911 database and 911 interconnection, including the
     provision of dedicated trunks from the requesting carrier's
     switching facilities to the 911 control office at parity with what
     \[the BOC\] provides to itself."[^707] Section
     271(c)(2)(B)(vii)(II) and section 271(c)(2)(B)(vii)(III) require a
     BOC to provide nondiscriminatory access to "directory assistance
     services to allow the other carrier's customers to obtain telephone
     numbers" and "operator call completion services,"
     respectively.[^708] Section 251(b)(3) of the Act imposes on each
     LEC "the duty to permit all \[competing providers of telephone
     exchange service and telephone toll service\] to have
     nondiscriminatory access to . . . operator services, directory
     assistance, and directory listing, with no unreasonable dialing
     delays."[^709] The Commission concluded in the *Second BellSouth
     Louisiana Order* that a BOC must be in compliance with the
     regulations implementing section 251(b)(3) to satisfy the
     requirements of sections 271(c)(2)(B)(vii)(II) and
     271(c)(2)(B)(vii)(III).[^710] In the *Local Competition Second
     Report and Order*, the Commission held that the phrase
     "nondiscriminatory access to directory assistance and directory
     listings" means that "the customers of all telecommunications
     service providers should be able to access each LEC's directory
     assistance service and obtain a directory listing on a
     nondiscriminatory basis, notwithstanding: (1) the identity of a
     requesting customer's local telephone service provider; or (2) the
     identity of the telephone service provider for a customer whose
     directory listing is requested."[^711] The Commission concluded
     that nondiscriminatory access to the dialing patterns of 4-1-1 and
     5-5-5-1-2-1-2 to access directory assistance were technically
     feasible, and would continue.[^712] The Commission specifically
     held that the phrase "nondiscriminatory access to operator
     services" means that ". . . a telephone service customer,
     regardless of the identity of his or her local telephone service
     provider, must be able to connect to a local operator by dialing
     '0,' or '0 plus' the desired telephone number."[^713]

198. Competing carriers may provide operator services and directory
     assistance by either reselling the BOC's services or by using their
     own personnel and facilities to provide these services. The
     Commission's rules require BOCs to permit competitive LECs wishing
     to resell the BOC's operator services and directory assistance to
     request the BOC to brand their calls.[^714] Competing carriers
     wishing to provide operator services or directory assistance using
     their own facilities and personnel must be able to obtain directory
     listings either by obtaining directory information on a "read only"
     or "per dip" basis from the BOC's directory assistance database, or
     by creating their own directory assistance database by obtaining
     the subscriber listing information in the BOC's database.[^715]
     Although the Commission originally concluded that BOCs must provide
     directory assistance and operator services on an unbundled basis
     pursuant to sections 251 and 252, the Commission removed directory
     assistance and operator services from the list of required
     unbundled network elements in the *Local Competition Third Report
     and Order*.[^716] Checklist item obligations that do not fall
     within a BOC's obligations to provide unbundled network elements
     are not subject to the requirements of sections 251 and 252,
     including the requirement that rates be based on forward-looking
     economic costs.[^717] Checklist item obligations that do not fall
     within a BOC's UNE obligations, however, still must be provided in
     accordance with sections 201(b) and 202(a), which require that
     rates and conditions be just and reasonable, and not unreasonably
     discriminatory.[^718]

## Checklist Item 8 -- White Pages Directory Listings

199. Section 271(c)(2)(B)(viii) of the 1996 Act requires a BOC to
     provide "\[w\]hite pages directory listings for customers of the
     other carrier's telephone exchange service."[^719] Section
     251(b)(3) of the 1996 Act obligates all LECs to permit competitive
     providers of telephone exchange service and telephone toll service
     to have nondiscriminatory access to directory listings.[^720]

200. In the *Second BellSouth Louisiana Order,* the Commission concluded
     that, "consistent with the Commission's interpretation of
     'directory listing' as used in section 251(b)(3), the term 'white
     pages' in section 271(c)(2)(B)(viii) refers to the local
     alphabetical directory that includes the residential and business
     listings of the customers of the local exchange provider."[^721]
     The Commission further concluded, "the term 'directory listing,' as
     used in this section, includes, at a minimum, the subscriber's
     name, address, telephone number, or any combination thereof."[^722]
     The Commission's *Second BellSouth Louisiana Order* also held that
     a BOC satisfies the requirements of checklist item 8 by
     demonstrating that it: (1) provided nondiscriminatory appearance
     and integration of white page directory listings to competitive
     LECs' customers; and (2) provided white page listings for
     competitors' customers with the same accuracy and reliability that
     it provides its own customers.[^723]

## Checklist Item 9 -- Numbering Administration.

201. Section 271(c)(2)(B)(ix) of the 1996 Act requires a BOC to provide
     "nondiscriminatory access to telephone numbers for assignment to
     the other carrier's telephone exchange service customers," until
     "the date by which telecommunications numbering administration,
     guidelines, plan, or rules are established."[^724] The checklist
     mandates compliance with "such guidelines, plan, or rules" after
     they have been established.[^725] A BOC must demonstrate that it
     adheres to industry numbering administration guidelines and
     Commission rules.[^726]

## Checklist Item 10 -- Databases and Associated Signaling.

202. Section 271(c)(2)(B)(x) of the 1996 Act requires a BOC to provide
     "nondiscriminatory access to databases and associated signaling
     necessary for call routing and completion."[^727] In the *Second
     BellSouth Louisiana Order,* the Commission required BellSouth to
     demonstrate that it provided requesting carriers with
     nondiscriminatory access to: "(1) signaling networks, including
     signaling links and signaling transfer points; (2) certain
     call-related databases necessary for call routing and completion,
     or in the alternative, a means of physical access to the signaling
     transfer point linked to the unbundled database; and (3) Service
     Management Systems (SMS)." [^728] The Commission also required
     BellSouth to design, create, test, and deploy Advanced Intelligent
     Network (AIN) based services at the SMS through a Service Creation
     Environment (SCE).[^729] In the *Local Competition First Report and
     Order*, the Commission defined call-related databases as databases,
     other than operations support systems, that are used in signaling
     networks for billing and collection or the transmission, routing,
     or other provision of telecommunications service.[^730] At that
     time the Commission required incumbent LECs to provide unbundled
     access to their call-related databases, including but not limited
     to: the Line Information Database (LIDB), the Toll Free Calling
     database, the Local Number Portability database, and Advanced
     Intelligent Network databases.[^731] In the *UNE Remand Order*, the
     Commission clarified that the definition of call-related databases
     "includes, but is not limited to, the calling name (CNAM) database,
     as well as the 911 and E911 databases."[^732]

## Checklist Item 11 -- Number Portability.

203. Section 271(c)(2)(B) of the 1996 Act requires a BOC to comply with
     the number portability regulations adopted by the Commission
     pursuant to section 251.[^733] Section 251(b)(2) requires all LECs
     "to provide, to the extent technically feasible, number portability
     in accordance with requirements prescribed by the
     Commission."[^734] The 1996 Act defines number portability as "the
     ability of users of telecommunications services to retain, at the
     same location, existing telecommunications numbers without
     impairment of quality, reliability, or convenience when switching
     from one telecommunications carrier to another."[^735] In order to
     prevent the cost of number portability from thwarting local
     competition, Congress enacted section 251(e)(2), which requires
     that "\[t\]he cost of establishing telecommunications numbering
     administration arrangements and number portability shall be borne
     by all telecommunications carriers on a competitively neutral basis
     as determined by the Commission."[^736] Pursuant to these statutory
     provisions, the Commission requires LECs to offer interim number
     portability "to the extent technically feasible."[^737] The
     Commission also requires LECs to gradually replace interim number
     portability with permanent number portability.[^738] The Commission
     has established guidelines for states to follow in mandating a
     competitively neutral cost-recovery mechanism for interim number
     portability,[^739] and created a competitively neural cost-recovery
     mechanism for long-term number portability.[^740]

## Checklist Item 12 -- Local Dialing Parity.

204. Section 271(c)(2)(B)(xii) requires a BOC to provide
     "\[n\]ondiscriminatory access to such services or information as
     are necessary to allow the requesting carrier to implement local
     dialing parity in accordance with the requirements of section
     251(b)(3)."[^741] Section 251(b)(3) imposes upon all LECs "\[t\]he
     duty to provide dialing parity to competing providers of telephone
     exchange service and telephone toll service with no unreasonable
     dialing delays."[^742] Section 153(15) of the Act defines "dialing
     parity" as follows:

. . . a person that is not an affiliate of a local exchange carrier is
able to provide telecommunications services in such a manner that
customers have the ability to route automatically, without the use of
any access code, their telecommunications to the telecommunications
services provider of the customer's designation . . .[^743]

205. The rules implementing section 251(b)(3) provide that customers of
     competing carriers must be able to dial the same number of digits
     the BOC's customers dial to complete a local telephone call.[^744]
     Moreover, customers of competing carriers must not otherwise suffer
     inferior quality service, such as unreasonable dialing delays,
     compared to the BOC's customers.[^745]

## Checklist Item 13 -- Reciprocal Compensation.

206. Section 271(c)(2)(B)(xiii) of the Act requires that a BOC enter
     into "\[r\]eciprocal compensation arrangements in accordance with
     the requirements of section 252(d)(2)."[^746] In turn, pursuant to
     section 252(d)(2)(A), "a state commission shall not consider the
     terms and conditions for reciprocal compensation to be just and
     reasonable unless (i) such terms and conditions provide for the
     mutual and reciprocal recovery by each carrier of costs associated
     with the transport and termination on each carrier's network
     facilities of calls that originate on the network facilities of the
     other carrier; and (ii) such terms and conditions determine such
     costs on the basis of a reasonable approximation of the additional
     costs of terminating such calls."[^747]

## Checklist Item 14 -- Resale

207. Section 271(c)(2)(B)(xiv) of the Act requires a BOC to make
     "telecommunications services . . . available for resale in
     accordance with the requirements of sections 251(c)(4) and
     252(d)(3)."[^748] Section 251(c)(4)(A) requires incumbent LECs "to
     offer for resale at wholesale rates any telecommunications service
     that the carrier provides at retail to subscribers who are not
     telecommunications carriers."[^749] Section 252(d)(3) requires
     state commissions to "determine wholesale rates on the basis of
     retail rates charged to subscribers for the telecommunications
     service requested, excluding the portion thereof attributable to
     any marketing, billing, collection, and other costs that will be
     avoided by the local exchange carrier."[^750] Section 251(c)(4)(B)
     prohibits "unreasonable or discriminatory conditions or
     limitations" on service resold under section 251(c)(4)(A).[^751]
     Consequently, the Commission concluded in the *Local Competition
     First Report and Order* that resale restrictions are presumed to be
     unreasonable unless the LEC proves to the state commission that the
     restriction is reasonable and non-discriminatory.[^752] If an
     incumbent LEC makes a service available only to a specific category
     of retail subscribers, however, a state commission may prohibit a
     carrier that obtains the service pursuant to section 251(c)(4)(A)
     from offering the service to a different category of
     subscribers.[^753] If a state creates such a limitation, it must do
     so consistent with requirements established by the Federal
     Communications Commission.[^754] In accordance with sections
     271(c)(2)(B)(ii) and 271(c)(2)(B)(xiv), a BOC must also demonstrate
     that it provides nondiscriminatory access to operations support
     systems for the resale of its retail telecommunications
     services.[^755]

# Compliance with separate affiliate requirements -- section 272

208. Section 271(d)(3)(B) requires that the Commission shall not approve
     a BOC's application to provide interLATA services unless the BOC
     demonstrates that the "requested authorization will be carried out
     in accordance with the requirements of section 272."[^756] The
     Commission set standards for compliance with section 272 in the
     *Accounting Safeguards Order* and the *Non-Accounting Safeguards
     Order*.[^757] Together, these safeguards discourage and facilitate
     the detection of improper cost allocation and cross-subsidization
     between the BOC and its section 272 affiliate.[^758] In addition,
     these safeguards ensure that BOCs do not discriminate in favor of
     their section 272 affiliates.[^759]

209. As the Commission stated in the *Ameritech Michigan Order*,
     compliance with section 272 is "of crucial importance" because the
     structural, transactional, and nondiscrimination safeguards of
     section 272 seek to ensure that BOCs compete on a level playing
     field.[^760] The Commission's findings regarding section 272
     compliance constitute independent grounds for denying an
     application.[^761] Past and present behavior of the BOC applicant
     provides "the best indicator of whether \[the applicant\] will
     carry out the requested authorization in compliance with section
     272."[^762]

# compliance with the Public Interest -- section 271(d)(3)(C).

210. In addition to determining whether a BOC satisfies the competitive
     checklist and will comply with section 272, Congress directed the
     Commission to assess whether the requested authorization would be
     consistent with the public interest, convenience, and
     necessity.[^763] Compliance with the competitive checklist is
     itself a strong indicator that long distance entry is consistent
     with the public interest. This approach reflects the Commission's
     many years of experience with the consumer benefits that flow from
     competition in telecommunications markets.

211. Nonetheless, the public interest analysis is an independent element
     of the statutory checklist and, under normal canons of statutory
     construction, requires an independent determination.[^764] Thus,
     the Commission views the public interest requirement as an
     opportunity to review the circumstances presented by the
     application to ensure that no other relevant factors exist that
     would frustrate the congressional intent that markets be open, as
     required by the competitive checklist, and that entry will
     therefore serve the public interest as Congress expected. Among
     other things, the Commission may review the local and long distance
     markets to ensure that there are not unusual circumstances that
     would make entry contrary to the public interest under the
     particular circumstances of the application at issue.[^765] Another
     factor that could be relevant to the analysis is whether the
     Commission has sufficient assurance that markets will remain open
     after grant of the application. While no one factor is dispositive
     in this analysis, the overriding goal is to ensure that nothing
     undermines the conclusion, based on the Commission's analysis of
     checklist compliance, that markets are open to competition.

##  {#section .unnumbered}

[^1]: We refer to the Communications Act of 1934, as amended, as the
    Communications Act or the Act.

[^2]: Verizon Application at 1.

[^3]: *Id*. at 2.

[^4]: *See* Pennsylvania Commission Comments at 1-4.

[^5]: *See* Pennsylvania Commission Reply at 6-10.

[^6]: *See*, *e.g*., *Application of Verizon New York Inc., Verizon Long
    Distance, Verizon Enterprise Solutions, Verizon Global Networks Inc.
    and Verizon Select Services, Inc.* *for Authorization to Provide
    In-Region, InterLATA Services in Connecticut*, CC Docket 01-100,
    Memorandum Opinion and Order, 16 FCC Rcd 14147, 14149, para. 3
    (2001) (*Verizon Connecticut Order*); *Application of Verizon New
    England Inc., Bell Atlantic Communications, Inc. (d/b/a Verizon Long
    Distance), NYNEX Long Distance Company (d/b/a Verizon Enterprise
    Solutions) And Verizon Global Networks Inc., for Authorization to
    Provide In-Region, InterLATA Services in Massachusetts*, CC Docket
    01-9, Memorandum Opinion and Order, 16 FCC Rcd 8988, 8990, at para.
    2 (*Verizon Massachusetts Order*).

[^7]: The Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat.
    56 (1996).

[^8]: The Commission has summarized the relevant statutory framework in
    prior orders. *See, e.g., Joint Application by SBC Communications
    Inc., Southwestern Bell Tel. Co., and Southwestern Bell
    Communications Services, Inc., d/b/a Southwestern Bell Long Distance
    for Provision of In-Region, InterLATA Services in Kansas and
    Oklahoma*, Memorandum Opinion and Order, 16 FCC Rcd 6237, 6241-42,
    paras. 7-10 (2001) (*SWBT Kansas/Oklahoma Order*); *Application by
    SBC Communications Inc., Southwestern Bell Tel. Co., and
    Southwestern Bell Communications Services, Inc. d/b/a Southwestern
    Bell Long Distance Pursuant to Section 271 of the Telecommunications
    Act of 1996 To Provide In-Region, InterLATA Services in Texas*,
    Memorandum Opinion and Order, 15 FCC Rcd 18354, 18359-61, paras.
    8-11 (2000) (*SWBT Texas Order*); *Application by Bell Atlantic New
    York for Authorization Under Section 271 of the Communications Act
    to Provide In-Region, InterLATA Service in the State of New York*,
    Memorandum Opinion and Order, 15 FCC Rcd 3953, 3961-63, paras. 17-20
    (1999) (*Bell Atlantic New York Order*), *aff'd*, *AT&T Corp. v.
    FCC,* 220 F.3d 607 (D.C. Cir. 2000).

[^9]: Thirty-six parties participated in the Pennsylvania Commission
    proceeding, with 17 parties filing final comments or briefs on
    Verizon's Compliance Filing. *See* Pennsylvania Commission Comments
    at 14-16.

[^10]: Dissenting statements were issued by Commissioners Nora Mead
    Brownell and Terrance J. Fitzpatrick. *Id*. at 16.

[^11]: The conditional approval of Verizon's application (1) required
    Verizon to withdraw an appeal challenging the Pennsylvania
    Commission's authority to impose self-executing remedies; (2)
    established voluntary, self-executing remedies of \$25,000 for
    certain metrics missed beyond ninety days; and (3) imposed a
    rebuttable presumption that features of the New York remedies plan
    (*e.g*., weighting of metrics, liability cap, etc.) should be
    adopted and made applicable in Pennsylvania. There is an ongoing
    proceeding concerning the Pennsylvania PAP, which is expected to be
    completed in December. *Id.*; Pennsylvania Commission Reply at 8.

[^12]: Pennsylvania Commission Comments at 17.

[^13]: On June 21, 2001, the Commission released a Public Notice
    establishing a schedule for filings in this proceeding, and
    addressing certain other procedural matters. *See Comments Requested
    on The Application By Verizon Pennsylvania, Inc. for Authorization
    Under Section 271 of the Communications Act to Provide In-Region,
    InterLATA Service in The State of Pennsylvania*, Public Notice, DA
    01-1486 (CCB rel. June 21, 2001).

[^14]: A complete list of commenters in this proceeding is contained in
    Appendix A.

[^15]: *See* Pennsylvania Commission Comments at 1-4; Pennsylvania
    Commission Reply at 1.

[^16]: Department of Justice Evaluation at 3. Specifically, the
    Department of Justice states that "Verizon filed its Pennsylvania
    application with the FCC without sufficient evidence to show that
    numerous problems with its wholesale billing systems have been
    corrected" and that "insufficient time has elapsed to determine
    whether Verizon's proposed fixes to its billing problems will be
    effective." *Id*.

[^17]: *Id.* at 2-3.

[^18]: *Id.* at 17.

[^19]: *Id*. at 17-18.

[^20]: *See*, *e.g.*, *SWBT Texas Order*, 15 FCC Rcd at 18371-72, para.
    38; *Bell Atlantic New York Order*, 15 FCC Rcd at 3969, para. 37. We
    disagree with Z-Tel that analyzing June data in this application
    would be inconsistent with our procedural rules governing section
    271 applications. *See* Z-Tel Reply at 2-4. The Commission has held
    that an "applicant may submit new evidence after filing solely to
    rebut arguments made or facts submitted by other commenters,"
    provided that the new evidence covers "only the period placed in
    dispute by commenters*.*" *See Updated Filing Requirements for Bell
    Operating Company Applications Under Section 271 of the
    Communications Act*, Public Notice, DA 01-734 at 4 (CCB rel. Mar.
    23, 2001) (citations omitted) (Mar. 23 Section 271 Procedural
    Notice). Here, the evidence we rely on was submitted by Verizon to
    rebut competitors' assertions and pertains only to the May and June
    billing cycles. To the extent that Verizon has submitted information
    concerning subsequent billing cycles, we do not rely on that
    information as a basis for granting the application. However,
    information about subsequent billing cycles does provide additional
    confirmation of Verizon's satisfaction of its obligations under
    section 271(c).

[^21]: *SWBT Texas Order*, 15 FCC Rcd at 18372, paras. 39-40.

[^22]: *See Application of GTE Corp., Transferor, and Bell Atlantic
    Corp., Transferee, For Consent to Transfer Control*, Memorandum
    Opinion and Order, 15 FCC Rcd 14032 (2000) (*GTE/Bell Atlantic
    Merger Order*).

[^23]: 47 U.S.C. § 271(c).

[^24]: *See, e.g.*, 47 U.S.C. § 271(c)(2)(B) ("\[a\]ccess or
    interconnection provided or generally offered by a Bell operating
    company to other telecommunications carriers meets the requirements
    of this subparagraph if such access and interconnection includes
    each of the following . . .\[setting forth the checklist
    requirements\].").

[^25]: 47 U.S.C. § 153(4).

[^26]: *See* *SWBT Texas Order,* 15 FCC Rcd at 18359-61, 18365-72,
    18373-78, paras. 8-11, 21-40, and 43-58; *Bell Atlantic New York
    Order*, 15 FCC Rcd at 3961-63, 3966-69, 3971-76, paras. 17-20,
    29-37, and 43-60; *see also* Appendix C.

[^27]: *See* *generally* Appendices B and C.

[^28]: *See* *Verizon Connecticut Order*, 16 FCC Rcd at 14151-52, para.
    9; *Verizon Massachusetts Order*, 16 FCC Rcd at 8996, para. 15;
    *SWBT Kansas/Oklahoma Order* 16 FCC Rcd at 6255-56, para. 39.

[^29]: 47 U.S.C. § 271(c)(2)(B)(ii).

[^30]: *See* Pennsylvania Commission Comments at 49-104.

[^31]: *Bell Atlantic New York Order*, 15 FCC Rcd at 3989, para. 82. The
    Commission has defined OSS as the various systems, databases, and
    personnel used by incumbent LECs to provide service to their
    customers. *See* *SWBT Texas Order*, 15 FCC Rcd at 18396-97, para.
    92; *Bell Atlantic New York Order*, 15 FCC Rcd at 3989-90, para.
    83*; Application of BellSouth Corporation, et al., Pursuant to
    Section 271 of the Communications Act of 1934, as amended, to
    Provide In-Region, InterLATA Services in South Carolina*, CC Docket
    No. 97-208, Memorandum Opinion and Order, 13 FCC Rcd 539, 585, para.
    82 (*BellSouth South Carolina Order*).

[^32]: *See Bell Atlantic New York Order*, 15 FCC Rcd at 3999, para. 102
    and n.277 (citations omitted).

[^33]: *See Verizon Connecticut Order*, 16 FCC Rcd at 14151, para. 8.

[^34]: *See* Appendix C at para. 40 (citations omitted).

[^35]: Although the process of calculating a bill is complex due to
    multiple service offerings, variable rates and usage-sensitive
    charges, an incumbent LEC essentially calculates the wholesale bill
    by multiplying the types and amounts of services the competitive LEC
    uses by the rates established for those services.

[^36]: *See, e.g., Bell Atlantic New York Order*, 15 FCC Rcd at 4075,
    para. 226.

[^37]: *See, e.g., SWBT Kansas/Oklahoma Order*, 16 FCC Rcd 6237,
    6316-17, para. 163; Department of Justice Evaluation at 11-14
    (inaccurate bills prevent competitive LECs from "determining whether
    Verizon is charging them correctly for services they have ordered,"
    increase competitive LECs' "costs of doing business in
    Pennsylvania," and "impedes not only efficient provisioning of new
    services, but also the raising of capital"); Pennsylvania Commission
    Comments at 102 ("Verizon PA needs to issue timely, accurate,
    auditable bills . . . to give its \[competitive\] LEC customers a
    meaningful and realistic opportunity to accurately assess their
    operational costs.").

[^38]: *See, e.g., SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6316-17,
    para 163; *SWBT Texas Order*, 15 FCC Rcd at 18461, para. 210; *Bell
    Atlantic New York Order*, 15 FCC Rcd at 4075, para. 226.

[^39]: Verizon Reply App. A, Vol. 1, Tab B, Joint Reply Declaration of
    Kathleen McLean, Raymond Wierzbicki, and Catherine T. Webster
    (Operations Support Systems) at para. 8 (Verizon
    McLean/Wierzbicki/Webster Reply Decl.).

[^40]: *Id*. at para. 10. Reconciling a usage file or billing account is
    the process of checking one file against another to ensure that the
    file is accurate and complete. *Id*.

[^41]: *Id*. Multiplying the usage on the DUF by the competitive LEC's
    stated rates is not the only means of calculating a competitive
    LEC's end-user bills. A competitive LEC might use other, equally
    legitimate methods to develop end-user bills, such as charging its
    customers a retail rate that is some percentage higher than the
    wholesale bill, or using other sources to ensure accuracy. *See,
    e.g.,* Letter from Jonathan D. Lee, Vice President for Regulatory
    Affairs, CompTel, to Magalie R. Salas, Secretary, Federal
    Communications Commission, CC Docket No. 01-138, at 8 (filed Sept.
    7, 2001) (CompTel Sept. 7 *Ex Parte* Letter) (asserting that because
    usage records and billing completion letter notices are inaccurate,
    "MetTel finds that it must have an accurate wholesale bill so that
    it can have a third method for determining proper end-user
    charges."). Thus, contrary to Verizon's suggestion, the provision of
    an accurate and timely DUF does not necessarily mean that competing
    carriers can collect revenues from their end users. *See, e.g.,*
    Verizon Reply at 7.

[^42]: *See, e.g.*, BI-1-02 (Percentage DUF in 4 Business Days) (all
    months but May score of 89.74 percent are better than the standard
    of 95 percent of DUF within 4 business days); BI-4-01 (Percentage
    Usage Accuracy) (every month shows 100 percent DUF accuracy against
    a standard of 95 percent). The dip in May DUF timeliness performance
    reflects Verizon's retention of certain DUF files while Verizon
    worked to correct an error that directed usage to the wrong
    competitive LEC accounts. *See* Verizon McLean/Wierzbicki/Webster
    Reply Decl. at para. 12. As of the end of May, the existing accounts
    had been corrected and Verizon released the corrected information to
    competitive LECs on a slightly delayed basis. In June, the DUF
    Timeliness metric again surpassed 95 percent. *Id*.

[^43]: Verizon Reply at 7. A few commenters claim to have received
    inaccurate usage information in the past: *see* Capsule Joint
    Comments at 17, CompTel Comments at 15-17 (alleging that Verizon's
    DUFs are often inaccurate, unreliable or unavailable). Verizon
    identified errors on the DUF and implemented a series of fixes in
    March, April and May to respond to these problems. Verizon
    McLean/Wierzbicki/Webster Decl. at para. 130; Verizon Application
    App. A, Vol. 2, Joint Declaration of Kathleen McLean, Raymond
    Wierzbicki, and Catherine T. Webster (Operations Support Systems) at
    para. 12 (Verizon McLean/Wierzbicki/Webster Decl.). Although CompTel
    also raises claims of inaccurate usage files, these claims appear
    more directly related to billing completion notice errors than
    errors with usage files. CompTel Sept. 7 *Ex Parte* Letter at 7;
    *see infra* at paras. 43-44.

[^44]: *See* Verizon Application App. B, Tab F, Sub-Tab 2 (December 22,
    2000 Final Report for Verizon Pennsylvania Inc. OSS Evaluation
    Project, KPMG Consulting, at 517-532 (KPMG Final Report)).

[^45]: Appendix C at para. 39.

[^46]: *Id*.

[^47]: Verizon McLean/Wierzbicki/Webster Decl. at para. 128.

[^48]: *Id.*

[^49]: Verizon McLean/Wierzbicki/Webster Reply Decl. at paras. 14, 18.

[^50]: *Id.* at para. 14.

[^51]: Regardless of the medium, the distinguishing feature of Verizon's
    retail-formatted bill is that it cannot be easily transferred into a
    computer spreadsheet or other electronic system that allows for
    computer auditing.

[^52]: Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 14.

[^53]: *Id.* at para. 18.

[^54]: KPMG Final Report at 565-572.

[^55]: *See, e.g.*, CompTel Comments at 4; Covad Comments at 20-21;
    Curry Comments at 5; Z-Tel Comments at 6; CompTel Comments, Attach.
    1, Declaration of Frank Lazzara at para 6b (CompTel Lazzara Decl.).
    According to competitive LECs, these billing problems are
    "substantially different and far greater than any billing issues
    that were present in" Massachusetts or New York. CompTel Comments at
    5; *accord* Z-Tel Comments, Attach. 1, Declaration of Margaret D.
    Rubino at para. 8 (Z-Tel Rubino Decl.) ("Z-Tel continues dispute a
    far greater portion of its Pennsylvania than it does for New York,
    Massachusetts, and Texas"); Letter from Michael B. Hazzard, Counsel
    for Z-Tel Communications, Inc., to Magalie R. Salas, Secretary,
    Federal Communications Commission, CC Docket No. 01-138, at 3 (filed
    Aug. 17, 2001) (Z-Tel Aug. 17 *Ex Parte* Letter) ("Z-Tel spends a
    disproportionate share of its billing verification personnel dealing
    with its Verizon Pennsylvania bills than in other states, including
    New York and Massachusetts.").

[^56]: *See, e.g.,* ASCENT Comments at 16; CompTel Comments at 4-5, 8-9;
    Curry Comments App. I, Ex. D (Complaint filed in *Curry
    Communications, Inc. v. Verizon Pennsylvania Inc.*, Pennsylvania
    Public Utility Commission, Docket No. C-00015458 (filed July 3,
    2001)).

[^57]: Verizon McLean/Wierzbicki/Webster Decl. at paras. 158-161
    (describing the measures Verizon took to correct inaccurate charges
    on the retail-formatted wholesale bills that resulted from systemic
    problems KPMG identified); Verizon McLean/Wierzbicki/Webster Reply
    Decl. at paras. 31-44 (same).

[^58]: Department of Justice Evaluation at 8 and n.28.

[^59]: *Id*. at 8 and n.30.

[^60]: Verizon McLean/Wierzbicki/Webster Decl. at para. 133.

[^61]: *See, e.g.,* WorldCom Comments at 3-4; WorldCom Comments Tab A,
    Declaration of Sherry Lichtenberg (Operation Support Systems) at
    paras. 24-29 (WorldCom Lichtenberg Decl.); Letter from Keith L.
    Seat, WorldCom, to Magalie R. Salas, Federal Communications
    Commission, CC Docket No. 01-138, at 1 (filed Aug. 17, 2001)
    (WorldCom Aug. 17 *Ex Parte* Letter). *But see, e.g.,* Z-Tel Reply
    at 5.

[^62]: Verizon McLean/Wierzbicki/Webster Decl. at para. 135.

[^63]: *Id*. at para. 136. A bill that "balances" internally is one in
    which the sum of every charge or credit results in the stated total
    at the next highest level of detail. *See* Letter from Dee May,
    Executive Director, Federal Regulatory, Verizon, to Magalie Roman
    Salas, Secretary, Federal Communications Commission, CC Docket No.
    01-138, Attach. 1 at 3 (filed Aug. 1, 2001) (Verizon Aug. 1 *Ex
    Parte* Letter).

[^64]: Verizon McLean/Wierzbicki/Webster Decl. at para. 136. The
    Validation Group examines the data from the BOS BDT bill and
    compares this data to the retail-formatted bill. In most cases,
    Verizon has previously identified the source of the problem and has
    already begun to develop a fix; in "a smaller number of cases,"
    Verizon cannot identify the source of the problem and the Validation
    Group investigates these cases to ascertain the reason for the
    imbalance. *Id.* at paras. 137-38.

[^65]: *Id.* at paras. 138-39.

[^66]: *Id.* at para. 140.

[^67]: *Id.* at para. 141.

[^68]: *Id.* at para. 143; Verizon McLean/Wierzbicki/Webster Reply Decl.
    at para. 24.

[^69]: Verizon McLean/Wierzbicki/Webster Decl. at para. 143; Verizon
    Application App. A, Vol. 2, Tab C, Joint Declaration of Catherine
    Bluvol and Sameer Kumar at paras. 23-48 (Verizon Bluvol/Kumar
    Decl.).

[^70]: Verizon McLean/Wierzbicki/Webster Decl. at para. 143; Verizon
    Bluvol/Kumar Decl. at para. 17.

[^71]: Verizon McLean/Wierzbicki/Webster Decl. at para. 134. Treating
    the BOS BDT bill as an official bill of record allowed competitive
    LECs to file billing disputes with Verizon based exclusively on
    information contained on the BOS BDT bill, rather than the
    information contained on the retail-formatted bill. *See id.*;
    Verizon Application at 66.

[^72]: Verizon McLean/Wierzbicki/Webster Reply Decl. at paras. 19-20;
    Letter from Dee May, Executive Director Federal Regulatory, Verizon
    to Magalie Roman Salas, Secretary, Federal Communications
    Commission, CC Docket No. 01-138, at 6 (filed Aug. 17, 2001)
    (Verizon Aug. 17 *Ex Parte* Letter).

[^73]: Verizon Reply at 7-8; Verizon McLean/Wierzbicki/Webster Reply
    Decl. at para. 31; Verizon Aug. 17 *Ex Parte* Letter at 2.

[^74]: *See, e.g*., AT&T Reply at 26-27; Z-Tel Aug. 17 *Ex Parte* Letter
    at 2.

[^75]: The effect of untimely or inaccurate wholesale bills can prove
    especially acute for many competitors because wholesale inputs
    purchased from incumbent LECs often comprise the single largest cost
    element of providing service to their end users. *See, e.g*.,
    WorldCom Comments at 1-2; AT&T Comments Exhibit C, Joint Declaration
    of Mason Fawzi and Robert J. Kirchberger, at 39 (AT&T
    Fawzi/Kirchberger Decl.); AT&T Reply at 26; Z-Tel Aug. 17 *Ex Parte*
    Letter at 1-2.

[^76]: *See, e.g*., Curry Comments App. I at 5-6 (estimating labor costs
    expended to correct Verizon billing errors); Z-Tel Rubino Decl. at
    para. 8 ("Z-Tel estimates that it dedicates one full time equivalent
    week per month to the reconciliation of the Pennsylvania bill. For
    New York, Massachusetts and Texas, one full time equivalent spends
    no more than two days per month per state on bill reconciliation,
    even though Z-Tel's customer base in New York dwarfs that in
    Pennsylvania."); AT&T Reply at 27 (A competitive LEC's "attempt to
    verify Verizon's charges . . . requires a substantial dedication of
    time and administrative costs.") (citations omitted).

[^77]: *See, e.g.,* CompTel Lazzara Decl. at para. 9 ("MetTel is
    negatively impacted by billing errors generated by Verizon in most
    aspects of its business, not the least of which are the problems
    that these errors create in MetTel's interaction with its current
    and potential investors."); Z-Tel Aug. 17 *Ex Parte* Letter at 2
    ("even if Z-Tel believes the bill is 20 percent inaccurate,
    independent financial auditors will still review the total amount
    invoiced and may require Z-Tel to 'carry' a portion of the disputed
    amount as a Cost of Goods Sold.") (emphasis omitted); *id.* at 3
    ("whether Z-Tel pays Verizon or withholds from Verizon disputed
    amounts is immaterial from an accounting perspective.").

[^78]: *See, e.g*., CompTel Lazzara Decl. at para. 9 ("MetTel is unable
    to evaluate the success of its business from a profitability margin
    perspective."); Z-Tel Aug. 17 *Ex Parte* Letter at 1 ("\[t\]o stay
    in business, every company . . . must be able to reliably predict
    its revenues and expenses").

[^79]: *See, e.g.,* CompTel Lazzara Decl. at paras. 3-4 ("Due to the
    inadequacies of Verizon's billing systems and Verizon's lack of
    attention to concerns repeatedly raised . . . , MetTel continually
    experiences customer loss and corporate credit damage.").

[^80]: As a practical matter, the sheer number of billing records
    generated for competitors that rely heavily on incumbent LEC inputs
    can effectively render a retail-formatted bill unusable. *See,
    e.g.,* ASCENT Comments at 15-16; CompTel Comments at 4, 8; Covad
    Comments at 21; CWA Comments at 4; WorldCom Comments at 2; AT&T
    Fawzi/Kirchberger Decl. at 38-39; WorldCom Lichtenberg Decl. at
    para. 11. Thus, offering BOS BDT bills is important to offering
    competitors a meaningful opportunity to compete. *See* Pennsylvania
    Commission Comments at 102 ("It is undisputed that electronic \[BOS
    BDT\] billing is a component of the billing process . . . .").

[^81]: Appendix C at para. 7.

[^82]: *Application of Ameritech Michigan Pursuant to Section 271 of the
    Communications Act of 1934, as amended,* CC Docket No. 97-137, 12
    FCC Rcd 20543, 20618, para. 138 (1997) (*Ameritech Michigan Order*);
    *Application of BellSouth Corporation, et al., for Provision of
    In-Region, InterLATA Services in Louisiana*, Memorandum Opinion and
    Order*,* 13 FCC Rcd 20599, 20655, para. 86 (1998) (*BellSouth
    Louisiana Order II*).

[^83]: *See infra* para. 41 and n.Error: Reference source not found.

[^84]: *See, e.g.,* ASCENT Comments at 16; CompTel Comments at 4-5, 8-9;
    WorldCom Comments at 5-6; Z-Tel Comments at 7; AT&T
    Fawzi/Kirchberger Decl. at 51; Curry Comments App. I, Ex. D;
    WorldCom Lichtenberg Decl. at para. 15. These errors appear to be
    most pronounced in the BOS BDT bill that Verizon provides to UNE-P
    subscribers, such as WorldCom, Z-Tel and MetTel. *See, e.g.,*
    CompTel Comments at 8-9. WorldCom alleges that Verizon's BOS BDT
    bill is so poorly formatted that WorldCom cannot perform the most
    basic function of loading Verizon's BOS BDT bill into WorldCom's
    auditing software. WorldCom Lichtenberg Decl. at paras. 19-26
    (describing billing errors and providing sample trouble ticket
    numbers for UNE-P billing errors over the last six months). Verizon
    states that it "will work with WorldCom" to assess WorldCom's
    problem in loading the BOS BDT bill, but adds that "Verizon does not
    understand the difficulty WorldCom is having," particularly since
    PWC and at least one competitive LEC have proved able to review and
    analyze the BOS BDT bill. Verizon Aug. 17 *Ex Parte* Letter at 7.

[^85]: *See, e.g.,* Verizon McLean/Wierzbicki/Webster Decl. at para. 135
    ("in many cases the BOS BDT did not match the \[retail-formatted\]
    paper bill because of differences in the timing of posting usage
    charges to the \[retail-formatted\] paper bill and the BDT," but
    "Verizon implemented a system change on April 23 to synchronize the
    cut-off dates."). In analyzing recent performance data for wholesale
    billing accuracy, we do not rely on the performance metrics that
    Verizon currently follows in Pennsylvania. *See infra* at para. 41
    and n.Error: Reference source not found.

[^86]: Verizon McLean/Wierzbicki/Webster Decl. at paras. 134-135;
    Verizon McLean/Wierzbicki/Webster Reply Decl. at paras. 20-21.

[^87]: Verizon scheduled more fixes for August. *See* Verizon
    McLean/Wierzbicki/Webster Reply Decl. at para. 34.

[^88]: Verizon Aug. 17 *Ex Parte* Letter at 5.

[^89]: *Id.* at 4-5.

[^90]: Verizon McLean/Wierzbicki/Webster Reply Decl. at paras. 33-35.
    The occurrence of incorrect charges for taxes has steadily declined
    from 1.06 percent of the competitive LECs' February bills, to 0.54
    percent of the March bills, to 0.03 percent of the April and May
    bills to 0.04 percent of the June bills. *See* Verizon Aug. 17 *Ex
    Parte* Letter at 4.

[^91]: Verizon McLean/Wierzbicki/Webster Reply Decl. at paras. 36-37. A
    competitive LEC's bill is comprised of many individual end-user
    accounts, which are called the competitive LEC's "component
    accounts." *Id.* at para. 36. To allow for auditing, billing systems
    link the competitive LEC's component accounts to a Summary Bill
    Master. *Id.* In some cases, however, KPMG found that Verizon might
    send a competitive LEC a "stand-alone bill" where some of the
    competitive LEC's component accounts arrive separately from the
    associated Summary Bill Master. *Id.* Specifically, KPMG issued an
    exception report on October 27, 1999, which stated that Verizon's
    "procedures do not adequately ensure that component invoices are
    associated with master accounts for billing purposes." *See* Verizon
    Application at App. B, Tab. G, Vol. 19, Sub-Tab 4. KPMG found that,
    "\[f\]rom the standpoint of a CLEC, routinely identifying and
    resolving stand-alone bills would require significant effort." *Id.*
    After Verizon implemented a series of software modifications,
    however, KPMG performed additional tests and concluded on September
    14, 2000 that this exception could be closed. *Id.*

[^92]: Verizon McLean/Wierzbicki/Webster Reply Decl. at paras. 38-40;
    Verizon Aug. 17 *Ex Parte* Letter at 4 (reporting the percent of
    disputed directory advertising charges as 0.51 percent for February,
    1.09 percent for March, 0.09 percent for April, 0.17 percent for May
    and 0.08 percent for June).

[^93]: As Z-Tel acknowledges in its comments, some nominal level of
    dispute over wholesale billing is to be expected in any
    large-volume, carrier-to-carrier relationship. *See* Z-Tel Comments
    at 11 (Z-Tel disputes two-to-three percent of its bill in states
    such as Massachusetts, New York and Texas); *see also* Verizon Aug.
    17 *Ex Parte* Letter at 5 (noting that disputes expressed as a
    percentage of current bill charges in New York ranged from 9.31 to
    5.17 percent from February to June 2001). While we lack sufficient
    record evidence to determine what an industry-average dispute rate
    might be, we recognize, as a practical matter, that high-volume,
    carrier-to-carrier commercial billing cannot always be perfectly
    accurate.

[^94]: *See* Conestoga Comments at 2 ("Conestoga's \[retail-formatted\]
    resale bills . . . are presented in a form that allows Conestoga to
    understand the products and services for which it is being billed
    and the amounts charged. Our staff is able to audit the bills,
    verify the charges presented, and identify any potential
    inaccuracies within a reasonable period of time."); Z-Tel Reply at
    Attach. A, Supplemental Declaration of Margaret D. Rubino on Behalf
    of Z-Tel Communications, Inc. at paras. 3, 6 (Z-Tel Reply Rubino
    Decl.) (noting that Z-Tel's June 28 wholesale bill reflected
    "\[s\]ome \[i\]mprovement \[o\]ver \[p\]ast \[m\]onths" and that
    Z-Tel "is encouraged by the attention has now devoted to fixing the
    problems in its wholesale bill").

[^95]: Z-Tel Reply at 5.

[^96]: *See, e.g.,* Letter from Michael B. Hazzard, Counsel to Z-Tel
    Communications, Inc., to Magalie R. Salas, Secretary, Federal
    Communications Commission, CC Docket No. 01-138, Attach. 1 (Aug. 10,
    2001) (Z-Tel Aug. 10 *Ex Parte* Letter).

[^97]: *See, e.g.,* Z-Tel Aug. 10 *Ex Parte* Letter at Attach. 1.
    Although even an 11.33 percent dispute rate might ordinarily be a
    source of concern, the percentage that Z-Tel provides only reflects
    amounts that Z-Tel disputes, not amounts Verizon has credited, and
    as discussed above, Verizon has identified the cause for the vast
    majority of these possible billing errors, and, in many cases, has
    already implemented software fixes. *See supra* para. 27*.*

[^98]: *See* Letter from Keith L. Seat, WorldCom, to Magalie R. Salas,
    Federal Communications Commission 2-3 (Aug. 17, 2001) (WorldCom Aug.
    17 *Ex Parte* Letter).

[^99]: Verizon Aug. 17 *Ex Parte* Letter at 10. The Pennsylvania
    Commission directed Verizon to tariff two port charges -- one that
    includes all vertical features at a price of \$2.67 per month and
    another that includes all but four vertical features at a price of
    \$1.90 per month. Verizon, however, tariffed only the more expensive
    port charge for UNE-P orders and, after WorldCom complained, Verizon
    agreed to credit WorldCom the seventy-seven cent difference and to
    correct its OSS to permit competitive LECs to order both the
    expensive and less expensive ports. WorldCom Comments at 6; Verizon
    Sept. 10 *Ex Parte* Letter at 2.

[^100]: Verizon Aug. 17 *Ex Parte* Letter at 10. According to WorldCom,
    Verizon has compensated WorldCom only for two of the thousands of
    erroneously billed switch ports that it ordered in 2000 and refused
    to explain its billing practices for 2001. WorldCom Comments at 6.
    Verizon, however, asserts that when it reviewed port orders to
    provide competitive LECs with credits for ordering the less
    expensive port, it found that some competitive LECs requested
    features only available in the more expensive port. Verizon Aug. 17
    *Ex Parte* Letter at 10. As a result, those competitive LECs "had to
    make an account by account determination of which port type and
    features they wanted." *Id.* Verizon asserts that "\[u\]ntil that
    reconciliation was complete, Verizon could not change the port type"
    and credit the competitive LEC accounts. *Id.* Verizon adds that,
    contrary to WorldCom's claims, it has provided competitive LECs with
    the ability to order the lower-priced port charge electronically.
    *Compare* World Com Reply Tab A, Reply Declaration of Sherry
    Lichtenberg (Operations Support Systems) at para. 27 (WorldCom
    Lichtenberg Reply Decl.), *with* Verizon Aug. 17 *Ex Parte* Letter
    at 10, *and* Verizon Sept. 10 *Ex Parte* Letter at 2-3.

[^101]: Verizon Aug. 17 *Ex Parte* Letter at 9-10.

[^102]: *Id.* at 9.

[^103]: *See* WorldCom Aug. 17 *Ex Parte* Letter at 2 ("Verizon has
    sometimes erroneously reported WorldCom payments as late until
    WorldCom provided check numbers and showed Verizon that it had
    received (and cashed) the checks on time"); Verizon Aug. 17 *Ex
    Parte* Letter at 9 ("contrary to WorldCom's claim, it does owe late
    fees"); *see also* Verizon Sept. 10 *Ex Parte* Letter at 3
    ("WorldCom has not paid its bills.").

[^104]: *See* *supra* para. 26.

[^105]: Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 42.

[^106]: *Id*.

[^107]: *Id.* at paras. 41-44. We reject Verizon's assertion that *no*
    harm to competitive LECs occurs from the improper assessment of
    retail or resale charges on a wholesale bill under the theory that
    competitive LECs are not required to pay disputed charges. *See*
    Verizon McLean/Wierzbicki/Webster Decl. at para. 152. Rather, we
    agree with Z-Tel and other competitive LECs that the assessment of
    retail or resale charges on wholesale bills prevents competitive
    LECs from understanding the ultimate cost of goods sold and injects
    uncertainty into the business process. *See, e.g.,* Z-Tel Rubino
    Decl. at para. 7; Z-Tel Aug. 17 *Ex Parte* Letter at 1-2. While
    Verizon's remedial actions do not represent a complete solution to
    the improper assessment of retail or resale charges on wholesale
    bills, Verizon's actions -- in the context of low absolute levels of
    improper charges, a trend toward increasing accuracy and a practice
    of reasonably timely crediting of improper charges -- may help
    mitigate some of the harm that occurs.

[^108]: Verizon Aug. 17 *Ex Parte* Letter at 8. Verizon states that it
    investigated Z-Tel's claim of inappropriate charges for "retail
    features" or "end user features" on Z-Tel's June bill. According to
    Verizon, many retail charges improperly appeared on Z-Tel's June
    bill. However, Verizon found that credits had been made for 13,000
    of the approximately 15,000 charges that it investigated. Some of
    these credits appeared on the same June bill for which Z-Tel had
    submitted a claim, while the remainder appeared on Z-Tel's July
    bill. *Id.* at 8-9.

[^109]: AT&T Fawzi/Kirchberger Decl. at para. 81 and n.65 (citing
    Verizon Bluvol/Kumar Decl. at 3 (noting that despite similar key
    summarization and billing points, discrepancies remain for other
    summarization and billing points)).

[^110]: *See, e.g.,* Curry Comments at 5; WorldCom Comments at 4;
    WorldCom Lichtenberg Decl. at paras. 18-20, 47-49; Z-Tel Rubino
    Decl. at para. 5; WorldCom Lichtenberg Reply Decl. at para. 28.

[^111]: *See, e.g.,* ASCENT Comments at 19; WorldCom Lichtenberg Decl.
    at paras. 47-49.

[^112]: Verizon McLean/Wierzbicki/Webster Decl. at para. 156; *see also*
    Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 30; Verizon
    Aug. 17 *Ex Parte* Letter at 7-8. For retail-formatted bills, such
    as those that Curry Communications identified as late, Verizon
    points to data showing that it sent bills to Curry Communications
    well within ten business days of the bill dates, as required by the
    Pennsylvania Carrier-to-Carrier guidelines. *See* Verizon
    McLean/Wierzbicki/Webster Reply Decl. at para. 29 and Attach. 6.
    Curry has not offered a response to this data.

[^113]: Verizon McLean/Wierzbicki/Webster Decl. at para. 156. Contrary
    to AT&T's argument, moreover, the series of fixes to Verizon's
    wholesale billing system prior to its application does not
    demonstrate that Verizon's wholesale billing system was inadequate
    at the time it filed its application. *See* AT&T Reply at 28.

[^114]: Verizon McLean/Wierzbicki/Webster Decl. at para. 156. In some
    cases, Verizon and the competitive LECs disagree about certain
    aspects of Verizon's timeliness in wholesale billing. *Compare*
    WorldCom Lichtenberg Reply Decl. at para. 28 (stating July 1 bill
    had not arrived as of August 6, 2001), *with* Verizon Aug. 17 *Ex
    Parte* at 8 (stating Verizon sent the July 1 bill on July 13). In
    other cases, Verizon and the competitive LECs seem to agree that a
    single human error by Verizon can delay the arrival of a wholesale
    bill. *Compare* Letter from Andrew M. Klein, Counsel for the
    Competitive Telecom. Ass'n to Magalie R. Salas, Secretary, Federal
    Communications Commission 2 (Aug. 15, 2001) (CompTel Aug. 15 *Ex
    Parte* Letter) (noting that MetTel received another competitive
    LEC's billing tape in its July billing envelope), *with* Verizon
    Aug. 17 *Ex Parte* at 11 (conceding that human error led Verizon to
    place the wrong billing tape into MetTel's July billing envelopes,
    but noting that it recreated and resent the bill to MetTel upon
    learning of the error). In any case, these types of discrete,
    limited delays and errors generally appear to indicate minor
    differences capable of being handled under Verizon's
    dispute-resolution process, rather than systemic failures in
    Verizon's billing systems significant enough to warrant a finding of
    non-compliance with checklist item 2.

[^115]: KPMG Final Report at 565-572.

[^116]: Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 17.

[^117]: KPMG Final Report at 14, 501-572.

[^118]: Verizon McLean/Wierzbicki/Webster Decl. at para. 143; Verizon
    Bluvol/Kumar Decl. at paras. 23-48.

[^119]: Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 24; *see*
    Letter from Clint E. Odom, Verizon, to Magalie R. Salas, Federal
    Communications Commission, at 1 and Attach. 1 (July 3, 2001)
    (Verizon July 3 *Ex Parte* Letter) (PWC performed the same
    calculation it performed initially for the period after the May
    fixes -- May 20 through June 13 -- and found that the percentage of
    manual adjustments had dropped to 0.89 percent, a 50 percent
    reduction).

[^120]: *See, e.g.,* WorldCom Comments at 5; Z-Tel Comments at 6-7.

[^121]: *Bell Atlantic New York Order*, 15 FCC Rcd at 3974, para. 53
    ("the most probative evidence that a BOC is providing
    non-discriminatory access is evidence of actual commercial usage");
    *Ameritech Michigan Order*, 12 FCC Rcd at 20618, para. 138 ("We
    agree with the Department of Justice that the most probative
    evidence that OSS functions are operationally ready is actual
    commercial usage.").

[^122]: WorldCom Comments at 5; Z-Tel Comments at 6-7.

[^123]: *See, e.g., Ameritech Michigan Order*, 12 FCC Rcd at 20618,
    para. 138 ("Carrier-to-carrier testing, independent third-party
    testing, and internal testing also can provide valuable evidence
    pertaining to operational readiness, but are less reliable
    indicators of actual performance than commercial usage."). Contrary
    to AT&T's assertion, moreover, the repeated need for Verizon to
    correct its billing system during KPMG's testing does not diminish
    Verizon's credibility, but rather helps demonstrate Verizon's
    commitment to correcting systemic problems in its billing system.
    *See* AT&T Fawzi/Kirchberger Decl. at paras. 88-89; *see also*
    WorldCom Lichtenberg Decl. at para. 35.

[^124]: KPMG Final Report at 14. The Commission placed significant
    reliance on this type of military-style testing in approving
    Verizon's New York application. *See Bell Atlantic New York Order*,
    15 FCC Rcd at 3998, para. 98.

[^125]: *See* WorldCom Comments at 5 ("KPMG did not . . . evaluate
    whether there were similar problems on the \[retail-formatted\]
    paper bill" after more competition emerged in the Pennsylvania
    market"); Department of Justice Evaluation at 8 n.26 ("It is not
    clear why the test did not capture the billing accuracy issues
    raised by \[competitive LECs\]."). The Department of Justice notes
    that KPMG relied on the bills submitted to it as a test competitive
    LEC, not the bills of actual competitive LECs in Pennsylvania. *See*
    Department of Justice Evaluation at 8 n.26 (citation omitted).

[^126]: Verizon Aug. 17 *Ex Parte* Letter at 5-6.

[^127]: *Id.* at 6-7.

[^128]: *Id*.

[^129]: *See* Department of Justice Evaluation at 10.

[^130]: *See, e.g.*, AT&T Fawzi/Kirchberger Decl. at para. 86 (PWC's
    qualifications underscore the "fundamental inaccuracy and
    unreliability problems that have permeated the \[BOS\] BDT bills
    since Verizon first tried to roll them out in Pennsylvania"); *see
    also* WorldCom Lichtenberg Decl. at para. 42 (describing various
    exceptions from the PWC study).

[^131]: *See, e.g.,* WorldCom Comments at 5 (noting that KPMG's study
    occurred prior to PWC's study and prior to the time when "commercial
    data revealed problems with the electronic \[BOS BDT\] bills."). In
    any case, PWC's primary test period for the BOS BDT bill follows the
    KPMG study by only five months. *See* Verizon Bluvol/Kumar Decl. at
    para. 9 (noting that the test period for four of the five assertions
    ran from April to May, 2001).

[^132]: *See, e.g.,* AT&T Fawzi/Kirchberger Decl. at para. 92 ("the PWC
    review apparently did not evaluate \[Universal Service Order
    Code\]-level detail -- a critically important requirement of
    electronic \[BOS BDT\] billing"); Z-Tel Comments at 9 (noting that
    PWC does not appear to have reviewed account-level or USOC-level
    detail, where many errors have occurred); WorldCom Lichtenberg Decl.
    at para. 41 ("it simply makes no sense to assess the accuracy of the
    electronic \[BOS BDT\] bill through a third party comparison with
    the \[retail-formatted\] paper bill when direct commercial evidence
    of the accuracy of the electronic bill exists."). A "Universal
    Service Order Code" (USOC) is an alphanumeric code used to identify
    a product service order. *See* KPMG Final report at 696.

[^133]: WorldCom Comments at 5 (citing Verizon McLean/Wierzbicki/Webster
    Decl. at para. 143); AT&T Comments at 53; Covad Comments at 21.

[^134]: WorldCom Comments at 5 (citing Verizon McLean/Wierzbicki/Webster
    Decl. at para. 143); AT&T Comments at 53.

[^135]: Verizon Reply App. A, Vol. 1, Joint Reply Declaration of
    Catherine Bluvol and Sameer Kumar (Operations Support Systems) at
    paras. 7-8 (Verizon Bluvol/Kumar Reply Decl.). Although the records
    inserted into the BOS BDT bill as part of the Manual Adjustment
    process generally cannot be validated, PWC noted that the Manual
    Adjustments on the BOS BDT bill were on average, less than one
    percent of the Current Charges on the bills with bill dates during
    the May 20 to June 13, 2001 time period, concurrent with the PWC
    study. *Id*. at para. 7. Z-Tel also states that it can load, read
    and audit Verizon's BOS BDT bill. *See* Z-Tel Aug. 17 *Ex Parte*
    Letter at 4 (using Monarch-brand software, "Z-Tel has been able to
    read and process the electronic \[BOS BDT\] bill received from
    Verizon").

[^136]: *Compare* CompTel Comments at 6-7, *and* CompTel Lazzara Decl.
    at para. 6c, *and* WorldCom Comments at 2-4, *with* Verizon
    McLean/Wierzbicki/Webster Reply Decl. at para. 26. Although
    Verizon's BOS BDT bill departs from the standard format, Verizon
    states that certain departures from the standard form are allowed,
    provided that the issuer documents these alterations. *See* Verizon
    McLean/Wierzbicki/Webster Reply Decl. at para. 26. Verizon also
    states that it has documented the changes it has made to the
    industry-standard BOS BDT bill format. *Id.*

[^137]: Verizon July 3 *Ex Parte* Letter at 1.

[^138]: *See* WorldCom Lichtenberg Decl. at para. 35.

[^139]: *See* Verizon McLean/Wierzbicki/Webster Decl. at para. 138-141;
    Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 22 and
    Attach. 2.

[^140]: *Compare* Verizon Bluvol/Kumar Decl. at Attach. 1 and Verizon
    July 3 *Ex Parte* Letter at Attach. 1 *with* Verizon Aug. 17 *Ex
    Parte* Letter at 5.

[^141]: ASCENT Comments at 17; AT&T Comments at 51-52; CompTel Comments
    at 14; WorldCom Comments at 8; Z-Tel Comments at 9; WorldCom
    Lichtenberg Decl. at para. 16; ASCENT Reply at 9-10; AT&T Reply at
    28. Many commenters claim that, because Verizon implemented software
    changes to correct errors in its billing system just a few days
    prior to filing with the Commission for Section 271 authority,
    neither Verizon nor the competitive LECs have had an opportunity to
    test, much less commercially use, the corrected billing system. CWA
    Comments at 4; *see also* ASCENT Comments at 17-18; AT&T Comments at
    52; CompTel Comments at 14; WorldCom Comments at 8-9; WorldCom
    Lichtenberg Decl. at para. 16. WorldCom observes that, of the
    eighty-one problems with its billing systems that Verizon
    acknowledged, the fixes for thirty of these issues were not
    implemented prior to April 21, 2001 and thus the fixes would have
    been reflected in the May bill at the earliest. In addition, ten
    problems were not fixed until June and thus the fixes would have
    been reflected in the June or the July bill at the earliest. *See*
    WorldCom Comments at 8 (citing Verizon McLean/Wierzbicki/Webster
    Decl. at Attach. 28). Some commenters also note that Verizon's own
    billing expert testified before the Pennsylvania Commission that no
    conclusive judgments on whether the system changes were successful
    could be made until the completion of several billing cycles under
    the new procedures. *See* Verizon Application App. B, Tab C, Sub-Tab
    26 (Pennsylvania Commission *en banc* 271 hearing, April 25, 2001,
    Geller testimony, transcript at 134) (Verizon's billing expert
    explained that "\[i\]t's not unreasonable for \[competitive LECs\]
    to say 'prove it'" in response to its claim that it would fix the
    problems with the BOS BDT bills.); *id.* at 146 ("\[w\]hat we'd like
    to be able to do at that point in time \[June 16, when the fixes are
    complete\] is, to insure that all parties have an opportunity to
    review it, Verizon included, is to run several cycles, in other
    words additional bill cycles, and at that point in time Verizon
    would make its final decision as to whether or not BOS-BDT could
    become the official bill and replace paper \[retail-formatted
    bills\]."); *see generally* WorldCom Comments at 8; WorldCom
    Lichtenberg Decl. at para. 34; AT&T Comments at 52. Finally, these
    parties point out that two Pennsylvania commissioners dissented from
    the recommendation to support section 271 authorization precisely on
    this point, noting that "Verizon must . . . successfully complete at
    least two billing cycles" before section 271 authorization is
    warranted. *See* Pennsylvania Commission Comments App. I at 6, 10
    (Dissenting Statement of Commissioner Brownell at 1; Dissenting
    Statement of Commissioner Fitzpatrick at 2); CompTel Comments at 15.
    The Department of Justice voices similar concerns. *See* Department
    of Justice Evaluation at 10-11.

[^142]: *See, e.g.,* Z-Tel Comments at 9; WorldCom Comments at 8;
    WorldCom Lichtenberg Decl. at para. 16; ASCENT Comments at 17;
    CompTel Comments at 14; AT&T Comments at 51-52.

[^143]: Verizon McLean/Wierzbicki/Webster Decl. at para 135-141.

[^144]: *See, e.g.,* AT&T Comments at 53. In other words, the process of
    making "manual adjustments" on Verizon's BOS BDT bill so that it
    will match Verizon's retail-formatted bill causes the sum of all of
    the detailed charges to no longer equal the relevant sub-total or
    total. *See id*.; WorldCom Lichtenberg Decl. at para. 37 (citing
    Verizon McLean/Wierzbicki/Webster Decl. at para 146) (noting that
    Verizon's experts testified that the manual adjustment process "does
    not provide \[competitive LECs\] detailed information to allow
    recalculation of the adjustment").

[^145]: Verizon July 3 *Ex Parte* Letter at 1andAttach. 1; Verizon
    McLean/Wierzbicki/Webster Reply Decl. at paras. 24-25; *see also*
    Verizon McLean/Wierzbicki/Webster Decl. at para. 144. We also
    received information on Purchase Order Numbers (PONs) and Billing
    Telephone Numbers (BTNs) from WorldCom on the eve of making our
    decision. Letter from Robert C. Lopardo, Director, Federal Advocacy,
    WorldCom, to Magalie R. Salas, Secretary, Federal Communications
    Commission, CC Docket No. 01-138, at 1-3 (filed September 17, 2001)
    (WorldCom Sept. 17 *Ex Parte* Letter). Although WorldCom suggests
    problems exist with missing PONs and BTNs, we exercise our
    discretion to give only minimal weight due to its lateness.
    Moreover, based on our limited review, even assuming WorldCom's
    claims were valid, this information would do nothing to undermine
    our decision here.

[^146]: Verizon McLean/Wierzbicki/Webster Decl. at para. 142. Verizon
    states that it will retain the manual review and adjustment
    procedures "until it has confirmed that the software fixes are
    effective in producing balanced BOS BDTs for" competitive LECs.
    *Id.*

[^147]: *Id.*

[^148]: Pennsylvania Commission Reply at 3.

[^149]: Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 46.

[^150]: *Id*. at para. 47.

[^151]: *Id*. at para. 48.

[^152]: Letter from Gordon R. Evans, Vice President, Verizon to Magalie
    R. Salas, Secretary, Federal Communications Commission at 3 (Aug.
    31, 2001) (Verizon Aug. 31 *Ex Parte* Letter); Letter from Clint E.
    Odom, Verizon, to Magalie Salas Roman, Secretary, Federal
    Communications Commission, at Attach. 1 (Sept. 7, 2001) (Verizon
    Sept. 7 *Ex Parte* Letter).

[^153]: Verizon Aug. 31 *Ex Parte* Letter at 3 and Attach. 3 (describing
    agenda of four, full-day billing workshops).

[^154]: *Id*. (offering to conduct on-site visits to those who
    participate in the workshops).

[^155]: *Id.* at 4.

[^156]: *Id.*

[^157]: *Id.* at 4-5. Several competitive LECs and the Department of
    Justice assert that the Pennsylvania metrics do not accurately
    reflect their commercial experience with Verizon's wholesale bills.
    *See, e.g.,* Department of Justice Evaluation at 13-14; ASCENT
    Comments at 18; Capsule Joint Comments at 20; WorldCom Comments at
    14-15; Z-Tel Comments at 10; AT&T Comments Exhibit D, Joint
    Declaration of Joseph Bloss and E. Christopher Nurse on Behalf of
    AT&T Corp., at paras. 21-24 (AT&T Bloss/Nurse Decl.); AT&T
    Fawzi/Kirchberger Decl. at paras. 98-101; Z-Tel Aug. 17 *Ex Parte*
    Letter at 4. While nearly all of the billing performance metrics
    show nearly perfect performance, the competitive LECs allege that
    various structural defects, omissions, inaccuracies and
    miscalculations distort the picture that the current billing metrics
    present. *See, e.g.,* Department of Justice Evaluation at 13; ASCENT
    Comments at 18; Capsule Joint Comments at 20; WorldCom Comments at
    14-15; Z-Tel Comments at 10; AT&T Fawzi/Kirchberger Decl. at 98-101;
    Z-Tel Aug. 17 *Ex Parte* Letter at 4. Verizon itself acknowledges
    some of the metrics' flaws. *See* Verizon McLean/Wierzbicki/Webster
    Reply Decl. at para. 55-57 (describing errors that led Verizon to
    eliminate most, if not all, billing adjustments from the BI-3
    billing accuracy metric and noting that "Verizon agrees that it
    \[BI-3\] is a flawed measure"); *see also* Verizon Application App.
    A, Vol. 3, Joint Declaration of Elaine M. Guerard, Julie A. Canny,
    and Marilyn C. DeVito (Performance Measurements) at para. 126
    (Verizon Guerard/Canny/DeVito Decl.) (for several months for four
    billing metrics, "Verizon . . . was improperly 'netting' credits and
    debits, which resulted in objectively incorrect data"). Until July,
    moreover, the billing accuracy and timeliness metrics did not apply
    to Verizon's BOS BDT bills. *See* Letter from Julia A. Conover,
    Verizon Vice President and General Counsel, to James J. McNulty,
    Secretary, Pennsylvania Public Utilities Commission, CC Docket
    01-138 (July 18, 2001) (Verizon July 18 *Ex Parte* Letter)
    (reporting that, consistent with the Pennsylvania Commission's June
    6, 2001 directive, Verizon has updated the Pennsylvania billing
    metrics to make them applicable to the BOS BDT bill effective July
    1, 2001); Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 52.
    Verizon generally does not rely on its wholesale billing performance
    metrics to establish its affirmative case. In these circumstances,
    we do not rely on the billing accuracy metrics in considering
    Verizon's section 271 showing.

[^158]: Verizon Aug. 31 *Ex Parte* at 4-5 and Attach. 2. The billing
    metrics that New York is developing are BI-3-03 (Percent Competitive
    LEC Billing Claims Acknowledged Within Two Business Days) and
    BI-3-04 (Percent Competitive LEC Billing Claims Resolved Within 28
    Calendar Days after Acknowledgement). These metrics are designed to
    measure the timeliness with which Verizon acknowledges and resolves
    competitive LEC billing adjustment claims. According to its recent
    announcement, Verizon will allow competitive LECs to replace the
    single BI-3 metric with two alternative metrics, but will split the
    Pennsylvania performance assurance plan remedies for the current
    BI-3 metric between the two new alternative metrics. Pennsylvania
    currently imposes the following remedies for poor billing
    performance: \$50,000 per competitive LEC per metric for violations
    up to thirty days; \$75,000 per competitive LEC per metric for
    violations up to sixty days; and 100,000 per competitive LEC per
    metric for violations up to ninety days. *See* Pennsylvania
    Commission Comments at 103. For each of the new alternative metrics
    to the current BI-3, therefore, Verizon would pay \$25,000 per
    competitive LEC per metric for violations up to thirty days;
    \$37,500 per competitive LEC per metric for violations up to sixty
    days; and \$50,000 per competitive LEC per metric for violations up
    to ninety days. *See* Verizon Aug. 31 *Ex Parte* Letter, Attach. 2
    at 3.

[^159]: 47 U.S.C. § 271(d)(6)(A).

[^160]: *See, e.g., Bell Atlantic-New York Authorization under Section
    271 of the Communications Act to Provide In-Region, InterLATA
    Service in the State of New York,* Order, 15 FCC Rcd 5413 (2000)
    (announcing a \$3 million payment to the United States Treasury and
    other terms of a Consent Decree entered with Bell Atlantic following
    an investigation into lost or mishandled orders for electronically
    submitted unbundled network element orders in New York).

[^161]: *See Bell Atlantic New York Order*, 15 FCC Rcd at 4052-53, para.
    187; *see also* CompTel Comments, Declaration of Elliot M. Goldberg
    on Behalf of the Competitive Telecommunications Association at para.
    4 (CompTel Goldberg Decl.).

[^162]: *See Bell Atlantic New York Order*, 15 FCC Rcd at 4052-53, para.
    187. These types of BCN errors can also cause a competitive LEC to
    continue to purchase wholesale services from Verizon to serve a
    customer whose service should have already been terminated due to
    either non-payment or migration back to the incumbent LEC. *See,
    e.g.,* CompTel Comments at 18; CompTel Goldberg Decl. at para. 7.

[^163]: AT&T Bloss/Nurse Decl. at para. 24; WorldCom Kinard Decl. at
    para. 11.

[^164]: Verizon Reply at 60.

[^165]: Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 74.

[^166]: Verizon McLean/Wierzbicki/Webster Decl. at paras. 102-105.

[^167]: *Id*. at paras. 104-105.

[^168]: *Id*. at para. 104. During this time, Verizon cannot process
    updates to the billing system for held accounts for either wholesale
    or retail customers. *Id.*

[^169]: *Id*.

[^170]: While some competitive LECs cite data purporting to show
    Verizon's BCNs are inaccurate and arrive late, *see, e.g.,* AT&T
    Comments at 49; AT&T Fawzi/Kirchberger Decl. at para. 46; WorldCom
    Comments at 26; CompTel Comments at 19; CompTel Goldberg Decl. at
    paras. 4-16 and Attach. I; Capsule Joint Comments at 18-19, this
    data generally relies on a three-day standard or on date and time
    stamps that differ from those stamps actually used in the design and
    operation of Verizon's OSS. *See, e.g.,* AT&T Fawzi/Kirchberger
    Decl. at para. 46 (relying on a three-day standard, rather than the
    more appropriate four-day standard to determine timeliness); CompTel
    Comments at 19 (calculating BCN timeliness with date and time stamps
    that differ from those stamps actually used in the design and
    operation of Verizon's OSS); *see also* Verizon Reply Comments at
    44-45; Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 77.
    While we recognize that Verizon's February-March performance falls
    short of the goal of moving 95 percent of relevant data from SOP to
    BCN within four days, Verizon provided more timely BCN performance
    in January and April and, after system modifications, still better
    performance in May and June. *See* Verizon Reply Comments at 45;
    Verizon McLean/Wierzbicki/Webster Decl. at para. 106 and Attach. 24;
    Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 74-77.

[^171]: Verizon Reply at 45; Verizon McLean/Wierzbicki/Webster Decl. at
    para. 106 and Attach. 24; Verizon McLean/Wierzbicki/Webster Reply
    Decl. at para. 74-77.

[^172]: WorldCom Lichtenberg Decl. at paras. 60-62 ("As of early
    February, WorldCom calculated that it had submitted trouble tickets
    with missing notifiers for nearly a fifth of the \[PONs\] it had
    transmitted." Recent fixes have improved BCN performance, but
    "WorldCom has no confidence that the current improvement will be
    permanent."). Although WorldCom asserts that Verizon has not
    performed a root-cause analysis, Verizon states that it provides
    competitive LECs with a "root-cause" analysis of BCN problems that
    have occurred and provides competitive LECs with weekly "root-cause"
    reports for any PONs reported on missing-notifier trouble tickets
    that are not resolved by resending the requested notifier through
    Verizon's OSS. *See* Verizon McLean/Wierzbicki/Webster Reply Decl.
    at para. 75. We find Verizon's response persuasive.

[^173]: The Commission's rules require Verizon to provide competitors
    all available information in its databases or internal records, in
    the same time intervals that it is available to any incumbent LEC
    personnel, regardless of whether Verizon's retail arm or advanced
    services affiliate has access to such information. *See
    Implementation of the Local Competition Provisions of the
    Telecommunications Act of 1996,* Third Report and Order, 15 FCC Rcd
    3696, 3885-3886, paras. 427-431 (*UNE Remand Order*).

[^174]: *See* Verizon Reply at 22 (*citing* *Verizon Massachusetts
    Order,* 16 FCC Rcd 8988 at 9021, para. 60); Pennsylvania Commission
    Comments at 134.

[^175]: *See Verizon Massachusetts Order,* 16 FCC Rcd at 9021-9022,
    paras. 61-62, 9024-9025, para. 67. Covad raises issues regarding
    Verizon's interim process similar to those it raised in
    Massachusetts. *See* Covad Comments at 17. We reject Covad's
    arguments for the same reasons expressed in our *Verizon
    Massachusetts Order*.

[^176]: *See* Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 63.
    Verizon states that this permanent method of access to loop
    qualification will be made available throughout the Verizon
    territory. *Id.*

[^177]: POCA Comments at 7-9. POCA asserts that Verizon has only
    included information in its loop qualification database for those
    central offices where competitive LECs have collocation
    arrangements. *See* POCA Comments at 11-12.

[^178]: *See UNE Remand Order* at 3886, para. 430. As we explained in
    the *UNE Remand Order*, to the extent an incumbent has not compiled
    loop information for itself, it is not required to "conduct a plant
    inventory and construct a database on behalf of requesting
    carriers." *Id.* at 3886, para. 429. Instead, the incumbent is
    obligated to provide requesting competitors with nondiscriminatory
    access to loop information within the same time frame whether it is
    accessed manually or electronically. *Id.*

[^179]: *See* Covad Comments at 16-17.

[^180]: *See* Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 64.

[^181]: *See, e.g., Verizon Massachusetts Order*, 16 FCC Rcd at 9030,
    para. 77.

[^182]: *See* AT&T Bloss/Nurse Decl. at para. 25; *see also* WorldCom
    Kinard Decl. at paras. 9, 20, 27.

[^183]: "Achieved flow through" measures the percentage of orders
    designed to flow through that do, in fact, flow through.

[^184]: *Verizon Massachusetts Order*, 16 FCC Rcd at 9032, para. 80 ("We
    do not specifically need . . . achieved flow-through figures in
    order to determine that Verizon's OSS are capable of offering high
    flow-through.").

[^185]: Some competitive LECs assert that Verizon's flow-through
    performance is inadequate. *See, e.g.,* AT&T Comments at 46-47; AT&T
    Fawzi/Kirchberger Decl. at paras. 33-45; AT&T, Bloss/Nurse Decl. at
    para. 25-26; AT&T Reply Comments at 32-35; Capsule Joint Comments at
    9, 14-15; Covad at 20; WorldCom at 27-28; WorldCom, Lichtenberg
    Decl. at para. 64; WorldCom, Kinard Decl. at para. 9; PAOCA at
    15-24.

[^186]: "Total flow through" measures the percentage of all orders (both
    those that are designed to flow through and those that are not
    designed to flow through) that flow through. "Simple flow through"
    measures the percentage of all electronically submitted basic POTS
    service orders that flow through.

[^187]: *See* OR 5-01 (Percent Flow-Through Total).

[^188]: *See* Pennsylvania Commission Comments at 87.

[^189]: Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 67 and
    Attach. 11.

[^190]: *Compare* Verizon Reply App. A, Vol. 2, Joint Reply Declaration
    of Elaine M. Guerard, Julie A. Canny and Marilyn C. DeVito
    (Performance Measurements) at Attach. 1 (Verizon
    Guerard/Canny/DeVito Reply Decl.) (service order accuracy scores for
    OR-6-01 (percent accuracy orders) and OR-6-02 (percent accuracy
    opportunities) ranging from 85 to 99 percent), *with Bell Atlantic
    New York Order*, 15 FCC Rcd at 4044, para. 174 and n.548 (adjusted
    service order accuracy score of 87 percent), *and Verizon
    Massachusetts Order*, 16 FCC Rcd at 9032, para. 81and n.251 (service
    order accuracy scores ranging from 82 to 99 percent). *See
    generally* Verizon McLean/Wierzbicki/Webster Reply Decl. at para.
    67.

[^191]: Verizon McLean/Wierzbicki/Webster Decl. at para. 77.

[^192]: *See Verizon Massachusetts Order*, 16 FCC Rcd at 9030, para. 78.

[^193]: KPMG Final Report at 307-308 (reporting satisfactory results for
    the TVV-3-1, TVV-3-2, TVV-3-3, TVV-3-4 and TVV-3-5 tests, which
    evaluate various aspects of Verizon's systems and processes that
    affect flow-through performance); Verizon McLean/Wierzbicki/Webster
    Decl. at para. 75; *see also* Verizon McLean/Wierzbicki/Webster
    Reply Decl. at paras. 59-62.

[^194]: *See, e.g.,* WorldCom Comments at 28; AT&T Comments at 47-48.

[^195]: Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 58.

[^196]: AT&T Comments at 45-46; Covad Comments at 19. EDI is an
    asynchronous ordering interface that competitive LECs use to order
    services from incumbent LECs. EDI is well suited for large-volume
    transactions.

[^197]: Capsule Joint Comments at 12-13; AT&T Bloss/Nurse Decl. at para.
    21. Web GUI is a synchronous ordering interface that competitive
    LECs use to order services from incumbent LECs. Web GUI is well
    suited for small-volume transactions.

[^198]: AT&T Comments at 45; AT&T Fawzi/Kirchberger Decl. at paras.
    20-21.

[^199]: AT&T Bloss/Nurse Decl. at paras. 20-23. According to AT&T,
    KPMG's interface test was flawed because KPMG tested the LSOG 2
    rather than the LSOG 4 interface; however, KPMG tested the current
    version of the EDI interface at the time KPMG began its test.
    Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 59.

[^200]: Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 59.

[^201]: *Id*. at para. 61.

[^202]: *Id*. at paras. 71-72.

[^203]: *Id*. at paras. 59-62 (comparing KPMG's testing methodology with
    AT&T testing methodology), 65 (responding to limited complaints
    about the Web GUI interface by noting that WorldCom made several
    errors in compiling its data, including using the wrong hours and
    business days in its definition of "prime time").

[^204]: AT&T Fawzi/Kirchberger Decl. at paras. 78, 80, and n.63, n.64;
    WorldCom Lichtenberg Decl. at para. 16.

[^205]: Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 78.

[^206]: CompTel Goldberg Decl. at para. 21.

[^207]: Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 79.

[^208]: *See* Pennsylvania Commission Comments at 104.

[^209]: AT&T Fawzi/Kirchberger Decl. at paras. 60-64; WorldCom Reply at
    1-4; WorldCom Lichtenberg Reply Decl. at paras. 3-18.

[^210]: *See* WorldCom Reply at 2. WorldCom adds that a competitive LEC
    that does not receive complete, accurate and timely line-loss
    reports will have no indication that a customer who calls to
    complain about double-billing has discontinued service and, in fact,
    has been improperly billed. *Id.* "As a result," according to
    WorldCom, "customers will be double billed, \[competitive LECs\]
    will be unable to resolve the problem, and the damage to the
    \[competitive LEC's\] reputation will be severe." *Id.*

[^211]: Verizon McLean/Wierzbicki/Webster Reply Decl. at para. 70;
    Letter from Clint E. Odom, Verizon, to Magalie R. Salas, Secretary,
    Federal Communications Commission, CC Docket No. 01-138, at 1-2
    (Aug. 29, 2001) (Verizon Aug. 29 *Ex Parte* Letter).

[^212]: Verizon Aug. 29 *Ex Parte* Letter at 1-2. "Verizon South" refers
    to the original pre-merger Bell Atlantic territory.

[^213]: Verizon Application App. B, Tab O, Sub-Tab 8 (Pennsylvania
    Commission's Interim Order setting UNE rates (Apr. 10, 1997)) (MFS
    III Order).

[^214]: Verizon Application App. B, Tab O, Sub-Tab 12 (Pennsylvania
    Commission's Final Opinion and Order adopting and modifying MFS III
    Order (Aug. 7, 1997)) (Final MFS III Order). In the Final MFS III
    Order, the Pennsylvania Commission reduced the common overhead
    factor, but otherwise adopted the MFS III Order. *Id*. at 4-6, 9.

[^215]: *See* MFS III Order at 13.

[^216]: Memorandum and Order, *MCI Telecomm. Corp. v. Bell
    Atlantic-Pennsylvania, Inc.*, No. 97-CV-1857, *slip op.* At 10-13
    (M.D. Pa. June 30, 2000), appeal pending, No. 00-2257 (3d Cir.,
    filed July 28, 2000).

[^217]: *See id*.

[^218]: Verizon Application App. B, Tab J, Sub-Tab 6 (Pennsylvania
    Commission's Opinion and Order Resolving Several Dockets (Sep. 30,
    1999)) (Global Order).

[^219]: Verizon Application App. B, Tab S, Sub-Tab 2 (Pennsylvania
    Commission's Interim Opinion and Order Setting UNE Rates (June 8,
    2001)).

[^220]: *See* Letter from Clint E. Odom, Verizon, to Magalie Roman
    Salas, Secretary, Federal Communications Commission, CC Docket No.
    01-138, at Attach. D (filed Aug. 8, 2001) (Verizon Aug. 8 *Ex Parte*
    Letter).

[^221]: Pennsylvania Commission Comments at 55, 61.

[^222]: *SWBT Kansas/Oklahoma Order* 16 FCC Rcd at 6266, para. 59; *Bell
    Atlantic New York Order*, 15 FCC Rcd at 4084, para. 244.

[^223]: *See* AT&T Comments at 13; WorldCom Comments at 19-20.

[^224]: *Implementation of the Local Competition Provisions in the
    Telecommunications Act of 1996*, CC Docket No. 96-98, 11 FCC Rcd
    15499, 15845-46, para. 678 (1996) (*Local Competition First Report
    and Order*).

[^225]: AT&T Comments at 19-22; WorldCom Comments at 18-22. AT&T also
    asserts that the rates are "the product of an arbitrary negotiated
    settlement." AT&T Comments at 10-11. Given that both AT&T and
    WorldCom are able to state with specificity various alleged TELRIC
    defects with the methodology used in Pennsylvania, we find this
    assertion without merit.

[^226]: MFS III Order at 69-70.

[^227]: Final MFS III Order at 7-9.

[^228]: *See* Global Order at 74-76.

[^229]: WorldCom Comments at 23.

[^230]: If a fill factor is set too high, the particular element will
    have insufficient capacity to accommodate anticipated increases in
    demand or service outages. If a fill factor is set too low, the
    network could have considerable excess capacity, which results in
    increases to the per-unit cost higher than an efficient firm's cost.

[^231]: Global Order at 75-76.

[^232]: *See* *Universal Service Tenth Report and Order*, 14 FCC Rcd at
    20369, App. A, Part 1.

[^233]: MFS III Order at 70-72.

[^234]: *See* http://www.fcc.gov/ccb/apd/hcpm.

[^235]: *See* AT&T Comments at 22-24.

[^236]: *See* *Bell Atlantic New York Order*, 15 FCC Rcd at 4086-87,
    paras. 248-49, *aff'd AT&T Corp. v. FCC*, 220 F.3d 607, 619 (D.C.
    Cir. 2000).

[^237]: *Bell Atlantic New York Order*, 15 FCC Rcd at 4086-87, para.
    248.

[^238]: MFS III Order at 67, 69.

[^239]: MFS III Order at 69.

[^240]: WorldCom Comments at 24.

[^241]: *See* Verizon Application App. B, Vol. 29b, Tab BB, Sub-Tab 4,
    Verizon Pennsylvania Tariff No. 216, at 36.

[^242]: Specifically, AT&T and WorldCom make the following additional
    allegations: (1) the UNE rates are inflated by short depreciation
    lives and excessive maintenance and repair costs; (2) the costs of
    digital loop carrier (DLC) are unlawfully inflated by using a
    weighted average of integrated DLC and universal DLC, even though
    integrated DLC is the forward-looking technology; (3) the loop rates
    are inflated by low fill factors for fiber cable; (4) Verizon's loop
    cost model inflates loop rates by double counting the need for
    excess capacity in its distribution cables; and (5) the switching
    rates are set too high because Verizon used a combination of new and
    add-on switch discounts in determining switch prices, rather than
    the new switch discount only. *See* AT&T Comments at 22-30; WorldCom
    Comments at 22-25.

[^243]: *See SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6276, para. 82.

[^244]: *See* *Verizon Massachusetts Order*, 16 FCC Rcd at 9002, para.
    28; *see also* *SWBT* *Kansas/Oklahoma Order*, 16 FCC Rcd at 6276,
    para. 82.

[^245]: To date, we have found that the New York, Texas and Kansas
    commissions have applied TELRIC correctly for recurring UNE charges.

[^246]: To date, we have not been in the position where the only
    previously-approved states that we could use to compare an
    applicant's state are in other BOCs' regions. We will evaluate the
    appropriateness of such a comparison should the situation arise.

[^247]: *SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6277, para. 84; *see
    also Federal-State Joint Board on Universal Service*, CC Docket No.
    96-45, Ninth Report and Order and Eighteenth Order on
    Reconsideration, 14 FCC Rcd 20432, 20455-56, paras. 41-42 (1999).

[^248]: We cannot rely on the USF model to provide guidance in examining
    non-recurring rates, because it does not examine these costs.

[^249]: Example 1: State X's rates are 20 percent higher than benchmark
    state B's rates, and X's costs are 25 percent higher. Because the 20
    percent difference in rates is less than the 25 percent relative
    difference in costs, X's rates would be found to be within the
    reasonable range that TELRIC would produce. Example 2: State Y's
    rates are 15 percent less than benchmark state B's rates, and Y's
    costs are 10 percent lower. Because the -15 percent difference in
    rates is less than the -10 percent relative difference in costs, X's
    rates would be found to be within the reasonable range that TELRIC
    would produce.

    In making this analysis, we make a number of adjustments to the USF
    cost model. *See* http://www.fcc.gov.ccb/apd/hcpm. The overhead
    costs used in the model are adjusted to reflect the fact that the
    UNE-P is a wholesale offering, while USF costs are for a retail
    offering. Specifically, the overhead cost is reduced and spread
    across all network elements. *See* letter from Robert W. Quinn, Jr.,
    Vice President, Federal Government Affairs, AT&T, to Magalie Roman
    Salas, Federal Communications Commission, CC Docket No. 01-9, at
    Attach. (filed February 1, 2001); *Universal Service Tenth Report
    and Order*, 14 FCC Rcd at 20421-23, Appendix D.

    The USF end office switching, common and direct transport, and
    signaling costs are adjusted to include, in addition to local
    traffic costs, costs for intrastate and interstate access, and
    intraLATA toll traffic. This adjustment is made because a CLEC might
    use the UNE-P for access and intraLATA toll traffic in addition to
    local traffic, and the USF cost model excludes these costs. In
    addition, the allowance for retail uncollectible revenues reflected
    in the USF costs is removed, and allowances for wholesale
    uncollectible revenues costs and for carrier-to-carrier customer
    service costs are added to the USF costs.

[^250]: The weighted average rates for a 2-wire analog loop in New York
    and Pennsylvania are \$14.03 and \$14.08, respectively.

[^251]: *See* *supra* n.249.

[^252]: Under an illustrative analysis, the weighted average rates for
    port, switching, signaling and transport for UNE-P in New York and
    Pennsylvania are \$13.14 and \$7.63, respectively. This makes the
    following monthly per line assumptions: 1200 originating and 1200
    terminating local minutes of use (UNE charges for terminating local
    minutes of use to a competitive LEC's end users are offset exactly
    by reciprocal compensation owed to the competitive LEC); 25 percent
    of minutes intraswitch; 200 local calls; 370 originating and
    terminating intraLATA toll, intrastate interLATA, and interstate
    interLATA minutes of use; 25 intraLATA toll, intrastate interLATA,
    and interstate interLATA calls; and in New York, 60 percent of usage
    is day, 30 percent is evening, and 10 percent is night or weekend.
    We find that the weighted average for these rates in Pennsylvania is
    within the reasonable range that TELRIC would produce regardless of
    which set of reasonable usage assumptions we make in a comparison
    with New York rates.

[^253]: *See* *supra* n.249.

[^254]: *See* WorldCom Reply at 9.

[^255]: *See* Letter from Maryanne R. Martin, Assistant Counsel,
    Pennsylvania Public Utility Commission, to Magalie Roman Salas,
    Secretary, Federal Communications Commission, CC Docket No. 01-138,
    Attach. at 10 (filed Sept. 6, 2001) (Pennsylvania Commission Sept. 6
    *Ex Parte* Letter).

[^256]: *See* WorldCom Comments at 18; WorldCom Reply, Declaration of
    Vijetha Huffman at paras. 5-10 (WorldCom Huffman Reply Decl.); AT&T
    Reply at 8-9.

[^257]: *SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6269, 6280-81,
    paras. 65, 92. *See also* *Verizon Massachusetts Order*, 16 FCC Rcd
    at 9008-09, paras. 41-42.

[^258]: *See id*.; *see also Local Competition First Report and Order*,
    11 FCC Rcd at 15922, para. 848 (declining to implement an imputation
    rule that would prevent price squeezes because doing so would impose
    substantial burdens on states to rebalance their retail rates. The
    issue of retail rates would similarly apply to any profitability
    analysis for a specific region of the state. *See* WorldCom Comments
    at 18; AT&T Reply at 7-8, n.7.

[^259]: *See* WorldCom Huffman Reply Decl. at Attach.

[^260]: *See* Verizon Application App. A, Vol. 4, Declaration of William
    E. Taylor, Attach. 1 at para. 1 (Verizon Taylor Decl.) (Competitive
    LECs serve more than 197,000 residential customers through the
    UNE-platform).

[^261]: 47 U.S.C. § 271(c)(2)(B)(ii); 47 C.F.R. § 51.315(b).

[^262]: *See* Pennsylvania Commission Comments at 68-74.

[^263]: *See* Verizon Application, App. A, Vol. 1, Joint Declaration of
    Paul A. Lacouture and Virginia P Ruesterholz at paras. 303, 310
    (Verizon Lacouture/Ruesterholz Decl.).

[^264]: *See* Verizon Application at 23; Verizon Lacouture/Ruesterholz
    Decl. at para. 311.

[^265]: We also note that KPMG found Verizon's provisioning performance
    for UNE-platforms and EELs to be nondiscriminatory. *See* Verizon
    Lacouture/Ruesterholz Decl. at para. 312. Commenters also raise
    issues concerning Verizon's policies regarding the availability of
    facilities for high capacity loops, one of the network elements that
    make up the EEL combination, which we discuss in Section III.A.2.

[^266]: *See* Broadslate Joint Comments at 13-14; ALTS Reply at 7-8;
    Broadslate Joint Reply at 2-3; *see also* Capsule Joint Comments at
    2-7.

[^267]: *See* Verizon Lacouture/Ruesterholz Decl. at paras. 312-315;
    *see also* Verizon Reply, App. A, Vol. 1, Reply Declaration of Paul
    A. Lacouture and Virginia P. Ruesterholz at paras. 40-44 (Verizon
    Lacouture/Ruesterholz Reply Decl.).

[^268]: To the extent that commenters assert that Verizon's tariffed
    termination fees are not just and reasonable the appropriate forum
    to challenge such fees is in the appropriate federal or state review
    of the specific tariff at issue.

[^269]: 47 U.S.C. § 271(c)(2)(B)(iv). The Commission has defined the
    loop as a transmission facility between a distribution frame, or its
    equivalent, in an incumbent LEC central office, and the demarcation
    point at the customer premises. Dark fiber and loop conditioning
    equipment are among the features, functions, and capabilities of the
    loop. *UNE Remand Order*, 15 FCC Rcd at 3772-73, paras. 166-167,
    n.301. *See* Appendix C at paras.48-52, regarding requirements under
    checklist item 4.

[^270]: *See* Pennsylvania Commission Comments at 4, 161. The Department
    of Justice concluded that "Verizon has made significant progress
    toward opening its local markets in Pennsylvania to competition."
    Department of Justice Evaluation at 2. The Department of Justice
    cites Verizon's estimate that, using all modes of entry, competitors
    serve approximately 990,000 lines in Pennsylvania, around 14 percent
    of all lines in Verizon's area. Of these, competitors serve
    approximately 661,000 business lines, around 23 percent of all
    business lines. *Id*. at 4, 5.

[^271]: For example, Verizon had provided approximately 69,000
    stand-alone unbundled local loops in Massachusetts when it filed its
    section 271 application in that state. *See Verizon Massachusetts
    Order,* 16 FCC Rcd 8988 at 8990, para. 3. When SWBT filed its
    application in Texas, it had provided approximately 54,000 loops on
    a stand-alone basis. *See* *SWBT Texas Order*, 15 FCC Rcd at 18481,
    para. 249. In New York, Verizon had provided approximately 50,000
    stand-alone loops when it filed its application there. *See* *Bell
    Atlantic New York Order*, 15 FCC Rcd at 4097, para. 277.

[^272]: The record reflects that in Pennsylvania, Verizon had
    provisioned approximately 145,000 voice grade loops, 15,000
    stand-alone xDSL-capable loops, 2,800 digital loops, 500 high
    capacity loops, and 1,000 line sharing arrangements to competitive
    LECs as of June 21, 2001, the date Verizon filed its section 271
    application. Verizon Application at 23, 26, 33; Verizon
    Lacouture/Ruesterholz Decl. at para. 140; Verizon
    Guerard/Canny/DeVito Reply Decl. at Attach. 1, 47.

[^273]: *See* *Verizon Massachusetts Order*, 16 FCC Rcd at 9055-56,
    para. 122.

[^274]: Verizon Lacouture/Ruesterholz Decl. at para. 157.

[^275]: *See Verizon Connecticut Order*, 16 FCC Rcd at 15153-56, paras.
    15-20; *Verizon Massachusetts Order*, 16 FCC Rcd at 9056, para. 123,
    and 9059, para. 130; *SWBT Kansas/Oklahoma Order*, 16 FCC Rcd 6237
    at 6326-27, paras. 181-182. We note that individual states and BOCs
    may define performance measures in different ways. We look to those
    measurements, however, that provide data most similar to data we
    have relied upon in past orders.

[^276]: Upon initial review, Verizon's installation quality measure
    appears to be out of parity; however, as discussed below, we
    conclude that the current benchmark for this measure in Pennsylvania
    is not appropriate for a parity comparison.

[^277]: *See* PO 1-06 (Average Response Time - Facility Availability -
    ADSL Loop Qualification); OR 1-04 (Order Confirmation Timeliness),
    Appendix B at B-4, B-14.

[^278]: There is no formal benchmark for the installation interval
    metric. We find, however, that the six-day interval currently
    offered by Verizon in Pennsylvania is an appropriate standard in
    Pennsylvania. Verizon met this standard for each month between
    February and June, 2001. *See* PR 2-02 (Average Interval Completed),
    Appendix B at B-18. Verizon also met the 5 percent benchmark for
    missed dispatch appointments for each month from February through
    June, 2001. *See* PR 4-04 (Percent Missed Dispatch Appointments),
    Appendix B at B-18. Verizon's performance for non-dispatch
    appointments is generally at parity as well. While Verizon's missed
    appointments for May 2001 spikes to 2.04 percent (compared to .12
    percent for retail), we find that this is not competitively
    significant because there are few competitive LEC orders that do not
    require a dispatch. *See* PR 4-05 (Percent Missed Non-Dispatch
    Appointments), Appendix B at B-18. Finally, for PR 5-01 (Percent
    Facility Missed Orders), Verizon missed parity between February and
    June, 2001, but since the rate of missed orders ranges from around 1
    percent to 3 percent, we do not find this to be competitively
    significant. *See* Appendix B at B-18.

[^279]: *See* MR 5-01 (Percent Repeat Reports Within 30 Days) and MR
    4-02/03 (Mean Time to Repair), Appendix B at B-22.

[^280]: *See, e.g*., MR 3-01/02 (Missed Appointment Rate) Appendix B at
    B-22. Verizon's missed loop appointments for competitive LECs exceed
    those for retail customers (MR 3-01) for February, 2001, Appendix
    B-22.

[^281]: For MR 2-02 (Network Trouble Report Rate -- Loop), Verizon's
    trouble report rate for competitors has trended in the .5 percent
    range between February and June, 2001. For MR 2-03 (Network Trouble
    Report Rate -- Central Office), Verizon's trouble report rate for
    competitors has trended around .1 percent.

[^282]: Verizon states that the New York Carrier-to-Carrier Working
    Group has established new guidelines for measuring installation
    quality, which compare Verizon's provision of xDSL-capable loops to
    competitive LECs and Verizon's provision of dispatched retail POTS.
    *See* Verizon Lacouture/Ruesterholz Reply Decl. at para. 65. We note
    that the Pennsylvania Commission has an ongoing proceeding in which
    it has indicated an express intention to similarly revise its
    performance measures. In addition, in previous section 271
    decisions, we have not relied upon a comparison with the BOC's
    advanced services affiliate when examining its performance in
    delivering stand-alone xDSL-capable loops to competitors. *See
    Verizon Connecticut Order*, 16 FCC Rcd at 14153-54, para. 15, n.31;
    *Verizon Massachusetts Order,* 16 FCC Rcd at 9059, para 130, n.411.

[^283]: *See, e.g.,* *Verizon Massachusetts Order*, 16 FCC Rcd at 9057,
    para. 126; *SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6326-27,
    paras. 182-83.

[^284]: The February to May, 2001 average for PR 6-01 (Percent
    Installation Troubles within 30 days) is 5.91 percent for
    competitive LECs, as compared to 1.76 percent for Verizon retail
    customers. *See* Appendix B at B-18. Verizon has recalculated these
    figures to account for the fact that this measure compares
    competitive LEC stand-alone xDSL-capable loop services to retail
    line sharing; the revised measure compares the competitive LEC
    services to dispatched retail POTS, where Verizon's trouble rate was
    6.2 percent. Verizon Lacouture/Ruesterholz Decl. at paras. 180-181;
    *see also* *supra* n.310. Under this revised measure, Verizon's
    performance for competitive LECs is at parity. *Id.*

[^285]: *See* Covad Comments at 4, 6-7.

[^286]: *See* Verizon Lacouture/Ruesterholz Reply Decl. at paras. 55-56.
    The error in Verizon's systems treated orders placed after 5:00 p.m.
    the same as orders received earlier that day, rather than as orders
    placed the following day. The result of this error was to treat the
    competitive LEC's order as requesting a longer provisioning interval
    than Verizon's standard interval and therefore, to exclude these
    orders from the performance metric. *Id.*

[^287]: *Id.* at para. 56*.*

[^288]: *See* Covad Comments at 8-10.

[^289]: *See* Verizon Lacouture/Ruesterholz Reply Decl. at paras. 66-68.

[^290]: *See* Covad Comments at 2-3, 8-9.

[^291]: *See* NAS Comments at 3-4; Letter from Rodney L. Joyce, Counsel,
    NAS, to Magalie Roman Salas, Secretary, Federal Communications
    Commission, CC Docket No. 01-138, at 1 (filed July 31, 2001) (NAS
    July 31 *Ex Parte* Letter). NAS argues that the Commission mandated
    cooperative testing and other changes in the Massachusetts section
    271 proceeding. *See* NAS Comments *id.*; NAS July 31 *Ex Parte*
    Letter, Attach. at 1. NAS also states that the installation quality
    measure should not exclude data from carriers that cooperatively
    test their lines. NAS Comments at 2 (citing *Verizon Massachusetts
    Order*, 16 FCC Rcd at 9069-9070, para. 146). Verizon indicates that
    revised business rules governing PR 6-01 include competitive LEC
    data regardless of whether the competitor cooperatively tests.
    Verizon Lacouture/Ruesterholz Decl. at paras. 180-181.

[^292]: Verizon Lacouture/Ruesterholz Reply Decl. at paras. 70-72.

[^293]: Verizon's installation intervals for dispatch services have been
    at parity for competitive LECs and for its own retail customers.
    *See* PR 1-02 (Average Interval Offered), PR 2-02 (Average Interval
    Completed), Appendix B at B-17. Verizon has been in parity for
    missed installation appointments since April 2001 (*see* PR 4-04
    Percent Missed Dispatch Appointments, Appendix B at B-18). Missed
    repair appointments have been better for competitive LECs than for
    Verizon's retail customers. *See* MR 3-01/02 (Missed Repair
    Appointment -- Loop/Central Office), Appendix B at B-21. While
    trouble report rates have been out of parity for most months, the
    overall rates have been lower than 2 percent for loop trouble and
    lower than 1 percent for central office trouble. *See* MR 2-02/03
    (Network Trouble Report Rate Loop/Central Office), Appendix B at
    B-21. Trouble duration has been in parity. *See* MR 4-01/02/03 (Mean
    Time to Repair -- Total/Loop/Central Office), Appendix B at B-21.
    Repeat trouble has been in parity for most recent months. *See* MR
    5-01 (Repeat Trouble Report), Appendix B at B-22.

[^294]: Verizon has been out of parity for installation quality for each
    reported month except March 2001, but only by approximately 4 to 5
    percent in recent months. *See* PR-6-01 (Percent Troubles Reported
    in 30 Days), Appendix B at B-18.

[^295]: In addition, we note that by the time it filed its application,
    Verizon had provisioned only 2,800 digital loops in Pennsylvania.
    *See* *supra* n. 300.

[^296]: *See* PR 9-01 (Percent On Time Performance -- Hot Cuts),
    Appendix B at B-16.

[^297]: *See* Verizon Lacouture/Ruesterholz Decl. at para. 138.

[^298]: *See* Verizon Lacouture/Ruesterholz Decl. at para. 137; PR 1-01
    (Average Interval Offered -- Total No Dispatch -- Hot Cut Loops), PR
    2-01 (Average Interval Completed -- Total No Dispatch -- Hot Cut
    Loops) Appendix B at B-16. In Pennsylvania, the standard interval
    for orders of 1-10 lines is six days, and for 11-20 lines, the
    standard interval is ten days. For orders larger than twenty lines,
    Verizon would negotiate an installation date. Verizon
    Lacouture/Ruesterholz Decl. at para. 137*.* Verizon indicates,
    however, that the standard interval is not an official benchmark
    standard in Pennsylvania as it is in New York. *See* *id*. at paras.
    136-137. Rather, Verizon's performance in Pennsylvania is measured
    by parity with its retail affiliate, even though there is no
    comparable retail product. *Id.* at para. 136.

[^299]: Verizon meets parity for trouble report rate and missed repair
    appointments. *See* MR 2-02/03 (Network Trouble Report Rate --
    Loop/Central Office) and MR 3-01/02 (Percent Missed Repair
    Appointment -- Loop/Central Office), Appendix B at B-20. In general,
    Verizon meets parity for loop trouble. While Verizon is out of
    parity for central office trouble, its performance has improved
    since January 2001. *See* MR 4-02/03, Appendix B at B-20. On one
    measure, repeat trouble, Verizon's performance has been worse for
    competitive LECs than for its retail customers. *See* MR 5-01
    (Percent Repeat Reports Within 30 Days -- POTS loop). Verizon
    argues, however, that competitive LECs have contributed to this
    problem because they often do not correctly locate the source of a
    problem or do not provide Verizon access to their customers. *See*
    Verizon Lacouture/Ruesterholz Decl. at paras. 123-126. Verizon also
    maintains that it lacks the capacity to test competitive LECs'
    loops. *Id.* at paras. 127-128.

[^300]: *See* PR 6-01, Appendix B at B-17. The incidence of trouble
    reported in 30 days has hovered between approximately two and three
    percent for competitive LECs, while remaining under two percent for
    Verizon's retail arm. While these numbers are not in strict parity,
    the difference is minimal.

[^301]: *See* PR 1-03 (Average Interval Offered -- Dispatch 1-5 lines --
    POTS loop) and PR 2-03 (Average Interval Completed -- Dispatch 1-5
    lines -- POTS loop), Appendix B at B-16 and B-17. Prior to April 21,
    2001, Verizon automatically assigned a six-day standard interval to
    competitive LECs. *See* Verizon Lacouture/Ruesterholz Decl. at para.
    109. For its own retail arm, Verizon assigns dates according to a
    "SMARTS clock", which takes into account work force and workload
    prior to assigning a date. *Id.* On April 21, 2001, Verizon began
    applying the SMARTS clock to competitive LECs as well. *Id.*

[^302]: Verizon's performance for intervals offered has achieved parity
    for May and June, 2001. Verizon's intervals completed have improved
    as well. *See* PR 1-03 and PR 2-03, Appendix B at B-16 and B-17.

[^303]: *See* Verizon Lacouture/Ruesterholz Decl. at para. 193;
    *Deployment of Wireline Services Offering Advanced
    Telecommunications Capabilities and Implementation of the Local
    Competition Provisions of the Telecommunications Act of 1996*, Third
    Report and Order, CC Docket No. 98-147, Fourth Report and Order, CC
    Docket No. 96-98, 14 FCC Rcd 20912 (1999) (*Line Sharing Order*)
    (*pet. for rehearing pending sub nom*. *USTA v. FCC*, DC Cir. No.
    00-102 (filed Jan. 18, 2000)); *Deployment of Wireline Services
    Offering Advanced Telecommunications Capabilities and Implementation
    of the Local Competition Provisions of the Telecommunications Act of
    1996*, Third Report and Order and Order on Reconsideration, CC
    Docket No. 98-147; Fourth Report and Order on Reconsideration, CC
    Docket No. 96-98; Third Further Notice of Proposed Rulemaking; CC
    Docket No. 98-147; Sixth Further Notice of Proposed Rulemaking; CC
    Docket No. 96-98, 16 FCC Rcd 2101 (2001) (*Line Sharing
    Reconsideration Order*).

[^304]: For PR 1-01 (Average Interval Offered -- Total No Dispatch),
    Verizon's Pennsylvania performance is at general parity for
    non-dispatch in relevant months. For PR 2-01, (Average Interval
    Completed -- Total No Dispatch), Verizon's performance has generally
    met parity. We note that Verizon's performance in April, according
    to this measure, is not in parity with its retail performance, but
    order volumes were significantly lower in April than in other recent
    months. For PR 4-05 (Percent Missed Appointments -- No dispatch),
    Verizon's performance is out of parity for several recent months,
    but we do not find the disparity to be competitively significant. We
    find the same to be true for PR 6-01 (Percent Installation Troubles
    Reported Within 30 Days). *See* Appendix B at B-18 and B-19. Covad
    contends that it was unable to obtain line sharing from Verizon in
    Pennsylvania until March 14, 2001, when Verizon certified it had
    solved problems associated with collocating its central offices to
    permit line sharing, long after the Commission's June 6, 2000,
    deadline for deploying line sharing. *See* Covad Comments at 12-13.
    We find that Verizon was providing line sharing in Pennsylvania as
    of June 21, 2001, the date it filed its section 271 application.
    *See* MR 4-03 (Mean Time to Repair -- Central Office Trouble). In
    cases where Verizon has not met parity, trouble report rates have
    been low. *See, e.g*., MR 2-03 (Network Trouble Report Rate --
    Central Office), Appendix B at B-22.

[^305]: *See* *Line Sharing Reconsideration* Order, 16 FCC Rcd at 2111,
    para. 20 n.36.

[^306]: *See* Verizon Lacouture/Ruesterholz Reply Decl. at paras.
    102-103.

[^307]: *See* Verizon Lacouture/Ruesterholz Reply Decl. at para. 104.
    Verizon is engaged in a line-splitting pilot in New York, which uses
    new OSS functionality to provide line splitting, while using the
    same loop and port. *Id.* at para 102.

[^308]: *See* PR 6-01 (Percent Installation Troubles within 30 days),
    Appendix B at B-19. Pennsylvania's data for repair performance show
    some disparities, but these are not competitively significant.
    Trouble reports have been out of parity for competitive LECs for
    each reported month, but the percentages have generally been under 2
    percent. *See* MR 2-01, Appendix B at B-22. Trouble duration has
    been out of parity for some months, but generally to a slight
    degree. *See* MR 4-01/02, Appendix B at B-22. Also, repeat trouble
    has been slight. *See* MR 5-01, Appendix B at B-23.

[^309]: *See* Verizon Lacouture/Ruesterholz Decl. at paras. 143,
    148-151. Verizon missed approximately 30 percent to 40 percent of
    competitive LEC's provisioning appointments for every month between
    February and June, 2001, and it takes Verizon approximately five to
    ten days longer to install high capacity loops for competitive LECs.
    One installation measure, Average Interval Offered, appears to be
    improving slightly. *See* PR 1-07 and PR 2-07 (Average Interval
    Offered and Completed for DS-1 lines) and PR 4-01 (Percent Total
    Missed Appointments), Appendix B at B-19; *but see* Verizon
    Lacouture/Ruesterholz Reply Decl. at para. 28.

[^310]: By the time it filed its application, Verizon had provisioned
    approximately 500 high capacity loops in Pennsylvania. *See* Verizon
    Application at 23, 26, 33; Verizon Lacouture/Ruesterholz Decl. at
    para. 140.

[^311]: *See* Broadslate Joint Comments at 8; Capsule Joint Comments at
    2-7; Covad Comments at 24-26. More broadly, competitors contend that
    Verizon will not perform necessary provisioning work for high
    capacity loops unless the competitive LEC orders them out of
    Verizon's special access tariffs. *See* Broadslate Joint Comments at
    3, 7, 9; Covad Comments at 26; ALTS Reply at 3, 7. In addition,
    carriers argue that once Verizon provisions a loop as a special
    access facility, Verizon refuses to convert it into an unbundled
    network element or charges prohibitively expensive termination fees
    to do so. *See, e.g.,* Broadslate Joint Comments at 3, 9-10; *but
    see* Verizon Lacouture/Ruesterholz Decl. at para. 44. One commenter
    indicates that prior to filing its section 271 application, Verizon
    had appeared willing to convert special access facilities to
    unbundled high capacity loops, but that its policy has since
    changed. *See* ALTS Reply at 3. Verizon argues that its policy has
    not changed. *See* Verizon Lacouture/Ruesterholz Reply Decl. at
    paras. 35-37 and Attach. 14.

[^312]: Verizon will fill a competitive LEC's order where "there are
    already high capacity loop facilities in use serving a customer."
    Verizon Lacouture/Ruesterholz Reply Decl. at para. 36; s*ee also
    id*. at Attach. 14; Letter from W. Scott Randolph, Director --
    Regulatory Affairs, Verizon, to Magalie Roman Salas, Secretary,
    Federal Communications Commission, CC Docket No. 01-138, at Attach.
    (filed August 24, 2001) (Verizon August 24 *Ex Parte* Letter).
    Verizon further explains that it will reject an order where "it does
    not have the common equipment in the central office, at the end
    user's location, or outside plant facility needed to provide a
    DS1/DS3 network element," or where, "there is no available wire or
    fiber facility between the central office and the end user." Verizon
    Lacouture/Ruesterholz Reply Decl. at Attach. 14*.*

[^313]: *See* Verizon August 24 *Ex Parte* Letter at 1.

[^314]: *Id.*

[^315]: Verizon Lacouture/Ruesterholz Reply Decl., Attach. 14.

[^316]: *Id.* at paras. 35-37 and Attach. 14. Verizon argues that it "is
    not obligated to construct new Unbundled Network Elements where such
    network facilities have not already been deployed for Verizon's use
    in providing service to its wholesale and retail customers." *Id.*
    at Attach. 14.

[^317]: *Id.*

[^318]: *See Verizon Massachusetts Order,* 16 FCC Rcd at 8993, para. 10,
    *SWBT Texas Order,* 15 FCC Rcd at 18366, para. 23.

[^319]: 47 U.S.C. § 271(c) (2)(B)(xiv). *See* Appendix C at para. 67.

[^320]: *See Verizon Connecticut Order*, 16 FCC Rcd at 14161-62, paras.
    30-33.

[^321]: *Association of Communications Enterprises* v. *FCC*, 235 F.3d
    662 (D.C. Cir. 2001) (*ASCENT*).

[^322]: *See Verizon Connecticut Order*, 16 FCC Rcd at 14161, para. 30.
    Section 251(c)(4) states that incumbent LECs must "offer for resale
    at wholesale rates any telecommunications service that \[they\]
    provide\[\] at retail . . . ." 47 U.S.C. § 251(c)(4).

[^323]: *See* Verizon Application at 52-56; Verizon Reply at 35, n.30;
    Letter from Dee May, Executive Director -- Federal Regulatory,
    Verizon, to Dorothy T. Attwood, Chief, Common Carrier Bureau,
    Federal Communications Commission, CC Docket No. 01-138 at 1 (filed
    July 9, 2001) (Verizon July 9 *Ex Parte* Letter).

[^324]: Verizon Application at 52 n.54; Verizon Lacouture/Ruesterholz
    Decl. at paras. 457-58.

[^325]: *See* Verizon Application at 52-53; Verizon
    Lacouture/Ruesterholz Decl. at paras. 457, 459, 461-62, 467-70,
    475-78; Verizon Taylor Decl. Attach. 1 at para. 1b.

[^326]: *See* VADI Tariff F.C.C. No.1, Transmittal 19 (filed August 31,
    2001); Letter from Jane Jackson, Chief, Competitive Pricing
    Division, Federal Communications Commission, to Donald R. Fowler,
    Director -- Tariffs, Verizon Advanced Data Inc. (rel. August 31,
    2001) (Special Permission Letter) (granting VADI's application and
    assigning Special Permission No. 01-093 and waiving 47 C.F.R.
    §§ 61.38 and 61.58). The Commission also has waived the relevant
    conditions in the *GTE/Bell Atlantic Merger Order*, 15 FCC Rcd
    14032, App. D, to allow Verizon and VADI to offer coordinated
    provision of voice and DSL services. *Application of GTE Corp.,
    transferor, and Bell Atlantic Corp., Transferee, For Consent to
    transfer of Control*, CC Docket No. 98-184, Order, DA 01-2039 (CCB
    rel. August 31, 2001).

[^327]: VADI Tariff F.C.C. No 1, 3^rd^ Revised Page 603 (effective Sept.
    1, 2001).

[^328]: *See, e.g*., ASCENT Comments at 10-13; AT&T Comments at 43-44;
    ASCENT Reply at 20; AT&T Reply at 21-23.

[^329]: *See* Verizon Aug. 31 *Ex Parte* Letter at 2. Verizon states
    that the five carriers currently providing resale service in
    Pennsylvania expressing an interest in the expanded DSL resale
    offering submitted a total of approximately 125 orders for new
    resold lines in Pennsylvania during July. On average, these carriers
    submitted approximately 40 orders per day during July for all types
    of resold voice lines, including feature changes and disconnects on
    resold lines. *Id.*

[^330]: *See, e.g*., AT&T Comments at 36, 44; ASCENT Reply at 20-23;
    AT&T Reply at 16-21; WorldCom Reply at 10-11.

[^331]: *Verizon Connecticut Order*, 16 FCC Rcd at 14162, para. 33.

[^332]: *See Verizon Massachusetts Order*, 16 FCC Rcd at 8993, para. 10,
    *SWBT Texas Order*, 15 FCC Rcd at 18366, para. 23.

[^333]: The Commission's procedural rules governing section 271
    applications provide that when an applicant files new information
    after the comment date, the Commission retains the discretion to
    start the 90-day review period again or to accord such information
    no weight in determining section 271 compliance. There is an
    exception to this approach for new information that is directly
    responsive to allegations raised in the comments, however. The
    Commission has also strictly limited the consideration of other
    developments that occur after the date for filing comments. *See
    Updated Filing Requirements for Bell Operating Company Applications
    Under Section 271 of the Communications Act*, Public Notice, 14 FCC
    Rcd 16128, 16130 (1999); Mar. 23 Section 271 Procedural Notice.

[^334]: We did not request comment on Verizon's August 31 *Ex Parte*
    Letter since it simply committed to accelerate the implementation
    schedule for expanded DSL resale which Verizon had agreed to in a
    filing made prior to the comment date. *See* Verizon July 9 *Ex
    Parte* Letter. We also note that interested parties were free to
    file *ex parte* comments on Verizon's accelerated implementation
    schedule.

[^335]: *Northeast Cellular Telephone Co. v. FCC*, 897 F.2d 1164, 1166
    (D.C. Cir. 1990); *WAIT Radio v. FCC*, 418 F.2d 1153 (D.C. Cir.
    1969).

[^336]: This is a natural consequence of the Commission's prior
    determination in the *GTE/Bell Atlantic Merger Order* requiring
    Verizon to provide advanced services through a separate corporate
    affiliate. *See GTE/Bell Atlantic Merger Order*, 15 FCC Rcd 14032 at
    Appendix D.

[^337]: The court did not issue the mandate in the *ASCENT* case until
    March 6, 2001, and the Commission released the *Verizon Connecticut
    Order* addressing the scope of Verizon's DSL resale obligations on
    July 20, 2001, after this application was filed.

[^338]: *See* Appendix C at paras. 17-24.

[^339]: Verizon Application at 17-22; Verizon Lacouture/Ruesterholz
    Decl. at paras. 9-96; Verizon Reply at 16-20; Verizon
    Lacouture/Ruesterholz Reply Decl. at paras. 105-124.

[^340]: Pennsylvania Commission Comments at 23-49.

[^341]: The commenting parties claim that Verizon's inclusion of
    language requiring a "Geographically Relevant Interconnection Point
    (GRIP)" in interconnection agreements effectively denies competing
    carriers the right to select a single point of interconnection
    because GRIP requires competitive carriers to build additional and
    unnecessary interconnection points. Or, alternatively, the
    competitive LEC is required to bear the costs of Verizon's transport
    from Verizon's designated interconnection point (IP), which is
    usually its end office of tandem, to the actual competitive LEC
    physical point of interconnection (POI), thereby improperly shifting
    to competing carriers inflated transport and switching costs
    associated with such an arrangement. *See* Sprint Comments at 2-8;
    WorldCom Comments at 30-31; Broadslate Joint Reply at 24-27; Letter
    from A. Renée Callahan, legal counsel for Sprint Communications
    Company L.P., to Magalie Roman Salas, Secretary, Federal
    Communications Commission, CC Docket No. 01-138 (filed August 16,
    2001) at 1 (Sprint Aug. 16 *Ex Parte* Letter); Letter from Sue D.
    Blumenfeld, legal counsel for Sprint Communications Company L.P., to
    Magalie Roman Salas, Secretary, Federal Communications Commission,
    CC Docket No. 01-138 (filed September 13, 2001) at 3 (Sprint Sept.
    13 *Ex Parte* Letter).

[^342]: Verizon Lacouture/Ruesterholz Decl. at para. 9 (emphasis added);
    Verizon Lacouture/Ruesterholz Reply Decl. at para. 107; Letter from
    Dee May, Assistant Vice President, Federal Regulatory, Verizon, to
    Magalie Roman Salas, Secretary, Federal Communications Commission,
    CC Docket No. 01-138, at 2-3 (filed September 10, 2001) (Verizon
    Sept. 10 *Ex Parte* Letter).

[^343]: Verizon Lacouture/Ruesterholz Reply Decl. at paras. 107-111.
    Verizon distinguishes the POI from the IP, which it defines as the
    point where traffic is dropped off for billing purposes.
    Traditionally, the physical point of interconnection is the same as
    the billing point. *See* Pennsylvania Commission Comments at 42-43
    n.136 (noting the crux of the issue lies in Verizon's distinction
    between the POI and the IP); Sprint Comments at 3-4 n.3.

[^344]: *Developing a Unified Intercarrier Compensation Regime,* CC
    Docket No. 01-92, Notice of Proposed Rulemaking, 16 FCC Rcd 9610,
    9634-9635, 9650-9652, paras. 72, 112-114 (2001) (*Intercarrier
    Compensation NPRM*).

[^345]: We note that Verizon currently is appealing the decision by the
    U.S. District Court of the Middle District of Pennsylvania ordering
    the Pennsylvania Commission to modify its arbitration decision
    approving an interconnection agreement that allowed a single point
    of interconnection per tandem instead of per LATA. *See* Verizon
    Application App. B, Tab O, Subtab 17 (*MCI v. Bell
    Atlantic-Pennsylvania*, No. CV-97-1857, slip op. at 14-15 (M.D. Pa.
    Jun. 30, 2000)); *see also* Sprint Comments at 5-7; WorldCom
    Comments at 31. In the future, to the extent that Verizon required
    competitive LECs to physically interconnect with Verizon at every
    tandem area (a smaller geographic area than a LATA), Verizon would
    not be in compliance with our rules.

[^346]: We note, however, that Verizon will have to comply with any rule
    adopted in the *Intercarrier Compensation* proceeding in order to
    remain in compliance with section 271.

[^347]: *See* Letter from Jason Oxman, Senior Counsel, Covad, to
    Michelle Carey, Chief, Policy and Program Planning Division, Common
    Carrier Bureau and Alexander Starr, Chief, Market Disputes
    Resolution Division, Enforcement Bureau, Federal Communications
    Commission, CC Docket No. 01-138 (filed August 3, 2001) (Covad Aug.
    3 *Ex Parte* Letter).

[^348]: 47 U.S.C. § 251(c)(6).

[^349]: *See, e.g*., *SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6355,
    para. 230; *SWBT Texas Order*, 15 FCC Rcd at 18366-67, paras. 22-27.

[^350]: Sprint Comments at 23; Sprint Aug. 16 *Ex Parte* Letter at 2;
    Sprint Sept. 13 *Ex Parte* Letter at 4.

[^351]: *Local Competition First Report and Order*, 11 FCC Rcd at 16109,
    para. 1247.

[^352]: Verizon has requested permission to collocate (*i.e.,*
    self-provision its own transport facilities to Sprint's POPs to
    deliver Sprint's local traffic) at Sprint's switch centers in its
    interconnection negotiations but it acknowledges that Sprint is not
    legally obligated to do so under the Act. Verizon also notes that it
    is currently in arbitration on this issue with Sprint before the
    Pennsylvania Commission. *See* Verizon Reply at 19 n.13; Verizon
    Lacouture/Ruesterholz Reply Decl. at paras. 117-118; Verizon Sept.
    10 *Ex Parte* Letter at 3; *see also* Sprint Aug. 16 *Ex Parte*
    Letter at Attach. 3.

[^353]: *See* CompTel Comments at 23; Covad Comments at 15-16; *see
    also* January 29, 2001 Report of Independent Public Accountants,
    Arthur Andersen LLP. This audit was conducted pursuant to conditions
    of the Commission's order approving the merger application of Bell
    Atlantic and GTE. CompTel and Covad claim that Verizon has failed to
    timely report space-exhausted offices on its website and failed to
    submit the appropriate information on space-exhausted offices to the
    Pennsylvania Commission before declaring that a central office was
    space-exhausted. CompTel Comments at 23; Covad Comments at 16. Covad
    also claims that Verizon requires competitive LECs to collocate with
    an intermediate point of interconnection, *e.g.*, point of
    termination (POT) bay, instead of direct connection to the
    incumbent's network when technically feasible. *See* Covad Comments
    at 16. In addition, Covad asserts that Verizon did not collect
    collocation application fees from its advanced services affiliate or
    charge its advanced services affiliate for completed virtual
    collocation arrangements. *Id.* at 15.

[^354]: Verizon Lacouture/Ruesterholz Decl. at paras. 86-96; Verizon
    Lacouture/Ruesterholz Reply Decl. at paras. 121-124.

[^355]: We are aware that the Enforcement Bureau has recently issued a
    Consent Decree following an investigation for possible violations of
    the Commission\'s rule requiring incumbent local exchange carriers
    promptly to post notices of premises that have run out of
    collocation space. *See* Verizon Communications, Inc., Consent
    Decree, File No. EB-01-IH-0236, DA-01-2079 (rel. Sept. 14, 2001).
    Therefore, we believe that the Enforcement Bureau, in its review
    prior to the issuance of the Consent Decree, has appropriately
    addressed the concerns raised in the audit.

[^356]: 47 U.S.C. § 271(c)(2)(B)(i).

[^357]: *See* 47 C.F.R. §§ 51.501-07, 51.509(g); *Local Competition
    First Report and Order*, 11 FCC Rcd at 15812-16, 15844-61, 15874-76,
    15912, paras. 618-29, 674-712, 743-51, 826.

[^358]: Pennsylvania Commission Comments at 38-39, 49.

[^359]: Sprint Comments at 19-22.

[^360]: *See* Verizon Lacouture/Ruesterholz Decl. at Attach. 12.

[^361]: Sprint Comments at 21 n. 36.

[^362]: *Id*.

[^363]: *See* Verizon Lacouture/Ruesterholz Decl. at para. 83.

[^364]: *Id*. at para. 80.

[^365]: *Id*. at para. 78.

[^366]: *Id.* at Attach. 12.

[^367]: *Id.* at para. 81.

[^368]: *See Verizon Massachusetts Order*, 16 FCC Rcd at 9100-03, paras.
    200-03.

[^369]: *See* Verizon Reply at 20; Verizon Lacouture/Ruesterholz Decl.
    at para. 85. We note that we are presently conducting a similar
    investigation with respect to the charges for DC power in Verizon's
    *interstate* collocation tariff. *See* *Bell Atlantic Telephone
    Companies Revisions in Tariff FCC Nos. 1 and 11*, CC Docket No.
    01-140, Order Designating Issues for Investigation, DA 01-1525 (CCB,
    rel. June 26, 2001).

[^370]: *See SWBT Texas Order*, 15 FCC Rcd at 18541, para. 383; *see
    also* 47 U.S.C. §§ 252(c), (e)(6); *AT&T Corp. v. Iowa Utils. Bd*.,
    525 U.S. 366 (1999).

[^371]: 47 U.S.C. § 271(c)(2)(B)(v). *See also* Appendix C at para. 53.

[^372]: *See* Verizon Lacouture/Ruesterholz Decl. at para. 270. The
    Pennsylvania Commission recently directed Verizon to offer dark
    fiber pursuant to tariffs, which Verizon asserts it has done. On
    July 11, 2001, Verizon filed revisions to its tariffs that contain
    rates, terms, and conditions for its dark fiber offering, which took
    effect on August 10, 2001. Verizon Lacouture/Ruesterholz Reply Decl.
    at para. 130.

[^373]: *See* Verizon Application at 40-41; Verizon
    Lacouture/Ruesterholz Decl. at paras. 249, 254, 270-271 and App. B,
    Tabs E3, E4, E6, E8, E10, E11 and E12; Verizon Reply at 28-31.

[^374]: *See* Pennsylvania Commission Comments at 172.

[^375]: *See* *SWBT Texas Order*, 15 FCC Rcd at 1851, para. 333; *Bell
    Atlantic New York Order*, 15 FCC Rcd at 4126, para. 339.

[^376]: Using the carrier-to-carrier numbers provided with the
    application, the five-month (February through June 2001) average for
    competitive LECs was 12.82 percent, compared to 2.3 percent for
    Verizon's retail "special services" provisioning. *See* PR-4-01
    (Provisioning of Special Services -- Missed Appointments -- Total
    IOF). Specifically, the competitive LEC missed appointment rates for
    February through June 2001 were 14.29 percent, 15.79 percent, 9.38
    percent, 21.05 percent, and 3.57 percent respectively. Verizon's
    performance for its own retail special services for the same period
    was 4.98 percent, 1.24 percent, 1.09 percent, 2.39 percent, and 1.80
    percent respectively.

[^377]: *See* Verizon Lacouture/Ruesterholz Decl. at para. 275. In
    Pennsylvania, the retail analogue for this measure historically has
    been all retail "special services," which predominantly includes
    relatively simple voice-grade services, rather than the more complex
    services that CLECs order. *Id.* at paras. 275-276. The revised
    retail analogue uses provisioning of retail DS-3s instead of retail
    special services because the unbundled interoffice facilities
    Verizon provides to competitive LECs are predominately at the DS-3
    level, rather than the voice grade level. *Id. See also* *Verizon
    Massachusetts Order*, 16 FCC Rcd at 9106, para. 210**.**

[^378]: *See* Verizon Lacouture/Ruesterholz Decl. at para. 275 and
    Attach. 68. The weighted average was based on missed installation
    appointments occurring between February and April 2001.

[^379]: Broadslate Joint Comments at 5-7; Capsule Joint Comments at 4-5.

[^380]: Broadslate Joint Comments at 7-11.

[^381]: *See* 47 C.F.R. §§ 51.307, 51.311, 51.319; *UNE Remand Order,*
    15 FCC Rcd at 3841-42, paras. 318-321.

[^382]: In the state proceeding, Cavalier noted that Verizon's current
    ordering system prevents CLECs from ordering dark fiber while
    collocation arrangements are being built or augmented. *See* Verizon
    Lacouture/Ruesterholz Decl. at para. 298. Sprint's comments also
    raise this issue with respect to transport facilities in general,
    noting that Verizon's transport ordering practices can subject
    competitive LECs to unreasonable delays in provisioning, or cause
    competitive LECs to lose access to transport that was available at
    the time a collocation order was placed. *See* Sprint Comments at
    9-13.

[^383]: Carriers that do not wish to use this method of provisioning
    will retain the option of using the current system. *See* Verizon
    Lacouture/Ruesterholz Decl. at para. 300. The implementation of this
    trial addresses Cavalier's concerns and Cavalier stipulates that
    Verizon meets the requirements of the checklist with respect to dark
    fiber. *See* Verizon Lacouture/Ruesterholz Reply Decl. at para. 129.

[^384]: The current Sprint trial is being conducted in Maryland.
    However, Verizon states that it will be able to apply the results of
    the Maryland trial to Pennsylvania, as the systems and procedures in
    place in both states are similar. *See* Verizon
    Lacouture/Ruesterholz Reply Decl. at para. 120. A Pennsylvania
    administrative law judge issued a recommended decision on August 8,
    2001 that requires Verizon to implement the parallel ordering and
    provisioning process for transport by December 31, 2001. *See*
    Sprint August 16 *Ex Parte* Letter.

[^385]: *See* Yipes Comments at 2-3.

[^386]: *See* Yipes Comments at 3; Verizon Lacouture/Ruesterholz Reply
    Decl. at para. 131. According to Verizon, the arbitration hearings
    began July 27, 2001, and a decision is not due until late October.

[^387]: Yipes has withdrawn from the arbitration its claim that Verizon
    does not allow a competitive LEC to collocate a fiber patch panel in
    order to connect to dark fiber upon which construction is not
    complete. *See* Yipes Comments at 12; Verizon Lacouture/Ruesterholz
    Reply Decl. at para. 135. Verizon states that it will not pursue
    implementation of the provision allowing it to "take back"
    provisioned dark fiber where Verizon determines that the fiber is
    being "underutilized." *See* Yipes Comments at 15; Verizon
    Lacouture/Ruesterholz Reply Decl. at para. 137.

[^388]: 47 U.S.C. § 271(c)(2)(B)(viii); *see* Appendix C at paras.
    59-60.

[^389]: Verizon provides competitive LECs with white page directory
    listings under interconnection agreements and tariffs. Verizon
    Lacouture/Ruesterholz Decl. at para. 380.

[^390]: KPMG Final Report at 415. KPMG reviewed a sample of directory
    listings orders and found that Verizon provisioned correctly 153 out
    of 156 orders, a 98 percent accuracy rate. Where, as here, there is
    no retail analogue to measure commercial performance, we will
    consider other evidence, such as independent third-party testing, in
    making our determination as to whether a BOC provides
    nondiscriminatory access. *See, e.g., Bell Atlantic New York Order,*
    15 FCC Rcd at 3993, para. 89.

[^391]: Verizon Application App. B, Tab D.

[^392]: Pennsylvania Commission Comments at 207-209.

[^393]: Broadslate Joint Comments at 15-18, 20-22; Broadslate Joint
    Reply at 13-20.

[^394]: Broadslate Joint Comments Exhibit A, Declaration of Craig Plue
    on behalf of XO Communications, Inc., at para. 18 (Broadslate Plue
    Decl.). The LVR is a draft of the directory listings provided to
    competitive LECs for pre-publication review. Verizon
    Lacouture/Ruesterholz Decl. at para. 393.

[^395]: Verizon Lacouture/Ruesterholz Reply Decl. at paras. 138, 140.

[^396]: Verizon Lacouture/Ruesterholz Decl. at paras. 403-404. Verizon
    states that it has created a "quality assurance team" to verify the
    accuracy of its provisioning of competitive LEC orders. Verizon also
    states that it has designated a group of employees to serve as the
    single point of contact in responding to competitive LEC requests to
    emend listings in the LVR. *Id*. Broadslate, *et al.*, concede that
    these steps "may offer some assistance to CLECs in correcting
    errors." Broadslate Joint Comments at 19.

[^397]: *See, e.g., BellSouth Second Louisiana Order*, 13 FCC Rcd at
    20749, para. 257.

[^398]: *See, e.g.,* POCA Comments at 22-24. *See also* Broadslate Joint
    Comments Exhibit C, Declaration of Ronald L. Reeder on behalf of
    CTSI, Inc., at paras. 3-5 (Broadslate Reeder Decl.); Broadslate
    Joint Reply at 13, 17-18. We received additional information
    regarding errors in the Lancaster area directory. *See* Letter from
    Robin F. Cohen, Counsel for CTSI, Inc., to Magalie R. Salas,
    Secretary, Federal Communications Commission, CC Docket No. 01-138,
    at 1 and Attachments (filed Sept. 13, 2001) (CTSI Sept. 13 *Ex
    Parte* Letter). Due to its lateness, we exercise our discretion to
    give this evidence minimal weight. Moreover, based on our limited
    review, we find that CTSI's claims do not undermine our conclusions
    regarding this checklist item.

[^399]: Verizon Lacouture/Ruesterholz Reply Decl. at para. 139. Verizon
    states that it accurately provisioned 99 percent of CTSI's customers
    listings for the Wyoming Valley directory, and 99.4 percent of CTSI
    listings for the Hazelton directory. *Cf. SWBT Texas Order*, 15 FCC
    Rcd at 18530, para. 358; *Bell Atlantic New York Order*, 15 FCC Rcd
    at 4045, para. 176. The benchmark for manual updates to the SWBT
    directory assistance database in Texas is a 97 percent accuracy
    rate. *See SWBT Kansas/Oklahoma Order,* 15 FCC Rcd at 18529, para.
    355, n.988 (*citing* SWBT Dysant Texas I aff. at paras. 640-641,
    646-648 and Attach. A at 133-136 (PM 110-113)).

[^400]: *See, e.g., Verizon Massachusetts Order,* 16 FCC Rcd at 9093,
    para. 184*; Bell Atlantic New York Order*, 15 FCC Rcd at 3976,
    paras. 59-60 ("Finally, in some instances, we may find that
    statistically significant differences in measured performance may
    exist, but that such differences have little or no competitive
    significance in the marketplace. As such, we may deem such
    differences non-cognizable under the statutory standard.")

[^401]: Broadslate Joint Comments at 16-22; POCA Comments at 18-20.

[^402]: *See, e.g.,* *Bell Atlantic New York Order*, 15 FCC Rcd at 3992,
    paras. 83-84, 87-89; *Ameritech Michigan Order*, 12 FCC Rcd at
    20616-18, paras. 137-138, and 20638, para. 180.

[^403]: Verizon states that it will adopt additional procedures by
    October 2001 intended to ensure that all competitive LEC orders
    clearly indicate how Verizon should process their customer listing
    information. Verizon Lacouture/Ruesterholz Decl. at para. 406.
    Verizon also has committed to implementing in the first quarter of
    2002, further improvements to its systems intended to automate the
    transfer of customer listing information that is currently handled
    on a manual basis by Verizon. *Id*.

[^404]: 47 U.S.C. § 271(c)(2)(B)(xiii); *see* Appendix C at para. 66.

[^405]: 47 U.S.C. § 252(d)(2)(A).

[^406]: Sprint Comments at 15-18.

[^407]: *See* Verizon Reply at 34 n.29; Sprint Aug. 16 *Ex Parte* Letter
    at Attach. 3 (Recommended Decision).

[^408]: *SWBT Texas Order*, 15 FCC Rcd at 18541, para. 383.

[^409]: *See* Broadslate Joint Comments at 26-28, Capsule Joint Comments
    at 24-27.

[^410]: *See Implementation of the Local Competition Provisions in the
    Telecommunications Act of 1996: Inter-Carrier Compensation for
    ISP-Bound Traffic*, Declaratory Ruling in CC Docket No. 96-98 and
    Notice of Proposed Rulemaking in CC Docket No. 96-98, 14 FCC Rcd
    3689 at 3706, para. 26 n.87 (1999) (*Reciprocal Compensation
    Declaratory Ruling*), *rev'd and remanded sub nom.* *Bell Atlantic
    Tel. Cos. v. FCC*, 206 F.3d 1 (D.C. Cir. 2000).

[^411]: *See Implementation of the Local Competition Provisions in the
    Telecommunications Act of 1996 and Inter-Carrier Compensation for
    ISP-Bound Traffic*, Order on Remand and Report and Order, CC Docket
    Nos. 96-98 and 99-68, 16 FCC Rcd 9151, 9167, 9171-72, paras. 35, 44
    (2001).

[^412]: *Bell Atlantic New York Order*, 15 FCC Rcd at 4142, para. 377.

[^413]: 47 U.S.C. § 271(c)(2)(B)(iii).

[^414]: *Id*. § 271(c)(2)(B)(vi).

[^415]: *Id*. § 271(c)(2)(B)(vii).

[^416]: *Id*. § 271(c)(2)(B)(ix).

[^417]: *Id*. § 271(c)(2)(B)(x).

[^418]: *Id*. § 271(c)(2)(B)(xi).

[^419]: *Id*. § 271(c)(2)(B)(xii).

[^420]: *See* Verizon Application at 44-45 (checklist item 3), 40-41
    (checklist item 6), 45-47 (checklist item 7), 49 (checklist item 9),
    49-50 (checklist item 10), and 51 (checklist items 11 and 12);
    Lacouture/Ruesterholz Decl. at paras. 316-343 (checklist item 3),
    249-269 (checklist item 6), 344-377 (checklist item 7), 409-413
    (checklist item 9), 414-439 (checklist item 10), 440-448 (checklist
    item 11), and 449-454 (checklist item 12). *See also* Appendix B.

[^421]: *See* Pennsylvania Commission Comments at 107-119 (checklist
    item 3), 172-180 (checklist item 6), 189 (checklist item 7 (the
    Pennsylvania Commission requires that Verizon continue to offer
    directory assistance/operator services as a UNE until Verizon is
    able to provide customized routing)), 212 (checklist item 9), 216
    (checklist item 10), 224 (checklist item 11), and 226 (checklist
    item 12).

[^422]: 47 U.S.C. § 271(d)(3)(A).

[^423]: *Id.*

[^424]: Pennsylvania Commission Comments at 21-22.

[^425]: Verizon Application at 8-10.

[^426]: *See* *SWBT Oklahoma Order*, 12 FCC Rcd at 8695, para. 14.

[^427]: 47 U.S.C. § 271(d)(3)(B). *See* Appendix C at paras. 68-69.

[^428]: *See* Verizon Application at 68-73; Verizon Application App. A,
    Vol. 4, Tab F, Declaration of Susan C. Browning at para. 4 (Verizon
    Browning Decl.).

[^429]: *Verizon Connecticut Order*, 16 FCC Rcd at 14178-79, para. 73;
    *Verizon Massachusetts Order*, 16 FCC Rcd at 9114-17, paras. 226-31;
    *Bell Atlantic New York Order*, 15 FCC Rcd at 4152-61, paras.
    401-21; Verizon Application at 68-73; Verizon Browning Decl. at
    paras. 4-49.

[^430]: We recognize that the first independent audit of Verizon's
    section 272 compliance conducted pursuant to section 53.209 of the
    Commission's rules is now complete. *See* Letter from
    PriceWaterhouseCoopers LLP to Magalie Roman Salas, Secretary,
    Federal Communications Commission (June 11, 2001) (transmitting
    audit report). While the audit raises issues that may require
    further investigation, the audit results are not a legal
    determination of Verizon's section 272 compliance. Parties were
    required to submit comments on the audit report no later than August
    20, 2001. *See* 47 C.F.R. § 53.213(d) (establishing 60-day comment
    period after audit report is made public). Because the Commission
    will not have had the opportunity to complete its own review of the
    audit results before it is required to issue a decision on this
    section 271 application, it would be premature to consider the audit
    as evidence of shortcomings in Verizon's section 272 compliance.
    *See* 47 U.S.C. § 271(d)(3) (establishing 90-day deadline after
    receipt of section 271 application for issuing a written
    determination).

[^431]: *See* 47 U.S.C. § 271(d)(3)(C); Appendix C at paras. 70-72.

[^432]: We emphasize that grant of this application *does not* reflect
    any conclusion that Verizon's conduct in the individual instances
    cited by commenters is nondiscriminatory and complies with the
    company's obligations under the Communications Act.

[^433]: *See SWBT Texas Order*, 15 FCC Rcd at 18558-59, para. 419.

[^434]: AT&T Comments at 66-75; Covad Comments at 27.

[^435]: AT&T Comments at 66-75.

[^436]: Covad Comments at 27.

[^437]: *See* *Ameritech Michigan Order*, 12 FCC Rcd at 20585, para. 77.

[^438]: Pennsylvania Commission Reply at 8-10 ("There is a rebuttable
    presumption that the features of the New York Remedies Plan will be
    adopted...").

[^439]: *Ameritech Michigan Order*, 12 FCC Rcd at 20748-50, paras.
    393-398. We note that in all of the previous applications that we
    have granted to date, the applicant was subject to an enforcement
    plan administered by the relevant state commission to protect
    against backsliding after BOC entry into the long-distance market.

[^440]: In our other section 271 applications, the relevant state
    commission had adopted either the New York or Texas plans for use in
    their respective state. *See SWBT Texas Order,* 15 FCC Rcd at 18560,
    para. 421; *Bell Atlantic New York Order,* 15 FCC Rcd at 4166-67,
    para. 433.

[^441]: *SWBT Texas Order*, 15 FCC Rcd at 18558-59, para. 423; *Bell
    Atlantic New York Order*, 15 FCC Rcd at 4166-67, para. 433.

[^442]: *See Ameritech Michigan* *Order*, 12 FCC Rcd at 20748, para.
    393. The Commission has previously predicted that the enforcement
    mechanisms developed in different plans developed by New York and
    Texas would be effective in practice. *See*, *e.g.*, *Bell Atlantic
    New York Order*, 15 FCC Rcd at 4166-67, para. 433. This prediction
    was based on five characteristics*:* potential liability that
    provides a meaningful and significant incentive to comply with the
    designated performance standards; clearly-articulated,
    pre-determined measures and standards, which encompass a
    comprehensive range of carrier-to-carrier performance; a reasonable
    structure that is designed to detect and sanction poor performance
    when it occurs; a self-executing mechanism that does not leave the
    door open unreasonably to litigation and appeal; and reasonable
    assurances that the reported data are accurate. *Id*.; *see also
    SWBT Texas Order*, 15 FCC Rcd at 18558-59, para. 423.

[^443]: We note that Verizon has voluntarily agreed to certain changes
    to the existing PAP pending approval of a revised PAP by the
    Pennsylvania Commission. Letter from Gordon R. Evans, Vice
    President, Federal Regulatory, Verizon to Magalie Roman Salas,
    Secretary, Federal Communications Commission, CC Docket No. 01-138
    at 2-3 (filed August 31, 2001). Verizon commits to allow individual
    competitive LECs to make a one-time choice for remedies for poor
    performance between the existing PAP and any remedy plan that may
    exist in their individual interconnection agreements. Verizon also
    agrees that in the event it believes a specific penalty payment
    under the existing PAP is not warranted for reasons stated in the
    existing PAP, it will not invoke its existing right to place such
    payments into escrow but instead will pay the penalty and then
    petition the Pennsylvania Commission for determination of whether
    Verizon should not have to make the specific payment. *Id.*

[^444]: Verizon Guerard/Canny/DeVito Decl. at paras. 13, 15-21.

[^445]: Verizon Application at 85. *See also* Pennsylvania Commission
    Reply at 8-9 ("There is a rebuttable presumption that features of
    the New York remedies plan will be adopted, *i.e*., weighing of
    metrics and liability cap." "Improvements may also include the
    promotion of efficiencies for all carriers through adoption of
    metrics common to other jurisdictions in the Verizon footprint.").
    Verizon proposes two alternate PAPs, one closely modeled on the
    existing New York PAP with changes to the penalty cap amount, a
    relative-weight scoring system for metrics and a phased-in
    flow-through metric benchmark. The other proposed plan is
    characterized by Verizon as incorporating elements of both the New
    York and Texas PAPs and includes the changes to the New York PAP
    indicated above as well as modifying the penalty payments structure
    to a per occurrence basis and adding penalties for the first-month
    of missing a performance metric. Verizon Reply at 65-70.

[^446]: *See, e.g*., *Verizon Massachusetts Order*, 16 FCC Rcd at
    9121-25, paras. 240-247; *SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at
    6377-81, paras. 273-278;.

[^447]: Department of Justice Evaluation at 16-17; AT&T Comments at
    61-63; Broadslate Joint Comments at 20-22; WorldCom Comments at 8;
    AT&T Reply at 38-39.

[^448]: Verizon Application at 88-90. *See Bell Atlantic New York
    Order*, 15 FCC Rcd at 4165, para. 430 (stating that the BOC "risks
    liability through antitrust and other private causes of action if it
    performs in an unlawfully discriminatory manner") (footnote
    omitted); *SWBT Texas Order*, 15 FCC Rcd at 18560, para. 421 (same).

[^449]: Department of Justice Evaluation at 14-15; AT&T Comments at
    54-65; CompTel Comments at 22; CWA Comments at 6; WorldCom Comments
    at 14-19. We note that CWA's comments pertain to information
    regarding Verizon's conduct in New York.

[^450]: Verizon Application at 88-90.

[^451]: Pennsylvania Commission Comments, App. I (Pennsylvania
    Commission's conditional approval, and Verizon letter accepting
    conditions).

[^452]: AT&T Comments at 65-66; WorldCom Comments at 9; AT&T Reply at
    44-45.

[^453]: AT&T Comments at 64-66; POCA Comments at 5, 32-40; WorldCom
    Comments at 31.

[^454]: Pennsylvania Commission Reply at 6-7. The Pennsylvania
    Commission believes "... Verizon is not likely to maintain a claim,
    in a subsequent litigation after Section 271 approval is obtained
    ...." *Id.*

[^455]: WorldCom Comments at 29-30. When a local freeze is in effect,
    customers wishing to change local service providers must contact
    their current provider before the customer\'s new carrier submits
    the change of service order or the new carrier\'s order to migrate
    the customer is rejected by the current provider.

[^456]: *See In the Matter of Implementation of the Subscriber Carrier
    Selection Changes Provisions of the Telecommunications Act of 1996,*
    CC Docket No. 94-129, Second Report and Order and Further Notice of
    Proposed Rulemaking, 14 FCC Rcd 1508, 1589-90, paras. 135-137
    (1998).

[^457]: WorldCom has a pending complaint before the Pennsylvania
    Commission regarding Verizon's Local Service Provider Protection
    Service. *See* MCI WorldCom Communications, Inc. v. Verizon
    Pennsylvania Inc., Docket No. C-00015149.

[^458]: AT&T Comments at 80-81.

[^459]: *See, e.g.*, 47 USC § 271(c)(2)(B) ("\[a\]ccess or
    interconnection provided or generally offered by a Bell operating
    company to other telecommunications carriers meets the requirements
    of this subparagraph if such access and interconnection includes
    each of the following . . .\[setting forth the checklist
    requirements\].")

[^460]: 47 U.S.C. § 153(4).

[^461]: 47 U.S.C. § 271(d)(6).

[^462]: *SWBT Kansas/Oklahoma* 16 FCC Rcd at 6382-84, paras. 283-85;
    *SWBT Texas Order,* 15 FCC Rcd at 18567-68, paras. 434-36; *Bell
    Atlantic New York Order,* 15 FCC Rcd at 4174, paras. 446-53. *See*
    Appendix C.

[^463]: 47 U.S.C. § 271(d)(6)(A).

[^464]: ASCENT Comments at 14-19; AT&T Comments at 65-67; Capsule Joint
    Comments at 16-21; CompTel Comments at 5-8; Curry Comments at 5-7;
    WorldCom Comments at 4-5; Z-Tel Comments at 5-11; WorldCom Reply at
    7-10.

[^465]: Department of Justice Evaluation at 7-14.

[^466]: *See supra* Section III(A)(1)(b).

[^467]: *See* 47 U.S.C. § 271(d)(6).

[^468]: *See, e.g., Bell Atlantic-New York, Authorization Under Section
    271 of the Communications Act to Provide In-Region, InterLATA
    Service in the State of New York,* File No. EB-00-IH-0085*,* Order,
    15 FCC Rcd 5413 (2000) (adopting consent decree between the
    Commission and Bell Atlantic that included provisions for Bell
    Atlantic to make a voluntary payment of \$3,000,000 to the United
    States Treasury, with additional payments if Bell Atlantic failed to
    meet specified performance standards and weekly reporting
    requirements to gauge Bell Atlantic's performance in correcting the
    problems associated with its electronic ordering systems).

[^469]: The Telecommunication Act of 1996, Pub. L. No. 104-104, 110
    Stat. 56 (1996).

[^470]: *See In the Matter of Application of Ameritech Michigan Pursuant
    to Section 271 of the Communications Act of 1934, as Amended, To
    Provide In-Region, InterLATA Services in Michigan*, 12 F.C.C. Rcd.
    20, ¶ 9 (1997) (*Michigan 271*).

[^471]: Evaluation of the United States Department of Justice, In the
    Matter of Application by Verizon Pennsylvania Inc., Verizon Long
    Distance, Verizon Enterprise Solutions, Verizon Global Networks,
    Inc., and Verizon Select Services Inc., for Authorization to Provide
    In-Region, InterLATA Services in Pennsylvania, CC Docket No. 01-138,
    14-15 (July 26, 2001) (citation omitted) (DOJ Evaluation).

[^472]: *United States v. American Telegraph & Telephone Co*., 552 F.
    Supp. 131, 188 (D. D.C. 1982) (Modification of Final Judgement).

[^473]: *See Michigan 271* at ¶ 10.

[^474]: *Id.* at ¶ 14. *See also In the Matter of Application of
    BellSouth Corporation, BellSouth Telecommunications, Inc., and
    BellSouth Long distance, Inc. for Provision of In-Region InterLATA
    Services in Louisiana*, 13 F.C.C. Rcd. 20, ¶ 3 (1998).

[^475]: *Michigan 271* at ¶ 18.

[^476]: *Id.* at ¶ 18.

[^477]: *In the Matter of Application of Verizon New England Inc., Bell
    Atlantic Communications Inc. (D/B/A Verizon Long Distance), NYNEX
    Long Distance Company (D/B/A Verizon Enterprise Solutions), and
    Verizon Global networks Inc. for Authorization to Provide In-Region
    InterLATA Services in Massachusetts*, 16 F.C.C. Rcd. 8988, ¶ 11
    (2001) (*Massachusetts 271*).

[^478]: 47 U.S.C. § 271(c)(2)(B).

[^479]: *In the Matter of Application by Verizon Pennsylvania Inc.,
    Verizon Long Distance, Verizon Enterprise Solutions, Verizon Global
    Networks Inc., and Verizon Select Services Inc. for Authorization To
    Provide In-Region, InterLATA Services in Pennsylvania*, (CC Docket
    No. 01-138), ¶ 12 (*Pennsylvania 271*). *See also Bell Atlantic New
    York Order*, 15 FCC Rcd at 3989, ¶ 82.

[^480]: *Pennsylvania 271* at ¶ 13.

[^481]: *Id.* at ¶ 22.

[^482]: *Id.* at ¶ 23 (citations omitted). *See also* *id*. at ¶ 13
    ("Wholesale bills are essential \[to competitors\] because
    competitive LECs must monitor the costs they incur in providing
    services to their customers.").

[^483]: *Id.* at ¶ 23 (citations omitted). "BOS-BDT" refers to the
    "Billing Output Specification (BOS) Bill Data Type (BDT) electronic
    billing format.

[^484]: *See* *Massachusetts 271* at ¶ 11.

[^485]: *Id*. Note that the Commission has found that "\[i\]n the first
    instance . . . a BOC must present a prima facie case in its
    application that all of the requirements of section 271 have been
    satisfied. Once the applicant has made such a showing, opponents of
    the BOC\'s entry must, as a practical matter, produce evidence and
    arguments necessary to show that the application does not satisfy
    the requirements of section 271 or risk a ruling in the BOC\'s
    favor. We emphasize, however, that the BOC applicant retains at all
    times the ultimate burden of proof that its application satisfies
    section 271." *Michigan 271* at 44.

[^486]: *In the Matter of Application by SBC Communications Inc.,
    Southwestern Bell Telephone Company, and Southwestern Bell
    Communications Services Inc. D/B/A/ Southwestern Bell Long
    Distance,* 15 F.C.C. Rcd. 18, ¶ 48 (2000).

[^487]: *Procedures for Bell Operating company Applications Under New
    Section 271of the Communications Act*, 11 F.C.C. Rcd. 19 (Dec. 6,
    1996).

[^488]: *Michigan 271* at ¶ 55.

[^489]: *See* Reply Comments of Z-Tel at ¶ 4 and footnote 1; *Ex Parte*
    Letter of Z-Tel at 3 (August 10, 2001); *Ex Parte* Letter of Z-Tel
    at 2-3 (August 17, 2001); WorldCom Reply Comments at 4-5;
    Lichtenberg Reply Declaration at ¶ 21, 23-28; Fawzi/Kirchberber
    Declaration at ¶¶ 93-95. It is important to note that these
    commenters indicate that problems with bills received after the
    software change relied upon by the majority. There is additional
    evidence that bills prior to June contained serious errors as well,
    including an admission by Verizon of billing errors. *See, e.g.,*
    Verizon McLean/Wierzbicki/Webster Declaration at ¶ 135.

[^490]: *See* *Pennsylvania 271* at ¶ 18 and footnote 55.

[^491]: *Id.* at ¶ 15.

[^492]: *See* *DOJ Evaluation* at 7-8.

[^493]: Consultative Report of the Pennsylvania Public Utilities
    Commission, 100-103 (June 25, 2001).

[^494]: Dissenting Statement of Commissioner Nora Mead Brownell, 1,
    (June 6, 2001).

[^495]: Dissenting Statement of Commissioner Terrance J. Fitzpatrick, 2
    (June 6, 2001).

[^496]: *DOJ Evaluation* at 3.

[^497]: *Id.* at 3.

[^498]: *Pennsylvania 271* at ¶ 37.

[^499]: *Id.* at ¶ 24.

[^500]: *Id.*

[^501]: *Id.*

[^502]: *See* KPMG, Verizon Pennsylvania Inc. OSS Evaluation Project
    Final Report (Dec. 22, 2000).

[^503]: *See Pennsylvania 271* at ¶ 21.

[^504]: *Id.* at ¶ 24.

[^505]: *DOJ Evaluation* at 10.

[^506]: *Pennsylvania 271* at ¶ 26 ("Verizon concedes past problems,
    particularly with the BOS BDT bill \[but\] contends that recent data
    show significantly improved performance.").

[^507]: *See* Reply Comments of Z-Tel at ¶ 4 and footnote 1; *Ex Parte*
    Letter of Z-Tel at 3 (August 10, 2001); *Ex Parte* Letter of Z-Tel
    at 2-3 (August 17, 2001); WorldCom Reply Comments at 4-5;
    Lichtenberg Reply Declaration at ¶ 21, 23-28; Fawzi/Kirchberber
    Declaration at ¶¶ 93-95. I note that in subsequent *Ex Parte*
    filings, these parties state that serious billing problems persist
    beyond the June bill, spilling into the July and August bills. While
    these *Ex Parte* communications occurred late in our process, to the
    extent that improvements in the July and August billing cycles give
    the Majority additional comfort in the decision that Verizon has
    complied with item 2, this evidence is important.

[^508]: 47 U.S.C. § 271(c)(2)(B).

[^509]: AT&T Comments at 22-30; WorldCom Comments at 22-25.

[^510]: *Id*.

[^511]: *Pennsylvania 271* at ¶ 55.

[^512]: *Id.* at ¶¶ 58-59.

[^513]: *Id.* at ¶ 60.

[^514]: *Id.* at ¶61 and footnote 242.

[^515]: *Id.* at ¶ 58-60.

[^516]: *Id.* at ¶ 63.

[^517]: *See* Recommended Decision on Module 3 Issues, Administrative
    Law Judge Joel A. Linsider, Case 98-C-1357.

[^518]: *See Massachusetts 271* at ¶¶ 29-30.

[^519]: 47 U.S.C. § 271(d)(3)(c).

[^520]: *Pennsylvania 271* at ¶ 127.

[^521]: *Michigan 271* at ¶ 22.

[^522]: *Pennsylvania 271* at ¶ 129.

[^523]: *DOJ Evaluation*, 14-15 (citation omitted).

[^524]: *See* Letter of William B. Petersen to James J. McNulty Re:
    Performance Measures Remedies, Doc. No. M-00011468, 1.

[^525]: *Michigan 271* at ¶ 23.

[^526]: For purposes of 271 proceedings, the Commission uses the
    definition of the term "Bell Operating Company" contained in 47
    U.S.C. § 153(4).

[^527]: 47 U.S.C. § 271(d)(1). For purposes of 271 proceedings, the
    Commission utilizes the definition of the term "in-region state"
    that is contained in 47 U.S.C. § 271(i)(1). Section 271(j) provides
    that a BOC's in-region services include 800 service, private line
    service, or their equivalents that terminate in an in-region state
    of that BOC and that allow the called party to determine the
    interLATA carrier, even if such services originate out-of-region.
    *Id.* § 271(j). The 1996 Act defines "interLATA services" as
    "telecommunications between a point located in a local access and
    transport area and a point located outside such area." *Id.* §
    153(21). Under the 1996 Act, a "local access and transport area"
    (LATA) is "a contiguous geographic area (A) established before the
    date of enactment of the \[1996 Act\] by a \[BOC\] such that no
    exchange area includes points within more than 1 metropolitan
    statistical area, consolidated metropolitan statistical area, or
    State, except as expressly permitted under the AT&T Consent Decree;
    or (B) established or modified by a \[BOC\] after such date of
    enactment and approved by the Commission." *Id.* § 153(25). LATAs
    were created as part of the Modification of Final Judgment's (MFJ)
    "plan of reorganization." *United States v. Western Elec. Co.*, 569
    F. Supp. 1057 (D.D.C. 1983), *aff'd sub nom.* *California v. United
    States*, 464 U.S. 1013 (1983). Pursuant to the MFJ, "all \[BOC\]
    territory in the continental United States \[was\] divided into
    LATAs, generally centering upon a city or other identifiable
    community of interest." *United States v. Western Elec. Co.*, 569 F.
    Supp. 990, 993-94 (D.D.C. 1983).

[^528]: 47 U.S.C. § 271(d)(3).

[^529]: *Id*. § 271(d)(2)(A).

[^530]: *Id*. § 271(d)(2)(B).

[^531]: *Bell Atlantic New York Order*, 15 FCC Rcd at 3962, para. 20;
    *Application of Ameritech Michigan Pursuant to Section 271 of the
    Communications Act of 1934, as amended,* CC Docket No. 97-137, 12
    FCC Rcd 20543, 20559-60 (1997) (*Ameritech Michigan Order*). As the
    D.C. Circuit has held, "\[A\]lthough the Commission must consult
    with the state commissions, the statute does not require the
    Commission to give State Commissions' views any particular weight."
    *SBC Communications v. FCC*, 138 F.3d at 416.

[^532]: *Ameritech Michigan Order*, 12 FCC Rcd at 20560; *SBC
    Communications v. FCC*, 138 F.3d at 416-17.

[^533]: 47 U.S.C. § 271(d)(3)(A). *See* Section III, *infra*, for a
    complete discussion of Track A and Track B requirements.

[^534]: *Id.* §§ 271(c)(2)(B), 271(d)(3)(A)(i).

[^535]: *Id.* § 272. *See* *Implementation of the Non-Accounting
    Safeguards of Sections 271 and 272 of the Communications Act of
    1934, as amended*, CC Docket No. 96-149, First Report and Order and
    Further Notice of Proposed Rulemaking, 11 FCC Rcd 21905 (1996)
    (*Non-Accounting Safeguards Order*), *recon.,* Order on
    Reconsideration, 12 FCC Rcd 2297 (1997), *review pending sub nom.*,
    *SBC Communications v. FCC*, No. 97-1118 (D.C. Cir., filed Mar. 6,
    1997) (held in abeyance pursuant to court order filed May 7, 1997),
    *remanded in part sub nom., Bell Atlantic Telephone Companies v.
    FCC*, No. 97-1067 (D.C. Cir., filed Mar. 31, 1997), *on remand*,
    Second Order on Reconsideration, FCC 97-222 (rel. June 24, 1997),
    *petition for review pending sub nom. Bell Atlantic Telephone
    Companies v. FCC,* No. 97-1423 (D.C. Cir. filed July 11, 1997);
    *Implementation of the Telecommunications Act of 1996; Accounting
    Safeguards Under the Telecommunications Act of 1996*, Report and
    Order, 11 FCC Rcd 17539 (1996)*.*

[^536]: 47 U.S.C. § 271(d)(3)(C).

[^537]: *Id*. § 271(d)(3); *see SBC Communications, Inc. v. FCC*, 138
    F.3d 410, 413, 416 (D.C. Cir. 1998).

[^538]: *See SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6246, para. 19;
    *see also AT&T Co. v. FCC*, 220 F.3d 607, 631 (D.C. Cir. 2000).

[^539]: *See* *Procedures for Bell Operating Company Applications Under
    New Section 271 of the Communications Act*, Public Notice, 11 FCC
    Rcd 19708, 19711 (Dec. 6, 1996); *Revised Comment Schedule For
    Ameritech Michigan Application, as amended,* *for Authorization
    Under Section 271 of the Communications Act to Provide In-Region,
    InterLATA Services in the State of Michigan*, Public Notice DA
    97-127 (Jan. 17, 1997); *Revised Procedures for Bell Operating
    Company Applications Under Section 271 of the Communications Act*,
    Public Notice, 13 FCC Rcd 17457 (Sept. 19, 1997); *Updated Filing
    Requirements for Bell Operating Company Applications Under Section
    271 of the Communications Act*, Public Notice, DA-99-1994 (Sept. 28,
    1999); *Updated Filing Requirements for Bell Operating Company
    Applications Under Section 271 of the Communications Act*, Public
    Notice, DA 01-734 (CCB rel. Mar. 23, 2001) (collectively "271
    Procedural Public Notices").

[^540]: *See, e.g.*, *SWBT Kansas/Oklahoma Order* 16 FCC Rcd at 6247-50,
    paras. 21-27; *SWBT Texas Order*, 15 FCC Rcd at 18370-73, paras.
    34-42; *Bell Atlantic New York Order*, 15 FCC Rcd at 3968-71, paras.
    32-42.

[^541]: *See* *SWBT Texas Order*, 15 FCC Rcd at 18374, para. 46; *Bell
    Atlantic New York Order*, 15 FCC Rcd at 3972, para. 46.

[^542]: *See Bell Atlantic New York Order*, 15 FCC Rcd at 3973-74, para.
    52.

[^543]: *See* 47 U.S.C. § 271(c)(2)(B)(i), (ii).

[^544]: *See SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6250-51, paras.
    28-29; *Bell Atlantic New York Order*, 15 FCC Rcd at 3971-72, paras.
    44-46.

[^545]: *SWBT Texas Order*, 15 FCC Rcd at 18373, para. 44; *Bell
    Atlantic New York Order*, 15 FCC Rcd at 3971, para. 44.

[^546]: *Bell Atlantic New York Order*, 15 FCC Rcd at 3971, para. 44;
    *Ameritech Michigan Order,* 12 FCC Rcd at 20618-19.

[^547]: *Id.*

[^548]: *SWBT Texas Order*, 15 FCC Rcd at 18374, para. 46; *Bell
    Atlantic New York Order*, 15 FCC Rcd at 3972, para. 46.

[^549]: *Id.*

[^550]: *See SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6252, para. 31;
    *SWBT Texas Order*, 15 FCC Rcd at 18377, para. 55andn.102.

[^551]: *See Bell Atlantic New York Order*, 15 FCC Rcd at 3970, para.
    59.

[^552]: The Commission has never required, however, an applicant to
    demonstrate that it processes and provisions a substantial
    commercial volume of orders, or has achieved a specific market share
    in its service area, as a prerequisite for satisfying the
    competitive checklist. *See Ameritech Michigan Order,* 12 FCC Rcd at
    20585, para. 77 (explaining that Congress had considered and
    rejected language that would have imposed a "market share"
    requirement in section 271(c)(1)(A)).

[^553]: *See* *SWBT Texas Order*, 15 FCC Rcd at 18376, para. 53; *Bell
    Atlantic New York Order*, 15 FCC Rcd at 3974, para. 53.

[^554]: *See* 47 U.S.C. § 271(d)(3)(A).

[^555]: *Id*.

[^556]: *Id*.

[^557]: *See Ameritech Michigan Order*, 12 FCC Rcd at 20589, para. 85;
    *see also Second BellSouth Louisiana Order*, 13 FCC Rcd at 20633-35,
    paras. 46-48.

[^558]: *See* 47 U.S.C. § 271(d)(3)(A)(ii).

[^559]: *See Ameritech Michigan Order*, 12 FCC Rcd at 20561-2, para. 34.
    Nevertheless, the above-mentioned foreclosure of Track B as an
    option is subject to limited exceptions. *See* 47 U.S.C. §
    271(c)(1)(B); *see also* *Ameritech Michigan Order*, 12 FCC Rcd at
    20563-64, paras. 37-38.

[^560]: 47 U.S.C. § 271(c)(2)(B)(i); *see Bell Atlantic New York Order,*
    15 FCC Rcd at 3977-78, para. 63; *Second BellSouth Louisiana Order*,
    13 FCC Rcd at 20640, para. 61; *Ameritech Michigan Order*, 12 FCC
    Rcd at 20662, para. 222.

[^561]: 47 U.S.C. § 251(c)(2)(A).

[^562]: *Local Competition First Report and Order*, 11 FCC Rcd at 15590,
    para. 176. Transport and termination of traffic are therefore
    excluded from the Commission's definition of interconnection. *See
    id.*

[^563]: 47 U.S.C. § 251(c)(2)(B). In the *Local Competition First Report
    and Order*, the Commission identified a minimum set of technically
    feasible points of interconnection. *See Local Competition First
    Report and Order*, 11 FCC Rcd at 15607-09, paras. 204-211.

[^564]: 47 U.S.C. § 251(c)(2)(C).

[^565]: *Id*. § 251(c)(2)(D).

[^566]: *Local Competition First Report and Order*, 11 FCC Rcd at
    15613-15, paras. 221-225; *see* *Bell Atlantic New York Order*, 15
    FCC Rcd at 3978, para. 64; *Second BellSouth Louisiana Order*, 13
    FCC Rcd at 20641-42, paras. 63-64.

[^567]: *Local Competition First Report and Order*, 11 FCC Rcd at
    15614-15, paras. 224-25.

[^568]: *See Bell Atlantic New York Order,* 15 FCC Rcd at 3978*,* para.
    64*; Second BellSouth Louisiana Order*, 13 FCC Rcd at 20648-50,
    paras. 74-77; *Ameritech Michigan Order*, 12 FCC Rcd at 20671-74,
    paras. 240-45. The Commission has relied on trunk blockage data to
    evaluate a BOC's interconnection performance. Trunk group blockage
    indicates that end users are experiencing difficulty completing or
    receiving calls, which may have a direct impact on the customer's
    perception of a competitive LEC's service quality.

[^569]: *Local Competition First Report and Order*, 11 FCC Rcd at 15612,
    para. 218; *see also Bell Atlantic New York* Order, 15 FCC Rcd at
    3978*,* para. 65*; Second BellSouth Louisiana Order*, 13 FCC Rcd at
    20642, para. 65.

[^570]: 47 C.F.R. § 51.305(a)(5).

[^571]: The Commission's rules require an incumbent LEC to provide
    two-way trunking upon request, wherever two-way trunking
    arrangements are technically feasible. 47 C.F.R. § 51.305(f); *see
    also Bell Atlantic New York* Order, 15 FCC Rcd at 3978-79, para.
    65*; Second BellSouth Louisiana Order*, 13 FCC Rcd at 20642, para.
    65; *Local Competition First Report and Order*, 11 FCC Rcd 15612-13,
    paras. 219-220.

[^572]: 47 C.F.R. § 51.305(a)(5).

[^573]: *Local Competition First Report and Order*, 11 FCC Rcd at 15779,
    paras. 549-50*; see Bell Atlantic New York Order,* 15 FCC Rcd at
    3979, para. 66*; Second BellSouth Louisiana Order*, 13 FCC Rcd at
    20640-41, para. 61.

[^574]: 47 C.F.R. § 51.321(b); *Local Competition First Report and
    Order*, 11 FCC Rcd at 15779-82, paras. 549-50; *see also Bell
    Atlantic New York Order,* 15 FCC Rcd at 3979*,* para. 66*; Second
    BellSouth Louisiana Order*, 13 FCC Rcd at 20640-41, para. 62.

[^575]: 47 U.S.C. § 251(c)(6) (requiring incumbent LECs to provide
    physical collocation); *Bell Atlantic New York Order*, 15 FCC Rcd at
    3979, para. 66; *Second BellSouth Louisiana Order*, 13 FCC Rcd at
    20640-41, paras. 61-62.

[^576]: *Advanced Services First Report and Order*, 14 FCC Rcd at
    4784-86, paras. 41-43.

[^577]: *Bell Atlantic New York Order*, 15 FCC Rcd at 3979, para. 66;
    *Second BellSouth Louisiana Order*, 13 FCC Rcd at 20643, para. 66;
    *BellSouth Carolina Order*, 13 FCC Rcd at 649-51, para. 62.

[^578]: *Bell Atlantic New York Order*, *id*.; *Second BellSouth
    Louisiana Order*, *id*. at 20640-41, paras. 61-62.

[^579]: 47 U.S.C. § 271(c)(2)(B)(i) (emphasis added).

[^580]: *Id*. § 252(d)(1).

[^581]: *See* 47 C.F.R. §§ 51.501-07, 51.509(g); *Local Competition
    First Report and Order*, 11 FCC Rcd at 15812-16, 15844-61, 15874-76,
    15912, paras. 618-29, 674-712, 743-51, 826.

[^582]: *See SWBT Texas Order*, 15 FCC Rcd at 18394, para. 88; *see
    also* 47 U.S.C. §§ 252(c), (e)(6); *AT&T Corp. v. Iowa Utils. Bd.,*
    525 U.S. 366 (1999) (*AT&T v. Iowa Utils. Bd*.).

[^583]: *SWBT Texas Order*, *id*.; *AT&T v. Iowa Utils. Bd*., 525 U.S.
    at \_\_\_ .

[^584]: *SWBT* *Texas Order*, *id*.; *see also Bell Atlantic New York
    Order*, 15 FCC Rcd at 4091, para. 258 (explaining the Commission's
    case-by-case review of interim prices).

[^585]: *SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6359-60, para 239.

[^586]: *See Bell Atlantic New York Order,* 15 FCC Rcd at 4091, para.
    260.

[^587]: *Id*. at 3989-90, para. 83; *BellSouth South Carolina Order*, 13
    FCC Rcd at 585.

[^588]: *See Bell Atlantic New York Order, id*. at 3990, para. 83;
    *BellSouth South Carolina Order*, *id*. at 547-48, 585; *Second
    BellSouth Louisiana Order*, 13 FCC Rcd at 20653.

[^589]: *See Bell Atlantic New York Order, id*. at 3990, para. 83.

[^590]: *Id.*

[^591]: 47 U.S.C. § 271(c)(2)(B)(ii).

[^592]: *Bell Atlantic New York Order,* 15 FCC Rcd at 3990, para. 84.

[^593]: *Id.*

[^594]: *Id.* As part of a BOC's demonstration that it is "providing" a
    checklist item (*e.g.*, unbundled loops, unbundled local switching,
    resale services), it must demonstrate that it is providing
    nondiscriminatory access to the systems, information, and personnel
    that support that element or service. An examination of a BOC's OSS
    performance is therefore integral to the determination of whether a
    BOC is offering all of the items contained in the competitive
    checklist. *Id*.

[^595]: *Id.* at 3990-91, para. 84.

[^596]: *Id.* at 3991, para. 85.

[^597]: *Id.*

[^598]: *Id.* For example, the Commission would not deem an incumbent
    LEC to be providing nondiscriminatory access to OSS if limitations
    on the processing of information between the interface and the back
    office systems prevented a competitor from performing a specific
    function in substantially the same time and manner as the incumbent
    performs that function for itself.

[^599]: *See id.*

[^600]: *Id.* at 3991, para. 86.

[^601]: *Id.*

[^602]: *Id.* As a general proposition, specific performance standards
    adopted by a state commission in an arbitration decision would be
    more persuasive evidence of commercial reasonableness than a
    standard unilaterally adopted by the BOC outside of its
    interconnection agreement. *Id*. at 20619-20.

[^603]: *See id.* at 3991-92, para. 86.

[^604]: *Id.* at 3992, para. 87; *Ameritech Michigan Order*, 12 FCC Rcd
    at 20616; s*ee also Second BellSouth Louisiana Order*, 13 FCC Rcd at
    20654; *BellSouth South Carolina Order*, 13 FCC Rcd at 592-93. In
    making this determination, the Commission "consider\[s\] all of the
    automated and manual processes a BOC has undertaken to provide
    access to OSS functions," including the interface (or gateway) that
    connects the competing carrier's own operations support systems to
    the BOC; any electronic or manual processing link between that
    interface and the BOC's OSS (including all necessary back office
    systems and personnel); and all of the OSS that a BOC uses in
    providing network elements and resale services to a competing
    carrier. *Ameritech Michigan Order*, 12 FCC Rcd at 20615; s*ee also
    Second BellSouth Louisiana Order*, 13 FCC Rcd at 20654 n.241.

[^605]: *See Bell Atlantic New York Order*, 15 FCC Rcd at 3992, para.
    88.

[^606]: *Id*. at 3992, para. 87; *see also Ameritech Michigan Order*, 12
    FCC Rcd at 20616, para. 136 (the Commission determines "whether the
    BOC has deployed the necessary systems and personnel to provide
    sufficient access to each of the necessary OSS functions and whether
    the BOC is adequately assisting competing carriers to understand how
    to implement and use all of the OSS functions available to them.").
    For example, a BOC must provide competing carriers the
    specifications necessary to design their systems interfaces and
    business rules necessary to format orders, and demonstrate that
    systems are scalable to handle current and projected demand. *Id.*

[^607]: *Id.*

[^608]: Business rules refer to the protocols that a BOC uses to ensure
    uniformity in the format of orders and include information
    concerning ordering codes such as universal service ordering codes
    (USOCs) and field identifiers (FIDs). *Id.; see also Ameritech
    Michigan Order*, 12 FCC Rcd at 20617 n. 335.

[^609]: *Bell Atlantic New York Order,* 15 FCC Rcd at 3992, para. 88.

[^610]: *Id.*

[^611]: *See id.*

[^612]: *Id.* at 3993, para. 89.

[^613]: *Id.*

[^614]: *Id.*

[^615]: *See id.; Ameritech Michigan Order*, 12 FCC Rcd at 20659
    (emphasizing that a third-party review should encompass the entire
    obligation of the incumbent LEC to provide nondiscriminatory access,
    and, where applicable, should consider the ability of actual
    competing carriers in the market to operate using the incumbent's
    OSS access).

[^616]: *See SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6301-02, para
    138.

[^617]: *See id*. at 6286-91, paras. 107-118

[^618]: *See id*. at 6288, para. 111.

[^619]: The Commission has consistently held that a BOC's OSS includes
    both mechanized systems and manual processes, and thus the OSS
    functions performed by BOC personnel have been part of the FCC's OSS
    functionality and commercial readiness reviews.

[^620]: *See* *SWBT Kansas/Oklahoma Order*, *id*. at 6287, para. 108.

[^621]: *See id*. at 6288, para. 111.

[^622]: In prior orders, the Commission has emphasized that providing
    pre-ordering functionality through an application-to-application
    interface is essential in enabling carriers to conduct real-time
    processing and to integrate pre-ordering and ordering functions in
    the same manner as the BOC. *SWBT Texas Order*, 15 FCC Rcd at 18426,
    para. 148.

[^623]: The Commission has held previously that an interface that
    provides responses in a prompt timeframe and is stable and reliable,
    is necessary for competing carriers to market their services and
    serve their customers as efficiently and at the same level of
    quality as a BOC serves its own customers. *See Bell Atlantic New
    York Order*, 15 FCC Rcd at 4025 and 4029, paras. 145 and 154.

[^624]: *See Bell Atlantic New York Order*, 15 FCC Rcd at 4014, para.
    129; *see also Second BellSouth Louisiana Order*, 13 FCC Rcd. at
    20660, para. 94 (referring to "pre-ordering and ordering"
    collectively as "the exchange of information between
    telecommunications carriers about current or proposed customer
    products and services or unbundled network elements or some
    combination thereof"). In prior orders, the Commission has
    identified the following five pre-order functions: (1) customer
    service record (CSR) information; (2) address validation; (3)
    telephone number information; (4) due date information; (5) services
    and feature information. *See Bell Atlantic New York Order*, 15 FCC
    Rcd at 4015, para. 132; Second *BellSouth Louisiana Order*, 13 FCC
    Rcd. at 20660, para. 94; *BellSouth South Carolina Order*, 13 FCC
    Rcd. at 619, para. 147.

[^625]: *Bell Atlantic New York Order*, *id*. at 4014, para. 129.

[^626]: *Id.; see also* *BellSouth South Carolina Order*, 13 FCC Rcd. at
    623-29 (concluding that failure to deploy an
    application-to-application interface denies competing carriers
    equivalent access to pre-ordering OSS functions).

[^627]: *Bell Atlantic New York Order*, *id*.

[^628]: *See* *id.* at 4014, para. 130; *Second BellSouth Louisiana
    Order*, 13 FCC Rcd at 20661-67, para. 105.

[^629]: *UNE Remand Order*, 15 FCC Rcd 3696, 3885, para. 426
    (determining "that the pre-ordering function includes access to loop
    qualification information.").

[^630]: *See id.* At a minimum, a BOC must provide (1) the composition
    of the loop material, including both fiber and copper; (2) the
    existence, location and type of any electronic or other equipment on
    the loop, including but not limited to, digital loop carrier or
    other remote concentration devices, feeder/distribution interfaces,
    bridge taps, load coils, pair-gain devices, disturbers in the same
    or adjacent binder groups; (3) the loop length, including the length
    and location of each type of transmission media; (4) the wire
    gauge(s) of the loop; and (5) the electrical parameters of the loop,
    which may determine the suitability of the loop for various
    technologies. *Id.*

[^631]: As the Commission has explained in prior proceedings, because
    characteristics of a loop, such as its length and the presence of
    various impediments to digital transmission, can hinder certain
    advanced services technologies, carriers often seek to "pre-qualify"
    a loop by accessing basic loop makeup information that will assist
    carriers in ascertaining whether the loop, either with or without
    the removal of the impediments, can support a particular advanced
    service. *See* *id.*, 15 FCC Rcd at 4021, para. 140.

[^632]: *UNE Remand Order*, 15 FCC Rcd at 3885-3887, paras. 427-431
    (noting that "to the extent such information is not normally
    provided to the incumbent's retail personnel, but can be obtained by
    contacting back office personnel, it must be provided to requesting
    carriers within the same time frame that any incumbent personnel are
    able to obtain such information.").

[^633]: *See SWBT Kansas Oklahoma Order* at para. 121.

[^634]: *Id.*

[^635]: *UNE Remand Order*, 15 FCC Rcd at 3885-3887, paras. 427-431.

[^636]: *See* *SWBT Texas Order*, 15 FCC Rcd at 18438, para. 170; *Bell
    Atlantic New York Order*, 15 FCC Rcd at 4035-4039, paras. 163-166.
    The Commission examines (i) order flow-through rates, (ii) jeopardy
    notices and (iii) order completion notices using the "same time and
    manner" standard. The Commission examines order confirmation notices
    and order rejection notices using the "meaningful opportunity to
    compete" standard.

[^637]: *See* *Bell Atlantic New York*, *id*. at 4058, para. 196. For
    provisioning timeliness, the Commission looks to missed due dates
    and average installation intervals; for provisioning quality, the
    Commission looks to service problems experienced at the provisioning
    stage.

[^638]: *Id.*

[^639]: *Id*. at 4067, para. 212; *Second BellSouth Louisiana Order*, 13
    FCC Rcd at 20692; *Ameritech Michigan Order*, 12 FCC Rcd at 20613,
    20660-61.

[^640]: *Bell Atlantic New York Order*, *id*.; *see also Second
    BellSouth Louisiana Order*, *id*. at 20692-93.

[^641]: *Bell Atlantic New York Order*, *id*.

[^642]: *Id*.

[^643]: *See* *SWBT Texas Order*, 15 FCC Rcd at 18461, para. 210.

[^644]: *See id.*; *SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6316-17,
    at para 163.

[^645]: *Bell Atlantic New York Order*, 15 FCC Rcd at 3999-4000, para.
    102; *First BellSouth Louisiana Order*, 13 FCC Rcd. at 6279 n. 197;
    *BellSouth South Carolina Order*, 13 FCC Rcd. at 625 n. 467;
    *Ameritech Michigan Order*, 12 FCC Rcd. at 20617 n. 334; *Local
    Competition Second Report and Order*, 11 FCC Rcd. at 19742.

[^646]: *Bell Atlantic New York Order*, *id*. at 3999, para. 102.

[^647]: *Id.* at 3999-4000, para. 102

[^648]: *Id.* at 4000, para. 102.

[^649]: *Id.* at 4000, para. 103.

[^650]: *Id.*

[^651]: *Id.* at 4000, para. 103.

[^652]: *Id.*

[^653]: *Id.* at 4002, para. 107.

[^654]: *Id.* at 4000, para. 104.

[^655]: *Id.* at 4002, para. 108.

[^656]: *Id.* at 4002-03, paras. 109-10.

[^657]: *Id.* at 4003-04, para. 110. In the *Bell Atlantic New York
    Order*, the Commission used these factors in determining whether
    Bell Atlantic had an adequate change management process in place.
    *See id.* at 4004, para. 111. The Commission left open the
    possibility, however, that a change management plan different from
    the one implemented by Bell Atlantic may be sufficient to
    demonstrate compliance with the requirements of section 271. *Id.*

[^658]: *Id.* at 3999, para. 101, 4004-05, para. 112.

[^659]: 47 U.S.C. § 271(c)(2)(B)(ii).

[^660]: *Id*. § 251(c)(3).

[^661]: *Id.*

[^662]: *Ameritech Michigan Order*, 12 FCC Rcd at 20718-19; *BellSouth
    South Carolina Order*, 13 FCC Rcd at 646.

[^663]: *BellSouth South Carolina Order*, *id*. *See also Local
    Competition First Report and Order*, 11 FCC Rcd at 15666-68.

[^664]: *Bell Atlantic New York Order* at para. 230.

[^665]: *Id.*

[^666]: 47 U.S.C. § 271(B)(ii).

[^667]: *Id*. § 251(c)(3).

[^668]: 47 U.S.C. § 252(d)(1).

[^669]: *Local Competition First Report and Order,* 11 FCC Rcd at
    15844-46, paras. 674-679; 47 C.F.R. §§ 51.501 *et* *seq*. *See also
    Deployment of Wireline Services Offering Advanced Telecommunications
    Capability, CC Docket No. 98-147, and Implementation of the Local
    Competition Provisions of the Telecommunications Act of 1996, CC
    Docket No. 96-98,* Third Report and Order and Fourth Report and
    Order, 14 FCC Rcd 20912, 20974, para. 135 *(Line Sharing Order)*
    (concluding that states should set the prices for line sharing as a
    new network element in the same manner as the state sets prices for
    other UNEs).

[^670]: *See* 47 C.F.R. § 51.315(b).

[^671]: *Bell Atlantic New York Order*, 15 FCC Rcd at 4084, para. 244;
    *SWBT Kansas/Oklahoma Order*, 16 FCC Rcd at 6266, para. 59.

[^672]: *Iowa Utils. Bd. v. FCC*, 120 F.3d 753, 800, 804, 805-06 (8^th^
    Cir. 1997).

[^673]: *AT&T Corp. v. Iowa Utils. Bd*., 525 U.S. 366 (1999). In
    reaching its decision, the Court acknowledged that section 201(b)
    "explicitly grants the FCC jurisdiction to make rules governing
    matters to which the 1996 Act applies." *Id.* at 380. Furthermore,
    the Court determined that section 251(d) also provides evidence of
    an express jurisdictional grant by requiring that "the Commission
    \[shall\] complete all actions necessary to establish regulations to
    implement the requirements of this section." *Id.* at 382. The Court
    also held that the pricing provisions implemented under the
    Commission's rulemaking authority do not inhibit the establishment
    of rates by the states. The Court concluded that the Commission has
    jurisdiction to design a pricing methodology to facilitate local
    competition under the 1996 Act, including pricing for
    interconnection and unbundled access, as "it is the States that will
    apply those standards and implement that methodology, determining
    the concrete result." *Id*.

[^674]: *Iowa Utils. Bd. v. FCC*, 219 F.3d 744 (8^th^ Cir. 2000),
    *petition for cert. filed sub nom. Verizon Communications v. FCC*,
    69 U.S.L.W. 3269 (U.S. Oct. 4, 2000) (No. 00-511).

[^675]: *Iowa Utils. Bd. v. FCC*, No. 96-3321 *et al.* (8^th^ Cir. Sept.
    25, 2000).

[^676]: 47 U.S.C. § 271(c)(2)(B)(iii). As originally enacted, section
    224 was intended to address obstacles that cable operators
    encountered in obtaining access to poles, ducts, conduits, or
    rights-of-way owned or controlled by utilities. The 1996 Act amended
    section 224 in several important respects to ensure that
    telecommunications carriers as well as cable operators have access
    to poles, ducts, conduits, or rights-of-way owned or controlled by
    utility companies, including LECs. *Second BellSouth Louisiana
    Order,* 13 FCC Rcd at 20706, n.574.

[^677]: 47 U.S.C. § 224(f)(1). Section 224(a)(1) defines "utility" to
    include any entity, including a LEC, that controls "poles, ducts,
    conduits, or rights-of-way used, in whole or in part, for any wire
    communications." 47 U.S.C. § 224(a)(1).

[^678]: 47 U.S.C. § 224(f)(2). In the *Local Competition First Report
    and Order,* the Commission concluded that, although the statutory
    exception enunciated in section 224(f)(2) appears to be limited to
    utilities providing electrical service, LECs should also be
    permitted to deny access to their poles, ducts, conduits, and
    rights-of-way because of insufficient capacity and for reasons of
    safety, reliability and generally applicable engineering purposes,
    provided the assessment of such factors is done in a
    nondiscriminatory manner. *Local Competition First Report and
    Order,* 11 FCC Rcd at 16080-81, paras. 1175-77.

[^679]: Section 224(a)(4) defines "pole attachment" as "any attachment
    by a cable television system or provider of telecommunications
    service to a pole, duct, conduit, or right-of-way owned or
    controlled by a utility." 47 U.S.C. § 224(a)(4).

[^680]: 47 U.S.C. § 224(b)(1).

[^681]: *Id*. § 224(c)(1). The 1996 Act extended the Commission's
    authority to include not just rates, terms, and conditions, but also
    the authority to regulate nondiscriminatory access to poles, ducts,
    conduits, and rights-of-way. *Local Competition First Report and
    Order*, 11 FCC Rcd at 16104, para. 1232; 47 U.S.C. § 224(f). Absent
    state regulation of terms and conditions of nondiscriminatory
    attachment access, the Commission retains jurisdiction. *Local
    Competition First Report and Order*, 11 FCC Rcd at 16104, para.
    1232; 47 U.S.C. § 224(c)(1); *see also Bell Atlantic New York
    Order*, 15 FCC Rcd at 4093, para. 264*.*

[^682]: *See States That Have Certified That They Regulate Pole
    Attachments*, Public Notice, 7 FCC Rcd 1498 (1992); 47 U.S.C.
    § 224(f).

[^683]: 47 U.S.C. § 271(c)(2)(B)(iv).

[^684]: *Local Competition First Report and Order*, 11 FCC Rcd at 15691,
    para. 380; *UNE Remand Order*, 15 FCC Rcd at 3772-73, paras.
    166-167, n.301 (retaining definition of the local loop from the
    *Local Competition First Report and Order*, but replacing the phrase
    "network interconnection device" with "demarcation point," and
    making explicit that dark fiber and loop conditioning are among the
    features, functions and capabilities of the loop).

[^685]: *SWBT Texas Order*, 15 FCC Rcd at 18481-81, para. 248; *Bell
    Atlantic New York Order*, 15 FCC Rcd at 4095, para. 269; *Second
    BellSouth Louisiana Order*, 13 FCC Rcd at 20637, para. 185.

[^686]: *See Line Sharing Order*, 14 FCC Rcd at 20924-27, paras. 20-27.

[^687]: *Line Sharing Reconsideration Order*, para. 10.

[^688]: *See generally* *SWBT Texas Order*, 15 FCC Rcd at 18515-17,
    paras. 323-329 (describing line splitting); 47 C.F.R. §51.703(c)
    (requiring that incumbent LECs provide competing carriers with
    access to unbundled loops in a manner that allows competing carriers
    "to provide any telecommunications service that can be offered by
    means of that network element.").

[^689]: *See* *Kansas/Oklahoma Order*, 16 FCC Rcd at 6348, para. *220.*

[^690]: 47 U.S.C. § 271(c)(2)(B)(v).

[^691]: *Second BellSouth Louisiana Order*, 13 FCC Rcd at 20719, para.
    201.

[^692]: *Id.* A BOC has the following obligations with respect to
    dedicated transport: (a) provide unbundled access to dedicated
    transmission facilities between BOC central offices or between such
    offices and serving wire centers (SWCs); between SWCs and
    interexchange carriers points of presence (POPs); between tandem
    switches and SWCs, end offices or tandems of the BOC, and the wire
    centers of BOCs and requesting carriers; (b) provide all technically
    feasible transmission capabilities such as DS1, DS3, and Optical
    Carrier levels that the competing carrier could use to provide
    telecommunications; (c) not limit the facilities to which dedicated
    interoffice transport facilities are connected, provided such
    interconnections are technically feasible, or restrict the use of
    unbundled transport facilities; and (d) to the extent technically
    feasible, provide requesting carriers with access to digital
    cross-connect system functionality in the same manner that the BOC
    offers such capabilities to interexchange carriers that purchase
    transport services. *Id.* at 20719*.*

[^693]: *Id.* at 20719, n. 650. The Commission also found that a BOC has
    the following obligations with respect to shared transport: (a)
    provide shared transport in a way that enables the traffic of
    requesting carriers to be carried on the same transport facilities
    that a BOC uses for its own traffic; (b) provide shared transport
    transmission facilities between end office switches, between its end
    office and tandem switches, and between tandem switches in its
    network; (c) permit requesting carriers that purchase unbundled
    shared transport and unbundled switching to use the same routing
    table that is resident in the BOC's switch; and (d) permit
    requesting carriers to use shared (or dedicated) transport as an
    unbundled element to carry originating access traffic from, and
    terminating traffic to, customers to whom the requesting carrier is
    also providing local exchange service. *Id.* at 20720, n. 652*.*

[^694]: 47 U.S.C. § 271(c)(2)(B)(vi); *see also Second BellSouth
    Louisiana Order,* 13 FCC Rcd at 20722. A switch connects end user
    lines to other end user lines, and connects end user lines to trunks
    used for transporting a call to another central office or to a
    long-distance carrier. Switches can also provide end users with
    "vertical features" such as call waiting, call forwarding, and
    caller ID, and can direct a call to a specific trunk, such as to a
    competing carrier's operator services.

[^695]: *Second BellSouth Louisiana Order*, 13 FCC Rcd at 20722, para.
    207.

[^696]: *Id*.

[^697]: *Id.* at 20722-23, para. 207.

[^698]: *Id.* at 20723, para. 208.

[^699]: *Id.* at 20723, para. 208 (citing the *Ameritech Michigan
    Order,* 12 FCC Rcd at 20619, para. 140).

[^700]: *Id.*

[^701]: *Id.*

[^702]: *Id.* at 20723, para. 209 (citing the *Ameritech Michigan
    Order*, 12 FCC Rcd at 20705, para. 306).

[^703]: *Id.* (citing the *Ameritech Michigan Order*, 12 FCC Rcd at
    20714-15, paras. 324-25).

[^704]: 47 U.S.C. § 271(c)(2)(B)(vii). 911 and E911 services transmit
    calls from end users to emergency personnel. It is critical that a
    BOC provide competing carriers with accurate and nondiscriminatory
    access to 911/E911 services so that these carriers' customers are
    able to reach emergency assistance. Customers use directory
    assistance and operator services to obtain customer listing
    information and other call completion services.

[^705]: *Ameritech Michigan Order,* 12 FCC Rcd at 20679, para. 256.

[^706]: *Id.*

[^707]: *Id.*

[^708]: 47 U.S.C. §§ 271(c)(2)(B)(vii)(II), (III).

[^709]: *Id*. § 251(b)(3). The Commission implemented section 251(b)(3)
    in the *Local Competition Second Report and Order*. 47 C.F.R. §
    51.217; *In re Implementation of the Local Competition Provisions of
    the Telecommunications Act of 1996*, Second Report and Order and
    Memorandum Opinion and Order, 11 FCC Rcd 19392 (1996) (*Local
    Competition Second Report and Order*) *vacated in part, People of
    the State of California v. FCC,* 124 F.3d 934 (8th Cir. 1997),
    *overruled in part, AT&T Corp. v. Iowa Utils. Bd.,* 119 S.Ct. 721
    (1999)*; see also Implementation of the Telecommunications Act of
    1996: Provision of Directory Listings Information under the
    Telecommunications Act of 1934*, Notice of Proposed Rulemaking, 14
    FCC Rcd 15550 (1999) (*Directory Listings Information NPRM*).

[^710]: While both sections 251(b)(3) and 271(c)(2)(B)(vii)(II) refer to
    nondiscriminatory access to "directory assistance," section
    251(b)(3) refers to nondiscriminatory access to "operator services,"
    while section 271(c)(2)(B)(vii)(III) refers to nondiscriminatory
    access to "operator call completion services." 47 U.S.C.
    §§ 251(b)(3), 271(c)(2)(B)(vii)(III). The term "operator call
    completion services" is not defined in the Act, nor has the
    Commission previously defined the term. However, for section
    251(b)(3) purposes, the term "operator services" was defined as
    meaning "any automatic or live assistance to a consumer to arrange
    for billing or completion, or both, of a telephone call." *Local
    Competition Second Report and Order,* 11 FCC Rcd at 19448, para.
    110. In the same order the Commission concluded that busy line
    verification, emergency interrupt, and operator-assisted directory
    assistance are forms of "operator services," because they assist
    customers in arranging for the billing or completion (or both) of a
    telephone call. *Id.* at 19449, para. 111. All of these services may
    be needed or used to place a call. For example, if a customer tries
    to direct dial a telephone number and constantly receives a busy
    signal, the customer may contact the operator to attempt to complete
    the call. Since billing is a necessary part of call completion, and
    busy line verification, emergency interrupt, and operator-assisted
    directory assistance can all be used when an operator completes a
    call, the Commission concluded in the *Second BellSouth Louisiana
    Order* that for checklist compliance purposes, "operator call
    completion services" is a subset of or equivalent to "operator
    service." *Second BellSouth Louisiana Order,* 13 FCC Rcd at 20740,
    n.763. As a result, the Commission uses the nondiscriminatory
    standards established for operator services to determine whether
    nondiscriminatory access is provided.

[^711]: 47 C.F.R. § 51.217(c)(3); *Local Competition Second Report and
    Order,* 11 FCC Rcd at 19456-58, paras. 130-35. The *Local
    Competition Second Report and Order's* interpretation of section
    251(b)(3) is limited "to access to each LEC's directory assistance
    service." *Id.* at 19456, para. 135. However, section
    271(c)(2)(B)(vii) is not limited to the LEC's systems but requires
    "nondiscriminatory access to . . . directory assistance to allow the
    other carrier's customers to obtain telephone numbers." 47 U.S.C. §
    271(c)(2)(B)(vii). Combined with the Commission's conclusion that
    "incumbent LECs must unbundle the facilities and functionalities
    providing operator services and directory assistance from resold
    services and other unbundled network elements to the extent
    technically feasible," *Local Competition First Report and Order,*
    11 FCC Rcd at 15772-73, paras. 535-37, section 271(c)(2)(B)(vii)'s
    requirement should be understood to require the BOCs to provide
    nondiscriminatory access to the directory assistance service
    provider selected by the customer's local service provider,
    regardless of whether the competitor; provides such services itself;
    selects the BOC to provide such services; or chooses a third party
    to provide such services. *See Directory Listings Information NPRM*.

[^712]: *Local Competition Second Report and Order*, 11 FCC Rcd at
    19464, para. 151.

[^713]: *Id*. at para. 112.

[^714]: 47 C.F.R. § 51.217(d); *Local Competition Second Report and
    Order,* 11 FCC Rcd at 19463, para. 148. For example, when customers
    call the operator or calls for directory assistance, they typically
    hear a message, such as "thank you for using XYZ Telephone Company."
    Competing carriers may use the BOC's brand, request the BOC to brand
    the call with the competitive carriers name or request that the BOC
    not brand the call at all. 47 C.F.R. § 51.217(d).

[^715]: 47 C.F.R. § 51.217(C)(3)(ii); *Local Competition Second Report
    and Order,* 11 FCC Rcd at 19460-61, paras. 141-44.

[^716]: *UNE Remand Order*, 15 FCC Rcd at 3891-92, paras. 441-42.

[^717]: *Local Competition Third Report and Order* at para. 470. *See
    generally* 47 U.S.C. §§ 251-52; *see also* 47 U.S.C. §
    252(d)(1)(A)(i) (requiring UNE rates to be "based on the cost
    (determined without reference to a rate-of-return or other
    rate-based proceeding) of providing the ... network element").

[^718]: *Local Competition Third Report and Order* at paras. 470-73;
    *see also* 47 U.S.C. §§ 201(b), 202(a).

[^719]: 47 U.S.C. § 271(c)(2)(B)(viii).

[^720]: *Id*. § 251(b)(3).

[^721]: *Second BellSouth Louisiana Order*, 13 FCC Rcd at 20748, para.
    255.

[^722]: *Id*. In the *Second BellSouth Louisiana Order,* the Commission
    stated that the definition of "directory listing" was synonymous
    with the definition of "subscriber list information." *Id.* at 20747
    (citing the *Local Competition Second Report and Order,* 11 FCC Rcd
    at 19458-59). However, the Commission's decision in a recent
    proceeding obviates this comparison, and supports the definition of
    directory listing delineated above. *See Implementation of the
    Telecommunications Carriers' Use of Customer Proprietary Network
    Information and Other Customer Information,* CC Docket No. 96-115,
    Third Report and Order; *Implementation of the Local Competition
    Provisions of the Telecommunications Act of 1996,* CC Docket No.
    96-98, Second Order on Reconsideration; *Provision of Directory
    Listing Information under the Telecommunications Act of 1934, As
    Amended,* CC Docket No. 99-273, FCC 99-227, Notice of Proposed
    Rulemaking, para. 160 (rel. Sept. 9, 1999).

[^723]: *Id.*

[^724]: 47 U.S.C. § 271(c)(2)(B)(ix).

[^725]: *Id.*

[^726]: *See Second Bell South Louisiana Order,* 13 FCC Rcd at 20752*;
    see also* *Numbering Resource Optimization*, Report and Order and
    Further Notice of Proposed Rulemaking, 15 FCC Rcd 7574 (2000);
    *Numbering Resource Optimization*, Second Report and Order, Order on
    Reconsideration in CC Docket No. 99-200 and Second Further Notice of
    Proposed Rulemaking in CC Docket No. 99-200, CC Docket Nos. 96-98;
    99-200 (rel. Dec. 29, 2000).

[^727]: 47 U.S.C. § 271(c)(2)(B)(x).

[^728]: *Second BellSouth Louisiana Order,* 13 FCC Rcd at 20753, para.
    267.

[^729]: *Id.* at 20755-56, para. 272.

[^730]: *Local Competition First Report and Order*, 11 FCC Rcd at 15741,
    n.1126; *UNE Remand Order*, 15 FCC Rcd at 3875, para. 403.

[^731]: *Id*. at 15741-42, para. 484.

[^732]: *UNE Remand Order*, 15 FCC Rcd at 3875, para. 403.

[^733]: 47 U.S.C. § 271(c)(2)(B)(xii).

[^734]: *Id.* at § 251(b)(2).

[^735]: *Id.* at § 153(30).

[^736]: *Id.* at § 251(e)(2); *see also Second BellSouth Louisiana
    Order*, 13 FCC Rcd at 20757, para. 274; *In the Matter of Telephone
    Number Portability*, Third Report and Order, 13 FCC Rcd 11701,
    11702-04 (1998) (*Third Number Portability Order*); *In the Matter
    of Telephone Number Portability*, Fourth Memorandum Opinion and
    Order on Reconsideration, CC Docket No. 95-116, at paras. 1, 6-9
    (Jun. 23, 1999) (*Fourth Number Portability Order*).

[^737]: *Fourth Number Portability Order* at para. 10; *In re Telephone
    Number Portability*, First Report and Order and Further Notice of
    Proposed Rulemaking, 11 FCC Rcd 8352, 8409-12, paras. 110-116 (1996)
    (*First Number Portability Order*); *see also* 47 U.S.C. §
    251(b)(2).

[^738]: *See* 47 C.F.R. §§ 52.3(b)-(f); *Second BellSouth Louisiana
    Order*, 13 FCC Rcd at 20758, para. 275; *First Number Portability
    Order*, 11 FCC Rcd at 8355 and 8399-8404, paras. 3 and 91; *Third
    Number Portability Order*, 13 FCC Rcd at 11708-12, paras. 12-16.

[^739]: *See* 47 C.F.R. § 52.29; *Second BellSouth Louisiana Order*, 13
    FCC Rcd at 20758, para. 275; *First Number Portability Order*, 11
    FCC Rcd at 8417-24, paras. 127-140.

[^740]: *See* 47 C.F.R. §§ 52.32, 52.33; *Second BellSouth Louisiana
    Order*, 13 FCC Rcd at 20758, para. 275; *Third Number Portability
    Order*, 13 FCC Rcd at 11706-07, para. 8; *Fourth Number Portability
    Order* at para. 9.

[^741]: Based on the Commission's view that section 251(b)(3) does not
    limit the duty to provide dialing parity to any particular form of
    dialing parity (*i.e*., international, interstate, intrastate, or
    local), the Commission adopted rules in August 1996 to implement
    broad guidelines and minimum nationwide standards for dialing
    parity. *Local Competition Second Report and Order,* 11 FCC Rcd at
    19407; *Interconnection Between Local Exchange Carriers and
    Commercial Mobile Radio Service Providers*, CC Docket No. 95-185,
    Further Order On Reconsideration, FCC 99-170 (rel. July 19, 1999).

[^742]: 47 U.S.C. § 251(b)(3).

[^743]: *Id.* at § 153(15).

[^744]: 47 C.F.R §§ 51.205, 51.207.

[^745]: *See* 47 C.F.R. § 51.207 (requiring same number of digits to be
    dialed); *Local Competition Second Report and Order*, 11 FCC Rcd at
    19400, 19403.

[^746]: 47 U.S.C. § 271(c)(2)(B)(xiii).

[^747]: *Id*. § 252(d)(2)(A).

[^748]: *Id*. § 271(c)(2)(B)(xiv).

[^749]: *Id*. § 251(c)(4)(A).

[^750]: *Id*. § 252(d)(3).

[^751]: *Id*. § 251(c)(4)(B).

[^752]: *Local Competition First Report and Order*, 11 FCC Rcd at 15966,
    para. 939; 47 C.F.R. § 51.613(b). The Eighth Circuit acknowledged
    the Commission's authority to promulgate such rules, and
    specifically upheld the sections of the Commission's rules
    concerning resale of promotions and discounts in *Iowa Utilities
    Board*. *Iowa Utils. Bd. v. FCC*, 120 F.3d at 818-19, *aff'd in part
    and remanded on other grounds*, *AT&T v. Iowa Utils. Bd.*, 525 U.S.
    366 (1999). *See* *also* 47 C.F.R. §§ 51.613-51.617.

[^753]: 47 U.S.C. § 251(c)(4)(B).

[^754]: *Id.*

[^755]: *See, e.g., Bell Atlantic New York Order*, 15 FCC Rcd at
    4046-48, paras. 178-81 (Bell Atlantic provides nondiscriminatory
    access to its OSS ordering functions for resale services and
    therefore provides efficient competitors a meaningful opportunity to
    compete).

[^756]: 47 U.S.C. § 271(d)(3)(B).

[^757]: *See Implementation of the Accounting Safeguards Under the
    Telecommunications Act of 1996*, CC Docket No. 96-150, Report and
    Order, 11 FCC Rcd 17539 (1996) (*Accounting Safeguards Order*),
    Second Order On Reconsideration, FCC 00-9 (rel. Jan. 18, 2000);
    *Implementation of the Non-Accounting Safeguards of Sections 271 and
    272 of the Communications Act of 1934, as amended*, CC Docket No.
    96-149, First Report and Order and Further Notice of Proposed
    Rulemaking, 11 FCC Rcd 21905 (1996) (*Non-Accounting Safeguards
    Order*), petition for review pending sub nom. SBC Communications v.
    FCC, No. 97-1118 (filed D.C. Cir. Mar. 6, 1997) (held in abeyance
    May 7, 1997), First Order on Reconsideration, 12 FCC Rcd 2297 (1997)
    (*First Order on Reconsideration*), Second Order on Reconsideration,
    12 FCC Rcd 8653 (1997) (*Second Order on Reconsideration*), *aff'd
    sub nom. Bell Atlantic Telephone Companies v. FCC*, 131 F.3d 1044
    (D.C. Cir. 1997), Third Order on Reconsideration, FCC 99-242 (rel.
    Oct. 4, 1999) (*Third Order on Reconsideration*).

[^758]: *Non-Accounting Safeguards Order*, 11 FCC Rcd at 21914;
    *Accounting Safeguards Order*, 11 FCC Rcd at 17550; *Ameritech
    Michigan Order*, 12 FCC Rcd at 20725.

[^759]: *Non-Accounting Safeguards Order*, *id*. at paras. 15-16;
    *Ameritech Michigan Order*, 12 FCC Rcd at 20725, para. 346.

[^760]: *Ameritech Michigan Order*, *id*.; *Bell Atlantic New York
    Order*, 15 FCC Rcd at 4153, para. 402.

[^761]: *Second BellSouth Louisiana Order*, 13 FCC Rcd at 20785-20786 at
    para. 322; *Bell Atlantic New York Order*, *id*.

[^762]: *Bell Atlantic New York Order,* *id*.

[^763]: 47 U.S.C. § 271(d)(3)(C).

[^764]: In addition, Congress specifically rejected an amendment that
    would have stipulated that full implementation of the checklist
    necessarily satisfies the public interest criterion. *See Ameritech
    Michigan Order*, 12 FCC Rcd at 20747 at para. 360-366; *see also*
    141 Cong. Rec. S7971, S8043 (June. 8, 1995).

[^765]: *See Second BellSouth Louisiana Order*, 13 FCC Rcd at 20805-06,
    para. 360 (the public interest analysis may include consideration of
    "whether approval . . . will foster competition in all relevant
    telecommunications markets").