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

Pursuant to Section 271 of the Telecommunications Act of 1996

To Provide In-Region, InterLATA Services in Texas, CC Docket No. 00-65

# Concurring Statement of Commissioner Harold W. Furchtgott-Roth

# 

I concur in the decision to grant this application by Southwestern Bell
Telephone Company (SWBT) to provide in-region, inter-LATA services in
the State of Texas. I write separately, however, in order to apply my
understanding of the statute.

## Application of Sections 251, 252, and 271

As I explained in the decision on Bell Atlantic's application to offer
long distance service in New York, the relationship between the
regulatory approval process under section 271 and the procedures
regarding private interconnection agreements established by sections 251
and 252 is a critical one. Unfortunately, the Commission has not paid
close attention to this relationship, and its failure to do so has
caused the section 271 review process to morph into something quite
different from the original statutory plan. The process has turned into
a general federal regulatory scheme, instead of tracking the
contract-based, State-centric model of sections 251, 252, and 271. *See
generally* Concurring Statement of Commissioner Harold W.
Furchtgott-Roth, *In the Matter of 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*, CC Docket No.
99-295 (rel. Dec. 22, 1999) ("*New York Statement*").

I will briefly reiterate those points that pertain to my analysis here.
*First*, the text of section 271 makes clear that the relevant universe
of BOC conduct to be tested in a "Track A" application is not its
commercial performance generally, as the Order supposes, but its
fulfillment of specific interconnection agreements:

With respect to a BOC that \"is providing access and interconnection
pursuant to one or more agreements described in paragraph (1)(A),\" as
here, it is \"*such* access and interconnection \[that must\] meet\[\]
the requirements of\" the competitive

checklist. *Id.* section 271(c)(2)(A) (emphasis added). Similarly, the
statute defines the Commission's administrative task under Track A as
determining whether the petitioning BOC \"with respect to access and
interconnection provided pursuant to

subsection c(1)(A) has fully implemented the checklist.\" *Id.* section
271(d)(3)(A)(i).

*New York Statement* at para. 6.

*Second*, in analyzing the RBOC's fulfillment of the checklist under its
approved interconnection agreements, one should consider the existence
of complaints to enforce those agreements filed by interconnecting
parties with the State Commission. If CLECs are receiving seriously
inadequate service under those agreements, one would expect to see them
invoke the rights and remedies guaranteed to them by sections 251 and
252, including the right to arbitration and federal court review.
Accordingly, it has seemed to me that

the most probative evidence of compliance with the checklist -- perhaps
even prima facie proof \-- is the absence of disputes arising under
section 252 contracts. Conversely, the best evidence of noncompliance is
the presence of such disputes. Record documentation of these disputes,
such as complaints filed with State Commissions pursuant to section 252,
would only strengthen that showing.

*Id.* at para. 23.*.*

In sum, the best case for noncompliance with section 271 under Track A
is to be made by parties: (1) with approved interconnection agreements
described in section 271(c)(1)(A); (2) who legitimately allege that the
RBOC is not providing them service pursuant to the actual terms and
conditions of those agreements; and (3) who have pursued those alleged
violations with State Commissions pursuant to section 252.

On this record, we have evidence that approaches, but does not meet,
this standard. Covad Communications, which opposes the instant
application, receives interconnection and access from SWBT pursuant to a
final, "Track A" interconnection agreement that was arbitrated and
approved under section 252. And that agreement appears to provide for
the non-discriminatory provisioning of x-DSL capable loops to Covad.
*See* Ex Parte Submission of Covad Communications (June 27, 2000)
(attaching interconnection agreement on DSL). So far, so good.

That interconnection agreement, however, was not finalized and operative
until February of this year. Although Covad points to findings by Texas
arbitrators related to discriminatory provisioning of loops by SWBT,
those findings were *not* made in the context of a controversy arising
under a section 252 contract -- that is, in a dispute over the adequacy
of SWBT's service under the terms of an existing interconnection
agreement. Rather, they were made in the context of a petition for
arbitration to establish an interconnection agreement and terms
thereunder with SWBT.[^1] Covad never alleged a breach of performance
under a Track A agreement, at the State Commission or anywhere else, and
the arbitrators' findings do not go to SWBT's actual performance of an
agreement but to the proper drafting of a future agreement. Such
findings, then, are not probative of a failure to provide access and
interconnection pursuant to a Track A agreement.

AT&T, which also takes service from SWBT under an approved
interconnection agreement, also opposes the grant of this application.
It argues in this proceeding that SWBT is, in various ways, violating
the terms and conditions of its interconnection agreement. *See* Ex
Parte Submission of AT&T (June 23, 2000). For example, AT&T says that
SWBT is discriminating against it in the provision of unbundled,
DSL-capable loops obtained as part of the UNE-platform, and that this
conduct violates the non-discrimination and other provisions of their
agreement and section 251. *See id.* at page 2 (citing section 55.1 of
agreement, providing that "\[a\]t the request of AT&T and pursuant to
the requirements of the Act, SWBT will offer . . . Network Elements to
AT&T on an unbundled basis on rates, terms, and conditions set forth in
this Agreement that are just, reasonable, and non-discriminatory").
Thus, AT&T well demonstrated that the conduct that it alleges as a
problem under section 271 is conduct to which its interconnection
agreement directly speaks. Again, so far so good.

What AT&T has not done, however, is adduce evidence that it has sought
enforcement of its contractual right to nondiscrimination with the State
Commission. Like Covad, it has participated in hearings regarding the
content of new, not-yet-entered-into interconnection agreements. *See*
AT&T Ex Parte Submission (June 27, 2000). But the record does not
reflect that AT&T has ever asserted that SWBT's provision of access and
interconnection under an operative agreement was in breach. As with
respect to Covad, there is no showing here that AT&T has ever attempted
to enforce its contractual rights.

As noted above, CLEC action to enforce an alleged breach of an
interconnection agreement is evidence of significantly inadequate
provisioning of access and interconnection under section 252 contracts,
which, as I read section 271, is the relevant universe of access and
interconnection Accordingly, while both Covad and AT&T make legitimate
points here, I still "view with skepticism assertions of inadequate BOC
performance lodged for the first time in the section 271 approval
process." Concurring Statement, *New York Order*. That is what we have
with respect to both Covad and AT&T, and I thus find no record evidence
of failure by SWBT to perform as required under the terms of section 252
contracts.

## SBC/Ameritech Merger Conditions

As I stated at the time of the Commission's approval of SBC and
Ameritech's application to transfer licenses and authorizations under
sections 309 and 214 of the Communications Act, I believe that some of
the conditions applied to the license transfer conflict with specific
sections of the Act. In particular, I believe that

of especial legal concern are those related to carrier-to-carrier
promotions. These conditions limit the number of services and facilities
that may be offered to competitive local exchangecarriers (CLECs) on a
promotional basis. Once the caps are reached, some CLECs will be unable
to obtain the same promotional deals as other CLECs. Quite simply,
carrier-to-carrier promotions will not be available on an equal basis to
all requesting carriers. In this way, then, the conditions violate the
\"nondiscriminatory access\" requirement of section 251(c)(3), as well
as the resale non-discrimination requirement of 251(c)(4)(B).

> Moreover, the caps directly conflict with the \"pick-and-choose\"
> provision of section 252. Section 252(i) requires incumbent LECs to
> \"make available \[to a CLEC\] any . . . service, or network element\"
> provided to any other CLEC \"upon the same terms and conditions,\"
> regardless of the level of offering to others. For the reasons given
> above, the guarantee of that section will be unfulfilled as a result
> of the caps.
>
> Apart from the caps themselves, the underlying discounts on loop rates
> also offend sections 252(i) and 251(c)(3). These discounts
> discriminate among CLECs \-- in terms of prices and offerings \-- by
> creating a situation in which a CLEC that uses an ILEC\'s unbundled
> switch gets one rate for the loop, but a CLEC that uses its own switch
> gets a discount on the very same loop.

Separate Statement of Commissioner Harold W. Furchtgott-Roth, Concurring
in Part and Dissenting in Part, *In re Applications of Ameritech Corp.,
Transferor, and SBC Communications, Inc., Transferee*, CC Docket No.
98-141 (rel. Oct. 6, 1999).

I personally solicited further comment on the effect of these merger
conditions on SWBT's section 271 application. *See* Separate Statement
of Commissioner Harold W. Furchtgott-Roth, *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 Pursuant to Section 271 of the*

*Telecommunications Act of 1996 To Provide In-Region, InterLATA Services
In Texas*, CC Docket 00-4 (rel. April 6, 2000).

Some parties addressed this issue. *See* Comments of AT&T at 62-64. As I
review the record, no party submitted information revelatory of the
actual effects of the loop discounts required in the Commission's merger
Order. Specifically, the record is ambiguous as to whether the cap has
been reached or not; and if the cap has not been reached, then price
discrimination is, at this point in time, just a theoretical
possibility. If, in future long distance applications, a party can show
that the cap has been reached and differential prices are actually being
charged, this issue would be live and I would be most willing to pursue
it further. At this point, however, the record does not support it.

> \* \* \*

Because I believe that SBWT is providing access and interconnection
pursuant to Track A agreements as required by those contracts, which in
turn incorporate rights available to CLECs under sections 251 and 252, I
concur in the grant of its application to offer long distance service in
Texas.

[^1]: Indeed, the arbitration award relied upon so heavily by Covad as
    evidence of actual discrimination in violation of section 251 and
    271 is captioned "Petition of Rhythms Links, Inc. for Arbitration to
    Establish an Interconnection Agreement with Southwestern Bell
    Telephone Company and Petition of Dieca Communications, Inc. d/b/a
    Covad Communications Company for Arbitration of Interconnection
    Rates, Terms, Conditions, and Related Arrangements with Southwestern
    Bell Telephone Company."