**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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| In the Matters of                | * | WC Docket No. 01-338         |
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| Petition for Forbearance of the  | ) | WC Docket No. 03-235         |
| Verizon Telephone Companies      | * |                              |
| Pursuant to                      | * | WC Docket No. 03-260         |
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| 47 U.S.C. § 160(c)               | * | WC Docket No. 04-48          |
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| SBC Communications Inc.'s        | ) |                              |
| Petition for Forbearance Under   | * |                              |
| 47 U.S.C. § 160(c)               | * |                              |
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| Qwest Communications             | * |                              |
| International Inc. Petition for  | * |                              |
| Forbearance Under                | ) |                              |
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| 47 U.S.C. § 160(c)               | * |                              |
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| BellSouth Telecommunications,    | * |                              |
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| Petition for Forbearance Under   | * |                              |
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MEMORANDUM OPINION AND ORDER

**Adopted:** October 22, 2004 **Released:** October 27, 2004

By the Commission: Chairman Powell, Commissioners Abernathy, and Martin
issuing separate statements; Commission Adelstein concurring in part,
dissenting in part and issuing a statement; Commissioner Copps
dissenting and issuing a statement.

#  {#section .unnumbered}

# INTRODUCTION

1.  In this Order, we forbear from enforcing the requirements of section
    271, for all four petitioners (the Bell Operating Companies (BOCs)),
    with regard to the broadband elements that the Commission, on a
    national basis, relieved from unbundling in the *Triennial Review
    Order* and subsequent reconsideration orders (collectively, the
    "*Triennial Review* proceeding"). These elements are
    fiber-to-the-home loops (FTTH loops), fiber-to-the-curb loops (FTTC
    loops), the packetized functionality of hybrid loops, and packet
    switching (collectively, broadband elements).[^1] We therefore grant
    the Verizon Petition[^2] and BellSouth Petition,[^3] and grant in
    part the SBC Petition[^4] and Qwest Petition.[^5]

2.  In its petition, Verizon requests that the Commission forbear from
    applying the independent section 271 unbundling obligations
    enumerated in the *Triennial Review* proceeding to the broadband
    elements the Commission removed from unbundling under section
    251.[^6] BellSouth seeks "the same relief requested by Verizon in
    its Petition for Forbearance."[^7] The SBC and Qwest petitions
    request broader relief, essentially asking the Commission to forbear
    from applying the independent access obligations of section 271 to
    all network elements that the Commission determined need not be
    unbundled under section 251.

# Background

3.  *Statutory Requirements*. The Telecommunications Act of 1996[^8]
    requires that incumbent local exchange carriers (incumbent LECs)
    provide unbundled network elements (UNEs) to other
    telecommunications carriers. In particular, section 251(c)(3)
    requires incumbent LECs to provide to requesting telecommunications
    carriers "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 in
    accordance with ... the requirements of this section and section
    252."[^9] Section 251(d)(2) of the Act describes two standards that
    the Commission should use in determining which network elements must
    be made available to requesting telecommunications carriers.[^10]
    For network elements that are not proprietary in nature, section
    251(d)(2)(B) requires the Commission to determine "at a minimum,
    whether ... the failure to provide access to such network elements
    would impair the ability of the telecommunications carrier seeking
    access to provide the services that it seeks to offer."[^11] The
    Commission has determined that most network elements (including the
    elements at issue) are nonproprietary in nature, and are thus
    governed by the section 251(d)(2)(B) "impair" standard.

4.  Section 271 establishes both the procedures by which a BOC may apply
    to provide interLATA services in its in-region states and the
    substantive standards by which that application must be judged. In
    particular, section 271(c)(2)(B) of the Act requires the BOCs to
    satisfy a fourteen point "competitive checklist" of access and
    interconnection requirements demonstrating that the local market is
    open to competition before they are permitted to provide in-region,
    interLATA services.[^12] The section 251(c) obligations are
    referenced and incorporated as obligations of the BOCs under
    checklist item number two.[^13] Four of the other checklist items
    require BOCs to provide competitors with "unbundled" access to
    specific network elements.[^14] Specifically, item four of the
    competitive checklist requires the BOCs to provide competitive
    providers with access to local loop transmission from the central
    office to the customer's premises.[^15] Item five requires the BOCs
    to provide access to local transport from the trunk side of a
    wireline local exchange carrier switch.[^16] Item six requires the
    BOCs to provide access to local switching[^17] and item ten requires
    the BOCs to provide nondiscriminatory access to databases and
    associated signaling.[^18]

5.  *Triennial Review Proceeding*. The Commission last year released the
    *Triennial Review Order*,[^19] which reexamined the issues presented
    in implementing the unbundling requirements of section 251 of the
    Act. The Commission redefined the "impair" standard governing which
    nonproprietary network elements the incumbent LECs should be
    required to unbundle under section 251(c)(3).[^20] The Commission
    concluded that a requesting telecommunications carrier is impaired
    when lack of access to an incumbent LEC network element poses
    barriers to entry, including operational and economic barriers that
    are likely to make entry into a market uneconomic.[^21] In
    considering whether the sum of the barriers to entry was likely to
    make entry uneconomic, the Commission made clear that it is
    necessary to take into account any countervailing advantages that a
    requesting carrier may have.[^22] With regard to loops, transport,
    switching and signaling/databases, the Commission, while limiting
    access to certain aspects of the elements, did find varying degrees
    of impairment and continued to require some unbundling of all of the
    elements at issue.[^23]

6.  The Commission distinguished new fiber networks used to provide
    broadband services for the purposes of its unbundling analysis.
    Specifically, the Commission determined, on a national basis, that
    incumbent LECs do not have to unbundle certain broadband elements,
    including FTTH loops in greenfield situations, broadband services
    over FTTH loops in overbuild situations, the packetized portion of
    hybrid loops, and packet switching.[^24] The Commission based its
    determinations with regard to these elements on the impairment
    standard and the requirement of section 706 of the 1996 Act to
    provide incentives for all carriers, including the incumbent LECs,
    to invest in broadband facilities.[^25] The Commission concluded
    that although it was relying on its impairment standard in
    determining whether these elements should be subject to unbundling,
    it had discretion under its section 251(d)(2) "at a minimum"
    authority to consider other factors.[^26] Accordingly, the
    Commission considered the statutory goals outlined in section 706 in
    concluding that those broadband elements would not be subject to
    unbundling nationwide. In the *Triennial Review MDU Reconsideration
    Order*, the Commission determined that these same section 706
    considerations justified extending the *Triennial Review Order*'s
    FTTH unbundling relief to encompass FTTH loops serving predominantly
    residential multiple dwelling units (MDUs).[^27] In the subsequent
    *Triennial Review FTTC Reconsideration Order*, the Commission found
    that the FTTH analysis applied to FTTC loops, as well, and granted
    the same unbundling relief to FTTC as applied to FTTH.[^28]

7.  The Commission also considered the relationship between sections 251
    and 271 of the Act. Specifically, the Commission considered the
    relationship between checklist item two (which references
    section 251) and checklist items four through six and ten (which do
    not). The Commission concluded that checklist items four through six
    and ten constitute a distinct statutory basis for the requirement
    that BOCs provide competitors with access to certain network
    elements that does not necessarily hinge on whether those elements
    are included among those subject to section 251(c)(3)'s unbundling
    requirements.[^29] Accordingly, the Commission stated that even if
    it concluded that requesting telecommunications carriers are not
    "impaired" without access to one of those elements under section
    251, section 271 would still require the BOC to provide access.[^30]
    However, under that circumstance, the pricing standard would not be
    determined under section 252(d)(1), but would be governed by the
    "just and reasonable" standard established under sections 201 and
    202.[^31]

8.  The United States Court of the Appeals for the District of Columbia
    Circuit recently reviewed the Commission's conclusions in the
    *Triennial Review Order*.[^32] Although the court vacated and
    remanded many of the Commission's impairment findings, including
    those relating to mass market switching and local transport, the
    court affirmed the Commission's decisions to relieve incumbent LECs
    from broadband unbundling obligations.[^33] The court also affirmed
    the Commission's conclusions related to the section 271
    obligations.[^34]

9.  *Petitions for Forbearance.* During the pendency of the *Triennial
    Review* proceeding described above, Verizon filed a petition
    requesting that the Commission forbear from applying items four
    through six and ten of the section 271 checklist once the
    corresponding elements no longer need to be unbundled under section
    251(d)(2).[^35] Immediately prior to the Commission's statutory
    deadline to rule on its petition, Verizon submitted a letter
    requesting that the Commission limit the pending forbearance
    petition to the broadband elements that the Commission found on a
    national basis in the *Triennial Review* proceeding do not have to
    be unbundled under section 251.[^36] The Commission denied that
    petition,[^37] and Verizon sought judicial review of the
    Commission's order. In an opinion released in July 2004, the Court
    of Appeals for the D.C. Circuit found that the Commission had failed
    adequately to explain its decision not to grant Verizon's original
    petition, and remanded the matter to the Commission.[^38]

10. BellSouth, SBC and Qwest then filed petitions seeking similar relief
    to that sought by Verizon. While BellSouth seeks forbearance from
    the same broadband elements as sought by Verizon,[^39] SBC and Qwest
    request forbearance from the section 271 independent access
    obligation for all elements---both narrowband and broadband---that
    are not required to be unbundled under section 251(d)(2).[^40] SBC
    and Qwest argue that once an element no longer meets the section
    251(d)(2) standard for unbundling, forbearance with respect to the
    parallel checklist item is required by section 10.[^41] SBC and
    Qwest further maintain that the rationale for forbearance is
    especially persuasive with regard to the broadband elements the
    Commission relieved from unbundling in the *Triennial Review*
    proceeding.[^42]

11. *Forbearance Standard*. The goal of the Telecommunications Act of
    1996 is to establish "a pro-competitive, de-regulatory national
    policy framework."[^43] An integral part of this framework is the
    requirement, set forth in section 10 of the 1996 Act, that the
    Commission forbear from applying any provision of the Act, or any of
    the Commission\'s regulations, if the Commission makes certain
    specified findings with respect to such provisions or
    regulations.[^44] Specifically, the Commission is required to
    forbear from any statutory provision or regulation if it determines
    that: (1) enforcement of the regulation is not necessary to ensure
    that charges and practices are just and reasonable, and are not
    unjustly or unreasonably discriminatory; (2) enforcement of the
    regulation is not necessary to protect consumers; and (3)
    forbearance is consistent with the public interest.[^45] In making
    such determinations, the Commission must also consider pursuant to
    section 10(b) "whether forbearance from enforcing the provision or
    regulation will promote competitive market conditions." Section
    10(d) specifies, however, that "\[e\]xcept as provided in section
    251(f), the Commission may not forbear from applying the
    requirements of section 251(c) or 271 . . . until it determines that
    those requirements have been fully implemented."[^46]

# discussion

12. For the reasons described below, we grant all BOCs forbearance from
    section 271's independent access obligations with regard to the
    broadband elements the Commission, on a national basis, relieved
    from unbundling under section 251: FTTH loops, FTTC loops, the
    packetized functionality of hybrid loops, and packet switching. As
    required by section 10, we forbear from applying the section 271
    access obligations to those broadband elements to the same extent
    that the Commission relieved those elements from unbundling under
    section 251(c)(3) in the *Triennial Review* proceeding.[^47] In
    arriving at this determination, we find that the checklist portion
    of section 271 has been "fully implemented" in all states, and that
    the three-pronged forbearance test has been met with respect to
    these broadband elements. With regard to SBC's and Qwest's broader
    forbearance requests, we decline to address those issues in this
    Order.[^48]

## "Fully Implemented"

13. As a threshold matter, we must consider whether section 10(d)
    prohibits the forbearance sought by the BOCs in this proceeding. As
    stated above, section 10(d) prohibits the Commission from forbearing
    from the requirements of section 271 until it determines that those
    requirements have been "fully implemented."[^49] In our recent order
    denying Verizon's forbearance petition from the separate operating,
    installation, and maintenance functions of section 272 (*OI&M
    Order*),[^50] the Commission concluded that the section 272 separate
    affiliate requirements, which are referenced in section 271(d), are
    not "fully implemented" until three years after a BOC has obtained
    section 271 authority to provide in-region interLATA services in a
    particular state.[^51] In arriving at that conclusion, the
    Commission noted that section 272 specifically requires that the
    BOCs maintain the separate affiliate structure for at least three
    years after grant of a section 271 application in a particular
    state.[^52]

14. AT&T argues that the *OI&M Order* prohibits the Commission from
    finding that section 271 is fully implemented until a minimum of
    three years after long distance authority has been granted in a
    particular state.[^53] Other commenters have argued that the
    Commission should adopt a market-based test and only find section
    271 "fully implemented" when markets are deemed competitive.[^54]
    The BOCs counter that the checklist of section 271 has already been
    determined to be "fully implemented" because the BOCs have received
    section 271 authority in all of their states.[^55]

15. We find that the checklist portion of section 271(c) is "fully
    implemented" once section 271 authority is obtained in a particular
    state. Accordingly, because the BOCs have obtained section 271
    authority in all of their states, we find that the checklist
    requirements of section 271(c) are "fully implemented" for purposes
    of section 10(d) throughout the United States.

16. This interpretation is the most reasonable reading of the statute.
    Once the checklist requirements have been met and the BOC is granted
    authority to provide interLATA services under section 271(d), there
    is nothing further the Commission or the BOC needs to do in order to
    implement the checklist. Certainly, the Commission continues to have
    enforcement authority under section 271(d)(6), but this assumes that
    the checklist has been implemented and that the BOC has received
    section 271 authority in a given state. This determination is
    consistent with the language in section 271(d)(3)(A)(i) stating that
    a BOC has met the requirements of section 271(c)(1) if among other
    obligations it has "fully implemented" the competitive
    checklist.[^56] It is the most logical interpretation that the words
    "fully implemented" would have the same meaning when used in section
    271, as when referring to section 10(d)'s requirement that section
    271 be "fully implemented" prior to forbearance.

17. Accordingly, we reject suggestions by commenters that section
    271(c)(1)(B) is only "fully implemented" once a certain competitive
    threshold in the market has been met. By interpreting the "fully
    implemented" language to include competitive thresholds, we would be
    creating inquiries redundant with those forbearance requirements,
    since section 10(b) of the Act already requires the Commission to
    consider the competitive market conditions, including whether a
    grant of forbearance will enhance competition in making its
    determination.[^57] Instead, we believe section 10(d) is reasonably
    interpreted as a threshold standard, limiting the Commission from
    granting forbearance until it has determined that the BOC satisfies
    the section 271(c) competitive checklist.

18. Our finding in the *OI&M Order* regarding application of section
    10(d) to section 272 in no way prevents us from reaching this
    conclusion. Indeed, the Commission specifically stated in the *OI&M
    Order* that its determination with regard to section 272 does not
    address whether any other part of section 271, such as the section
    271(c) competitive checklist, is "fully implemented."[^58] The
    "fully implemented" language of section 10(d) must be read in light
    of the particular requirements at issue, and section 272
    requirements are distinct from the other requirements of section
    271: the separate affiliate obligations of section 272 continue for
    at least a three-year period after the BOC is authorized to provide
    interLATA telecommunications services under section 271(d), while
    the section 271(c) competitive checklist lacks any such statutorily
    mandated timeframe. Accordingly, we conclude that the "fully
    implemented" standard that we have applied to section 272 should not
    be applied to the checklist obligation of section 271(c).

## Forbearance from Section 271 Independent Access Obligations for Broadband Elements

19. As discussed below, we find that the BOCs have demonstrated that
    they satisfy the criteria set forth in section 10 with respect to
    the broadband elements for which the Commission provided unbundling
    relief on a national basis in the *Triennial Review* proceeding:
    FTTH loops, FTTC loops, the packetized functionality of hybrid
    loops, and packet switching. Therefore, as required by section 10,
    we forbear from applying the section 271 access obligations to those
    broadband elements to the same extent that the Commission relieved
    those elements from unbundling under section 251(c)(3).

20. We apply our section 10 analysis in light of the Act's overall goals
    of promoting local competition and encouraging broadband
    deployment.[^59] Indeed, the Commission previously has considered
    "the statutory language, the framework of the 1996 Act, its
    legislative history, and Congress' policy objectives," and concluded
    that the Act "directs us to use, among other authority, our
    forbearance authority under section 10(a) to encourage the
    deployment of advanced services."[^60] The analysis below is
    informed by that congressional direction, and we believe that our
    conclusions are faithful to Congress's intent.

### Just and Reasonable Charges and Practices

21. Section 10(a)(1) requires that we determine whether applying the
    independent section 271 unbundling obligation to the broadband
    elements of the BOCs is necessary to ensure that the "charges,
    practices, classifications, or regulations . . . are just and
    reasonable and are not unjustly or unreasonably
    discriminatory."[^61] Although in other forbearance orders, the
    Commission placed emphasis on the wholesale aspect of the 10(a)(1)
    prong,[^62] we find that, under the particular circumstances
    relevant to the instant analysis, it is appropriate to consider the
    wholesale market in conjunction with competitive conditions in the
    downstream retail broadband market. Specifically, the developing
    nature of the broadband market at both the wholesale and retail
    levels, including the ongoing introduction of new services and
    deployment of new facilities, leads us to conclude that the
    contribution of section 271 unbundling requirements to ensuring just
    and reasonable charges and practices is relatively
    modest---particularly at the retail level---and outweighed by the
    greater competitive pressure that would be brought to bear on all
    providers if the section 271 unbundling requirements were
    lifted.[^63] We are mindful of the disincentive effects of
    unbundling on BOC investment, and believe that the beneficial effect
    of unbundling is small given the particular characteristics of this
    retail market. Accordingly, our section 10(a)(1) analysis considers
    the effects of forbearance from section 271's broadband unbundling
    requirements on the BOCs' rates and practices, considering the
    overall state of competition in the developing broadband market and
    the investment disincentives associated with unbundling obligations.
    For the following reasons, we agree with the BOCs' petitions that
    their relative position in the emerging broadband market would not
    lead to unreasonable or discriminatory practices in the absence of a
    section 271 obligation to unbundle their broadband facilities.[^64]

22. The broadband market is still an emerging and changing market,
    where, as the Commission previously has concluded, the preconditions
    for monopoly are not present.[^65] In particular, actual and
    potential intermodal competition informs rational competitors'
    decisions concerning next-generation broadband technologies.[^66]
    From the BOCs' perspective, cable providers play an especially
    significant role in the emerging broadband market. The Commission's
    most recent High Speed Services Report, as well as other data in the
    record of this proceeding, indicates that cable modem providers
    control a majority of all residential and small-business high-speed
    lines.[^67] The record demonstrates that cable operators have had
    success in acquiring not only residential and small-business
    broadband customers, but increasingly large business customers as
    well.[^68] Further, in the *Triennial Review Order*, the Commission
    observed that "\[t\]here appear to be a number of promising access
    technologies on the horizon and we expect intermodal platforms to
    become increasingly a substitute for . . . wireline broadband
    service."[^69] The Commission recognized in the *Triennial Review
    Order* the "important broadband potential of other platforms and
    technologies, such as third generation wireless, satellite, and
    power lines."[^70] Ku-band satellite service and fixed wireless
    service are available to provide high-speed Internet access across
    large parts of the country, and the Commission has a pending
    proceeding addressing broadband over power lines and has also
    created a task force on wireless broadband.[^71] The record here
    likewise demonstrates the existence of numerous emerging broadband
    competitors.[^72]

23. We also note that, in the *USTA II* decision, the D.C. Circuit
    upheld the Commission's findings in the *Triennial Review Order*
    that it was appropriate to relieve the BOCs from unbundling
    obligations on a national basis for the broadband elements at
    issue.[^73] In affirming these findings, the court noted the
    presence of robust intermodal competition from cable operators and
    concluded that the Commission was correct to take into account the
    BOCs' lesser penetration of the broadband market when compared with
    cable broadband providers.[^74] The D.C. Circuit further agreed with
    the Commission that the emerging nature of the broadband market,
    along with the availability of alternative loop facilities,[^75]
    mitigated any potential harm from removing access to these
    facilities.[^76]

24. Given the importance of competition in ensuring just, reasonable,
    and nondiscriminatory charges and practices for broadband services,
    we also weigh the value of the BOCs' own competitive role in the
    emerging broadband market as part of our overall section 10(a)(1)
    analysis.[^77] As the Commission previously has found in the context
    of its section 10(a)(1) analysis, "competition is the most effective
    means of ensuring that . . . charges, practices, classifications,
    and regulations . . . are just and reasonable, and not unreasonably
    discriminatory."[^78] The section 271 unbundled access obligations
    for broadband have the effect of discouraging BOC investment in this
    emerging market, diminishing their potential effectiveness as
    competitors today and in the future, to the detriment of the goals
    of section 10(a)(1). We recognized when we relieved the incumbent
    LECs from unbundling obligations under section 251(c) that the
    elements used to provide access to next-generation networks are more
    recently developed technologies, and generally represent upgrades to
    incumbent LECs' loop plant.[^79] Indeed, by granting relief from the
    similar broadband unbundling obligations of section 251, the
    Commission's intention was to encourage the deployment of new fiber
    technologies by incumbent LECs and their competitors alike, and
    increase the broadband services being offered to consumers in the
    near future.[^80]

25. We conclude that investment disincentives also arise from section
    271 unbundled access requirements. Those disincentives are
    attributable to not only the prospect that regulated unbundling will
    diminish the compensation BOCs receive from users of their broadband
    facilities, but also the costs of constructing BOC broadband
    facilities in a fashion that will allow the BOC to satisfy whatever
    access requirements might foreseeably be imposed under section 271,
    as well as the significant costs that can be associated with
    regulatory proceedings themselves.[^81] In light of the competitive
    benefit of the BOCs' continued investment in fiber-based broadband
    facilities, the disincentives associated with regulated broadband
    unbundling under section 271 support our decision to grant
    forbearance from those requirements. We conclude that removing those
    disincentives will promote just and reasonable charges and practices
    through the operation of market forces.

26. With regard to the potential impact of forbearance specifically on
    the wholesale broadband market, as raised by certain competitive LEC
    commenters,[^82] the evidence currently before us, taken as a whole,
    leads us to conclude that competition from multiple sources and
    technologies in the retail broadband market, most notably from cable
    modem broadband providers, will pressure the BOCs to utilize
    wholesale customers to grow their share of the broadband markets and
    thus the BOCs will offer such customers reasonable rates and terms
    in order to retain their business. Verizon plausibly claims that
    because the BOCs face intense intermodal competition, even in the
    absence of section 271 unbundling they will need to find ways to
    keep traffic "on-net," which we conclude would likely include the
    provision of wholesale offerings.[^83] Although we acknowledge that
    the question is not entirely susceptible to resolution with
    evidentiary proof, and a degree of informed prediction is required,
    we conclude in light of the evidence before us that even if the BOCs
    were not required to provide competitors unbundled access to the
    broadband elements at issue under section 271, competitive LECs
    would still be able to access other network elements to compete in
    the broadband market or take advantage of the opportunities
    presented by the developing market situation to build their own
    facilities or obtain access to facilities from other suppliers.[^84]

27. We also note that, where section 271 unbundling obligations
    discourage the BOCs from building next generation networks in the
    first place, competitive LECs derive no access benefit from those
    obligations. Competitive LECs cannot provide broadband services
    using a BOC network that is unable to support broadband services.
    Moreover, as discussed above, we take into account the effect that
    terminating wholesale access under section 271 would have on retail
    customers.[^85] Given our analysis of the characteristics of the
    retail broadband market, coupled with the potential for section 271
    unbundling obligations to deter the BOCs from becoming more vibrant
    broadband competitors (and thereby spurring other providers as
    well), we find that the requirements of section 10(a)(1) are
    satisfied here.[^86]

28. We reject the arguments of competitive LECs that a fully competitive
    wholesale market is a mandatory precursor to a finding that section
    10(a)(1) is satisfied, regardless of the state of intermodal
    competition in the retail market and the effects on incumbent LEC
    investments.[^87] Forbearance need not await the development of a
    fully competitive market when the section 10 criteria are otherwise
    satisfied.[^88] Furthermore, the competitive LECs' reading of
    section 10 conflicts with the D.C. Circuit's *USTA II* decision
    which held, in the section 251 context, that "the Commission cannot
    ignore intermodal alternatives" when evaluating wholesale unbundling
    obligations.[^89] The D.C. Circuit likewise required a
    "confrontation of the issue \[of investment disincentives\] and some
    effort to make reasonable trade‑offs" when considering unbundling
    pursuant to section 251.[^90] We disagree with commenters who argue
    that the Commission is precluded under our forbearance authority
    from considering factors relating to unbundling policy pursuant to
    section 271 that we are required to consider pursuant to
    section 251. If section 10(a)(1) were read as the competitive LECs
    propose, no amount of intermodal retail competition or investment
    disincentives could ever warrant forbearance if there was not also a
    fully competitive wholesale market that would continue in the
    absence of unbundling.

29. Finally, and consistent with the foregoing analysis, we specifically
    reject the assertions of competitive carriers that forbearance
    should be denied because the BOCs either are not subject to
    competition with respect to their broadband offerings, or are
    constrained only by a duopolistic relationship with cable
    operators.[^91] Again, we refuse to take the static view suggested
    by some competitors of this dynamic broadband market, thus leveling
    the terms of competition, providing real competitive choice, and
    furthering the goal of ensuring just, reasonable and
    nondiscriminatory rates, terms and conditions for these services. As
    explained above, broadband technologies are developing and we expect
    intermodal competition to become increasingly robust, including
    providers using platforms such as satellite, power lines and fixed
    and mobile wireless in addition to the cable providers and BOCs. We
    expect forbearance from section 271 unbundling will encourage the
    BOCs to become full competitors in this emerging industry and at the
    same time substantially enhance the competitive forces that will
    prevent the BOCs from engaging in unjust and unreasonable practices
    at any level of the broadband market.

### Protection of Consumers

30. Section 10(a)(2) of the forbearance analysis requires us to
    determine whether the independent section 271 access obligation for
    broadband elements is necessary to protect consumers.[^92] For
    reasons similar to those that persuade us that the independent
    section 271 unbundling obligation for the broadband elements is not
    necessary within the meaning of section 10(a)(1), we also determine
    that the obligation is not necessary for the protection of
    consumers. As we concluded above, the BOCs have limited competitive
    advantages with regard to the broadband elements, given their
    position with respect to cable modem providers and others in the
    emerging broadband market. BOCs are not even the largest provider of
    broadband services to consumers---many more consumers receive
    broadband through cable modem services.[^93]

31. Therefore, as discussed above, we believe that forbearance from
    these requirements will provide an increased incentive for the BOCs
    to deploy broadband services and compete with cable providers, which
    will in turn increase competition and benefit consumers.[^94] As the
    Commission stated in the *Triennial Review Order*, relieving the
    incumbent LECs from the section 251 unbundling requirements for
    broadband elements will benefit consumers "from this race to build
    next generation networks and the increased competition in the
    delivery of broadband services."[^95] The *USTA II* decision
    recently upheld the Commission's approach, finding that the
    Commission lawfully may focus on future consumer benefits
    anticipated by its current policy decisions.[^96] We believe that
    forbearance from the section 271 independent unbundling obligations
    for the broadband elements is consistent with these findings and
    will further this result.

32. Accordingly, we reject the arguments of competitive LECs that the
    section 271 independent access obligation is necessary under section
    10(a)(2) to ensure that competitive LECs will also have the ability
    to provide broadband services, thereby offering consumers additional
    choices.[^97] We believe this argument is faulty because in this
    context forbearance provides competitive carriers as well as BOCs
    with increased incentives to invest in the broadband market. As we
    concluded in the *Triennial Review Order*, removing unbundling
    obligations for broadband services will result in increased choices
    for consumers in two ways. First, once incumbent LECs are certain
    that their broadband networks will be free from unbundling
    requirements, we expect that they will expand their deployment of
    these networks, and provide increased choices to consumers.[^98]
    Second, we expect that competitive LECs will seek "innovative
    network access options" to continue to provide broadband services to
    consumers and to compete with the incumbent LECs.[^99]

### Public Interest

33. With respect to the third criterion for forbearance, we conclude
    that relieving the BOCs from the section 271(c) access obligation
    for the broadband elements is in the public interest. Section 10(b)
    directs the Commission to consider whether forbearance "will promote
    competitive market conditions, including the extent to which such
    forbearance will enhance competition among providers of
    telecommunications services," and states that such a determination
    may be the basis for finding that forbearance is in the public
    interest and thus meets section 10(c).[^100] As we concluded above,
    given that these broadband elements generally involve new network
    investment on the BOCs' part, and that the BOCs are subject to
    significant intermodal competition in providing broadband services,
    relieving the BOCs of unbundling obligations will encourage BOCs to
    further invest in, and deploy broadband technologies. In turn, we
    believe these investments will promote increased competition in the
    market for broadband services.

34. Our analysis of the public interest is informed by section 706 of
    the 1996 Act, which -- as noted above -- directs us to promote the
    timely and comprehensive deployment of broadband facilities.
    Moreover, we take note of the BOCs' arguments that the unbundling
    obligation of section 271 imposes a costly requirement of designing
    the broadband network to create access points for the various
    components.[^101] The Commission intended that its determinations in
    the *Triennial Review* proceeding would relieve incumbent LECs of
    such substantial costs and obligations, and encourage them to invest
    in next-generation technologies and provide broadband services to
    consumers. We see no reason why our analysis should be different
    when the unbundling obligation is imposed on the BOCs under section
    271 rather than section 251(c) of the Act.[^102]

35. In making these determinations, we reject the arguments of certain
    competitive carriers that section 271(d)(4), which provides that
    "\[t\]he Commission may not, by rule or otherwise, limit or extend
    the terms used in the competitive checklist set forth in subsection
    (c)(2)(B) of this section," precludes the relief the BOCs seek
    here.[^103] Such a reading is inconsistent with the plain terms of
    the statute. As an initial matter, as we have found above, the
    competitive checklist of section 271 is "fully implemented" when a
    BOC receives authorization to provide interLATA service under
    section 271. Subsequent forbearance from the checklist cannot thus
    be considered to "limit or extend" its terms: the Commission applied
    the checklist when it completed its section 271 inquiry and may then
    exercise forbearance, consistent with its obligations under
    section 10. Indeed, the opposite reading would place entirely too
    much weight on section 271(d)(4), to the detriment of the clear
    statutory directive in section 10. Forbearance neither limits nor
    extends the terms of any statutory provision. Rather, the decision
    to forbear represents the conclusion that under the statute, we are
    prohibited from applying a particular provision at all to specific
    telecommunications carriers or services. Granting forbearance in
    this circumstance, therefore, would not alter the terms used in the
    checklist, but instead suspend their ongoing enforcement in a
    discrete set of circumstances. Had Congress intended the prohibition
    on "limit\[ing\] or extend\[ing\]" the checklist to bar forbearance
    as well, it would have addressed that specific statutory procedure
    in section 271(d)(4).[^104]

36. The BOCs have therefore satisfied section 10(a)'s three-pronged test
    with regard to section 271(c)(2)(B)'s independent access obligations
    for the particular broadband elements at issue in this decision.
    Accordingly, we forbear from enforcing those requirements.

# conclusion

37. Based on the foregoing discussion, we conclude that section
    271(c)(1)(B) has been fully implemented for all of the BOCs in all
    of the states in which they are providing service. Moreover, we find
    that section 10(a)'s three-pronged test for forbearance has been met
    with respect to section 271(c)(1)(B)'s independent access obligation
    for FTTH loops, FTTC loops, the packetized functionality of hybrid
    loops, and packet switching for all of the affected BOCs to the
    extent such broadband elements were relieved of unbundling on a
    national basis under section 251(c). Accordingly, we grant Verizon's
    and BellSouth's petitions for forbearance, and we grant in part the
    SBC and Qwest petitions.

# EFFECTIVE DATE

38. Consistent with section 10 of the Act and our rules, the
    Commission's forbearance decision shall be effective on Friday,
    October 22, 2004.[^105] The time for appeal shall run from the
    release date of this order.[^106]

# ordering clauses

39. Accordingly, IT IS ORDERED that, pursuant to section 160 of the
    Communications Act of 1934, as amended, 47 U.S.C. § 160(d), Verizon
    Telephone Companies' Revised Petition for Forbearance IS GRANTED.

40. IT IS FURTHER ORDERED that, pursuant to section 160 of the
    Communications Act of 1934, as amended, 47 U.S.C. § 160(d), SBC
    Communications Inc.'s Petition for Forbearance IS GRANTED to the
    extent described herein.

41. IT IS FURTHER ORDERED that, pursuant to section 160 of the
    Communications Act of 1934, as amended, 47 U.S.C. § 160(d), Qwest
    Communications International Inc.'s Petition for Forbearance IS
    GRANTED to the extent described herein.

42. IT IS FURTHER ORDERED that, pursuant to section 160 of the
    Communications Act of 1934, as amended, 47 U.S.C. § 160(d),
    BellSouth's Petition for Forbearance IS GRANTED.

43. IT IS FURTHER ORDERED that, pursuant to section 10 of the
    Communications Act of 1934, 47 U.S.C. 160, and section 1.103(a),
    that the Commission's forbearance decision SHALL BE EFFECTIVE on
    October 22, 2004. Pursuant to sections 1.4 and 1.13 of the
    Commission's rules, 47 C.F.R. 1.4 and 1.13, the time for appeal
    shall run from the release date of this Order.

    FEDERAL COMMUNICATIONS COMMISSION

    Marlene H. Dortch

    Secretary

**STATEMENT OF**

**CHAIRMAN MICHAEL K. POWELL**

Re: Petition for Forbearance of the Verizon Telephone Companies Pursuant
to\
47 U.S.C. § 160(c), SBC Communications Inc.'s Petition for Forbearance
Under 47 U.S.C. § 160(c), Qwest Communications International Inc.
Petition for Forbearance Under 47 U.S.C. § 160(c), BellSouth
Telecommunications, Inc. Petition for Forbearance Under 47 U.S.C. §
160(c), WC Docket Nos. 01-338, 03-235, 03-260, 04-48

In my separate statement to the *Triennial Review Order* and in
countless other statements during my seven years at the Commission, I
have emphasized that "\[b\]roadband deployment is the most central
communications policy objective of our day." Today, we take another
important step forward to realize this objective.

By removing 271 unbundling obligations for fiber-based technologies -
and not copper based technologies such as line sharing - today's
decision holds great promise for consumers, the telecommunications
sector and the American economy. The item eliminates barriers to
companies that provide customers with an assortment of new services and
applications including interactive educational content, improved
telecommuting, life saving telemedicine applications, real-time two-way
sign language conversations with people with disabilities, and enhanced
video-on-demand services in competition with cable operators.

This Commission has a comprehensive approach to bringing faster
broadband connections to consumers. Many have complained that the United
States ranks 11^th^ in the world. Today's action represents an effort to
close that gap. The networks we are considering in this item offer
speeds of up to 100 Mbs and exist largely where no provider has
undertaken the expense and risk of pulling fiber all the way to a home.
And companies are responding to the Commission's efforts to create a
stable regulatory environment for new investment. For example, just this
week Verizon announced its plans to double its fiber-to-the-premises
(FTTP) deployment rate next year, bringing FTTP to 2 million additional
locations. This represents a 566 percent increase over the number of
existing FTTP subscribers. SBC has committed to serve 300,000 households
with a FTTH network while BellSouth has deployed a deep fiber network to
approximately 1 million homes. Other carriers are taking similar
actions. And there are important ancillary benefits to this activity. It
is estimated that Verizon's efforts will generate between 3,000 and
5,000 new jobs. These are positive developments for consumers and our
nation's economy. All of these facts demonstrate that the Commission has
a clear plan that has generated clear results.

My mission is to continue to stimulate investment in next generation
architectures, apply a light hand and let entrepreneurs bring the future
to the people. This item demonstrates that we are one step further
along.

STATEMENT OF\
COMMISSIONER KATHLEEN Q. ABERNATHY

> Re: Petition for Forbearance of the Verizon Telephone Companies
> Pursuant to\
> 47 U.S.C. § 160(c), SBC Communications Inc.'s Petition for Forbearance
> Under 47 U.S.C. § 160(c), Qwest Communications International Inc.
> Petition for Forbearance Under 47 U.S.C. § 160(c), BellSouth
> Telecommunications, Inc. Petition for Forbearance Under 47 U.S.C. §
> 160(c), WC Docket Nos. 01-338, 03-235, 03-260, 04-48

In the Triennial Review Order and subsequent reconsideration orders, the
Commission took the bold step of fencing off next-generation broadband
facilities from unbundling obligations. This forbearance decision is an
important component of that deregulatory policy, and it will help
deliver the promise of broadband networks and IP-enabled services to
Americans throughout all parts of the country.

The Commission declined to subject broadband facilities to unbundling
obligations under section 251 to encourage greater investment in
deep-fiber networks ― investment that is massive in scope and carries no
assurance of profit. While curtailing unbundling requirements undeniably
creates challenges for wireline competitors, the Commission was rightly
concerned that new broadband investment would be severely chilled if
incumbents were required to share the fruits of their labors on terms
and conditions set by regulators. Moreover, in a broadband marketplace
where cable operators enjoy a significant lead over wireline incumbents,
it is difficult to justify saddling the less-dominant platform ― but not
the market leader ― with unbundling obligations.

Forbearance from unbundling obligations imposed under section 271 is
necessary to ensure that the Commission's broadband relief has its
intended effect. The Commission has determined that the costs of
unbundling outweigh its benefits in the broadband context, and that
determination warrants relief from unbundling irrespective of which
statutory provision it arises under. While access obligations under
section 271 have been argued to be less burdensome than those imposed
under section 251 (because the TELRIC standard is inapplicable under
section 271), unbundling in all events "spread\[s\] the disincentive to
invest in innovation and create\[s\] complex issues of managing shared
facilities." *United States Telecom Ass'n v. FCC*, 290 F.3d 415, 427
(D.C. Cir. 2002).

Notably, the Commission retains regulatory authority to ensure that
consumers will be protected if robust broadband competition fails to
live up to its potential. I do not expect such an outcome, but the
Commission stands ready to act if a market failure occurs. In addition,
this grant of forbearance is without prejudice to our ongoing proceeding
regarding the *Computer Inquiry* nondiscrimination provisions, so the
Commission will have a full opportunity to determine the extent to which
those separate requirements remain necessary.

**DISSENTING STATEMENT OF\
COMMISSIONER MICHAEL J. COPPS**

Re: *Petition for Forbearance of the Verizon Telephone Companies
Pursuant to 47*

*U.S.C. § 160(c), SBC Communications Inc.'s Petition for Forbearance
Under 47*

*U.S.C. § 160(c), Qwest Communications International Inc. Petition for*

*Forbearance Under 47 U.S.C. § 160(c), BellSouth Telecommunications,
Inc.*

*Petition for Forbearance Under 47 U.S.C. § 160(c),* Memorandum Opinion
and

Order (WC Docket Nos. 01-338, 03-235, 03-260 & 04-48)

The mismatch between the Commission's broadband rhetoric and reality
reaches new heights with today's decision. The reality is that the
International Telecommunications Union reports that the United States is
now ***thirteenth*** in the world in broadband penetration. This is a
fall even from our sobering perch at eleven that the Commission reported
just a few months ago. It's an ominous trend when we recall that just
two-and-a-half years ago the Commission reported that the United States
ranked number four in the world in broadband penetration.

While the country experiences broadband freefall, the Commission has
embarked on a policy of closing off competitive access to last mile
bottleneck facilities. In the *Triennial Review*, the majority
restricted access to fiber-to-the-home loops. Last summer, the majority
extended this exemption from competition to facilities serving
"primarily residential" buildings, an action that clouded the line
between mass market and small business customers. The result: millions
of small businesses located in buildings where there are also
residential units are shut off from the benefits of having competitive
broadband options. Last week brought another onslaught when the majority
insulated fiber-to-the-curb architectures from competition. This action
further restricted broadband choice for residential consumers and
further tightened the noose on small businesses seeking competitive
broadband services.

Today, the majority pounds another nail into the coffin it is building
for competition. In all prior decisions, the majority used Section 251
to restrict access to last mile facilities. But to ensure at least the
possibility of access and the possibility of competition---even though
it might be at higher prices---the Commission unanimously required
continued access to these facilities under the less stringent
requirements of Section 271. In *USTA II*, the D.C. Circuit upheld this
approach. But in today's decision, the majority casts aside the court's
holding and moves on to slash even the residual bare requirements of
Section 271 access. As a result, there is now absolutely no obligation
to provide competitive access to any broadband facilities---from
fiber-to-the-home to fiber-to-the curb to packetized functions of hybrid
loops to packetized switching capabilities---at just and reasonable
rates. The majority accomplishes this final feat using the Commission's
Section 10 forbearance authority to shut off any obligation to provide
fair access to last mile bottleneck facilities. In doing so, they
replace their will for that of Congress, finding that competition is not
required for just and reasonable charges or for the protection of
consumers. They conclude that the public interest is served by
retreating to a policy of non-competition and last mile monopoly
control. I cannot support such conclusions nor the underlying analysis.

The majority attempts to assure us that today's action is part of an
effort to promote local competition. They contend that in the broadband
market preconditions for dominance are not present because promising
technologies are flooding the marketplace. But broad rhetoric about the
power of competition does not make it happen. And choosing to ignore the
Commission's own data does not help the weak analytical structure on
which this decision is built.

The facts are clear. This Commission's most recent report on high-speed
services shows that the residential and small business market is a
duopoly. Our data show that new satellite and wireless
technologies---exciting though they are---together serve only 1.3
percent of this market. Broadband over powerline does not yet even
register. Yet the majority chooses to ignore the Commission's
statistics, preferring instead sweeping rhetoric about regulatory relief
and broadband competition.

One problem here is that the majority gets so carried away with its
vision of the country's telecom future that they act like it is already
here, that competition is everywhere flourishing, and that intermodal
competition is already ubiquitous reality. But their cheerful blindness
to stubborn market reality actually pushes farther into the future the
kind of competitive telecom world they say they want.

The lack of analysis in this proceeding---and in the Commission's
approach to broadband generally---amounts to a regulatory policy of
crossing our fingers and hoping competition will somehow magically burst
forth. With the international economy increasingly dependent on
broadband facilities, faith-based approaches to advanced
telecommunications are insufficient. We cannot afford to wait. As
*Business Week* recently made clear: "If the U.S. is not to lose out in
the global race of the next-generation Internet and the new businesses
it can spawn, change is needed. The country must create vigorous
competition to drive the low prices and high speeds that can usher in a
prosperous broadband economy." I agree. There may not be a
"one-sized-fits-all" competition policy out there, but if we want to
enter the brave new world of broadband, we need to move away from our
current course. The facts show we are headed in the wrong direction at
warp speed. I dissent.

**STATEMENT OF**

**COMMISSIONER KEVIN J. MARTIN**

*Re: Petition for Forbearance of the Verizon Telephone Companies
Pursuant to 47 U.S.C. Sec. 160(c); SBC Communications Inc.'s Petition
for Forbearance Under 47 U.S.C. Sec. 160(c); Qwest Communications
International Inc. Petition for Forbearance Under 47 U.S.C. Sec. 160(c);
BellSouth Telecommunications, Inc. Petition for Forbearance Under 47
U.S.C. Sec. 160(c)*

For the past year, I have called on the Commission to take quick action
to clarify that the section 271 rules do not trump the regulatory relief
we provided in our recent broadband decisions. I am pleased that today's
action continues the commitment not to saddle next-generation broadband
networks and facilities with unbundling obligations established for
legacy networks. This decision should encourage the rapid deployment of
new investment in the high-speed broadband networks and facilities that
will provide American consumers with more 21^st^ century advanced
services.

I join my colleagues in support of today's decision to forbear from
enforcing the requirements of section 271, with regard to all the
broadband elements that the Commission, on a national basis, relieved
from unbundling in the *Triennial Review Order* and subsequent broadband
decisions. The elements are fiber-to-the-home loops, fiber-to-the-curb
loops, the packetized functionality of hybrid loops, packet switching,
and line-sharing.

While the Commission did not specifically address line sharing in
today's decision, the Bell Operating Companies had included a request in
their petitions that we forbear from enforcing the requirements of
section 271 with respect to line sharing.[^107] Since line-sharing was
included in their request for broadband relief and we affirmatively
grant their request, I believe today's order also forbears from any
section 271 obligation with respect to line-sharing. Regardless of
whether it was affirmatively granted, because the Commission's decision
fails to deny the requested forbearance relief with respect to line
sharing, it is therefore deemed granted by default under the statute.

**STATEMENT OF**

**COMMISSIONER JONATHAN S. ADELSTEIN**

**CONCURRING IN PART, DISSENTING IN PART**

*Re* *Petition for Forbearance of the Verizon Telephone Companies
Pursuant to*

*47 U.S.C. § 160(c), SBC Communications Inc.'s Petition for Forbearance
Under 47 U.S.C. § 160(c), Qwest Communications International Inc.
Petition for Forbearance Under*

*47 U.S.C. § 160(c), BellSouth Telecommunications, Inc. Petition for
Forbearance Under*

*47 U.S.C. § 160(c), CC Docket No. 01-338, WC Docket Nos. 03-235,
03-260, 04-48*

I concur in part and dissent in part to this decision to relieve the
Bell Operating Companies from the unbundling requirements of Section 271
for high-speed fiber loops capable of delivering advanced data, video
and voice service to the mass market. I am disappointed, however, that
this expert agency fails to back up many of the assertions in this item
with hard data and in-depth analysis. With the U.S. ranked 13^th^ in the
world in broadband penetration, this Order should be based on a careful,
comprehensive and independent analysis of the broadband marketplace.
Unfortunately, this Order makes bold predictions about broadband
competition but fails to apply the careful and thorough analysis
requisite to our delicate forbearance authority.

Particularly with respect to the capital-intensive investments required
to deploy new fiber networks to customers' premises, I have taken the
view that we should carefully balance the costs and benefits of
unbundling, a view affirmed recently by the D.C. Circuit Court of
Appeals.[^108] In past Orders, that approach has led me to support
measured unbundling relief for broadband investment in so-called
"greenfield areas," where there is no existing loop plant and
competitors and incumbents stand on equal footing.

For similar reasons, I again support the lifting of unbundling
requirements for greenfield deployments of fiber-to-the-home facilities
used to serve mass market customers.[^109] In reaching this decision, I
acknowledge the extraordinary investment required to bring high-speed
fiber to mass market customers' premises and the consumer benefits that
will result, including the potential for new competition in the video
marketplace. Given these benefits, granting providers additional
incentives to build these next generation networks through targeted
unbundling relief is warranted.

I can only concur in my support, however, because I believe that this
Order falls far short in providing the careful market analysis required
under the statute and Commission precedent.[^110] Under current case
law, we must presume that the petitioners exercise market power in their
provision of advanced services, in the absence of a finding of
non-dominance.[^111] In previous Orders, the Commission has carefully
considered the ability of such carriers to use market power to affect
the reasonableness of rates for consumers. Yet, the Commission makes
little serious attempt in this Order to evaluate specific product or
geographic markets, the competitive market conditions in all areas of
the country, or the petitioners' abilities to exercise market power for
broadband services. In my view, the Commission should have conducted the
requisite market analysis first.[^112] The Commission could have then
lifted unbundling requirements in markets in which we determined the
carrier does not exercise market power. This sort of careful review
would help allay concern about the impact of Section 10 forbearance on
the ability of State commissions to ensure just and reasonable wholesale
rates where competitive alternatives are lacking.

A decision based on the statutory forbearance criteria requires us to
make reasoned judgments to ensure the protection of consumers and
competition consistent with the public interest. This undertaking
requires a comprehensive and rigorous review to ensure that we do not
inadvertently harm the very communities and burgeoning competition that
we are trying to protect. Despite the Order's lack of in-depth market
analysis, I must nonetheless make a determination on the petitioners'
forbearance requests based on the best information available. My support
for measured unbundling relief here recognizes that the petitioners
currently have less market share than the leading provider in the
rapidly developing, but still emerging, market for mass market broadband
services, albeit on a national basis. Should we find in the future that
circumstances are changed, the Commission's approach here may well need
to change.

My support for targeted relief here does not signal that the Commission
need not remain vigilant about the evolution of this marketplace to
ensure that consumers continue to gain the benefits of lower prices and
increased bandwidth offerings. Similarly, the Commission should move to
address distinctions between the mass market and the enterprise market,
given the importance of competitive choice to small businesses
throughout the nation.

I note that my support for this Order does not speak to the different
context of access to networks provided to information service providers
under our rules. Any reconsideration of those rules, which have served
to ensure the open character of the Internet, may involve a very
different set of considerations than those faced here.

For these reasons, I concur in part and dissent in part.

[^1]: These elements are defined in our *Triennial Review Order*,
    *Triennial Review MDU Reconsideration Order*, and *Triennial Review
    FTTC Reconsideration Order*. *See Review of the Section 251
    Unbundling Obligations of Incumbent Local Exchange Carriers,
    Implementation of the Local Competition Provisions of the
    Telecommunications Act of 1996, Deployment of Wireline Services
    Offering Advanced Telecommunications Capability*, CC Docket Nos.
    01-338, 96-98, 98-147, Report and Order and Order on Remand and
    Further Notice of Proposed Rulemaking, 18 FCC Rcd 16978 (2003)
    (*Triennial Review Order*), *corrected by* Errata, 18 FCC Rcd 19020
    (2003) (*Triennial Review Order Errata*), *vacated and remanded in
    part, aff'd in part, United States Telecom Ass'n v. FCC*, 359 F.3d
    554 (D.C. Cir. 2004) (*USTA II*); Order on Reconsideration, FCC
    04-191 (rel. Aug. 9, 2004) (*Triennial Review MDU Reconsideration
    Order*); Order on Reconsideration, FCC 04-248 (rel. Oct. 18, 2004)
    (*Triennial Review FTTC Reconsideration Order*). In response to the
    D.C. Circuit's vacatur of certain *Triennial Review Order*
    unbundling rules, the Commission issued an *Interim Order and NPRM*,
    setting forth a six-month interim unbundling framework with respect
    to those network elements, and seeking comment on permanent
    unbundling rules that would respond to the *USTA II* decision.
    *Unbundled Access to Network Elements; Review of the Section 251
    Unbundling Obligations of Incumbent Local Exchange Carriers*, WC
    Docket No. 04-313, CC Docket No. 01-338, Order and Notice of
    Proposed Rulemaking, FCC 04-179 (rel. Aug. 20, 2004) (*Interim Order
    and NPRM*).

[^2]: *See* Letter from Susanne A. Guyer, Senior Vice President, Federal
    Regulatory Affairs, Verizon, to Michael Powell, Chairman, and
    Kathleen Abernathy, Kevin Martin, Michael Copps and Jonathan
    Adelstein, Commissioners, FCC, CC Docket No. 01-338 (filed Oct. 24,
    2003) (Verizon Oct. 24 *Ex Parte* Letter or Verizon Revised
    Petition); *Commission Establishes Comment Cycle for New Verizon
    Petition Requesting Forbearance from Application of Section 271*,
    Public Notice, 18 FCC Rcd 22795 (2003) (subsequent history omitted)
    (Verizon Revised Petition Public Notice).

[^3]: *BellSouth Telecommunications, Inc. Petition for Forbearance*, WC
    Docket No. 04-48 (filed Mar. 1, 2004) (BellSouth Petition).

[^4]: *SBC Communications Inc.'s Petition for Forbearance Under 47
    U.S.C. § 160(c)*, WC Docket No. 03-235 (filed Nov. 6, 2003) (SBC
    Petition).

[^5]: *Qwest Communications International Inc. Petition for Forbearance
    Under 47 U.S.C. § 160(c*), WC Docket No. 03-260 (filed Dec. 18,
    2003) (Qwest Petition).

[^6]: Although Verizon's Petition was ambiguous with regard to the exact
    scope of the relief requested, later submissions by Verizon clarify
    that Verizon is requesting forbearance relief only with respect to
    those broadband elements for which the Commission made a national
    finding relieving incumbent LECs from unbundling under section
    251(c). *See* Verizon Revised Petition; Letter from Dee May, Vice
    President -- Federal Regulatory, Verizon to Marlene H. Dortch,
    Secretary, FCC, CC Docket Nos. 01-337, 01-338, 02-33, 02-52, Attach.
    at 1-8 (filed Mar. 26, 2004) (Verizon Mar. 26 *Ex Parte* Letter).

[^7]: BellSouth Petition at 1.

[^8]: Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56.
    The 1996 Act amended the Communications Act of 1934, 47 U.S.C. § 151
    *et seq.* We refer to these Acts collectively as the "1996 Act" or
    the "Act."

[^9]: 47 U.S.C. § 251(c)(3).

[^10]: 47 U.S.C. § 251(d)(2).

[^11]: 47 U.S.C. § 251(d)(2)(B).

[^12]: 47 U.S.C. § 271(c)(2)(B).

[^13]: 47 U.S.C. § 271(c)(2)(B)(ii).

[^14]: 47 U.S.C. § 271(c)(2)(B)(iv), (v), (vi), (x).

[^15]: 47 U.S.C. § 271(c)(2)(B)(iv).

[^16]: 47 U.S.C. § 271(c)(2)(B)(v).

[^17]: 47 U.S.C. § 271(c)(2)(B)(vi).

[^18]: 47 U.S.C. § 271(c)(2)(B)(x).

[^19]: *See generally Triennial Review Order*, 18 FCC Rcd 16978.

[^20]: *Triennial Review Order*, 18 FCC Rcd at 17021-85, paras. 61-169,
    *corrected by Triennial Review Order Errata,* 18 FCC Rcd at 19020,
    paras. 5-6.

[^21]: *Triennial Review Order*, 18 FCC Rcd at 17035, para. 84.

[^22]: *Id*.

[^23]: Regarding loops for mass market customers, the Commission held
    that incumbent LECs are required to offer unbundled access to
    stand-alone copper loops, line splitting and subloops for the
    provision of narrowband and broadband services. *Triennial Review
    Order*, 18 FCC Rcd at 17128-32, paras. 248-54, *corrected by
    Triennial Review Order Errata*, 18 FCC Rcd at 19020-21, paras. 9-10.
    The Commission also required incumbent LECs to offer unbundled
    access to hybrid/copper loops for narrowband services. *Id.* at
    17153-54, paras. 296-97. For enterprise customer loops, the
    Commission required incumbent LECs to offer unbundled access to dark
    fiber loops, DS3 loops and DS1 loops subject to more granular
    reviews by the state commissions. *Id*. at 17155-83, paras. 298-342,
    *corrected by Triennial Review Order Errata*, 18 FCC Rcd at 19021,
    paras. 12-13. The Commission further ruled that incumbent LECs must
    provide unbundled access to dark fiber, DS3 and DS1 dedicated
    transport subject to more granular reviews by state commissions.
    *Id.* at 17199-237, paras. 359-418, *corrected by Triennial Review
    Order Errata*, 18 FCC Rcd at 19021, para. 15. With regard to
    switching for mass market customers, the Commission found that
    competing carriers are impaired without unbundled incumbent LEC
    local circuit switching because of barriers associated with the
    incumbent LEC hot cut process. *Id.* at 17265-85, paras. 464-85,
    *corrected by Triennial Review Order Errata*, 18 FCC Rcd at 19021,
    paras. 17-18. The Commission therefore asked the state commissions
    to approve loop cut-over processes that accommodate high volume
    cut-overs, or make detailed findings demonstrating that such a
    process is not necessary. *Id*. at 17286-90, paras. 487-92. The
    state commissions were also asked to determine whether there is any
    other impairment in a particular market and whether such impairment
    can be cured by requiring unbundled switching on a rolling basis,
    rather than making unbundled switching available for an indefinite
    period of time. *Id*. at 17310-12, paras. 521-24. The Commission
    determined that both unbundled signaling and call-related databases
    must be unbundled for competitive carriers that are purchasing the
    incumbent LEC's local circuit switching. *Id.* at 17323-34, paras.
    542-60.

[^24]: For FTTH loops, the Commission relieved incumbent LECs from
    unbundling FTTH loops in greenfield situations. In overbuild
    circumstances, the Commission required incumbent LECs to either keep
    the existing copper loop for competitive use, or provide unbundled
    access to a 64 kbps transmission path. However, incumbent LECs are
    relieved from any requirement to unbundle broadband services over
    overbuild FTTH loops. *Id.* at 17142-45, paras. 273-77. As discussed
    below, the Commission extended the FTTH unbundling relief initially
    to FTTH loops serving predominantly residential MDUs, and then to
    FTTC loop facilities, as well. *See infra* nn. Error: Reference
    source not found-Error: Reference source not found and accompanying
    text. The Commission also relieved incumbent LECs from the
    requirement to unbundle the next generation, packetized capabilities
    of their hybrid loops for the provision of broadband services to the
    mass market. *Id.* at 17149-53, paras. 288-95. Finally, the
    Commission found that competitive LECs were not impaired without
    unbundled access to packet switching, and declined to require the
    incumbent LECs to unbundle such facilities. *Id.* at 17321-23,
    paras. 537-41, *corrected by Triennial Review Order Errata*, 18 FCC
    Rcd at 19022, para. 26.

[^25]: *Triennial Review Order*, 18 FCC Rcd at 17125-27, paras. 242-44.

[^26]: *Id.* at 17121, para. 234.

[^27]: *Triennial Review MDU Reconsideration Order*, paras. 7-9.

[^28]: *Triennial Review FTTC Reconsideration Order*, paras. 9-19.

[^29]: *Triennial Review Order*, 18 FCC Rcd at 17382-91, paras. 649-67,
    *corrected by Triennial Review Errata*, 19 FCC Rcd at 19022, paras.
    30-33.

[^30]: *Id.* at 17384, para. 653.

[^31]: *Id.* at 17386-89, paras 656-64, *corrected by Triennial Review
    Order Errata*, 18 FCC Rcd at 19022, paras. 32-33.

[^32]: *See generally USTA II*, 359 F.3d 554.

[^33]: *Id*. at 578-85.

[^34]: *Id*. at 588-90.

[^35]: *Petition for Forbearance of the Verizon Telephone Companies
    Pursuant to 47 U.S.C. § 160(c)*, CC Docket No. 01-338 (filed July
    29, 2002).

[^36]: Verizon Revised Petition.

[^37]: Verizon Revised Petition Public Notice.

[^38]: *Verizon Telephone Companies v. FCC*, 374 F.3d 1229 (D.C. Cir.
    2004).

[^39]: BellSouth Petition at 1.

[^40]: SBC Petition at 4-8; Qwest Petition at 3-14.

[^41]: SBC Petition at 5-6; Qwest Petition at 11-13.

[^42]: SBC Petition at 8-14; Qwest Petition at 14-15.

[^43]: Joint Explanatory Statement of the Committee of Conference, S.
    Conf. Rep. No. 230, 104th Cong., 2d Sess. 113 (1996).

[^44]: 47 U.S.C. § 160(a).

[^45]: 47 U.S.C. § 160.

[^46]: 47 U.S.C. § 160(d).

[^47]: The forbearance relief granted in this Order in no way modifies
    the obligations of the BOCs under section 251(c) to continue to
    provide access to UNEs as specified in the *Triennial Review Order*.
    For example, in the *Interim Order and NPRM*, the Commission
    established six-month, interim unbundling rules. *Interim Order and
    NPRM*, paras. 18-29.

[^48]: We note that the one-year statutory period for considering these
    requests runs to November 5, 2004 with respect to SBC, and December
    17, 2004 with respect to Qwest.

[^49]: 47 U.S.C. § 160(d).

[^50]: *See Petition of Verizon for Forbearance from the Prohibition of
    Sharing Operating, Installation, and Maintenance Functions Under
    Section 53.203(a)(2) of the Commission's Rules*, CC Docket No.
    96-149, Memorandum Opinion and Order, 18 FCC Rcd 23525 (2003) (*OI&M
    Order*).

[^51]: *OI&M Order*, 18 FCC Rcd at 23530, para. 7. The Commission also
    initiated a rulemaking regarding the "operate independently"
    requirement of section 272. *See Section 272(b)(1)'s "Operate
    Independently" Requirement for Section 272 Affiliates*, WC Docket
    No. 03-228, Notice of Proposed Rulemaking, 18 FCC Rcd 23538 (2003).

[^52]: *OI&M Order*, 18 FCC Rcd at 23529-30, para. 6.

[^53]: *See, e.g.,* AT&T Comments at 11 (Verizon Petition).

[^54]: *See, e.g.,* MCI Comments at 18 (Verizon Petition); PACE
    Coalition Comments at 5 (Verizon Petition); Sprint Comments at 8-9
    (Verizon Petition); Covad Comments at 6 (Verizon Petition).

[^55]: Verizon Reply at 26-29; SBC Petition at 8; Qwest Petition at
    17-18.

[^56]: *See* 47 U.S.C. § 271(d)(3)(A)(i).

[^57]: 47 U.S.C. § 160(b).

[^58]: *OI&M Order*, 18 FCC Rcd at 23529-30, para. 6.

[^59]: Telecommunications Act of 1996, Pub. L. No. 104-04, purpose
    statement, 110 Stat. 56, 56 (1996) (1996 Act Preamble); Pub. L.
    104-104, Title VII, § 706, Feb. 8, 1996, 110 Stat. 153, reproduced
    in the notes under 47 U.S.C. § 157 (Section 706).

[^60]: *Deployment of Wireline Services Offering Advanced
    Telecommunications Capability*, CC Docket No. 98-147, Memorandum
    Opinion and Order, and Notice of Proposed Rulemaking, 13 FCC Rcd
    24012, 24047, para. 77 (1998) (*Advanced Services Order and NPRM*)
    (subsequent history omitted) (discussing the relationship between
    section 10 and section 706).

[^61]: 47 U.S.C. § 160(a)(1).

[^62]: *See, e.g., Review of Regulatory Requirements for Incumbent LEC
    Broadband Telecommunications Services*, CC Docket No. 01-337,
    Memorandum Opinion and Order, 17 FCC Rcd 27000, 27009-13, paras.
    17-22 (2002).

[^63]: *Cf. Application of WorldCom, Inc., and MCI Communications
    Corporation for Transfer of Control of MCI Communications
    Corporation to WorldCom, Inc.*, CC Docket No. 97-211, Memorandum
    Opinion and Order, 13 FCC Rcd 18025, 18065-68, paras. 67-71
    (*WorldCom/MCI Order*) (finding loss of wholesale market of concern
    only to the extent that it had negative effects in the retail
    market).

[^64]: *See* Verizon Reply at 7-9; BellSouth Petition at 7; SBC Petition
    at 13-14; Qwest Petition at 15-16.

[^65]: *See, e.g.*, *Inquiry Concerning the Deployment of Advanced
    Telecommunications Capability*, CC Docket No. 98-146, Report, 14 FCC
    Rcd 2398, 2423-24, para. 48 (1999) ("The preconditions for monopoly
    appear absent . . . . \[W\]e see the potential for this market to
    accommodate different technologies such as DSL, cable modems,
    utility fiber to the home, satellite and terrestrial radio.");
    *Inquiry Concerning the Deployment of Advanced Telecommunications
    Capability*, Third Report, 17 FCC Rcd 2844, paras. 79-88 (2002)
    (*Section 706 Third Report*) (describing development of intermodal
    competition in broadband market); *Review of Regulatory Requirements
    for Incumbent LEC Broadband Telecommunications Services*, CC Docket
    No. 01-337, Notice of Proposed Rulemaking, 16 FCC Rcd 22745,
    22747-48, para. 5 (2001) ("\[T\]he one-wire world for customer
    access appears to no longer be the norm in broadband services
    markets as the result of the development of intermodal competition
    among multiple platforms, including DSL, cable modem service,
    satellite broadband service, and terrestrial and mobile wireless
    services."); *Rulemaking to Amend Parts 1, 2, 21, and 25 of the
    Commission's Rules to Redesignate the 27.5-29.5 GHz Frequency Band,
    to Reallocate the 29.5-30.0 GHz Frequency Band, to Establish Rules
    and Policies for Local Multipoint Distribution Service and for Fixed
    Satellite Services*, CC Docket No. 92-297, Third Report and Order
    and Memorandum Opinion and Order, 15 FCC Rcd 11857, 11864, 11865,
    paras. 17, 19 (2000) (noting with approval "a continuing increase in
    consumer broadband choices within and among the various delivery
    technologies," which indicates that "no group of firms or technology
    will likely be able to dominate the provision of broadband
    services"); *Applications for Consent to the Transfer of Control of
    Licenses and Section 214 Authorizations from MediaOne Group, Inc.,
    Transferor, to AT&T Corp., Transferee*, CS Docket No. 99-251,
    Memorandum Opinion and Order, 15 FCC Rcd 9816, 9867, para. 116
    (2000) (finding that cable operators, despite having a commanding
    share of the broadband market, face "significant actual and
    potential competition from . . . alternative broadband providers").

[^66]: *See* *generally* *United States v. General Dynamics Corp*., 415
    U.S. 486, 498 (1974) (market share is imperfect measure of
    competitive constraints and must be examined in light of access to
    alternative supplies); *Time Warner Entertainment Co. v. FCC*, 240
    F.3d 1126, 1134 (D.C. Cir. 2001) (stating, in discussing competition
    to cable systems, that "normally a company's ability to exercise
    market power depends not only on its share of the market, but also
    on the elasticities of supply and demand, which in turn are
    determined by the *availability* of competition"); *Motion of AT&T
    Corp. to be Reclassified as a Non-Dominant Carrier*, Order, 11 FCC
    Rcd 3271, 3308, para. 68 (1995) ("market share alone is not
    necessarily a reliable measure of competition, particularly in
    markets with high supply and demand elasticities") (quoting
    *Competition in the Interstate Interexchange Marketplace*, CC Docket
    No. 90-132, Order, 6 FCC Rcd 5880, 5890, para. 51 (1991)).

[^67]: Industry Analysis and Technology Division, Wireline Competition
    Bureau,, *High-Speed Services for Internet Access: Status as of June
    30, 2003* at Tables 3 & 4 (Dec. 2003) (*High-Speed Services Report
    Dec. 2003*); Verizon Mar. 26 *Ex Parte* Letter, Attach. at 1-8
    (citing broadband market data through "the second half of 2003");
    Letter from Dee May, Vice President -- Federal Regulatory, Verizon
    to Marlene H. Dortch, Secretary, FCC, CC Docket Nos. 01-337, 01-338,
    02-33, 02-52 at 9 (filed May 3, 2004) (Verizon May 3 *Ex Parte*
    Letter) (same).

[^68]: *See* Verizon Mar. 26 *Ex Parte* Letter at 24-25 & Attach. We
    note that AT&T argues that forbearance should not be granted because
    cable providers tend not to serve business customers, allowing the
    BOCs to retain monopoly power for those services. *See* Letter from
    David L. Lawson, Counsel for AT&T, to Marlene H. Dortch, Secretary,
    FCC, CC Docket No. 01-338, WC Docket Nos. 03-235, 03-260, at 1-5
    (filed May 12, 2004) (AT&T May 12 *Ex Parte* Letter). In response,
    Verizon cites evidence that cable providers are currently serving
    some small business customers and are increasingly offering services
    to such customers. Letter from Dee May, Vice President -- Federal
    Regulatory, Verizon to Marlene H. Dortch, Secretary, FCC, CC Docket
    Nos. 01-338, 96-98, 98-147 (filed May 17, 2004) (Verizon May 17 *Ex
    Parte* Letter). However, the availability of intermodal competition
    specifically from cable operators is only part of our analysis.
    Because competitive LECs can still obtain access to network elements
    under section 251 to serve business customers, and because of actual
    and potential intermodal competition from other services, we find
    that forbearance from section 271 is warranted, notwithstanding that
    the evidence regarding cable competition for business customers is
    not as powerful as residential customers. *See infra* para. 26. We
    therefore reject AT&T's argument.

[^69]: *Triennial Review Order*, 18 FCC Rcd at 17127, para. 246.

[^70]: *Id*. at 17136, para. 263.

[^71]: *Section 706 Third Report*, 17 FCC Rcd at 2875, 2877, paras. 72,
    78; *Carrier Current Systems, including Broadband Over Power Line
    Systems*, ET Docket Nos. 03-104, 04-37, Notice of Proposed
    Rulemaking, 19 FCC Rcd 3335 (2004); *FCC Chairman Michael K. Powell
    Announces Formation of Wireless Broadband Access Task Force* (rel.
    May 5, 2004),
    http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-246852A1.pdf.

[^72]: *See, e.g.*, Verizon Mar. 26 *Ex Parte* Letter, Attach.
    (describing existing and potential competition from cable modem
    providers, power lines, fixed wireless, 3G mobile wireless, and
    satellite).

[^73]: *See USTA II*, 359 F.3d at 578-85.

[^74]: *Id*. at 582.

[^75]: In the *Triennial Review Order*, the Commission found that
    competitive LECs could deploy FTTH loops, had widely deployed their
    own packet switches, and continued to have access to other elements
    of the incumbent LECs' network. *Triennial Review Order*, 18 FCC Rcd
    at 17143, 17151, 17321-22, paras. 275, 291, 538.

[^76]: *USTA II,* 359 F.3d at 581-82.

[^77]: In addition, the investment disincentives associated with
    broadband unbundling obligations also are a factor in our more
    general analysis of consumer protection, as discussed below. *See*
    *infra* para. 32.

[^78]: *Petition of U S WEST Communications Inc. for a Declaratory
    Ruling Regarding the Provision of National Directory Assistance*, CC
    Docket No. 97-172, *Petition of U S WEST Communications, Inc., for
    Forbearance*, CC Docket No. 97-172, *The Use of N11 Codes and Other
    Abbreviated Dialing Arrangements*, CC Docket No. 92-105, Memorandum
    Opinion and Order, 14 FCC Rcd 16252, 16270, para. 31 (1999).

[^79]: *Triennial Review Order*, 18 FCC Rcd at 17126, para. 243.

[^80]: *Id.* at 17141, para. 272.

[^81]: *See Id.* at 17127, 17145, 17153, paras. 244, 278, 295. We note
    that, even if we were not correct about the disincentive effects of
    unbundling requirements under section 271, that would not
    necessarily suggest that forbearance is inappropriate under section
    10(a). If section 271 did not discourage investment, the most
    obvious reason would be that competitive forces impose equivalent
    (or more severe) constraints on BOC pricing and offerings. In that
    situation, application of the section 10(a) criteria likely would
    lead to the same conclusion that forbearance is required.

[^82]: *See, e.g.,* Sprint Comments at 14 (Verizon Petition); AT&T
    Comments at 21 (Verizon Petition); Letter from David L. Lawson,
    Counsel for AT&T, to Marlene H. Dortch, Secretary, FCC, CC Docket
    No. 01-338, WC Docket Nos. 03-235, 03-260, at 9 (filed Mar. 3, 2004)
    (AT&T Mar. 3 *Ex Parte* Letter).

[^83]: Verizon March 26 *Ex Parte* Letter at 15.

[^84]: We note that our judgment here is based on our determination that
    because the broadband market is a developing market, we should not
    presume, nor do we have any evidence, that the BOCs will act in an
    unreasonable or unreasonably discriminatory manner without evidence
    of such actions. To the extent our predictions about the broadband
    market and the BOCs' actions are incorrect, carriers can file
    appropriate petitions with the Commission and, of course, the
    Commission has the option of reconsidering this forbearance ruling.
    *See CellNet Communications, Inc. v. FCC*, 149 F.3d 429, 442 (6th
    Cir. 1998); *see also* *Petition of SBC Communications Inc. For
    Forbearance From Structural Separation Requirements of Section 272
    of the Communications Act of 1934, As Amended, and Request For
    Relief to Provide International Directory Assistance Services*, CC
    Docket No. 97-172, Memorandum Opinion and Order, 19 FCC Rcd 5211,
    5223-24, para. 19 n.66 (2004) (*International Directory Assistance
    Order*). For these reasons and the reasons given in the text, we
    reject the premise of AT&T's argument that granting the forbearance
    authority at issue here involves an impermissible "'trade off'
    between short-term consumer harms and longer-term policy benefits."
    AT&T May 12, 2004 *Ex Parte* at 2. We conclude, instead, that market
    forces and regulatory safeguards will adequately protect against the
    short-term consumer harms AT&T hypothesizes in the absence of
    section 271 unbundling requirements for certain broadband elements.

[^85]: *See WorldCom/MCI Order*, 13 FCC Rcd at 18065, para. 68.

[^86]: This situation has parallels to the one the Commission recently
    addressed in the *International Directory Assistance Order,* in
    which the Commission concluded that because the BOCs would be new
    entrants into the international directory assistance market, and
    would face competition from interexchange carriers, they would be
    unable to impose unjust, unreasonable, or unjustly or unreasonably
    discriminatory charges or practices on other carriers. *See*
    *International Directory Assistance Order*, 19 FCC Rcd at 5221-23,
    paras. 15-19.

[^87]: For instance AT&T argues that because the BOCs allegedly have
    monopolistic power in the broadband markets, forbearance from the
    access obligations of section 271 would permit them to either charge
    supracompetitive prices for wholesale access to their broadband
    facilities, or deny access altogether. *See, e.g.,* AT&T Mar. 3 *Ex
    Parte* Letter; Letter from David L. Lawson, Counsel for AT&T, to
    Marlene H. Dortch, Secretary, FCC, CC Docket No. 01-338, WC Docket
    Nos. 03-235, 03-260, at 1-5 (filed Apr. 15, 2004) (AT&T Apr. 15 *Ex
    Parte* Letter).

[^88]: *See Implementation of Sections 3(N) and 332 of the
    Communications Act Regulatory Treatment of Mobile Services*, GN
    Docket No. 93-252, Second Report and Order, 9 FCC Rcd 1411, 1467-68,
    1470-72, paras. 138, 146-54 (1994) (concluding that market need not
    be "fully competitive" to permit forbearance under section
    332(c)(1)(A) and describing constraints on anti-competitive
    practices by duopoly providers).

[^89]: *USTA II*, 359 F.3d at 572-73.

[^90]: *USTA v. FCC*, 290 F.3d 415, 425 (D.C. Cir. 2002) (*USTA I*).

[^91]: *See* AT&T Mar. 3 *Ex Parte* Letter at 11-12; *see also* CLEC
    Coalition Comments at 6-7 (Verizon Petition). AT&T also incorrectly
    focuses on the existence of competition with respect to particular
    facilities, such as hybrid loops. AT&T Mar. 3 *Ex Parte* Letter at
    9. We need not evaluate competition separately with respect to each
    type of facility in the BOCs' networks that can be used to offer
    broadband services when, as discussed above, there is both existing
    and potential competition in the emerging broadband market from a
    wide range of facilities and platforms (including incumbent LEC
    facilities that must be unbundled under section 251).

[^92]: 47 U.S.C.§ 160(a)(2).

[^93]: *High Speed Services Report Dec. 2003* at Table 2.

[^94]: *See* Verizon Petition at 7-10; SBC Petition at 8-10; Qwest
    Petition at 10-11.

[^95]: *Triennial Review Order*, 18 FCC Rcd at 17141-42, para. 272.

[^96]: *USTA II*, 359 F.3d at 581.

[^97]: *See, e.g.,* AT&T Comments at 23-25 (Verizon Petition); Sprint
    Comments at 15-17 (Verizon Petition).

[^98]: *Triennial Review Order*, 18 FCC Rcd at 17141-42, para. 272.

[^99]: *Id.*

[^100]: 47 U.S.C. § 160(b).

[^101]: *See, e.g.,* Verizon Petition at 9-10.

[^102]: We disagree with MCI's argument that Verizon's offering
    competitive carriers access to transmission services as part of its
    Packet at the Remote Terminal Services (PARTS) proves that the
    unbundling difficulties that Verizon and the other BOCs present do
    not exist. MCI Comments at 13-14 (Verizon Petition). As Verizon
    explained in its reply comments, the PARTS service was designed to
    provide competitive LECs access to xDSL service over hybrid
    facilities and does not contemplate unbundling of full fiber
    networks. Verizon Reply at 13.

[^103]: *See, e.g*., AT&T Comments at 8 (Verizon Petition); Sprint
    Comments at 6-7 (Verizon Petition).

[^104]: *See, e.g.*, *Barnhart v. Sigmon Coal Co., Inc.*, 534 U.S. 438,
    452 (2002) ("\[W\]hen Congress includes particular language in one
    section of a statute but omits it in another section of the same
    Act, it is generally presumed that Congress acts intentionally and
    purposely in the disparate inclusion or exclusion.") (internal
    quotations and citations omitted).

[^105]: *See* 47 U.S.C. § 160(c) (deeming the petition granted as of the
    forbearance deadline if the Commission does not deny the petition
    within the time period specified in the statute), and 47 C.F.R. §
    1.103(a).

[^106]: *See* 47 C.F.R. §§ 1.4 and 1.13.

[^107]: *See, e.g., Verizon Petition for Forbearance*, Review of the
    Section 251 Unbundling Obligations of Incumbent Local Exchange
    Carriers, CC Dkt No. 01-338.

[^108]: *See United States Telecom Ass'n v. FCC*, 359 F.3d 554 (D.C.
    Cir. 2004).

[^109]: In past Orders, I have supported relief for the deployment of
    functionally equivalent facilities, such as fiber to the curb and
    fiber to multi-dwelling units, to serve mass market customers in
    greenfield areas. My support for the unbundling relief in this Order
    extends similarly to these investments.

[^110]: *See* 47 U.S.C. § 160 (enumerating forbearance criteria and
    directing the Commission to consider "competitive market
    conditions"); *Review of Regulatory Requirements for Incumbent LEC
    Broadband Telecommunications Services*, Notice of Proposed
    Rulemaking, CC Docket 01-337, FCC 01-360 (2001) (describing the
    Commission's approach to market definition and market power
    analysis).

[^111]: *See Review of Regulatory Requirements for Incumbent LEC
    Broadband Telecommunications Services*, Memorandum Opinion and
    Order, FCC 02-340, CC Docket 01-337 (2002) (*Advanced Services
    Forbearance Order*).

[^112]: I note that the Commission opened an as-yet-uncompleted
    proceeding to conduct precisely this sort of market analysis almost
    three years ago. *Review of Regulatory Requirements for Incumbent
    LEC Broadband Telecommunications Services*, Notice of Proposed
    Rulemaking, CC Docket 01-337, FCC 01-360 (2001).