**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | ) | WC Docket No. 05-281         |
|                                  |   |                              |
| Petition of ACS of Anchorage,    | ) |                              |
| Inc. Pursuant to Section 10 of   |   |                              |
| the Communications Act of 1934,  | ) |                              |
| as Amended, for Forbearance from |   |                              |
| Sections 251(c)(3) and 252(d)(1) | ) |                              |
| in the Anchorage Study Area      |   |                              |
|                                  | ) |                              |
|                                  |   |                              |
|                                  | ) |                              |
|                                  |   |                              |
|                                  | ) |                              |
|                                  |   |                              |
|                                  | ) |                              |
+----------------------------------+---+------------------------------+

**MEMORANDUM OPINION AND ORDER**

**Adopted: December 28, 2006 Released: January 30, 2007**

By the Commission: Chairman Martin and Commissioner Tate issuing
separate statements; Commissioners Copps and Adelstein concurring and
issuing a joint statement; Commissioner McDowell not participating.

**TABLE OF CONTENTS**

**Para.**

# [I. INTRODUCTION](#introduction) 1 {#i.-introduction-1 .TOC-1}

# [II. BACKGROUND](#background) 3 {#ii.-background-3 .TOC-1}

# [III. DISCUSSION 9](#discussion) {#iii.-discussion-9 .TOC-1}

## [A. Forbearance Standard](#forbearance-standard) 10 {#a.-forbearance-standard-10 .TOC-2}

## [B. Market Definition](#__RefHeading___Toc153280600) 12 {#b.-market-definition-12 .TOC-2}

### [1. Scope of Market Analysis](#scope-of-market-analysis) 12 {#scope-of-market-analysis-12 .TOC-3}

### [2. Wire Center Service Area as Geographic Market](#wire-center-service-area-as-geographic-market) 14 {#wire-center-service-area-as-geographic-market-14 .TOC-3}

### [3. Wire Center Boundaries](#wire-center-boundaries) 17 {#wire-center-boundaries-17 .TOC-3}

## [C. Forbearance from Section 251(c)(3) and Section 252(d)(1) Requirements](#forbearance-from-section-251c3-and-section-252d1-requirements) 20 {#c.-forbearance-from-section-251c3-and-section-252d1-requirements-20 .TOC-2}

### [1. Section 10(a)(1) -- Charges, Practices, Classifications, and Regulations](#section-10a1-charges-practices-classifications-and-regulations) 25 {#section-10a1-charges-practices-classifications-and-regulations-25 .TOC-3}

#### [a. Competition in the Anchorage Study Area](#competition-in-the-anchorage-study-area) 27 {#a.-competition-in-the-anchorage-study-area-27 .TOC-4}

#### [b. Condition of Forbearance](#condition-of-forbearance) 39 {#b.-condition-of-forbearance-39 .TOC-4}

### [2. Section 10(a)(2) -- Protection of Consumers](#section-10a2-protection-of-consumers) 48 {#section-10a2-protection-of-consumers-48 .TOC-3}

### [3. Section 10(a)(3) -- Public Interest](#section-10a3-public-interest) 49 {#section-10a3-public-interest-49 .TOC-3}

# [IV. EFFECTIVE DATE](#effective-date) 50 {#iv.-effective-date-50 .TOC-1}

# [V. ORDERING CLAUSES](#ordering-clauses) 51 {#v.-ordering-clauses-51 .TOC-1}

APPENDIX -- LIST OF COMMENTERS

# INTRODUCTION 

1.  Last year, ACS of Anchorage, Inc. (ACS) filed a petition pursuant to
    section 10 of the Telecommunications Act of 1996[^1] seeking
    forbearance from the unbundling obligations of section 251(c)(3) of
    the Act and the related pricing standard set forth in section
    252(d)(1) for unbundled network elements (UNEs) throughout the
    Anchorage, Alaska local exchange carrier (LEC) study area (Anchorage
    study area).[^2] Today, we grant ACS forbearance, subject to
    specific conditions, from the obligation to provide unbundled loops
    and dedicated transport pursuant to sections 251(c)(3) and 252(d)(1)
    in those portions of its service territory in the Anchorage study
    area where a facilities-based competitor has substantially built out
    its network.[^3] While each case must be judged on its own merits,
    and while we adopt herein no rules of general applicability, the
    relief we grant today follows, as closely as possible based on the
    record, the relief we granted Qwest Corporation (Qwest) in the Omaha
    Metropolitan Statistical Area (Omaha MSA) last year under comparable
    competitive conditions.

2.  As discussed in detail below, Commission precedent and the record
    evidence particular to the Anchorage study area lead us to the
    decision we reach today.[^4] *First*, based on the record in this
    proceeding, we grant ACS relief from section 251(c)(3) unbundling
    obligations and section 252(d)(1) pricing obligations in 5 of the 11
    wire centers in the Anchorage study area, where the level of
    facilities-based competition by the local cable operator, General
    Communication Inc. (GCI), ensures that market forces will protect
    the interests of consumers and that such regulation, therefore, is
    unnecessary. *Second*, as a condition of today's Order, we require
    ACS to make loops and certain subloops available in those wire
    centers where we grant relief, by no later than the end of the
    transition period, at the same rates, terms and conditions as those
    negotiated between GCI and ACS in Fairbanks, Alaska until
    commercially negotiated rates are reached.[^5] *Third*, similar to
    the *Qwest Omaha* decision, we create a one-year transition period
    before the forbearance grant takes effect.

# BACKGROUND

3.  The Act includes a number of provisions designed to promote the
    development of competitive markets, including the unbundling
    obligations set forth in section 251(c)(3) and the related pricing
    standards set forth in section 252(d)(1) from which ACS seeks
    forbearance.[^6] The Commission previously has summarized the long
    and complex history of its unbundling regime since the passage of
    the 1996 Act.[^7] Here, we offer only a brief review of these
    requirements, which are specifically relevant to our forbearance
    analysis.

4.  *Section 251(c)(3)*. Section 251(c)(3) imposes on incumbent LECs
    "\[t\]he duty to provide, to any requesting telecommunications
    carrier . . . nondiscriminatory access to network elements on an
    unbundled basis . . . in accordance with . . . this section and
    section 252."[^8] Congress directed the Commission to determine
    which non-proprietary network elements must be unbundled under
    section 251(c)(3) after considering, at a minimum, whether access to
    a non-proprietary element on an unbundled basis would "impair" a
    requesting carrier's ability to provide service.[^9]

5.  In February 2005, the Commission released the *Triennial Review
    Remand Order*, in which it revised the list of network elements that
    must be provided as UNEs.[^10] The Commission also modified its
    unbundling framework by making impairment determinations in part by
    drawing reasonable inferences about the prospects for competition in
    one geographic market from the state of competition in other,
    similar markets.[^11] In making such inferences for high-capacity
    loops and transport, the Commission adopted a wire-center-based
    analysis that used the number of access lines and fiber collocations
    in a wire center as proxies to determine impairment for
    high-capacity loop and dedicated transport UNEs.[^12] Rather than
    initiating a number of separate proceedings to address,
    case-by-case, situations where the Commission's impairment findings
    did not perfectly match local market realities, the Commission
    instead invited incumbent LECs to seek forbearance from the
    application of the Commission's unbundling rules in specific
    geographic markets where the requirements for forbearance have been
    met.[^13] The Commission recognized that it could be appropriate to
    conclude, based on sufficient facilities‑based competition,
    particularly from cable companies, that the state of local
    competition might justify forbearance from unbundling
    obligations.[^14]

6.  *Section 252(d)(1)*. Under section 252(d)(1), UNEs that must be
    offered pursuant to section 251(c)(3) must be made available at
    mutually agreed upon rates, or at cost-based rates as determined
    using the Total Element Long Run Incremental Cost (TELRIC)
    methodology.[^15] The Commission established the TELRIC pricing
    methodology that state commissions must use to determine what are
    permissible cost-based rates incumbent LECs may charge for UNEs in
    the *Local Competition First Report and Order*.[^16]

7.  *Qwest Omaha Order*. On December 2, 2005, approximately two months
    after ACS filed its petition in this proceeding, in a case of first
    impression concerning forbearance from a section 251(c)(3)
    unbundling obligation, the Commission released an order granting in
    part and denying in part a forbearance petition filed by Qwest with
    respect to Qwest's operations in the Omaha MSA.[^17] In the *Qwest
    Omaha Order*, the Commission held that section 251(c)(3) had been
    "fully implemented" nationwide[^18] and granted Qwest forbearance
    from Qwest's section 251(c)(3) unbundling obligations in 9 of the 24
    wire centers in the Omaha MSA due to the state of competition and
    level of competitive facilities deployment in those 9 wire centers,
    as well as certain other regulatory safeguards, such as continued
    availability of section 251(c)(4) resale and section 271 unbundled
    elements.[^19] The Commission concluded that, in areas served by
    those 9 wire centers, Cox Communications, Inc. (Cox), the local
    cable operator, had built out "extensive facilities" and was using
    those facilities to provide service to customers in competition with
    Qwest.[^20] Although Cox leased some wholesale last-mile inputs from
    Qwest pursuant to voluntary commercial agreements, Cox provided
    competition to Qwest without accessing UNEs provided by Qwest
    pursuant to section 251(c)(3).[^21] To avoid customer disruption,
    the Commission adopted a six-month transition period for customers
    of competitive LECs other than Cox that relied on Qwest's UNEs
    offered pursuant to section 251(c)(3).[^22]

8.  The Commission declined to grant Qwest forbearance from its section
    251(c)(3) unbundling obligations in the remaining 15 wire centers in
    the Omaha MSA where Cox's facilities deployment was not as
    extensive.[^23] The Commission also denied Qwest forbearance from
    certain section 271 obligations, to which Qwest is subject as a Bell
    Operating Company (BOC).[^24] As relevant to our discussion below,
    specifically, the Commission denied Qwest forbearance from section
    271 checklist items 4, 5, and 6, which establish independent
    obligations to provide unbundled access to local loops, local
    transport, and local switching,[^25] and relied on the continued
    availability of wholesale access to Qwest's network under section
    271 in determining to forbear from section 251(c)(3).[^26] The "just
    and reasonable" standard of sections 201 and 202 governs the rates,
    terms, and conditions for network elements made available pursuant
    to checklist items 4 through 6, rather than the section 252(d)(1)
    TELRIC standard that applies to section 251(c)(3) UNEs.[^27]

# DISCUSSION

9.  This Order marks the second time the Commission has addressed
    whether forbearance from the unbundling provisions of section
    251(c)(3) is warranted in light of market conditions in a particular
    local geographic area. While each forbearance case must be judged on
    its own merits, and while we adopt herein no rules of general
    applicability,[^28] the decision we reach today is similar in most
    respects to the decision the Commission reached in the *Qwest Omaha
    Order*. Most notably, we apply the same analytic framework to our
    analysis of the level of competition in the Anchorage study area in
    this proceeding that the Commission applied to its analysis of
    competition in the Omaha MSA. In each case, the Commission begins by
    examining the level of retail competition to the incumbent LEC and
    the role of the wholesale market. The Commission then evaluates the
    extent to which competitive facilities can and will be used to
    provide competitive services in each wire center service area where
    relief is sought. In the *Qwest Omaha Order* and here, the
    Commission's analysis results in granting the incumbent LEC relief
    from its unbundling obligations where the level of facilities-based
    competition ensures that market forces will protect the interests of
    consumers and that section 251(c)(3) unbundling regulation is,
    therefore, unnecessary and not in the public interest. Similarly, in
    each case, the Commission declines to grant the incumbent LEC's
    forbearance petition in a number of wire center service areas where
    facilities-based deployment has not developed sufficiently.

## Forbearance Standard

10. The goal of the Telecommunications Act of 1996 is to establish "a
    pro-competitive, de‑regulatory national policy framework."[^29] 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.[^30] Specifically, the
    Commission must 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.[^31] 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."[^32] As part of our forbearance analysis, and
    consistent with the Commission's prior decisions, we examine the
    status of competition in the retail market as well as the role of
    the wholesale market in the Anchorage study area.[^33]

11. Pursuant to our statutory obligations, in this Order, we therefore
    apply the criteria of section 10 to the regulations and statutory
    provisions from which ACS seeks relief.[^34] We emphasize, however,
    that in undertaking this analysis, we do not issue any declaratory
    rulings, promulgate any new rules, or otherwise make any general
    determinations of the sort we would properly make in a rulemaking
    proceeding on a fuller record.[^35] Our sole task here is to
    determine whether to forbear under the standard of section 10 from
    the regulatory and statutory provisions at issue, and we do not --
    and cannot -- issue comprehensive proclamations in this proceeding
    regarding non-impairment status in the Anchorage study area.[^36]

## Market Definition

### Scope of Market Analysis

12. As stated above, under section 10, the "Commission is required to
    forbear from *any statutory provision or regulation* if it
    determines that" the criteria of section 10 are satisfied.[^37]
    Therefore, we begin the section 10 analysis with the statutory
    provisions and regulations from which ACS seeks relief. In this
    case, ACS seeks relief from the unbundling obligations of section
    251(c)(3) and the related pricing obligations of section 252(d)(1),
    as well as the associated rules.[^38] The Commission's unbundling
    rules that implement section 251(c)(3) require ACS to provide
    requesting carriers with access to certain categories of facilities
    when parties are unable to negotiate the terms and conditions of
    such access. Our analysis therefore involves these categories of
    facilities.[^39] Nevertheless, we decline to formally define product
    markets pursuant to a market power analysis for purposes of this
    proceeding as requested by ACS, GCI, or any other participants in
    this proceeding as we would if we were conducting a traditional
    dominant-carrier analysis.[^40] ACS seeks UNE forbearance relief
    similar to the UNE relief the Commission granted in the *Qwest Omaha
    Order*. The Commission did not define product markets for the
    purpose of its UNE forbearance analysis in the *Qwest Omaha Order*,
    and nothing in the language of section 10 leads us to depart from
    this precedent and undertake this aspect of dominant carrier
    analysis here.[^41]

13. Similarly, we reject GCI's proposal that the Commission break up its
    low-capacity loop unbundling requirements between residential and
    business customers.[^42] In the *Triennial Review Order*, the
    Commission adopted "loop unbundling rules specific to each loop
    type," and found that the "unbundling obligations and limitations
    for such loops do not vary based on the customer to be served."[^43]
    The same was true in the Commission's analysis in the *Qwest Omaha
    Order*, and remains the best way to structure our forbearance
    analysis here. We believe that a distinction in relief depending on
    the nature of the customers remains administratively impracticable
    and would encourage disputes over whether a particular customer is a
    residential or business customer.[^44] As explained below, any
    differences in GCI's deployment and capabilities are taken into
    account in the geographic scope of relief and the loop access
    condition we impose below.

### Wire Center Service Area as Geographic Market 

14. As in the *Qwest Omaha Order*, we conclude that it is appropriate
    for us to use the wire center service area as the relevant
    geographic market.[^45] Section 10 of the Act directs the Commission
    to "forbear from applying any regulation or any provision of this
    chapter to a telecommunications carrier or telecommunications
    service, or class of telecommunications carriers or
    telecommunications services, *in any or some of its or their
    geographic markets*, if the Commission determines that" the criteria
    of section 10 have been met.[^46] The D.C. Circuit has affirmed the
    Commission's interpretation that the scope of relief may vary
    depending on the circumstances.[^47]

15. We reject ACS's request that the Commission consider the entire
    Anchorage study area as the relevant geographic market.[^48] We find
    that the Anchorage study area is not uniform, and that not every
    customer in Anchorage has a choice of competitors or faces the same
    prices.[^49] In fact, ACS agrees that there are substantial
    topographical and density variations in certain areas of the
    Anchorage study area, and regarding certain outer, sparsely
    populated portions of Anchorage states that "O'Malley, Rabbit Creek,
    Girdwood, Hope and Indian, are difficult to serve, and facilities
    deployment to these areas costs more than in more densely populated
    parts of the study area."[^50] Moreover, GCI has not uniformly
    deployed facilities throughout the Anchorage study area. In some
    wire center service areas, GCI's cable plant is extensively
    deployed, but in other wire center service areas, GCI has few, if
    any, last-mile cable facilities, and virtually no last-mile fiber
    facilities.[^51] Notably, GCI is not even the certificated cable
    operator in Girdwood and Indian areas, which are located to the
    southeast of Anchorage.[^52] Therefore, GCI's ability to use its
    network to provide telecommunications services varies significantly
    across the wire center service areas comprising the Anchorage study
    area.[^53]

16. Because conditions vary across the Anchorage study area, we once
    again find it appropriate to analyze competitive conditions more
    granularly, by wire center service areas.[^54] In particular, the
    wire center service areas in the Anchorage study area are
    sufficiently small and discrete to enable us to grant forbearance in
    the geographic areas where the standards of section 10 are
    satisfied,[^55] without being administratively unworkable, as would
    be the case with a loop-by-loop (or customer-by-customer)
    analysis.[^56] In the *Triennial Review Remand Order*, the
    Commission also used wire center service areas to determine in which
    geographic locations high-capacity loop and transport UNEs must be
    provided under section 251(c)(3).[^57] Similarly, in the *Qwest
    Omaha Order*, the Commission conducted a wire-center analysis to
    determine whether and where to grant Qwest UNE forbearance relief in
    the Omaha MSA.[^58] We thus find that a wire center approach is
    consistent with prior orders and appropriately balances the
    deregulatory aims of section 10 with interests in administrability.

### Wire Center Boundaries 

17. ACS and GCI disagree on the number of wire centers in the Anchorage
    study area. ACS proposes that, if the Commission uses wire centers
    in its analysis at all, it count only ACS's 5 host switches as wire
    centers, whereas GCI proposes that the Commission recognize 12 wire
    centers.[^59] For the reasons explained below, we conclude that the
    areas served by the 11 wire centers identified by ACS in its NECA
    tariff are the appropriate geographic areas for our analysis
    here.[^60] These 11 wire center service areas are the areas served
    by the North, Central, East, West, and South host switches, and the
    O'Malley, Rabbit Creek, Indian, Girdwood, Elmendorf, and Fort
    Richardson remote switches.[^61]

18. We find that the 11 wire centers listed in ACS's NECA Tariff fit the
    definition of a "wire center" contained in Part 51 of the
    Commission's rules, which is the definition of wire center the
    Commission uses in its unbundling rules in a similar context to
    determine, *inter alia*, when an incumbent LEC must provide a
    requesting carrier with access to certain network elements.[^62]
    Section 51.5 of the Commission's rules defines a wire center as "the
    location of an incumbent LEC local switching facility containing one
    or more central offices, as defined in the Appendix to part 36 of
    this chapter."[^63] The Appendix to Part 36, in turn, states that a
    central office is "\[a\] switching unit, in a telephone system which
    provides service to the general public, having the necessary
    equipment and operations arrangements for terminating and
    interconnecting subscriber lines and trunks or trunks only."[^64] We
    are persuaded that each of the 11 host and remote switches described
    above satisfies this definition and is capable of terminating and
    interconnecting subscriber lines and trunks.[^65] In addition, using
    host and remote switches to define the relevant geographic markets
    is the approach most consistent with our precedent. In the *Qwest
    Omaha Order*, the Commission counted as distinct geographic markets
    areas served by host and remote switches.[^66]

19. We decline GCI's request to recognize as a distinct geographic
    market the area served by the Hope remote terminal.[^67] GCI
    acknowledges that Hope does not satisfy the Commission's definition
    of wire center because the remote terminal located there does not
    contain sufficient switching functionality to satisfy the
    Commission's definition of a wire center.[^68] As explained above,
    and consistent with the Commission's precedent, we recognize as
    separate geographic markets all and only those wire centers that
    satisfy the Commission's Part 51 definition of a wire center. There
    are many possible ways to disaggregate geographic markets other than
    by wire center service areas, such as according to population
    thresholds, population density, distance from competitive fiber,
    MSAs, counties, zip codes, and many other possibilities. We choose
    the Part 51 definition of wire center as a workable bright-line
    approach. We note that, following our decision today, customers in
    the Hope area will continue to have competitive alternatives for
    telecommunications service, such as through resale and through the
    condition we impose on ACS. As a result, the impact of our decision
    that Hope does not constitute a separate geographic market is
    limited.[^69]

## Forbearance from Section 251(c)(3) and Section 252(d)(1) Requirements

20. We conditionally grant ACS's Petition in part, and forbear from
    applying to ACS the requirements arising under section 251(c)(3) and
    section 252(d)(1) to provide unbundled access to loop, copper
    subloop, and transport elements[^70] in certain wire centers in
    Anchorage based on the development of sufficient facilities-based
    competition and other factors we explain below.[^71] As a result of
    GCI's investment in network infrastructure in the Anchorage study
    area, GCI is providing services over its own last-mile facilities to
    many customers, and is in the process of further upgrading its
    networks so it will be able to use its extensive last-mile
    facilities to provide low- and high-capacity services to even more
    customers.

21. To ensure that the forbearance we grant ACS tracks competitive
    realities in the Anchorage study area, we tailor ACS's relief to
    those locations where the record indicates that GCI provides
    sufficient facilities-based competition to ACS to satisfy the
    forbearance criteria of section 10(a). We grant ACS relief in the
    North, East, Central, West, and South wire center service areas,
    which are the only wire center service areas where GCI's
    voice-enabled cable plant covers at least \[**confidential**\]
    percent of the end user locations that are accessible from that wire
    center.[^72]

22. As a necessary condition of this grant of forbearance, we require
    ACS to continue to provide requesting carriers in these 5 wire
    centers with access to loop facilities, other than broadband
    facilities, under rates, terms and conditions reached through new
    commercial negotiations. Until a commercial agreement is reached,
    however, ACS must provide GCI with access to loop facilities under
    the rates, terms and conditions negotiated and agreed to by ACS and
    GCI in Fairbanks, Alaska.[^73] In addition, GCI and other
    competitive LECs may in all areas of the Anchorage study area
    continue to compete with ACS by exercising their section 251(c)(4)
    resale rights, and by relying on the other market-opening provisions
    under the Act, such as section 251 interconnection rights.

23. We deny ACS's Petition with respect to the Rabbit Creek, O'Malley,
    Indian, Girdwood, Elmendorf, and Fort Richardson wire center service
    areas, and find that ACS has not satisfied the criteria of section
    10 with respect to these 6 wire center services areas sufficient for
    us to grant ACS forbearance from its section 251(c)(3) or 252(d)(1)
    obligations. In these geographic areas, ACS has not demonstrated
    that it is subject to significant competition that is not largely
    premised on ACS's wholesale services. Specifically, GCI's
    voice-enabled cable plant covers less than \[**confidential**\]
    percent of the end user locations that are accessible from 4 wire
    centers, and we have insufficient evidence in the record to
    determine GCI's coverage in 2 wire center service areas.[^74]
    Forbearing from section 251(c)(3) or section 252(d)(1) of the Act
    where no competitive carrier has constructed substantial competing
    last‑mile facilities capable of providing telecommunications
    services is not consistent with the public interest and likely would
    lead to a substantial reduction in the retail competition that today
    is benefiting customers in the Anchorage study area.

24. We conditionally grant ACS forbearance from its obligation to
    provide unbundled access to copper subloops as provided for in
    section 51.319(b)(1) of the Commission's rules, but deny ACS's
    Petition to the extent it seeks forbearance from the section
    51.319(b)(2) obligation to provide unbundled subloops for access to
    multiunit premises wiring and from the section 51.319(c) obligation
    to provide unbundled access to NIDs.[^75] We find that in wire
    center service areas where GCI satisfies our coverage threshold
    test, granting ACS forbearance from its section 51.319(b)(1) subloop
    obligations is warranted. As discussed throughout this Order, GCI's
    extensive deployment in these areas convinces us of its ability to
    deploy such subloop facilities. However, GCI has submitted
    unrebutted evidence that the criteria of section 10 are not
    satisfied with respect to ACS's obligation to provide unbundled
    subloops for access to multiunit premises wiring.[^76] Even though
    the record shows that GCI does not always need access to NIDs, NIDs
    are often required to access wiring inside multiunit premises,
    including inside wiring subloops.[^77] Lacking substantive record
    evidence to the contrary, we decline to grant ACS forbearance from
    its obligations under section 51.319(b)(2) and section 51.319(c) of
    the Commission's rules.[^78]

### Section 10(a)(1) -- Charges, Practices, Classifications, and Regulations

25. We begin by examining the state of competition in the Anchorage
    study area. Under the standards of section 10(a)(1), our task is to
    determine whether competition for telecommunications services is
    sufficiently developed that the section 251(c)(3) obligation to
    provide unbundled access to loops and transport under prices
    regulated under section 252(d)(1) is no longer necessary to ensure
    that ACS's "charges, practices, classifications, or regulations . .
    . are just and reasonable and are not unjustly or unreasonably
    discriminatory" in this market.[^79] 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."[^80] For the
    reasons discussed below, we conclude that competition in portions of
    the Anchorage study area is sufficiently robust that, under the
    standards of section 10(a)(1), we can and should forbear from
    section 251(c)(3) and section 252(d)(1) in those areas subject to
    the condition we set forth below.

26. In the following subsections, we: (i) examine the level of retail
    competition and the role of the wholesale market in the study area
    to determine as a threshold matter whether the Anchorage study area
    is sufficiently competitive to support forbearance; (ii) examine the
    extent to which competitive facilities deployment is responsible for
    this level of competition and how the market would be affected in
    the absence of access to UNEs; and (iii) expressly condition the
    relief we grant ACS on the requirement that ACS provide continued
    access to loops at just and reasonable rates, terms, and conditions
    in the manner set forth below after ACS is no longer required to
    provide UNEs in the relevant wire centers. The condition we impose
    is similar to the obligation that applies to Qwest in the Omaha MSA
    on which the Commission relied in granting Qwest partial forbearance
    in that market.[^81]

#### Competition in the Anchorage Study Area 

27. Consistent with prior forbearance proceedings, we evaluate the
    Petitioner's request for relief by examining the level of
    competition in the retail market as well as the role of the
    wholesale market in the Anchorage study area.[^82] Our focus is the
    competition between ACS and GCI because the evidence in this
    proceeding indicates that there are no other significant competitors
    for local exchange or exchange access services in the Anchorage
    study area.[^83]

##### Extent of Current Competition

28. Retail competition in the Anchorage study area is robust.[^84]
    According to the data submitted by ACS and GCI,[^85] GCI has
    captured \[**confidential**\] percent of the residential lines in
    the Anchorage study area.[^86] GCI has also successfully marketed
    its telecommunications services to business customers and has
    \[**confidential**\] percent of the voice-grade equivalent business
    lines in the Anchorage study area.[^87] GCI provides
    \[**confidential**\] retail voice-grade equivalent high-capacity
    switched retail lines, and \[**confidential**\] retail voice-grade
    equivalent low-capacity switched retail lines, to business customers
    in the Anchorage study area.[^88] This compares with the
    \[**confidential**\] retail voice-grade equivalent switched access
    lines ACS provisions over high-capacity circuits, and
    \[**confidential**\] retail voice-grade equivalent lines ACS
    provisions over low-capacity circuits to business customers.[^89]

29. Apart from competition from GCI, ACS contends that customers in
    Anchorage can obtain substitutes to ACS's service using commercial
    wireless services, broadband-based VoIP services and other
    technologies.[^90] Because in this case we lack sufficient data to
    evaluate the extent of substitution of interconnected VoIP and
    wireless services in the Anchorage study area, and because the data
    submitted do not allow us to further refine our analysis, we do not
    include competition from wireless and interconnected VoIP services
    in our market analysis.[^91]

30. We also examine the state of the wholesale market. We find that
    GCI's reliance on ACS for wholesale inputs in the Anchorage study
    area is significant and relevant to our forbearance analysis.[^92]
    Although the retail data above show that GCI has succeeded in
    attracting a large number of customers in the Anchorage study area,
    GCI currently relies on ACS's loop elements, including UNE loops,
    for many of the access lines GCI provides or uses in its retail
    services. Specifically, in the Anchorage study area, GCI purchases
    from ACS \[**confidential**\] resold residential lines,
    \[**confidential**\] resold business lines, \[**confidential**\] UNE
    DS1 loops, \[**confidential**\] UNE analog copper and DS0 loops,
    \[**confidential**\] voice grade and digital data special access
    circuits, \[**confidential**\] DS1 special access circuits, and
    \[**confidential**\] DS3 special access circuits.[^93] Thus, for
    example, as of September 2006, GCI was relying on ACS for
    approximately \[**confidential**\] percent of the residential lines
    GCI serves in the Anchorage study area and approximately
    \[**confidential**\] percent of the business switched voice lines
    GCI serves in the Anchorage study area.[^94] The record does not
    reflect any significant alternative sources of wholesale inputs for
    carriers in the Anchorage study area.[^95] Thus, continued access to
    the incumbent's loop facilities is important even in wire centers
    where there already is extensive competition. Finally, the record
    shows that GCI self-provisions all of its own transport.[^96]

##### Competitive Facilities Coverage 

###### Coverage Threshold Test 

31. We believe it appropriate to grant forbearance relief only in wire
    center service areas where a competitor has facilities coverage of
    at least \[**confidential**\] percent of the end user locations
    accessible from a wire center. Our reliance on extensive
    facilities-based coverage for determining where forbearance is
    warranted stems from the importance facilities-based last-mile
    deployment plays in lessening the need for regulatory intervention.
    As the Commission previously has found, the telecommunications
    industry is characterized by high fixed and sunk costs, network
    effects, and economies of scale, among other barriers to entry.[^97]
    When a new market entrant has overcome these barriers by investing
    heavily enough in its own facilities that it satisfies the last-mile
    coverage threshold we adopt here, we believe the new entrant has
    demonstrated a deep commitment to compete vigorously for customers.
    In areas where competitive last-mile facilities deployment satisfies
    the coverage threshold we set forth above, we have solid evidence
    that the competitive entrant in all probability will be able to
    fulfill those commitments.

32. In the *Qwest Omaha Order*, the Commission explained that a
    competitor "covers" a location where it uses its own network,
    including its own loop facilities, through which it is willing and
    able, within a commercially reasonable time, to offer the full range
    of services that are substitutes for the incumbent LEC's local
    service offerings.[^98] We apply a similar analysis here, and find
    that GCI covers enough locations to justify conditional forbearance
    in 5 wire centers.[^99] In particular, we find below that GCI
    "covers" \[**confidential**\] percent of a wire center service area
    where it can use its own network, including its own loop facilities,
    to provide within a commercially reasonable time services that
    "offer the full range of services that are substitutes for the
    incumbent LEC's local service offerings."[^100]

33. Our coverage threshold is a product of line-drawing. A significantly
    higher threshold would, in effect, mandate that GCI's network must
    neatly map to ACS's wire center service area boundaries as a
    precondition of granting ACS forbearance relief. A facilities-based
    competitor such as GCI that does not compete solely through reliance
    on UNEs is unlikely to pattern the architecture of its network on
    wire center service area boundaries.[^101] Furthermore, if we were
    to require GCI's network to cover 100 percent of the area served by
    a wire center before granting ACS forbearance in that wire center,
    GCI would be able to prevent ACS from obtaining forbearance relief
    (and, despite its migration of most customers from UNEs to its own
    facilities, may have the incentive to do so) by declining to "cover"
    only a relatively small percentage of potential customers in each
    wire center service area.[^102]

34. We disagree with GCI's claim that the development of extensive
    facilities in a wire center service area is not sufficient reason to
    forbear from ACS's UNE obligations because ACS has been granted the
    flexibility by the Regulatory Commission of Alaska (RCA) to
    deaverage its rates.[^103] GCI contends that, because ACS knows
    where GCI's facilities are located, ACS will be able to charge
    individual customers not covered by GCI's facilities more than
    customers who are covered by GCI's facilities.[^104] We are not
    persuaded by these arguments for several reasons. First, the
    specific coverage threshold we select in this Order is based
    primarily on GCI's extensive cable plant deployment. We are not
    persuaded that ACS can identify exactly where GCI is capable of
    providing service over its cable plant in all areas, which limits
    ACS's ability to impose prices, terms and conditions on the
    remaining \[**confidential**\] percent or less of customers in a
    wire center service area that are less favorable than the offerings
    available to the other customers in that wire center.[^105] Second,
    ACS and GCI agree that the RCA will continue to have authority to
    regulate ACS's rates.[^106] Although we believe that the extensive
    competition in the Anchorage study area will not permit the
    emergence of anticompetitive pricing practices, if ACS were to
    engage in anticompetitive price discrimination, we have no reason to
    doubt that the RCA would be adequately equipped to address such
    problems.[^107] Third, our grant of forbearance to ACS is
    conditioned on ACS continuing to offer to GCI unbundled access to
    loop elements at commercially negotiated prices.[^108] Therefore,
    even if ACS were to charge a particular customer a supra-competitive
    price because that customer, though located in a wire center service
    area where GCI has extensive last-mile deployment, is not located
    near GCI's last-mile facilities, GCI would still be able to serve
    that customer using loops purchased from ACS at commercially
    reasonable prices. Our condition therefore helps ensure continued
    robust competition in the Anchorage study area and is itself a check
    on ACS engaging in supra-competitive pricing. Finally, if we
    accepted GCI's reasoning that the mere possibility of price
    discrimination should preclude forbearance, we would not be able to
    grant forbearance relief in any wire center service area where GCI
    covers less than 100 percent of the end user locations in that wire
    center service area.[^109] As we discuss above, we do not believe
    such a high threshold coverage test is warranted.

###### Application of Coverage Test to the Anchorage Study Area 

35. In 5 wire center service areas, which includes the downtown area in
    Anchorage,[^110] we find that GCI's voice-enabled cable plant covers
    more than \[**confidential**\] percent of the end user locations
    that are accessible from those wire centers.[^111] As noted above,
    we also find that GCI has deployed a fiber optic network "over which
    it provides high-capacity services to customers with sufficient
    demand and proximity to this network" in all 5 wire center service
    areas where we afford forbearance today.[^112] Lastly, we find that
    GCI has fiber and equipment collocated at each of the 5 wire centers
    where we conditionally grant ACS forbearance.[^113]

36. We disagree with GCI that its inability immediately to transition
    all of its customers to its own network demonstrates that it does
    not "cover" sufficient locations to show that the criteria of
    section 10 are satisfied.[^114] GCI argues that it lacks, at this
    time, the ability to transition all of its customers onto its own
    network, particularly the subset of customers in Anchorage who
    demand DS1-type services or other specialized business
    services,[^115] and has also pointed out that the construction
    season in Anchorage is abbreviated.[^116] We recognize that it will
    take GCI some time to migrate all of its existing customers to its
    own facilities.[^117] GCI nevertheless "covers" the customers it is
    migrating because it already has invested in the wire center service
    area sufficient infrastructure to give it the economies of scale and
    scope necessary to serve those customers. Moreover, because the
    access condition we adopt below as a necessary condition of
    forbearance will permit GCI to remain on ACS's network at rates,
    terms and conditions that are commercially reasonable, we are
    comfortable that GCI's service to customers will not be disrupted as
    GCI completes its work of migrating its customers from ACS's
    facilities onto GCI's own last-mile facilities.[^118] We also
    disagree with GCI's arguments that it cannot yet provide every kind
    of service ACS can provide at all locations and therefore does not
    satisfy the coverage threshold we adopt in this Order. There is
    limited retail market demand for high-capacity telecommunications
    services in the Anchorage study area,[^119] and GCI has nearly
    ubiquitous last-mile cable plant where we grant relief, and has
    submitted evidence that it can use these facilities to serve the
    telecommunications needs of most customers in these areas.[^120]
    Moreover, GCI also has deployed a fiber optic network which gives
    GCI additional capabilities to serve a significant number of
    additional end user locations in the Anchorage study area with
    high-capacity or more complex telecommunications services.[^121] We
    therefore find that GCI is able to provide over its own facilities
    -- including its own market-leading broadband facilities -- a suite
    of telecommunications services that is reasonably comparable to the
    services provided by ACS in these wire centers.[^122] Finally, many
    of the arguments GCI raises as to why its coverage is more limited
    than we find above are premised on hurdles that must be crossed by
    most, if not all, facilities-based providers of telecommunications
    service, including Cox in the Omaha MSA. For instance, GCI's need to
    obtain a customer's permission to access the customer premises; to
    install new drops to the customer's location in certain
    circumstances; and to demonstrate to third parties (*e.g.,* alarm
    monitoring companies) that its technology is compatible with theirs,
    are issues common to all facilities-based telecommunications
    providers.[^123]

37. In addition, we believe it is appropriate to consider the
    competitive effect of GCI's long-established, concrete, and
    partially realized plans to fully upgrade its cable system in
    determining the scope of forbearance relief, at least in those areas
    where GCI's current deployment is greatest.[^124] In light of record
    evidence of GCI's strong success to date in providing competitive
    telecommunications services, its technical expertise, its economies
    of scale and scope, its sunk investments in network infrastructure,
    its established presence and brand in the Anchorage study area, and
    its current marketing efforts and emerging success in the enterprise
    market, we must conclude that GCI poses a substantial competitive
    threat to ACS for all telecommunications services in the 5 wire
    center service areas where we grant relief.[^125]

38. Unlike the 5 wire center service areas where GCI is concentrating
    its build-out, we are unable to find that GCI has deployed
    competitive facilities to the same extent in the 6 wire center
    service areas where we deny ACS's forbearance request. Currently,
    GCI's upgraded cable plant and fiber facilities cover less than
    \[**confidential**\] percent of the end user locations that are
    accessible from four wire centers. In particular, by the end of
    2006, GCI's cable plant will cover less than \[**confidential**\]
    percent of all end-user locations in the Rabbit Creek wire center
    service area and \[**confidential**\] percent of all end-user
    locations in the O'Malley wire center service area.[^126] In
    addition, GCI does not even have franchises to operate cable systems
    in the Indian and Girdwood wire center service areas.[^127] GCI
    therefore has no coverage in these 2 wire center service areas.
    Neither ACS nor GCI submitted coverage data for the Elmendorf and
    Fort Richardson wire center service areas.[^128] Although ACS
    contends that GCI has exclusive access to 3 subdivisions and 2
    buildings in the Elmendorf wire center, this representation, against
    the backdrop of ACS's overall market presence, does not persuade us
    that GCI's facilities coverage in these two wire centers service
    areas satisfies the \[**confidential**\] percent coverage threshold
    we set forth above.[^129]

#### Condition of Forbearance 

39. Consistent with the *Qwest Omaha Order*, which maintained a section
    271 access obligation, we condition our grant of forbearance in the
    Anchorage study area on the continued availability of loop access.
    Specifically, we find that a continuing obligation of ACS to provide
    access to loops and subloops at commercially negotiated rates is
    necessary to justify the relief we grant ACS today from its section
    251(c)(3) and section 252(d)(1) obligations.[^130] Therefore, as a
    condition of granting ACS forbearance from its section 251(c)(3) and
    section 252(d)(1) obligations, as an ongoing obligation after the
    transition period expires, we require ACS to provide local "legacy"
    loop access,[^131] including access to the same subloops from which
    we forbear unbundled from local switching or other services,
    pursuant to commercially negotiated rates specific to the Anchorage
    study area.[^132] Until such a commercial agreement is reached, we
    require ACS to provide loop access at the same rates, terms, and
    conditions negotiated between ACS and GCI in Fairbanks, Alaska for
    loop and subloop access.[^133] We look to the Fairbanks agreement
    because it contains commercially agreed upon rates that should serve
    as appropriate interim rates until ACS and GCI agree to rates, terms
    and conditions that are specific to Anchorage. Among the interim
    "rates, terms and conditions" that will apply in Anchorage are any
    loop and subloop provisioning intervals, requirements, and
    penalties, and any non-recurring charges applicable to such
    provisioning.[^134]

40. We believe that in those areas of the Anchorage study area where GCI
    has deployed facilities capable of supporting competitive local
    exchange and exchange access offerings to at least
    \[**confidential**\] percent of all end users, this condition will
    help ensure that ACS's "charges, practices, classifications, . . .
    are just and reasonable and are not unjustly or unreasonably
    discriminatory."[^135] This condition is necessary because ACS,
    unlike Qwest in the Omaha MSA, is under no compulsion to offer loop
    access absent this condition.[^136] To ensure that our grant of
    forbearance does not undercut the basis of retail competition that
    exists in the Anchorage study area, this condition which requires
    ACS to provide continued loop access is a prerequisite to our grant
    of forbearance relief. Moreover, in every wire center service area
    where we grant relief, there are areas where no competitive carrier
    has deployed its own facilities. Absent the condition we adopt here,
    we would not be able to conclude that the criteria of section 10 are
    met.

41. The condition we adopt here assuages any lingering concerns we might
    have over GCI's arguments that it is unable to provide symmetric
    high-speed service over its cable plant or otherwise unable to
    provide particular services to particular customers yet. For
    example, GCI claims that, in order to provide the full range of
    services, it needs to complete additional work or implement new
    standards.[^137] We need not adjudicate whether or to what extent
    these alleged difficulties limit GCI's ability to migrate its
    customers to its own network, because the competitive backstop we
    adopt as a condition of today's grant of forbearance ensures that
    the criteria of section 10 are satisfied and that forbearance is
    therefore warranted in limited areas of the Anchorage study
    area.[^138] Some of the unique circumstances in the Anchorage study
    area include that: (a) ACS is subject to competition from a single
    competitor, GCI, that has been migrating its customers off of UNEs
    to its own facilities, and that expects in the near future to be
    finished with its migration in the wire center service areas where
    we grant relief; (b) GCI does not rely on UNE transport; (c) most
    businesses in the Anchorage study area purchase only low-capacity
    services; (d) GCI already has deployed extensive broadband
    facilities; and (e) due to the unique physical characteristics of
    the Anchorage study area, new entrants would face unique
    circumstances in terms of network deployment.

42. Our decision to impose a continuing access obligation on ACS to all
    requesting carriers as a condition of forbearance finds support in
    the Commission's decision in the *Qwest Omaha Order*. When the
    Commission granted Qwest partial forbearance from its unbundling
    obligations in the Omaha MSA, it declined to grant Qwest the
    forbearance it also sought from Qwest's section 271 checklist
    obligations to provide unbundled access to loops and transport at
    just and reasonable, and not unjustly or unreasonably
    discriminatory, rates, terms and conditions.[^139] Because ACS is
    not a BOC, it is not subject to the requirements of section 271. The
    ongoing unbundling obligation we conditionally impose on ACS to
    provide access to loop facilities mirrors the section 271 checklist
    obligation the Act imposes on BOCs that have obtained section 271
    approval to provide access to these facilities.[^140]

43. We emphasize that the scope of the requirements we impose on ACS as
    a condition of our grant of forbearance is limited to ACS's "legacy"
    elements, consistent with the BOCs' section 271 obligations today.
    In accord with our nation's policy goals of trying to provide all
    carriers with incentives to make broadband investments, we decline
    to extend the loop access obligation to ACS's broadband
    elements.[^141] Specifically, we do not impose on ACS the obligation
    to offer access to the broadband elements that the Commission, on a
    national basis, relieved from section 251(c)(3) unbundling in the
    *Triennial Review Order*, and subsequent reconsideration orders, and
    that the Commission also relieved from section 271 unbundling
    obligations.[^142] These elements include FTTH loops, FTTC loops,
    and the packetized functionality of hybrid loops.[^143] We believe
    that narrowing the scope of the loop access condition in this way is
    most consistent with the Commission's precedent in this area.

44. The access obligations we impose on ACS as a condition of our
    partial grant of forbearance, combined with other regulatory
    wholesale options and tariffed offerings that are available in the
    Anchorage study area, should be adequate to ensure continued vibrant
    retail competition in the wire center service areas where we forbear
    from UNE obligations. In particular, we find that ACS's obligation
    to continue providing wholesale access to legacy loops in the
    Anchorage study area at rates, terms and conditions commercially
    negotiated by ACS and GCI regarding the Anchorage study area -- and,
    until such agreement is reached, at the rates, terms and conditions
    GCI and ACS negotiated with GCI and agreed to in Fairbanks -- in
    addition to ACS's obligations to provide its services for resale
    under section 251(c)(4), and ACS's own tariffed wholesale offerings,
    are sufficient wholesale inputs to preserve and foster a vibrant
    competitive retail market in those wire center service areas where
    GCI has deployed its own last-mile facilities to at least
    \[**confidential**\] percent of all end users.

45. Furthermore, ACS has the incentive to make attractive wholesale
    offerings available so that it will derive revenue indirectly from
    retail customers who choose a retail provider other than ACS for two
    reasons: (1) GCI's current ability to provide retail competition
    with its own facilities and the increase in the number of voice
    grade lines that GCI expects to migrate to its own facilities in the
    near term; and (2) the very high levels of retail competition that,
    going forward, will not rely on ACS's facilities -- and for which
    ACS receives little to no revenue.[^144] This gives us comfort that
    for the 5 wire center service areas where we grant relief, section
    251(c)(3) and section 252(d)(1) are "not necessary to ensure that
    the charges, practices, classifications, or regulations by, for, or
    in connection with that telecommunications carrier or
    telecommunications service are just and reasonable and are not
    unjustly or unreasonably discriminatory."[^145]

46. For the reasons explained above, we disagree with commenters who
    contend that facilities‑based competition between ACS and an
    incumbent cable operator results in an impermissible duopoly.[^146]
    As the Commission found in the *Qwest Omaha Order*, a fully
    competitive wholesale market is not a prerequisite to
    forbearance.[^147] While we recognize above that most of the
    competition in the Anchorage study area comes from two competitors,
    the continuing obligation of ACS to provide unbundled access to
    loops at rates, terms and conditions under mutually agreeable rates,
    terms, and conditions -- with an interim agreement no less favorable
    than that reached by ACS and GCI in Fairbanks -- with permit other
    competitors to enter the market, thereby reducing the risk of
    anticompetitive conduct.[^148]

47. *Transition Plan*. We adopt a one-year plan for competing carriers
    to transition UNE loops and subloops in the North, East, Central,
    West, and South wire centers to alternative facilities or
    arrangements, including self-provided facilities, or services
    offered by ACS.[^149] We believe that this is sufficient time to
    allow ACS and GCI, and any other competitive LECs, to perform the
    tasks necessary to an orderly transition, including decisions
    concerning where to deploy, purchase, or lease facilities, obtain
    other wholesale facilities, or take other actions.[^150] We believe
    that a one-year transition period is appropriate given the severe
    weather conditions in Alaska that limit the Anchorage construction
    season.[^151] Consequently, carriers have one year from the
    effective date of this Order to modify their interconnection
    agreements, including completing any change of law processes.[^152]
    By the end of the one-year period, requesting carriers must have
    transitioned all of their affected 251(c)(3) network elements to
    alternative facilities or arrangements. Consistent with the
    Commission's transition plan in the *Qwest Omaha Order*, competitive
    LECs may no longer add new UNEs pursuant to section 251(c)(3) in
    circumstances where the Commission has determined to forbear from a
    section 251(c)(3) unbundling requirement.[^153]

### Section 10(a)(2) -- Protection of Consumers

48. Section 10(a)(2) requires that we assess whether the section
    251(c)(3) obligations and section 252(d)(1) pricing obligations for
    loop and transport elements are necessary to protect
    consumers.[^154] For reasons similar to those that persuade us that
    these regulatory obligations are not necessary under section
    10(a)(1), we conclude that these regulatory obligations are no
    longer necessary for the protection of consumers under section
    10(a)(2). We are convinced that the condition we adopt today
    adequately ensures that GCI's customers will not face service
    disruptions or other consequences resulting from our grant of
    forbearance inconsistent with section 10(a)(2).[^155] Furthermore,
    we determine that the continued application in the Anchorage study
    area of the provisions of the Act -- other than section 251(c)(3)
    and section 252(d)(1) -- that are designed to promote the
    development of competitive markets, in addition to the requirement
    we adopt in this Order as a condition of our partial grant, will
    help ensure that customers in the Anchorage study area have
    competitive choices. Thus, for the reasons we explained above, in
    those areas of the Anchorage study area where the coverage threshold
    we set forth above is satisfied, we find that the 251(c)(3) access
    obligation for UNE loop and transport elements and section 252(d)(1)
    pricing obligation is no longer necessary to protect consumers in
    part because sufficient alternative facilities and facilities access
    obligations exist to ensure competitive market conditions.[^156]

### Section 10(a)(3) -- Public Interest 

49. We also conclude that relieving ACS from the section 251(c)(3)
    access obligations and section 252(d)(1) pricing obligations for
    loop and transport elements, subject to the condition we adopt
    above, is in the public interest under section 10(a)(3). In making
    our determination, we conclude that our conditional grant of
    forbearance to ACS "will promote competitive market
    conditions."[^157] We found above that ACS is subject to a
    significant amount of competition in the Anchorage study area. The
    factors upon which we based our conclusions above also convince us
    that granting ACS forbearance from section 251(c)(3) and section
    252(d)(1) obligations for loop and transport elements would be
    consistent with the public interest under section 10(a)(3) and will
    help promote competitive market conditions and enhance competition
    among providers of telecommunications services as contemplated by
    section 10(b).[^158] Moreover, given GCI's increasing ability to
    absorb customers over its own last-mile facilities, ACS will be
    subject to very strong market incentives to ensure that its network
    is used to optimal capacity -- irrespective of any legal mandate
    that it do so. Faced with aggressive "off‑net" competition from GCI,
    we predict that ACS will endeavor to maximize use of its existing
    local exchange network, providing service at retail and at
    wholesale, in order to minimize revenue losses resulting from
    customer defections to GCI's service.[^159]

# EFFECTIVE DATE

50. Consistent with section 10 of the Act and our rules, the
    Commission's forbearance decision shall be effective on December 28,
    2006.[^160] The time for appeal shall run from the release date of
    this Order.[^161]

# ORDERING CLAUSES

51. Accordingly, IT IS ORDERED that, pursuant to section 160 of the
    Communications Act of 1934, as amended, 47 U.S.C. § 160(d), ACS's
    Petition for Forbearance IS GRANTED to the extent stated and subject
    to the conditions established herein, and otherwise IS DENIED.

52. IT IS FURTHERED ORDERED that, pursuant to section 10 of the
    Communications Act of 1934, 47 U.S.C. § 160, and section 1.103(a) of
    the Commission's rules, 47 C.F.R. § 1.103(a), the Commission's
    forbearance decision SHALL BE EFFECTIVE on December 28, 2006.
    Pursuant to sections 1.4 and 1.13 of the Commission's rules, 47
    C.F.R. §§ 1.4 and 1.13, the time for appeal shall run from the
    release date of this Order.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

APPENDIX

List of Commenters

**Comments in WC Docket No. 05-281**

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

  Alaska Telephone Association        ATA

  Covad Communications Group, Inc.    Covad

  COMPTEL                             CompTel

  General Communication, Inc.         GCI

  Integra Telecom, Inc.               Integra

  Ketchikan Public Utilities          KPU

  Matanuska Telephone Association,    MTA
  Inc.                                

  McLeodUSA Telecommunications        McLeodUSA
  Services, Inc. and Mpower           
  Communications Corp.                

  Nuvox Communications, Inc. and XO   NuVox
  Communications, Inc.                

  Talk America, Inc.                  Talk America

  Time Warner Telecom, Inc*.,*        Time Warner
  Cbeyond Communications LLC,         
  Conversent Communications LLC and   
  CTC Communications, Inc.            

  United States Telecom Association   USTelecom

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

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

  ACS of Anchorage, Inc.              ACS

  Covad Communications Group, Inc*.,* Covad
  NuVox Communications, Inc. and XO   
  Communications, Inc.                

  Eschelon Telecom, Inc.              Eschelon

  General Communication, Inc.         GCI

  Ketchikan Public Utilities          KPU

  Matanuska Telephone Association,    MTA
  Inc.                                

  Qwest Communications International  Qwest
  Inc.                                

  Verizon Telephone Companies         Verizon

  United States Telecom Association   USTelecom
  ----------------------------------- -----------------------------------

**Replies in WC Docket No. 05-281**

**STATEMENT OF**

**CHAIRMAN KEVIN J. MARTIN**

Re: *Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the
Communications Act of 1934, as Amended, for Forbearance from Sections
251(c)(3) and 252(d)(1) in the Anchorage Study Area*, WC Docket No.
05-281

Today we remove the application of legacy network unbundling
requirements on ACS of Anchorage, Inc. (ACS), the incumbent LEC
operating in Anchorage, Alaska. This relief is warranted based on the
specific market facts before us. These facts demonstrate that General
Communication Inc. (GCI) has made a substantial infrastructure
investment in the Anchorage study area and has used these facilities to
provide competing telephone services to thousands of residential and
business customers. As was the case in the Commission's *Qwest Omaha
Order*, this success of intermodal competition warrants the Commission's
careful exercise of its forbearance authority.

Significantly, however, our grant of forbearance in this item is
conditional. Specifically, we require ACS to continue to provide loops
at the same rates, terms, and conditions that it is currently offering
pursuant to an existing commercially negotiated agreement covering
Fairbanks, Alaska. ACS must make this offering until commercially
negotiated rates are reached. It is my hope that commercial agreements
will quickly be reached.

**STATEMENT OF**

**COMMISSIONERS MICHAEL J. COPPS AND JONATHAN S. ADELSTEIN, CONCURRING**

Re: *Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the
Communications Act of 1934, as Amended, for Forbearance from Sections
251(c)(3) and 252(d)(1) in the Anchorage Study Area*, Memorandum Opinion
and Order, FCC 06-188, WC Docket No. 05-281 (Dec. 28, 2006).

In today's decision, the Commission grants forbearance from certain
unbundling obligations in parts of Anchorage, Alaska where a
facilities-based carrier has extensively built out its network and taken
significant market share from the incumbent wireline provider. While we
support the outcome in this order and believe it is clearly superior to
an automatic grant of the underlying petition, we have concerns with the
analysis in this decision.[^162]

The goal of the Telecommunications Act of 1996 is to establish a
competitive and de-regulatory telecommunications environment. While
today's order reduces regulation by eliminating some incumbent
obligations and demonstrates that the Commission can respond to the
dynamic marketplace, it is not accurate to depict this as an ideally
competitive market. The Commission relies on the intermodal efforts of a
single alternative provider to conclude that sufficient competition
exists. While we agree that there is especially strong evidence of
competition between the incumbent cable and wireline provider in parts
of the Anchorage market, we believe the statute contemplates more than
just competition between a wireline and cable provider -- and that both
residential and business consumers deserve more.

We concur also because this decision does not adequately address market
differentiations, as between residential and business, making it
difficult to conclude which market segments are actually receiving the
benefit of emerging competitive choice.

We note that the transition period before the forbearance grant takes
effect is longer than in the *Qwest Omaha Order*, which we believe is
appropriate given the challenges faced by providers in Alaska and the
need to provide a reasonable transition period for business planning
purposes. Also, as in the *Qwest Omaha Order*, we believe that the facts
in this case are unique and therefore this decision should not be
considered generally applicable for future forbearance petitions
involving phone providers facing different competitive landscapes,
challenges, and market share.

**STATEMENT OF**

**COMMISSIONER DEBORAH TAYLOR TATE**

Re: *Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the
Communications Act of 1934, as Amended, for Forbearance from Sections
251(c)(3) and 252(d)(1) in the Anchorage Study Area*, WC Docket No.
05-281

Today, we recognize the significant facilities-based competition that
exists in the Anchorage market by forbearing from the unilateral network
sharing obligations of the incumbent local exchange carrier (LEC) Alaska
Communications Systems (ACS). In many ways, the fierce competition
throughout Anchorage between ACS and its primary competitive rival
General Communications Inc. (GCI) epitomizes the benefits of local
significant network investment and facilities-based competition made
possible by the market-opening 1996 Act.

I am pleased that today's Order takes seriously the pro-competitive and
deregulatory mandates in section 10 of the Act, and applies that
statutory standard to the specific market facts to facilitate
market-based solutions. When sustainable competition arrives, we must
exercise our regulatory humility and transition markets away from the
constant touch of government regulation, such as price-setting. Today's
Order takes a carefully balanced approach, providing regulatory relief
to the incumbent ACS in areas in which GCI has captured significant
market share and is capable of serving a significant proportion of the
consumers in the market over its own network, but denying relief where
the state of facilities-based competitive entry does not yet warrant
regulatory forbearance. Accordingly, I support today's Order removing
legacy regulations where robust competition has rendered those
regulations no longer necessary to maintain a competitive market and
protect consumers.

[^1]: 47 U.S.C. § 160; Telecommunications Act of 1996, Pub. L. No.
    104-104, 110 Stat. 56 (1996). The 1996 Act amended the
    Communications Act of 1934, 47 U.S.C. § 151 *et seq*. In this Order,
    we use "1996 Act" to refer exclusively to the Telecommunications Act
    of 1996, and use "the Act" to refer either to the 1996 Act or the
    Communications Act which the 1996 Act amended.

[^2]: Petition of ACS of Anchorage, Inc. Pursuant to Section 10 of the
    Communications Act of 1934, as amended, for Forbearance from
    Sections 251(c)(3) and 252(d)(1) in the Anchorage Study Area, WC
    Docket No. 05-281 (filed September 30, 2005) (ACS Petition or
    Petition). ACS filed an amended petition on October 6, 2005.
    Comments were filed in this proceeding by January 9, 2006, and reply
    comments were filed by February 23, 2006. *See Pleading Cycle
    Established for Comments on ACS's Petition for Forbearance in the
    Anchorage, Alaska Local Exchange Carrier* S*tudy Area*, WC Docket
    No. 05-281, Public Notice, 20 FCC Rcd 16307 (WCB 2005); *Wireline
    Competition Bureau Grants Request for Extension of Time to File
    Comments on Petition of ACS of Anchorage, Inc. Pursuant to Section
    10 of the Communications Act of 1934, as Amended, for Forbearance
    from Sections 251(c)(3) and 252(d)(1) in the Anchorage Study Area*,
    WC Docket No. 05-281, Public Notice, 20 FCC Rcd 19341 (WCB 2005).
    The Wireline Competition Bureau extended the one-year deadline for
    acting on the Petition by 90 days as provided for in section 10(c)
    of the Act. *See Petition of ACS of Anchorage, Inc. Pursuant to
    Section 10 of the Communications Act of 1934, as Amended, for
    Forbearance from Sections 251(c)(3) and 252(d)(1) in the Anchorage
    Study Area,* WC Docket No. 05-281, Order, DA 06-1719 (rel. Aug. 25,
    2006). On May 22, 2006, ACS filed a second forbearance petition,
    requesting that the Commission forbear from certain dominant carrier
    regulation of ACS's interstate access services, and for forbearance
    from Title II regulation of its broadband services, in the Anchorage
    study area. *See* *Pleading Cycle Established for Comments on
    Petition of ACS of Anchorage, Inc. for Forbearance from Certain
    Dominant Carrier Regulation of its Interstate Access Services and
    From Title II Regulation of its Broadband Services in the Anchorage,
    Alaska Incumbent Local Exchange Carrier Study Area*, WC Docket No.
    06-109, Public Notice, 21 FCC Rcd 6565 (WCB 2006). The issues raised
    in ACS's second forbearance petition are being considered in a
    separate proceeding.

[^3]: ACS requests, in the alternative, that if the Commission declines
    to grant it forbearance from its section 251(c)(3) unbundling
    obligations and its section 252(d)(1) pricing obligations, that the
    Commission grant it forbearance from these obligations "with respect
    to GCI." ACS Petition at 4. For the reasons explained below, we
    grant ACS the level of forbearance relief we find warranted at the
    present time in the Anchorage study area, and deny its Petition
    otherwise. Because we would not grant ACS any greater relief
    regarding its alternative request than we do its primary request, we
    deny ACS's alternate request to the extent it is not already granted
    herein.

[^4]: ACS requests forbearance in the Anchorage study area. A study area
    is a geographic segment of an incumbent LEC's telephone operations.
    *See* *MTS and WATS Market Structure, Amendment of Part 67 of the
    Commission's Rules and Establishment of a Joint Board*, CC Docket
    Nos. 78-72, 80-286, Decision and Order, 50 Fed. Reg. 939 (1985)
    (*Part 67 Order*), *adopting Recommended Decision and Order*, 49
    Fed. Reg. 48325 (1984); *see also* 47 C.F.R. Part 36, App. The
    Anchorage study area is the area served by ACS in and around
    Anchorage, Alaska, and is used to determine universal service
    support and to allocate costs between the state and interstate
    jurisdictions for ratemaking purposes. The Anchorage study area
    includes some areas beyond the political boundaries of the
    Municipality of Anchorage. *See* ACS Petition at 1.

[^5]: *See* *supra* Part III.b. Such terms and conditions would include,
    for example, loop provisioning, maintenance and non-recurring
    charges associated with loop access. ACS must make this offering
    until it and any requesting carrier, including GCI, reach a
    commercial agreement replacing these negotiated rates, terms, and
    conditions.

[^6]: *See* 47 U.S.C. §§ 251, 252(d)(1).

[^7]: *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. 96-98, 98-147, 01-338, Report and Order
    and Order on Remand and Further Notice of Proposed Rulemaking, 18
    FCC Rcd 16978, 16992-17007, paras. 8-34 (2003) (*Triennial Review
    Order*), *corrected by* *Errata*, 18 FCC Rcd 19020 (2003), *aff'd in
    part, remanded in part, vacated in part*, *United States Telecom
    Ass'n v. FCC*, 359 F.3d 554 (D.C. Cir. 2004) (*USTA II*), *cert.
    denied sub nom*. *National Ass'n Regulatory Util. Comm'rs v. United
    States Telecom Ass'n*, 125 S. Ct. 313, 316, 345 (2004).

[^8]: *See* 47 U.S.C. § 251(c)(3); *see also* 47 C.F.R. §§ 51.301-19,
    51.321, 51.323 (implementing section 251(c)(3)).

[^9]: *See* 47 U.S.C. §§ 251(d)(1), (2)(B). For proprietary network
    elements, the Act directs the Commission to consider whether access
    to such network elements is "necessary." *See id*. § 251(d)(2)(A).
    Almost all network elements have been considered "non-proprietary"
    and analyzed under section 251(d)(2)(B).

[^10]: *Unbundled Access to Network Elements, Review of the Section 251
    Unbundling Obligations of Incumbent Local Exchange Carriers*, WC
    Docket No. 04-313, CC Docket No. 01-338, Order on Remand, 20 FCC Rcd
    2533, 2541, para. 12 (2004) (*Triennial Review Remand Order*),
    *aff'd*, *Covad Communications Co. v. FCC*, 450 F.3d 528 (D.C. Cir.
    2006).

[^11]: *See, e.g.*, *Triennial Review Remand Order*, 20 FCC Rcd at 2546,
    para. 22.

[^12]: *See, e.g.*, *id.* at 2537, para. 5 (discussing enterprise loop
    impairment).

[^13]: *Id.* at 2557, para. 39. The Commission's section 251(d)(2)
    impairment analysis, while instructive in a section 10(a)
    forbearance proceeding, does not bind the Commission's forbearance
    review. In a forbearance proceeding, Congress has charged the
    Commission with determining whether the standards of section 10(a)
    are satisfied; those standards are not identical to the standards of
    section 251(d)(2). *Compare* 47 U.S.C. § 160(a) *with* 47 U.S.C.
    § 251(d)(2).

[^14]: *Triennial Review Remand Order*, 20 FCC Rcd at 2556-57, paras.
    38-39; *see also id*. at 2556, para. 39 n.116.

[^15]: *See* 47 U.S.C. § 252(d)(1).

[^16]: *Implementation of the Local Competition Provisions of the
    Telecommunications Act of 1996*, CC Docket Nos. 96-98, 95-185, First
    Report and Order, 11 FCC Rcd 15499, 15846-50, paras. 679-89 (1996)
    (*Local Competition First Report and Order*) (subsequent history
    omitted) (establishing the TELRIC methodology and asking the states
    to perform the necessary analysis under this methodology). The
    Supreme Court upheld this allocation of federal and state
    jurisdiction, *see* *AT&T Corp. v. Iowa Util. Bd.,* 525 U.S. 366,
    377-86 (1999), and upheld the TELRIC pricing methodology, *see*
    *Verizon Communications v. FCC*, 535 U.S. 467 (2002). The Commission
    has initiated a separate proceeding in which it is comprehensively
    reviewing TELRIC. *Review of the Commission's Rules Regarding the
    Pricing of Unbundled Network Elements and the Resale of Service by
    Incumbent Local Exchange Carriers*, WC Docket No. 03-173, Notice of
    Proposed Rulemaking, 18 FCC Rcd 18945 (2003) (*TELRIC Notice*).

[^17]: *Petition of Qwest Corporation for Forbearance Pursuant to 47
    U.S.C. § 160(c) in the Omaha Metropolitan Statistical Area*,
    Memorandum Opinion and Order, WC Docket No. 04-223, 20 FCC Rcd
    19415, 19417, para. 2 (2005) (*Qwest Omaha Order*), *appeal
    pending*, *Qwest Corp. v. FCC & USA*, No. 04-1450 (D.C. Cir. filed
    Dec. 12, 2005).

[^18]: *Qwest Omaha Order*, 20 FCC Rcd at 19440, para. 53 (concluding
    that section 251(c) is "fully implemented" because the Commission
    has issued rules implementing section 251(c) and those rules have
    gone into effect).

[^19]: 47 U.S.C. §§ 251(c)(4) (resale obligation), 271(c)(2)(B)
    (competitive checklist).

[^20]: *Qwest Omaha Order*, 20 FCC Rcd at 19444, para. 59.

[^21]: *Id.* at 19450, para. 69 n.186 (stating that "Cox does not itself
    rely on Qwest's UNEs to compete").

[^22]: *Id.* at 19452-53, paras. 73-74.

[^23]: *Id.* at 19444-45, para. 60.

[^24]: *Id.* at 19460, para. 90; *see also* 47 U.S.C. § 153(4) (defining
    "Bell operating company").

[^25]: 47 U.S.C. § 271(c)(2)(B)(iv)-(vi). Section 271(c)(2)(B) of the
    Act sets forth a fourteen point "competitive checklist" of access,
    interconnection and other threshold requirements that a BOC must
    demonstrate that it satisfies before that BOC can be authorized to
    provide in-region, interLATA services. *Id.* at § 271(c)(2)(B).
    After a BOC obtains section 271 authority to offer in-region
    interLATA services, these threshold requirements become ongoing
    requirements. *Id.* at § 271(d)(6).

[^26]: *Qwest Omaha Order*, 20 FCC Rcd at 19446-47, 19449-50, 19452,
    19455, paras. 62, 64, 67-68, 71, 80.

[^27]: *Triennial Review Order,* 18 FCC Rcd at 17386-89, paras. 656-64,
    *corrected by Triennial Review Order Errata*, 18 FCC Rcd at 19022,
    paras. 32-33. The Court of Appeals for the District of Columbia
    Circuit (D.C. Circuit) affirmed the Commission's conclusions in the
    *Triennial Review Order* related to the BOCs' section 271
    obligations. *See* *USTA II*, 359 F.3d at 588-90.

[^28]: As we explain in greater detail below, this proceeding considers
    factors unique to the Anchorage study area. *See infra* para. 41.
    The Commission may reach different conclusions in other markets
    regarding forbearance from section 251(c)(3) and section 252(d)(1)
    obligations where the competitive situation differs from the
    situation in Anchorage. The decision we reach today is based on the
    present record and our precedent. To the extent the Commission
    relies on the *Qwest Omaha* decision, it follows the analysis
    established in that Order that is readily available to the public.
    We therefore reject arguments predicated on a lack of access to
    confidential information. *See* Letter from Brad E. Mutschelknaus
    *et al.*, Counsel for Broadview Networks, Inc. *et al.*, to Marlene
    H. Dortch, Secretary, FCC, WC Docket No. 05-281 at 2-3 (filed Dec.
    11, 2006) (Broadview Dec. 11, 2006 *Ex Parte* Letter) (contending
    that interested parties are unable "to address the potential use of
    the *Qwest Omaha Order* as a 'roadmap' for resolution of the instant
    petition" or to compare the competitive market in Omaha at the time
    that order was decided with the competitive market in Anchorage). In
    reaching this conclusion, we do not prejudge how we might rule on
    confidentiality issues raised in other proceedings. *See, e.g.*,
    *id.* at 3 (arguing that the Commission should grant a pending
    motion to modify the Protective Order in the Qwest Omaha
    proceeding); *see also* Letter from Brett Heather Freedson, Counsel
    for Broadview Networks, Inc. *et al.*, to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 04-223, Attach. (filed Oct. 11, 2006),
    *amended by* Letter from Brett Heather Freedson, Counsel for
    Broadview Networks, Inc. *et al.*, to Marlene H. Dortch, Secretary,
    FCC, WC Docket No. 04-223, Attach. (filed Oct. 13, 2006) (Motion to
    Modify Protective Order).

[^29]: Joint Explanatory Statement of the Committee of Conference, S.
    Conf. Rep. No. 230, 104th Cong*.,* 2d Sess. 113 (1996).

[^30]: 47 U.S.C. § 160(a).

[^31]: *Id*.

[^32]: *Id*. § 160(b).

[^33]: As stated above, the Commission has determined that, for purposes
    of section 10(d), the requirements of section 251(c) are fully
    implemented nationwide and may be forborne from. *See supra* text
    associated with note Error: Reference source not found; *see also
    Qwest Omaha Order*, 20 FCC Rcd at 19439-42, paras. 51, 53-56. We
    therefore reject commenters' requests to revisit the Commission's
    interpretation of "fully implemented." *See, e.g.*, Covad Comments
    at 12; McLeodUSA Opposition at 3-4; NuVox Comments at 6 (stating
    that "with respect to UNEs not de-listed, section 251 is not fully
    implemented and thus forbearance cannot be granted until the
    Commission makes a determination of non-impairment for all remaining
    UNEs consistent with its rules"); Letter from Andrew D. Lipman *et
    al.*, Counsel for ACN Communications Services, Inc. *et al.*, to
    Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281 at 4-5
    (filed Dec. 11, 2006) (ACN Dec. 11, 2006 *Ex Parte* Letter).

[^34]: *See, e.g.*, *Qwest Omaha Order*, 20 FCC Rcd at 19447, para. 65;
    *Petition for Forbearance of the Verizon Telephone Companies
    Pursuant to 47 U.S.C. § 160(c)*, 19 FCC Rcd 21496, 21505, para. 21
    (2004) (*Broadband 271 Forbearance Order*), *aff'd, EarthLink, Inc.
    v. FCC*, 462 F.3d 1 (D.C. Cir. 2006).

[^35]: *See* *Qwest Omaha Order*, 20 FCC Rcd at 19424, para. 14 n.47.
    Thus, consistent with past practice, we do not craft any new
    impairment tests. We therefore reject commenters' suggestions to the
    contrary. *See, e.g.*, NuVox Comments at 36 (stating that "UNEs
    cannot be eliminated, however, unless the impairment test of Section
    251 is satisfied"); Time Warner Opposition at 5 (arguing that
    "\[t\]he Commission must either review the petition under the
    framework for making impairment determinations adopted in the
    \[*Triennial Review Order*, *Triennial Review Remand Order*\] and
    D.C. Circuit decisions reviewing those orders, or it must explain
    why it is reasonable to depart from that framework"). In the *Qwest
    Omaha Order*, the Commission similarly rejected commenters' requests
    to interpret and apply the section 251(c)(3) impairment standard to
    its forbearance analysis. *Qwest Omaha Order*, 20 FCC Rcd at 19424,
    para. 14 n.48.

[^36]: *See, e.g.*, ACS Petition at 47-48 (arguing that the Commission
    should make "unimpairment" findings); Letter from Karen Brinkmann
    *et al.*, Counsel for ACS of Anchorage, Inc., to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 05-281 at 9-17 (filed Nov. 30, 2006)
    (ACS Nov. 30, 2006 *Ex Parte* Letter) (arguing that "GCI has not met
    its burden to prove impairment without access to UNEs").

[^37]: 47 U.S.C. § 160(a) (emphasis added).

[^38]: *See* 47 U.S.C. §§ 251(c)(3); 252(d)(1); *see also* 47 C.F.R. §§
    51.301-19, 51.321, 51.323 (implementing section 251(c)(3)); § 51.501
    *et seq*. (implementing section 252(d)(1)).

[^39]: The Commission's unbundling rules impose unbundling obligations
    for several loop-types, including DS0s, DS1s, and DS3s. *See, e.g.*,
    47 C.F.R. §§ 51.319(a)(1) (copper loop, *e.g.,* DS0), 51.319(a)(4)
    (DS1 loop), 51.319(a)(5) (DS3 loop).

[^40]: *See, e.g.*, GCI Opposition, Declaration of David E. M.
    Sappington (GCI Sappington Decl.) Exh. D at 9-12 (applying the
    Department of Justice Horizontal Merger Guidelines to local exchange
    and exchange access services in Anchorage and proposing three
    relevant product markets); ACS Reply at 13 (citing past Commission
    merger orders as support for defining product markets). Therefore,
    we dismiss commenters' arguments that the Commission should adopt
    product markets for this proceeding or that ACS failed to supply
    evidence according to the correct product markets. *See, e.g.*, GCI
    Opposition at 12-19; GCI Sappington Decl. at 12; GCI Opposition,
    Declaration of Gina Borland (GCI Borland Decl.) Exh. A at 2; NuVox
    Comments at 2-3; ACS Reply at 12-16; Covad Reply at 6; Letter from
    John T. Nakahata *et al.*, Counsel for General Communication Inc.,
    to Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281 at 1
    (filed Nov. 14, 2006) (GCI Nov. 14, 2006 Different Record *Ex Parte*
    Letter); Broadview Dec. 11, 2006 *Ex Parte* Letter at 3-4 (arguing
    that the Commission should go beyond its analysis in the *Qwest
    Omaha Order* and separately analyze for each product market and each
    geographic area whether the requirements of section 10 are met). We
    note that at the time it filed its comments, GCI claimed that there
    were technical and operational impediments to providing its cable
    telephone service in the MDU environment, which GCI claimed
    justified treating MDUs as a separate product market. GCI Opposition
    at 27; GCI Opposition, Declaration of Gary Haynes (GCI Haynes Decl.)
    Exh. H at 9; Letter from John T. Nakahata *et al.*, Counsel for
    General Communication Inc., to Marlene H. Dortch, Secretary, FCC, WC
    Docket No. 05-281 at 22-24 (filed July 3, 2006) (GCI July 3, 2006
    *Ex Parte* Letter). In a more recent filing, however, GCI
    acknowledges that it now "has equipment that addresses many of the
    technological problems that previously hampered delivery of \[such
    cable telephone\] service to the residential MDU market." Letter
    from John T. Nakahata *et al.*, Counsel for General Communication
    Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281 at
    3 (filed Aug. 22, 2006) (GCI Aug. 22, 2006 *Ex Parte* Letter).

[^41]: In determining whether to forbear from certain dominant carrier
    regulations in the *Qwest Omaha Order*, the Commission found that
    section 10(a) "closely parallels the Commission's traditional
    approach under its dominance assessments to product markets and
    geographic markets, respectively," and used traditional market power
    analysis, including relevant product market definitions, to inform
    the Commission's evaluation. *See Qwest Omaha Order*, 20 FCC Rcd at
    19425, para. 17. However, because ACS did not seek relief from any
    dominant carrier regulation in this proceeding, we do not base our
    analysis on product market definitions. *See, e.g.*, *EarthLink,
    Inc. v. FCC*, 462 F.3d at 8 (affirming the Commission's
    interpretation of section 10 to allow the Commission's forbearance
    analysis to vary depending on the circumstances); Letter from John
    T. Nakahata *et al.*, Counsel for General Communication Inc., to
    Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281 at 5 n.12, 6
    n.16 (filed Nov. 28, 2006) (GCI Nov. 28, 2006 *Ex Parte* Letter)
    (citing to the dominant carrier portion of the *Qwest Omaha Order*).
    In discussing UNE forbearance and competition in the Omaha MSA, the
    Commission did refer at various points to the retail market, the
    wholesale market, the local market, the business market, and the
    residential market. *Qwest Omaha Order*, 20 FCC Rcd at 19447-52,
    paras. 65-72. However, the Commission used these constructs in a
    broader evaluation of competition and as a reflection of how parties
    submitted data in that proceeding, rather than as steps in a
    traditional market power review.

[^42]: *See, e.g.*, Letter from Christopher P. Nierman, Counsel for
    General Communication Inc., to Marlene H. Dortch, Secretary, FCC, WC
    Docket No. 05-281 at 1-2 (filed Nov. 16, 2006); GCI Nov. 28, 2006
    *Ex Parte* Letter.

[^43]: *Triennial Review Order*, 18 FCC Rcd at 1711, para. 210.

[^44]: *See infra* note Error: Reference source not found. *But see* GCI
    Nov. 14, 2006 Different Record *Ex Parte* Letter at 9 (noting that
    the Commission could "order product market relief that distinguishes
    between DS0s for residential and business purposes. Because business
    lines go through different ordering and provisioning processes than
    residential lines, both ACS and GCI know whether a particular DS0 is
    being used for business or residential services.").

[^45]: *See Qwest Omaha Order*, 20 FCC Rcd at 19445-46, paras. 61-62;
    *see also* Covad Comments at 18 (stating that ACS fails to
    acknowledge the Commission's use of wire centers as the relevant
    geographic market in a section 251 proceeding); GCI July 3, 2006 *Ex
    Parte* Letter at 14.

[^46]: 47 U.S.C. § 160(a) (emphasis added).

[^47]: *See* *EarthLink, Inc. v. FCC*, 462 F.3d at 8 (stating that
    section 10, on its face, "imposes no particular mode of market
    analysis or level of geographic rigor").

[^48]: To support its Petition, ACS claims that all areas in the
    Anchorage study area are equally competitive and are subject to
    uniform retail rates. ACS Petition at 27. ACS also contends that the
    Anchorage study area is fairly uniform in population, density,
    topography, and development, and ACS's main competitor, GCI, has
    deployed copper and cable facilities throughout the area. *See id*.
    ACS further claims that "every Anchorage customer, business and
    residential, has a choice of facilities-based providers." *See id*.
    at 29.

[^49]: *See, e.g.*, GCI Opposition at 14; GCI Sappington Decl. at para.
    36 (stating that "\[c\]ompetitive conditions vary considerably in
    different regions of Anchorage, even within individual ACS wire
    centers"); GCI Opposition, Declaration of William P. Zarakas (GCI
    Zarakas Decl.) Exhs. V and VI; GCI July 3, 2006 *Ex Parte* Letter at
    13-14; NuVox Comments at 16-17; Covad Reply at 5; GCI Nov. 14, 2006
    Coverage *Ex Parte* Letter*,* Declaration of David E.M. Sappington
    Exh. 3 at 3 (stating that GCI has presented substantial evidence
    that competitive conditions vary considerably across the 11 National
    Exchange Carrier Association (NECA) wire centers).

[^50]: ACS Reply, Declaration of Thomas R. Meade Exh. D at para. 9.

[^51]: *See infra* paras. 35-38. In addition to operating a cable system
    in Anchorage, GCI also has deployed a fiber optic network in much of
    the Anchorage study area, including all of the wire center service
    areas where we grant relief. We address GCI's fiber plant below.
    *See infra* note Error: Reference source not found.

[^52]: GCI Sappington Decl. para. 36; GCI July 3, 2006 *Ex Parte* Letter
    at 14. We disagree with ACS that the dearth of facilities-based
    competition in these areas should be of little relevance in our
    analysis. *See* ACS Nov. 30, 2006 *Ex Parte* Letter at 7 (stating
    that "\[l\]ocations where GCI has not extended its facilities are of
    GCI's choosing, not due to limitations imposed externally").

[^53]: *See, e.g.*, GCI Sappington Decl. para. 36.

[^54]: *See* *Qwest Omaha Order*, 20 FCC Rcd at 19445, para. 61, n.161
    (stating that the Commission is "under no statutory obligation to
    evaluate \[a forbearance Petition\] other than as pled" but
    determining to evaluate Qwest's petition on a wire center basis). We
    are not persuaded by GCI's claim that the appropriate geographic
    markets should be defined according to where GCI has plant that can
    be used to serve customers. *See* GCI Opposition at 15 n.42. As we
    did in the Omaha proceeding, we reject the idea of measuring
    facilities-based coverage on the basis of individual end users'
    locations. *Qwest Omaha Order*, 20 FCC Rcd at 19450, para. 69 n.186.
    First, it would be administratively unworkable. Also, providing a
    list of every potential customer in the Anchorage study area and
    disclosing whether GCI is able to use its own network, including its
    own loop facilities, to provide services that are reasonably
    comparable to the services available from the incumbent LEC within
    the foreseeable future is an unreasonable prospect in a competitive
    market. *Id.* In addition, such an approach would be of limited
    utility unless updated periodically. *Id*.

[^55]: *See* ACS Petition at 1, 26-27; *see also* ACS Reply at 5-7; ACS
    Reply, Declaration of Howard A. Shelanski Exh. G at paras. 4-8;
    Letter from Thomas Jones and Jonathan Lechter, Counsel for Time
    Warner Telecom Inc. *et al.*, to Marlene H. Dortch, Secretary, FCC,
    WC Docket No. 05-281 at 3-4 (filed Dec. 18, 2006).

[^56]: *See, e.g.*, Covad Comments at 18-19; McLeodUSA Opposition at 9;
    NuVox Comments at 16-17; Time Warner Opposition at 11; *see also*
    GCI Opposition at 15; GCI Zarakas Decl. Exhs. V and VI; GCI July 3,
    2006 *Ex Parte* Letter at 13-14; Letter from Christopher P. Nierman,
    Counsel for General Communication Inc., to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 05-281 at 2 (filed Oct. 5, 2006) (GCI
    Oct. 5, 2006 *Ex Parte* Letter).

[^57]: *See, e.g.*, *Triennial Review Remand Order*, 20 FCC Rcd at
    2581-85, paras. 79-85 (analyzing dedicated transport impairment at
    the "very detailed level" of specific routes between wire centers);
    *see also id*. at 2619-25, paras. 155-65 (conducting a wire
    center-based impairment analysis for high-capacity loops because a
    building-by-building test would not be administrable).

[^58]: *Qwest Omaha Order*, 20 FCC Rcd at 19438-39, para. 50, n.129
    ("When evaluating whether certain network elements should be made
    available on an unbundled basis, which implicates issues of economic
    self-provisioning, the Commission has focused its analysis on wire
    centers, which also is the approach we adopt today when analyzing
    Qwest's unbundling obligations arising under section 251 and section
    271 of the Act.").

[^59]: *Compare* GCI Opposition at Exh. E; GCI July 3, 2006 *Ex Parte*
    at 13-14; GCI Oct. 5, 2006 *Ex Parte* Letter at 2; Letter from John
    T. Nakahata *et al.*, Counsel for General Communication Inc., to
    Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281 (filed Oct.
    10, 2006) (GCI Oct. 10, 2006 *Ex Parte* Letter) *with* ACS Petition
    at Exh. C; ACS Reply at 29; ACS Reply, Declaration of Kenneth L.
    Sprain Exh. A at 1; Letter from Karen Brinkmann, Counsel for ACS of
    Anchorage, Inc. *et al.*, to Marlene H. Dortch, Secretary, FCC, WC
    Docket No. 05-281 at 8 (filed Sept. 8, 2006) (ACS Sept. 8, 2006 *Ex
    Parte* Letter); Letter from Karen Brinkmann, Counsel for ACS of
    Anchorage, Inc. *et al.*, to Marlene H. Dortch, Secretary, FCC, WC
    Docket No. 05-281 at 1 (filed Sept. 20, 2006) (ACS Sept. 20, 2006
    *Ex Parte* Letter).

[^60]: Under the Commission's NECA rules, each incumbent LEC must
    provide NECA (established pursuant to part 69 of the Commission's
    rules) with certain information listed by study area and certain
    information by wire center in order to allow determination of the
    study areas and wire centers that are entitled to an expense
    adjustment. 47 C.F.R. § 36.631.

[^61]: For purposes of this proceeding, we use the names listed above as
    the names for the 11 switches and for the 11 wire centers. *See* GCI
    Opposition at Exh. E (providing a wire center map). As discussed
    below, we treat the area served by the Hope remote terminal as
    included in the South wire center service area. *See* Letter from
    Karen Brinkmann, Counsel for ACS of Anchorage, Inc. *et al.*, to
    Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281 at 2 (filed
    Nov. 1, 2006) (ACS Nov. 1, 2006 *Ex Parte* Letter) (stating that the
    Hope remote terminal is switched from the South wire center).

[^62]: 47 C.F.R. § 51.5 (defining "wire center" and stating that
    "\[t\]he wire center boundaries define the area in which all
    customers served by a given wire center are located"); *see also*
    GCI Oct. 10, 2006 *Ex Parte* Letter at 2.

[^63]: 47 C.F.R. § 51.5.

[^64]: 47 C.F.R. Part 36, App. (defining "central office" and stating
    that "\[t\]here may be more than one central office in a building").
    A trunk is a "\[c\]ircuit between switchboards or other switching
    equipment, as distinguished from circuits which extend between
    central office switching equipment and information
    origination/termination equipment." *See id*. (defining "trunks").

[^65]: ACS argues that we should not base our definition of wire center
    on the definition of wire center ACS used for purposes of its NECA
    filings. ACS argues that it identified 11 wire centers in its NECA
    tariff for "accounting classifications" reasons only. *See* ACS
    Sept. 8, 2006 *Ex Parte* Letter at 8. However, ACS does not cite to
    any of the Commission's rules or precedent to support its position
    that the Commission in this proceeding should recognize only wire
    centers that contain host switches. The Commission's NECA rules do
    not distinguish between host and remote switches for defining wire
    centers, and instead rely on the same definition of "wire center"
    contained in the Appendix to Part 36 that is referred to in section
    51.5. *See* 47 C.F.R. §§ 51.5, 54.5; *see also* GCI Oct. 5, 2006 *Ex
    Parte* Letter at 2.

[^66]: According to the Local Exchange Routing Guide (LERG), the
    Commission treated some of Qwest's remote switches in the *Qwest
    Omaha Order* as wire centers. *See* GCI Oct. 10, 2006 *Ex Parte*
    Letter at 3 n.8 (claiming that the LERG shows that the Gretna,
    Springfield, Valley, Manawa, Crescent, Glenwood, Malvern, Missouri
    Valley, Neola and Underwood wire centers that the Commission
    recognized as separate geographic markets in the *Qwest Omaha Order*
    all are served by remote switches).

[^67]: *See id.* at 2-3 n.5 (arguing that the competitive alternatives
    in the area served by the Hope remote terminal are not identical to
    the competitive conditions in most of the remainder of the area
    served by the South wire center and that Hope lies entirely outside
    GCI's cable franchise area).

[^68]: *See* *id;* *see also* ACS Nov. 1, 2006 *Ex Parte* Letter at 2
    (explaining that Hope is switched from the South wire center).

[^69]: Letter from John T. Nakahata *et al.*, Counsel for General
    Communication Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket
    No. 05-281 at Exhs. V and VI (filed Oct. 24, 2006) (GCI Oct. 24,
    2006 *Ex Parte* Letter).

[^70]: By "loop and transport elements," we mean all analog, DS0, DS1
    and DS3 loop, certain subloop, and dedicated transport network
    elements that are subject to section 251(c)(3) unbundling. *See* 47
    C.F.R. §§ 51.319(a) (loops), 51.319(b)(1) (copper subloops);
    51.319(e) (dedicated transport). We expressly do not forbear today
    from requirements arising under section 251(c)(3) with respect to
    911 and E911 databases or operations support systems as defined in
    sections 51.319(f) and (g) of the Commission's rules. *See id*. §§
    51.319(f), (g). There is no record evidence to support granting ACS
    forbearance relief from its obligations to provide E911 databases or
    operations support systems. For the reasons discussed *infra*, we
    conditionally grant ACS limited forbearance from its obligation to
    provide unbundled access to certain subloops as defined in section
    51.319(b)(1) of the Commission's rules, but deny ACS's Petition to
    the extent it seeks forbearance from the section 51.319(b)(2)
    obligation to provide unbundled subloops for access to multiunit
    premises wiring and from the section 51.319(c) obligation to provide
    unbundled access to network interface devices (NIDs). 47 C.F.R.
    § 51.319(b), (c).

[^71]: ACS seeks relief from section 252(d)(1) only to the extent ACS
    "chooses" to continue to offer UNEs in Anchorage. Specifically, ACS
    sought forbearance from the unbundling obligations of section
    251(c)(3) of the Act as they apply to ACS's Anchorage study area,
    and from "the application of the related Section 252(d)(1) pricing
    standards for UNEs to the extent that ACS chooses to continue to
    offer UNEs in Anchorage." ACS Petition at 1. For all of the reasons
    explained in this Order, we expressly find that ACS has satisfied
    the criteria of section 10 with respect to its obligations under
    section 252(d)(1) to the extent provided herein. Thus, in today's
    Order, we forbear from TELRIC pricing in addition to unbundling
    obligations.

[^72]: We explain our use of the term "coverage" below. *See infra*
    para. 32.

[^73]: *See* Letter from John T. Nakahata *et al.*, Counsel for General
    Communication Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket
    No. 05-281 (filed Nov. 21, 2006) (GCI Nov. 21, 2006 *Ex Parte*
    Letter) (providing loop rates applicable in Fairbanks and Juneau);
    Letter from Christopher Nierman, Counsel for General Communication
    Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281,
    Attachs. 2-4 (filed Dec. 1, 2006) (providing copies of the
    interconnection and resale agreements ACS and GCI negotiated and
    agreed to in Fairbanks).

[^74]: *See infra* para. 37.

[^75]: 47 C.F.R. §§ 51.319(b), (c); *see generally Triennial Review
    Order*, 18 FCC Rcd at 17184-199, paras. 343-58 (discussing subloop
    and NID unbundling obligations); *id*. at 17193, para. 351 (stating
    that often there is no alternative inside wiring other than the
    incumbent LEC's and "in cases where customer premises wire is not
    part of the incumbent LEC's network, hence not an inside wire
    subloop, the NID may be the sole means of accessing this customer
    premises wire").

[^76]: *See, e.g.*, GCI Haynes Decl. at 5; Letter from John T. Nakahata
    *et al.*, Counsel for General Communication Inc., to Marlene H.
    Dortch, Secretary, FCC, WC Docket No. 05-281 at 2 (filed Nov. 2,
    2006) (GCI Nov. 2, 2006 *Ex Parte* Letter) (stating that forbearance
    from loop obligations will make "essential access to cost-based
    subloops, inside wires, and NIDs to ensure that GCI can access
    buildings and inside wire to serve customers in multitenant
    environments"); Letter from Karen Brinkmann *et al.*, Counsel for
    ACS of Anchorage, Inc., to Marlene H. Dortch, Secretary, FCC, WC
    Docket No. 05-281 at 1 n.1 (filed Oct. 13, 2006) (ACS Oct. 13, 2006
    *Ex Parte*) (acknowledging that ACS provides subloops to GCI when
    GCI orders UNE loops from ACS because subloops are defined as part
    of the loop).

[^77]: *See* GCI Nov. 2, 2006 *Ex Parte* Letter at 2-3; *see also* ACS
    Reply at 17 (acknowledging that GCI sometimes uses inside wiring and
    conduit in multiunit buildings even though GCI typically uses its
    own NID when serving customers over digital local phone service
    (DLPS)); ACS Nov. 30, 2006 *Ex Parte* Letter, at 17 (stating that if
    the Commission grants forbearance from inside wire subloops and
    NIDs, GCI will still have opportunities to negotiate with ACS
    regarding such network elements).

[^78]: This is distinguishable from the circumstances in the *Qwest
    Omaha Order*, where the Commission granted relief from subloop and
    NID obligations. *Qwest Omaha Order*, 20 FCC Rcd at 19443, para. 57
    n.149. In the *Qwest Omaha Order*, the evidence was that the primary
    competitor (Cox) did not rely on UNEs, including the inside wire
    subloop and NIDs, at all, nor was there other evidence in the record
    that there was other reliance on those network elements. We are not
    persuaded that other provisions of the Act will ensure that GCI has
    access to end-user customers, and conclude that ACS has not shown
    that unbundled access to these UNEs are unnecessary to ensure that
    consumers' interests are protected. *See, e.g.*, ACS Reply at 17
    (claiming that "to the extent ACS controls access to the in-building
    wiring, any telecommunications carrier can gain access to any
    conduits, ducts and rights-of-way to which ACS has access, pursuant
    to Section 224 of the Act"). *But see, e.g.*, GCI Nov. 2, 2006 *Ex
    Parte* Letter at 3 (explaining that section 224 applies to pole,
    duct, conduit, or right-of-way and does not obligate ACS to provide
    access to subloops, inside wires, or NIDs).

[^79]: 47 U.S.C. § 160(a)(1).

[^80]: *Petition of U S WEST Communications Inc. for a Declaratory
    Ruling Regarding the Provision of National Directory Assistance*;
    *Petition of U S WEST Communications, Inc., for Forbearance*; *The
    Use of N11 Codes and Other Abbreviated Dialing Arrangements*, CC
    Docket Nos. 97-172, 92-105, Memorandum Opinion and Order, 14 FCC Rcd
    16252, 16270, para. 31 (1999).

[^81]: *See Qwest Omaha Order*, 20 FCC Rcd at 19447, 19466-70, paras.
    64, 103-10.

[^82]: *See* *Qwest Omaha Order*, 20 FCC Rcd at 19447-52, paras. 65-72;
    *see also* *Broadband 271 Forbearance Order*, 19 FCC Rcd at 21505,
    para. 21 (considering the wholesale market in conjunction with the
    retail market given the nature of relief requested). We reject ACS's
    argument that we need not consider wholesale market competition. ACS
    Reply at 20; Letter from Karen Brinkmann *et al.*, Counsel for ACS
    of Anchorage, Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket
    No. 05-281 at 4 (filed April 3, 2006). Competition in the retail
    market can be directly affected by the level of competition and the
    availability of inputs in an upstream wholesale market (*e.g.,* DS0
    and high-capacity loops). GCI Opposition at 72; GCI Borland Decl.
    para. 46; GCI Sappington Decl. para. 101; Covad Comments at 15;
    NuVox Comments at 13-14; Covad Reply at 7-8; Eschelon Reply at 5.
    Because ACS seeks forbearance for the unbundling obligation for
    wholesale services, our analysis must consider the effects a grant
    of the petition would have on consumers of retail services as well
    as consumers of wholesale services. *See, e.g*., *Qwest Omaha
    Order*, 20 FCC Rcd at 19448-49, para. 67.

[^83]: *See, e.g.*, GCI Oct. 5, 2006 *Ex Parte* Letter at 1 ("In
    Anchorage, there are only two competitors operating their own local
    switches -- GCI and ACS. GCI is clearly ACS's principal (and only
    significant) competitor in any of the Anchorage markets."); *see
    also* ACS Petition at 2-3 (stating that GCI is the only current
    purchaser of UNEs in the Anchorage study area); ACS Nov. 1, 2006 *Ex
    Parte* Letter, Attach. 1 at 2 (listing \[**confidential**\]).

[^84]: ACS claims that the Anchorage study area is among the most
    competitive telecommunications markets in the country. ACS Petition
    at 1-2 (stating that GCI currently provides local exchange and
    exchange access service to approximately half of the Anchorage local
    exchange market). ACS further contends that GCI is the largest
    broadband provider in Alaska and that, while GCI currently relies on
    UNEs and other last-mile wholesale inputs from ACS, GCI has
    announced plans to convert its local exchange service customer base
    to its own facilities. ACS Petition at 2.

[^85]: We primarily rely on ACS's and GCI's most recent data submissions
    because they have continued to refine their data submissions
    throughout this proceeding. For instance, the ACS Nov. 1, 2006 *Ex
    Parte* Letter clarifies and expands information submitted in the ACS
    Oct. 13, 2006 *Ex Parte* Letter. *Compare* ACS Nov. 1, 2006 *Ex
    Parte* Letter *with* ACS Oct. 13, 2006 *Ex Parte* Letter.

[^86]: Based upon staff calculations ACS has \[**confidential**\]
    residential retail lines, GCI has \[**confidential**\] residential
    retail lines, and other competitive LECs have \[**confidential**\]
    residential retail lines in the Anchorage study area. *See* ACS Nov.
    1, 2006 *Ex Parte* Letter, Attach. 1; GCI Oct. 24, 2006 *Ex Parte*
    Letter at Exh. V; *see also* ACS Petition, Declaration of Thomas R.
    Meade (ACS Meade Decl.) Exh. A at 3; ACS Petition, Declaration of
    David C. Blessing (ACS Blessing Decl.) Exh. E at 7. As we stated
    above, in accord with our precedent, we do not separate low-capacity
    loop unbundling requirements by whether the end user is a
    residential customer or a business customer. *See supra* note Error:
    Reference source not found. Nevertheless, because both ACS and GCI
    track their data by customer class and submitted data to us
    disaggregated by customer class and by whether a line is switched or
    non-switched, our discussion of the data submitted to us also is
    disaggregated in this manner.

[^87]: Based upon staff calculations ACS has \[**confidential**\]
    business voice-grade equivalent retail lines, GCI has
    \[**confidential**\] business voice-grade equivalent retail lines,
    and other competitive LECs have \[**confidential**\] voice-grade
    equivalent business lines. ACS Nov. 1, 2006 *Ex Parte* Letter,
    Attach. 1; GCI Oct. 24, 2006 *Ex Parte* Letter at Exhs. V and VI.
    The retail market demand for high-capacity services is relatively
    limited in the Anchorage study area. For example, ACS provides only
    \[**confidential**\] retail special access circuits in the Anchorage
    study area. ACS Nov. 1, 2006 *Ex Parte* Letter, Attach. 2 (excluding
    \[**confidential**\] special access circuits ACS sells to its long
    distance, Internet and wireless affiliates).

[^88]: GCI Oct. 24, 2006 *Ex Parte* Letter at Exhs. V and VI. We reject
    ACS's contention that the sheer fact of its line loss compels
    forbearance. *See, e.g.*, ACS Blessing Decl. at 7-8 (discussing
    ACS's drop in access lines from 1999 to 2006); ACS Nov. 1, 2006 *Ex
    Parte* Letter, Attach. 1. For instance, the abandonment of a
    residential access line does not necessarily indicate capture of
    that customer by a competitor, but may indicate that the consumer
    converted a second line used for dial-up Internet access to an
    incumbent LEC broadband line for Internet access. *See, e.g.*,
    Trends in Telephone Service, Industry Analysis Division, Wireline
    Competition Bureau, 7-1 (June 2005) (noting that the decline of
    lines provided by wireline carriers might be due to some households
    eliminating second lines when they move from dial-up Internet
    service to broadband service).

[^89]: *See* ACS Nov. 1, 2006 *Ex Parte* Letter, Attach. 1 (clarifying
    that the \[**confidential**\] switched access business lines
    provided over high-capacity circuits are provisioned over
    \[**confidential**\] DS1s); *see also* ACS Oct. 13, 2006 *Ex Parte*
    Letter, Attach. 1. ACS has explained that it does not maintain
    certain data by wire center. *See* ACS Nov. 1, 2006 *Ex Parte*
    Letter at 2 and Attach. 1 (stating that ACS does not maintain DS1
    UNE loop data by wire center); *see also* Letter from John T.
    Nakahata *et al.*, Counsel for General Communication Inc., to
    Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281 (filed Nov.
    8, 2006) (providing DS1 UNE loop data by wire center).

[^90]: ACS Petition at 16-17.

[^91]: *See, e.g.*, ACS Petition at 16 (conceding that it cannot
    determine with certainty how many customers use wireless telephony
    as a substitute for wireline service and relying upon general
    statements by industry analysts projecting wireless competition to
    grow in the future); ACS Reply Comments at 30 (Vonage and other VoIP
    providers do not currently offer local numbers in Anchorage.); GCI
    July 3, 2006 *Ex Parte* Letter at 10 (explaining that GCI's wireless
    network is limited by terrain, tree cover, and other factors; is not
    designed to replace UNEs throughout Anchorage or to provide business
    services; and that GCI would have to embark on a large-scale network
    redesign, provisioning, and installation process in order to replace
    a significant number of UNEs with wireless local loops); *see also*
    CompTel Comments at 9; Covad Comments at 26-27; Eschelon Reply at 6;
    *Qwest Omaha Order*, 20 FCC Rcd at 19452, para. 72.

[^92]: GCI Sappington Decl. at 33-34; *see also* CompTel Comments at 2;
    Covad Reply at 7; *Qwest Omaha Order*, 20 FCC Rcd at 19450, para. 68
    n.185 ("Granting Qwest forbearance from the application of section
    251(c)(3) on the basis of competition that exists only due to
    section 251(c)(3) would undercut the very competition being used to
    justify the forbearance.").

[^93]: *See* ACS Nov. 1, 2006 *Ex Parte* Letter, Attach. 1; ACS Oct. 13,
    2006 *Ex Parte* Letter, Attach. 1.

[^94]: *See* GCI Oct. 24, 2006 *Ex Parte* Letter at Exh. VI. As of
    November 2005, GCI relied on ACS for approximately
    \[**confidential**\] percent of the \[**confidential**\]
    non-switched DS1 circuits GCI provides at retail in the Anchorage
    study area. *See* GCI Zarakas Decl. Exh. II.

[^95]: *See, e.g.*, ACS Meade Decl. at paras. 4-9; ACS Oct. 13, 2006 *Ex
    Parte* Letter, Attach. 1; *see also* *supra* note Error: Reference
    source not found.

[^96]: ACS states that neither GCI nor any other carrier in Anchorage
    orders UNE transport from ACS. ACS Nov. 1, 2006 *Ex Parte* Letter at
    2.

[^97]: *See, e.g.*, *Triennial Review Order*, 18 FCC Rcd 17035-41,
    paras. 85-91.

[^98]: *Qwest Omaha Order*, 20 FCC Rcd at 19444, para. 60 n.156
    (clarifying that coverage applies to Multiple Tenant Environment
    (MTE) locations even if the building owner has not already granted
    the carrier the right to provide service within that particular
    building).

[^99]: *See infra* Part 1.(b).

[^100]: *Qwest Omaha Order*, 20 FCC Rcd at 19444, 19446, paras. 60
    n.156, 62.

[^101]: GCI Borland Decl. at para. 28 (stating that GCI's cable plant
    footprint does not cover the entirety of the ACS Anchorage study
    area).

[^102]: If we were to require that GCI's network must cover 100 percent
    of the end user locations in a wire center service area before
    granting ACS's forbearance in that wire center, ACS would only be
    entitled to forbearance relief in \[**confidential**\] wire centers
    today, despite the fact that GCI provides mass market services to
    \[**confidential**\] and relies heavily and increasingly on its own
    facilities to do so. *See* GCI July 3, 2006 *Ex Parte* Letter,
    Declaration of Alan Mitchell (GCI July 3, 2006 *Ex Parte* Mitchell
    Decl.) Exh. 1.

[^103]: GCI Opposition at 10-11.

[^104]: GCI Nov. 14, 2006 Different Record *Ex Parte* at 3, 6.

[^105]: GCI has submitted evidence that ACS is aware of the outlines of
    GCI's fiber plant, even though there is no evidence that ACS also
    knows where GCI's splice points are located or knows other detailed
    information about GCI's fiber facilities. *See* GCI Nov. 14, 2006
    Different Record *Ex Parte* Letter at 3 n.12 (citing a map of GCI's
    fiber network ACS submitted to the record). However, neither GCI nor
    ACS contends that ACS has detailed knowledge of where GCI's cable
    facilities are located -- facilities that GCI uses to compete by
    providing telecommunications services reasonably comparable to those
    offered by ACS.

[^106]: *See, e.g.*, GCI July 3, 2006 *Ex Parte* Letter, Declaration of
    G. Nanette Thompson (GCI July 3, 2006 *Ex Parte* Thompson Decl.) at
    para. 8 (agreeing that it is "technically accurate" that the RCA has
    authority to regulate rates and practices). The RCA is competent to
    address the issues over which it has jurisdiction and we therefore
    decline ACS's invitation to provide guidance to the RCA regarding
    what steps it should take following our decision today. *See* Letter
    from Karen Brinkmann, Counsel for ACS of Anchorage, Inc., to Marlene
    H. Dortch, Secretary, FCC, WC Docket No. 05-281 at 3 (filed Dec. 8,
    2006) (ACS Dec. 8, 2006 *Ex Parte* Letter) (requesting the
    Commission to provide guidance to the RCA to revisit TELRIC rates in
    certain areas of the Anchorage market); *see also* Letter from John
    T. Nakahata *et al.*, Counsel for General Communication Inc., to
    Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281 at 3 (filed
    Dec. 14, 2006) (arguing that ACS seeks higher UNE rates in what it
    claims are high-cost areas while also benefiting from higher UNE
    rates in what it claims are low-cost areas).

[^107]: *See* GCI July 3, 2006 *Ex Parte* Thompson Decl. at para. 8
    (stating that under current RCA rules, the RCA may act to deny or
    modify price changes if a complaint challenging ACS's prices is
    filed, and explaining that the RCA no longer conducts rigorous rate
    reviews of ACS's prices before they go into effect due to the extent
    of local competition).

[^108]: *See* *infra* para. 39. As discussed below, the Commission
    establishes default rates based on the rates ACS and GCI negotiated
    in Fairbanks until GCI and ACS reach an agreement to replace those
    rates, terms, and conditions.

[^109]: GCI claims that both GCI and ACS currently engage in
    customer-specific pricing for business customers in the Anchorage
    study area, and that ACS also recently obtained similar pricing
    flexibility for residential services. *See, e.g.*, GCI Nov. 14, 2006
    Different Record *Ex Parte* Letter at 3, 6 (citing ACS's
    representations submitted in a different proceeding of customer
    specific pricing in Anchorage); *see also id.* at 6 n.30 (discussing
    residential pricing flexibility). If we were to accept GCI's
    arguments that the possibility of price discrimination exists for
    any customer who is not covered by GCI's facilities, and that such
    possibility should preclude forbearance in the entire wire center
    service area where that customer is located, we would have to deny
    forbearance in any wire center service area where even a single
    customer is not covered by GCI's facilities.

[^110]: *See* ACS Sept. 20, 2006 *Ex Parte* Letter, Attach. (providing
    the Commission with a map created by ACS technicians called "GCI
    Fiber Network in Anchorage").

[^111]: *See supra* para. 32 (defining coverage). *See, e.g.*, GCI July
    3, 2006 *Ex Parte* Mitchell Decl. Exh. 1; Letter from John T.
    Nakahata *et al.*, Counsel for General Communication Inc., to
    Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281 (filed Nov.
    14, 2006) (GCI Nov. 14, 2006 Coverage *Ex Parte* Letter) Declaration
    of Alan Mitchell (GCI Nov. 14, 2006 Coverage *Ex Parte* Mitchell
    Decl.) at Exhs. 1-3; *see also* Letter from Karen Brinkmann *et
    al.*, Counsel for ACS of Anchorage, Inc., to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 05-281 at 9-17 (filed Dec. 15, 2006)
    (ACS Dec. 15, 2006 *Ex Parte* Letter), Attach. at 2-3 (arguing that
    GCI's coverage is sufficient to grant forbearance despite various
    difficulties GCI claims it faces in providing service).

[^112]: GCI Zarakas Decl. at para. 5.

[^113]: *See, e.g.*, ACS Petition, Declaration of Howard A. Shelanski
    Exh. D at 7, 9.

[^114]: *See, e.g.*, GCI Nov. 14, 2006 Coverage *Ex Parte* Letter at 2,
    *passim* (arguing that, although GCI's last-mile cable facilities
    "pass" a large number of end user locations, GCI can only be said to
    "cover" a \[**confidential**\] of locations in each of the small
    business and enterprise product markets and \[**confidential**\]
    percent of the homes after a one-to-two year transition period);
    *see also supra* Part 1 (rejecting GCI's product market analysis);
    ACN Dec. 11, 2006 *Ex Parte* Letter at 1-2.

[^115]: *See, e.g.*, GCI Opposition at 28-29; GCI July 3, 2006 *Ex
    Parte* at 24-29; GCI Nov. 14, 2006 Different Record *Ex Parte*
    Letter at 2-3, 5-6; GCI Nov. 14, 2006 Coverage *Ex Parte* Letter at
    5-6, 9-11.

[^116]: *See, e.g.*, GCI July 3, 2006 *Ex Parte* Letter at 21 (stating
    that GCI can perform node modifications and replace buried drops
    only during the shortened construction season); GCI Aug. 22, 2006
    *Ex Parte* Letter Exh. 2 at 9 (stating that "the plant upgrades
    themselves are seasonal" but the "the conversions once the plant is
    upgraded are not terribly seasonal").

[^117]: GCI claims that it historically has been able to convert
    approximately \[**confidential**\] percent of the residential lines
    within the areas served by a node within about one year of a node
    upgrade. GCI Nov. 14, 2006 Coverage *Ex Parte* Letter at 14. GCI
    also states that by the end of 2006, it already will have converted
    approximately 30,000 of GCI's lines to DLPS. *See* Letter from John
    T. Nakahata *et al.*, Counsel for General Communication Inc., to
    Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281 at 1 (filed
    Nov. 7, 2006) (GCI Nov. 7, 2006 *Ex Parte* Letter). GCI currently
    serves a total of \[**confidential**\] residential retail lines and
    \[**confidential**\] retail business lines. *See supra* para. 28.
    While GCI claims that it historically has been able to convert a
    smaller percentage of its business customers to its own facilities,
    it also has submitted evidence that \[**confidential**\]. *See* GCI
    Nov. 14, 2006 Coverage *Ex Parte* Letter, Declaration of Jonathan P.
    Wolf at 7 (GCI Nov. 14, 2006 Coverage *Ex Parte* Wolf Decl.).

[^118]: *See, e.g.*, Letter from John T. Nakahata *et al.*, Counsel for
    General Communication Inc., to Marlene H. Dortch, Secretary, FCC, WC
    Docket No. 05-281 at 1-2 (filed Dec. 6, 2006) (GCI Dec. 6, 2006 *Ex
    Parte* Letter) (arguing that granting ACS forbearance from all UNE
    access obligations would be disruptive to competition in Anchorage
    and would harm Anchorage customers). GCI anticipates moving all of
    its customers to its own facilities as quickly as it can. *See* GCI
    July 3, 2006 *Ex Parte* Letter at 16. GCI has credibly demonstrated
    that it perceives financial and business incentives to reduce "as
    fast as possible its dependence on ACS-provided UNE loops." *See,
    e.g.*, GCI July 3, 2006 *Ex Parte* Letter at 17 stating that GCI is
    "motivated to move off of ACS facilities wherever it can as quickly
    as it can because of the costs GCI can avoid and the customer
    service benefits of serving a customer entirely over GCI
    facilities").

[^119]: *See, e.g.*, ACS Dec. 15, 2006 *Ex Parte* Letter, Attach. at 5
    ("Businesses in Anchorage are relatively small, and most can be
    served using DS0 capacity lines."); Letter from Brad Mutschelknaus
    and Thomas Cohen, Counsel for XO Communications, to Marlene H.
    Dortch, Secretary, FCC, WC Docket No. 05-281, Attach. at 3 (filed
    Dec. 18, 2006) (XO Communications Dec. 18, 2006 *Ex Parte* Letter)
    (stating that the business market in Anchorage is "more DS0
    oriented"); ACS Sept. 8, 2006 *Ex Parte* Letter at 17 (stating that
    "there are very few customers in Anchorage that require multiple DS1
    and higher capacity lines"); ACS Reply Comments at 18 (noting that
    GCI has acknowledged that its enterprise customers do not purchase
    capacity higher than DS1s); ACS Sept. 8, 2006 *Ex Parte* Letter,
    Declaration of Charles L. Jackson at 5. ACS provides only
    \[**confidential**\] retail voice-grade equivalent switched access
    lines over high-capacity circuits while it provides
    \[**confidential**\] retail voice-grade equivalent lines over
    low-capacity circuits to business customers. *See* ACS Nov. 1, 2006
    *Ex Parte* Letter, Attach. 1. In addition, ACS provides only
    \[**confidential**\] retail special access circuits in the Anchorage
    study area. *See id*., Attach. 2 (excluding \[**confidential**\]
    special access circuits ACS sells to its long distance, Internet and
    wireless affiliates).

[^120]: *See, e.g.*, GCI Nov. 14, 2006 Coverage *Ex Parte* Mitchell
    Decl. Exhs. 1-3 (showing that GCI expects its cable plant node
    upgrades to be completed in the 5 wire center service areas where we
    grant relief by the end of 2006). By GCI's own estimates, its cable
    plant passes approximately \[**confidential**\] percent of GCI's
    existing residential lines and approximately \[**confidential**\]
    percent of GCI's existing business lines. *See* GCI Zarakas Decl.
    Exh. 1 at n.1; *see also* GCI July 3, 2006 *Ex Parte* Letter at 15
    (stating that GCI has last-mile facilities near approximately
    \[**confidential**\] percent of the medium and large business
    locations in Anchorage); ACS Petition at 27-28 (claiming that GCI's
    cable plant serves close to the entire Anchorage study area).

[^121]: Although GCI's fiber network is not deployed as ubiquitously as
    its cable plant, GCI's fiber facilities nevertheless cover
    approximately \[**confidential**\] percent of business locations in
    the Anchorage study area, which are the end user locations most
    likely to take services economically provided over fiber. *See,
    e.g.*, GCI Nov. 14, 2006 Coverage *Ex Parte* Letter at 9. Thus, the
    mere fact that GCI has historically been able to migrate
    \[**confidential**\] DS1 lines to its own cable facilities is not
    dispositive of whether forbearance is warranted or whether the
    coverage threshold adopted in this order is satisfied. *See, e.g.*,
    GCI July 3, 2006 *Ex Parte* Letter, Declaration of Dennis Hardman
    (GCI July 3, 2006 *Ex Parte* Hardman Decl.) at para. 4 (explaining
    that commercial deployment of products that would allow GCI to
    provide DS1 service over its cable plant is likely "a good two years
    away"); *see also* GCI Nov. 14, 2006 Coverage *Ex Parte* Letter at
    2. GCI's fiber facilities overlap to a significant degree with GCI's
    cable facilities. *See, e.g.*, GCI Mitchell Reply Decl. at para. 13.

[^122]: For instance, we see no reason why GCI could not satisfy the
    telecommunications needs of many business customers in Anchorage by
    offering cable modem service combined with multiple DLPS lines.
    *See* Letter from Karen Brinkman, Counsel for ACS of Anchorage,
    Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281 at
    2 (filed Dec. 6, 2006) (showing that GCI has approximately twice as
    many broadband lines in Alaska as ACS); XO Communications Dec. 18,
    2006 *Ex Parte* Letter, Attach. at 3 (stating that GCI dominates the
    broadband market in the Anchorage study area). We note that GCI
    could substitute its own cable facilities in certain circumstances
    where it serves multiple customers over a DS1 loop. For example, as
    ACS suggests, where GCI serves multiple nearby businesses -- each of
    which requiring voice lines and broadband Internet access -- over a
    multiplexed DS1, GCI could continue to provide service over its own
    voice and cable modem facilities. *See, e.g.*, ACS Dec. 15, 2006 *Ex
    Parte* Letter, Attach. at 2.

[^123]: GCI Haynes Decl. at para. 10; GCI July 3, 2006 *Ex Parte* Letter
    at 24-25; GCI Nov. 14, 2006 Coverage *Ex Parte* Letter at 6; GCI
    Nov. 14, 2006 Coverage *Ex Parte* Wolf Decl. at para. 4.

[^124]: *See infra* para. 41 (discussing GCI's claims that it currently
    is unable to provide symmetric high-speed service over its cable
    plant).

[^125]: We note that GCI has submitted evidence that
    \[**confidential**\] through reliance on ACS's last-mile facilities.
    *See* GCI Nov. 14, 2006 Coverage *Ex Parte* Wolf Decl. at para. 8-9;
    \[**confidential**\].

[^126]: *See* GCI July 3, 2006 *Ex Parte* Mitchell Decl. at Exh. 1.
    GCI's node upgrades are not yet complete in the Rabbit Creek and
    O'Malley wire centers. GCI stated in August 2006 that it expected to
    "complete the vast majority of node upgrades on its cable network by
    the end of 2007 and complete node upgrades by the end of 2008, which
    GCI expects will enable it to serve substantially all of its
    residential customers over its own facilities by sometime in 2008."
    GCI Aug. 22, 2006 *Ex Parte* Letter at 1-2. However, GCI more
    recently has stated that its upgrade is not progressing as quickly
    as GCI expected due to operational constraints on the speed at which
    GCI can deploy its facilities. *See* GCI Nov. 7, 2006 *Ex Parte*
    Letter. We decline to adopt ACS's suggestion that we prospectively
    grant ACS forbearance relief "automatically" once GCI's facilities
    deployment in wire center service areas where we do not grant relief
    today reaches the coverage threshold test relied on in this
    proceeding. *See* Letter from Karen Brinkmann, Counsel for ACS of
    Anchorage, Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket No.
    05-281 at 2-3 (filed Dec. 7, 2006) (ACS Dec. 7, 2006 *Ex Parte*
    Letter). ACS remains free to petition the Commission for further
    forbearance relief when it believes market conditions warrant such
    relief.

[^127]: *See* GCI July 3, 2006 *Ex Parte* Letter at 14 (stating that the
    Indian and Girdwood areas "fall outside of GCI's cable-certificated
    area and thus outside of GCI's cable facilities footprint").

[^128]: GCI generated its coverage data by relying on parcel data
    extracted from the Municipality of Anchorage geographic information
    system, which did not include data regarding Elmendorf and Fort
    Richardson because these wire center service areas are military
    bases. *See* GCI July 3, 2006 *Ex Parte* Mitchell Decl. at para. 7
    n.9.

[^129]: The Elmendorf and Fort Richardson wire centers serve less than
    \[**confidential**\] percent of all access lines in the Anchorage
    study area. *See* *id.* According to staff calculations based on the
    parties' data submissions, GCI serves over its own facilities only
    approximately \[**confidential**\] percent of the voice-grade
    equivalent switched business lines and \[**confidential**\] percent
    of the residential lines in the Elmendorf wire center service area,
    and approximately \[**confidential**\] percent market of voice-grade
    equivalent switched business lines and \[**confidential**\] percent
    of the total residential voice-grade equivalent lines in the Fort
    Richardson wire center service area. *See* ACS Nov. 1, 2006 *Ex
    Parte* Letter, Attach. 1; GCI Oct. 24, 2006 *Ex Parte* Letter,
    Attach. (updating GCI Zarakas Decl. Exhs. V and VI). ACS also
    provides wholesale special access circuits to other carriers in the
    Elmendorf and Fort Richardson wire center service areas. *See* ACS
    Nov. 1, 2006 *Ex Parte* Letter, Attach. 2. ACS contends that it is
    entitled to forbearance relief in the Elmendorf and Fort Richardson
    wire center service areas based on GCI's market share in those areas
    and illustrations of the geographic contours of GCI's facilities --
    irrespective of the number of end-user locations covered, which is
    the standard the Commission used to determine coverage in the *Qwest
    Omaha Order* and which we adopt in this proceeding as a bright-line
    threshold test. *See* Letter from Karen Brinkmann, Counsel for ACS
    of Anchorage, Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket
    No. 05-281 at 1-2 (filed Dec. 21, 2006). We are unable to discern
    from ACS's submissions the percentage of end-user locations covered
    in the Elmendorf and Fort Richardson wire center service areas, and
    therefore lack sufficient data to grant ACS's Petition in these
    service areas.

[^130]: Because no competitive carrier in the Anchorage study area
    relies on UNE transport, we see no need to condition our grant of
    forbearance of UNE transport obligations on a continuing transport
    unbundling obligation.

[^131]: *See infra* para. 43 (explaining the meaning of "legacy" loops).

[^132]: ACS and GCI each argue that it has the willingness and incentive
    to engage in commercial negotiations in the Anchorage market. ACS
    has argued throughout this proceeding that it is willing to engage
    in commercial negotiations for UNE access and has strong incentives
    to keep receiving revenue from GCI for UNEs. *See* ACS Nov. 30, 2006
    *Ex Parte* Letter at 18; *see also* ACS Petition at 3 (stating that
    if the Commission grants ACS forbearance relief, "ACS has ample
    incentive to continue offering network elements to GCI on
    negotiated, market-based terms in order to maintain the revenue
    stream"); ACS Dec. 7, 2006 *Ex Parte* Letter at 1 (claiming that ACS
    is willing to negotiate commercial agreements for UNE access and
    citing ACS's strong economic interest in maintaining GCI as a
    wholesale customer). GCI also has argued throughout this proceeding
    that it is willing to negotiate a commercial agreement for UNE
    access with ACS. *See* GCI July 3, 2006 *Ex Parte* Letter at 19-20
    (arguing that due to regulatory uncertainty and GCI's continuing
    roll-out of its own facilities that GCI has strong incentives to
    negotiate for continued UNE access in Anchorage); *see also* GCI
    Opposition at 38-41 (arguing that GCI sought to commercially
    negotiate UNE rates for Anchorage at the same time the parties
    negotiated UNE rates for Fairbanks and Juneau); GCI Opposition,
    Declaration of Blaine Brown at para. 20 (stating that GCI has "gone
    out of its way to offer ACS use of the few access lines in Anchorage
    for which GCI is the sole provider"). In light of these mutual
    representations to the Commission of a willingness to negotiate in
    good faith, we disagree that a condition to provide UNE access at a
    specific rate to which both parties have already agreed in other
    markets until a commercial agreement in this market is reached will
    result in more litigation. *See* ACS Dec. 15, 2006 *Ex Parte* Letter
    at 1 (stating that, if the Commission sets UNE rates, it could
    result in litigation and further uncertainty that might continue for
    years).

[^133]: Under the terms agreed to between ACS and GCI, the rate in
    Fairbanks for a DS0 loop is \$23.00 (compared to the Anchorage UNE
    rate of \$18.64), and the rate for a DS1 loop is \$87.93 (compared
    to the Anchorage UNE rate of \$86.23). *See* GCI Nov. 21, 2006 *Ex
    Parte* Letter at 1. *See supra* note Error: Reference source not
    found (addressing the length of this commitment). Because ACS and
    GCI each have indicated a willingness and incentive to reach
    commercial agreement, we reject ACS's request to provide for a ten
    percent annual increase in the Fairbanks rates as applied to the
    Anchorage wire center service areas where we grant ACS forbearance
    relief. *See* ACS Dec. 8, 2006 *Ex Parte* Letter at 2. Such an
    arbitrary rate of escalation could actually serve as a disincentive
    to negotiation. Similarly, and for the same reasons, we see no
    reason to grant GCI's request for a lower "blended rate" based on
    the weighted average of the rates ACS and GCI agreed to in Fairbanks
    and Juneau. *See* Letter from John T. Nakahata *et al.*, Counsel for
    General Communication Inc., to Marlene H. Dortch, Secretary, FCC, WC
    Docket No. 05-281 at 2 (filed Dec. 20, 2006) (GCI Dec. 20, 2006 *Ex
    Parte* Letter). Following our decision today, ACS and GCI will be
    free to negotiate for the terms and conditions each seeks, such as
    providing for ACS's access to GCI's facilities, and establishing
    differentiated pricing based on geographic, volume or term
    distinctions that ACS contends have not been achievable in a
    regulated environment. *See* ACS Dec. 8, 2006 *Ex Parte* Letter at
    2.

[^134]: *See* *id.* ("Negotiation of the UNE agreement in Fairbanks
    involved multiple factors, and a single term may not be meaningful
    outside the context of the entire agreement."). We clarify, however,
    that to the extent the Fairbanks agreement addresses issues other
    than UNE access, such as resale obligations, we do not condition
    forbearance on such terms. *See* Letter from John T. Nakahata,
    Counsel for General Communication Inc., to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 05-281 at 1 (filed Dec. 4, 2006)
    (stating that the Fairbanks commercial agreement is a full
    interconnection agreement that covers access to UNEs, but also,
    *inter alia*, interconnection, collocation and resale). We believe
    this condition adequately addresses issues raised by McLeodUSA.
    *See* Letter from Chris MacFarland, Group Vice President -- Chief
    Technology Officer, McLeodUSA, to Marlene H. Dortch, Secretary, FCC,
    WC Docket No. 05-281 (filed Dec. 15, 2006) (arguing that Qwest's
    non-recurring charges and special access pricing in the Omaha MSA
    following forbearance have made it difficult for McLeodUSA to
    compete in that market).

[^135]: 47 U.S.C. § 160(a)(1).

[^136]: *See, e.g.*, GCI Dec. 6, 2006 *Ex Parte* Letter at 3. GCI
    submitted evidence that ACS previously has been unwilling to
    negotiate access to unbundled loops in the absence of a regulatory
    obligation to do so. *See, e.g.*, GCI Opposition at 68-69; GCI
    Opposition, Declaration of Dana Tindall Exh. B at 9-11; GCI July 3,
    2006 *Ex Parte* Letter at 19-20; Letter from John T. Nakahata *et
    al.*, Counsel for General Communication Inc., to Marlene H. Dortch,
    Secretary, FCC, WC Docket No. 05-281 (filed Sept. 27, 2006) (GCI
    Sept. 27, 2006 *Ex Parte* Letter); GCI Dec. 20, 2006 *Ex Parte*
    Letter at 1-2 (contending that ACS has been unwilling to negotiate
    with GCI and has not responded to GCI's latest proposal "which GCI
    offered seven weeks ago"); *see also* CompTel Comments at 11
    (stating that the 271 backstop "is not available in Anchorage and
    thus the Commission can take no comfort in ACS's aspirations to
    voluntary provision UNEs in the absence of regulatory compunction");
    Covad Comments at 32; GCI Opposition at 49-51; Integra Comments at
    3; MTA Reply at 7 (urging the Commission to condition forbearance on
    assurance of good faith negotiation of commercial rates). GCI argues
    that, because ACS is not subject to section 271 obligations, the
    logic of the *Qwest Omaha Order* "requires, at a minimum, that ACS
    must continue to provide access to loops and transport under section
    251(c)(3)." GCI Reply at 19 (claiming that "were the Commission to
    forbear from section 251(c)(3), as ACS requests, there would remain
    no statutory requirement of any kind to make unbundled loops
    available, whether at a TELRIC rate or any other 'just and
    reasonable' rate"). In the *Qwest Omaha Order*, the Commission
    determined that it could grant Qwest partial forbearance from its
    section 251(c)(3) obligations because Qwest would continue to be
    subject to section 271 obligations to provide unbundled access to
    its loops and transport elements at just and reasonable prices. *See
    Qwest Omaha Order*, 20 FCC Rcd at 19446-47, 19449-50, 19452, 19455,
    paras. 62, 64, 67-68, 71, 80. We agree with USTelecom that
    forbearance should be available to non-BOC incumbent LECs even
    though they are not subject to section 271 unbundling obligations.
    USTelecom Reply at 4-5 (arguing that the "Commission must dispel any
    notion that non-RBOC ILECs are not entitled for forbearance from
    unbundling obligations because they are not subject to section
    271"). The condition we impose on ACS to provide access to its loops
    fully addresses and satisfies GCI's concern and the issue raised by
    USTelecom. Because the rates, terms and conditions of the
    commercially negotiated Fairbanks agreement will apply until ACS and
    GCI reach a commercial agreement in Anchorage, consumers in
    Anchorage are fully protected and we do not need to make any
    findings regarding ACS's and GCI's claims that the other party has
    been unwilling thus far to engage in commercial negotiations with
    GCI in Anchorage. *Compare* GCI Sept. 27, 2006 *Ex Parte* Letter at
    5 (arguing that "\[g\]iven ACS's demonstrated unwillingness to
    negotiate with GCI in a commercially reasonable manner, the
    Commission should conclude that ACS has no intention of making UNEs
    available at commercially reasonable rates if forbearance is
    granted") *with* ACS Sept. 8, 2006 *Ex Parte* Letter, Declaration of
    Thomas R. Meade at paras. 5-9 (arguing that ACS has been unable to
    reach commercial agreement in Anchorage with GCI because GCI to date
    has had little incentive to negotiate with ACS).

[^137]: GCI claims it will need to undertake a "large-scale upgrade of
    its network capacity before it can provide all of its business
    customers with DS1 services over its \[cable\] plant." GCI July 3,
    2006 *Ex Parte* Letter at 28 (contending that it will need to
    "install hundreds of additional amplifiers and upgrade thousands of
    taps to boost bandwidth capacity"). GCI also claims that upstream
    bandwidth limits limit its ability currently to provide
    high-capacity services. GCI July 3, 2006 *Ex Parte* Letter at 28;
    GCI July 3, 2006 *Ex Parte* Hardman Decl. at para. 7 (stating that
    in one node in the North wire center, "GCI can support only two DS1
    lines over its current \[hybrid fiber coaxial\] HFC plant before
    reaching upstream bandwidth limits and freezing other services,
    including video and Internet"). In addition, GCI contends that,
    until recently, there was no cable industry standard to support all
    of the features demanded by enterprise-level telecommunications
    customers. GCI Haynes Decl. at para. 22 (stating that "while some
    companies offer proprietary work-arounds to provide DS1 services
    over DOCSIS cable networks, the reality is that these work-around
    solutions are cumbersome, expensive and add additional potential
    points of service failure"); *see also* GCI July 3, 2006 *Ex Parte*
    Letter at 26 (stating that, on May 12, 2006, CableLabs issued a
    specification that purports to better support the provision of
    enterprise services over cable facilities). While GCI claims that
    CableLabs adopted a standard this year that appears to satisfy its
    concerns in this regard, we recognize that it will take some time
    before vendors incorporate this new standard into their products and
    GCI is able to begin testing these products. GCI July 3, 2006 *Ex
    Parte* Letter at 26; GCI Opposition, Declaration of Richard Dowling
    at para. 5. In light of GCI's early adoption of low-capacity cable
    telephony technology that was not adopted by a sufficient portion of
    the remainder of the nation's cable operators to remain viable, GCI
    claims that it is "wary of deploying non-standardized products
    before they are embraced by the major MSOs, which drive technology
    adoption." GCI July 3, 2006 *Ex Parte* Letter at 27.

[^138]: As noted above, our decision today addresses factors unique to
    the Anchorage study area. *See supra* note Error: Reference source
    not found.

[^139]: *Qwest Omaha Order*, 20 FCC Rcd at 19468, para. 106; *see also*
    Broadview Dec. 11, 2006 *Ex Parte* Letter at 7-9 (arguing that the
    Commission should deny forbearance relief due to the absence of a
    regulatory "backstop" like the ongoing section 271(c) access
    obligations the Commission relied on in the *Qwest Omaha Order*).

[^140]: *See* 47 U.S.C. § 271(c)(2)(B)(iv)-(v).

[^141]: *Cf.* *Broadband 271 Forbearance Order*, 19 FCC Rcd at 21505,
    para. 21. Specifically, the Commission concluded that "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." *Id.* at
    21505, para. 21; *see also* 47 U.S.C. § 157 nt (directing the
    Commission to "encourage the deployment on a reasonable and timely
    basis of advanced telecommunications capability to all Americans" by
    using regulatory measures that "promote competition in the local
    telecommunications market" and "remove barriers to infrastructure
    investment").

[^142]: In the *Triennial Review Order*, the Commission determined that
    incumbent LECs have no unbundling obligation under section 251(c)(3)
    for new fiber construction and for fiber overbuild situations where
    the incumbent LEC does not retire existing copper loops. *See
    Triennial Review Order*, 18 FCC Rcd at 17142, para. 273. The
    Commission made a similar unbundling determination regarding FTTH
    loops serving predominantly residential multiple dwelling units
    (MDUs) in the *MDU Reconsideration Order*. *Review of the [Section
    251](http://web2.westlaw.com/find/default.wl?DB=1000546&DocName=47USCAS251&FindType=L&AP=&mt=Westlaw&fn=_top&sv=Split&vr=2.0&rs=WLW5.08)
    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, Order on Reconsideration, [19 FCC Rcd 15856,
    15858, paras. 7‑9
    (2004)](http://web2.westlaw.com/find/default.wl?DB=4493&SerialNum=2004843135&FindType=Y&AP=&mt=Westlaw&fn=_top&sv=Split&vr=2.0&rs=WLW5.08).
    The Commission then determined that that fiber-to-the-curb (FTTC)
    loops are not subject to a section 251(c)(3) unbundling obligation
    in the *FTTC Reconsideration Order*. *Review of the [Section
    251](http://web2.westlaw.com/find/default.wl?DB=1000546&DocName=47USCAS251&FindType=L&AP=&mt=Westlaw&fn=_top&sv=Split&vr=2.0&rs=WLW5.08)
    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, Order on Reconsideration, 19 FCC Rcd 20293,
    20297-303, paras. 9-19 (2004). The Court of Appeals for the D.C.
    Circuit recently upheld the Commission's decision to forbear under
    section 10 from enforcing the requirements of section 271 regarding
    the broadband elements that the Commission, on a national basis,
    relieved from unbundling in the *Triennial Review Order* and
    subsequent reconsideration orders. *See Broadband 271 Forbearance
    Order*, 19 FCC Rcd at 21496, para. 1, *aff'd,* *EarthLink, Inc. v.
    FCC*, 462 F.3d 1 (D.C. Cir. 2006).

[^143]: *See* *Broadband 271 Forbearance Order*, 19 FCC Rcd at 21504,
    para. 19.

[^144]: *See, e.g.*, ACS Nov. 30, 2006 *Ex Parte* Letter at 2 ("ACS
    would prefer that a GCI customer be served using ACS's facilities to
    having that customer use GCI's network exclusively, which offers ACS
    no revenue and only a miniscule reduction in costs."). In similar
    contexts, the Commission has found additional support in
    deregulating broadband services through its expectation that the
    emerging competition from "multiple sources and technologies in the
    retail broadband market," likely would "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." *Broadband 271 Forbearance
    Order*, 19 FCC Rcd at 21508, para. 26. As it noted at the time, even
    if the Commission's prediction were wrong that competitive providers
    of retail broadband services would be able to rely on reasonably
    priced wholesale broadband offerings, these competitive providers
    would "still be able to access other network elements to compete in
    the broadband market." *Id*.

[^145]: 47 U.S.C. § 160(a)(1).

[^146]: *See, e.g.*, Covad Comments at 35; CompTel Comments at 10;
    Integra Comments at 5; TalkAmerica Comments (stating that "UNE loops
    and transport could disappear forever, anytime there was a success
    of an ILEC/Cable duopoly); Time Warner Opposition at 22.

[^147]: *Qwest Omaha Order*, 20 FCC Rcd at 19452, para. 71.

[^148]: *See Broadband 271 Forbearance Order*, 19 FCC Rcd at 21510,
    para. 29, *aff'd, EarthLink, Inc. v. FCC*, 462 F.3d at 11 (agreeing
    with the Commission that consumers sometimes are able to benefit
    from competition even when a market is comprised of only two
    competitors).

[^149]: The Commission previously has adopted transition plans in its
    various proceedings. *See, e.g.*, *Qwest Omaha Order*, 20 FCC Rcd at
    19453, para. 74; *Triennial Review Remand Order*, 20 FCC Rcd
    2639-41, paras. 195-98; *see also, e.g.,* 47 C.F.R.
    §§ 51.319(a)(4)(iii) (establishing DS1 loop transition period),
    51.319(a)(5)(iii) (establishing DS3 loop transition period),
    51.319(a)(6)(ii) (establishing dark fiber loop transition period);
    *Appropriate Framework for Broadband Access to the Internet over
    Wireline Facilities*, Report and Order and Notice of Proposed
    Rulemaking, 20 FCC Rcd 14853, 14855, para. 1 (2005), petitions for
    review pending, *Time Warner Telecom v. FCC*, No. 05-4769 (and
    consolidated cases) (3rd Cir. filed Oct. 26, 2005).

[^150]: *See* ACS Dec. 8, 2006 *Ex Parte* Letter at 1 (stating that a
    3-6 month transition period is sufficient and that ACS and GCI have
    a long history of working together to resolve operational issues).
    We disagree with GCI that a significantly longer transition period
    is required in Anchorage than the Commission adopted in Omaha in the
    *Qwest Omaha Order*, and find that the condition we impose today
    addresses the issues raised by GCI. *See* Letter from John T.
    Nakahata *et al.*, Counsel for General Communication Inc., to
    Marlene H. Dortch, Secretary, FCC, WC Docket No. 05-281 (filed Dec.
    13, 2006) (GCI Dec. 13, 2006 *Ex Parte* Letter) (seeking a two-year
    transition in the "residential market" and no forbearance with
    respect to the "small business and enterprise markets"). In
    particular, we find that the Fairbanks condition addresses GCI's
    concern that the "possibility of disruption is much higher in
    Anchorage than it was in Omaha." *See id.* at 1-2. Moreover, we
    reject GCI's argument that loops cannot be substituted
    "Anchorage-wide" within this transition period because the relief we
    grant ACS is limited to the wire centers that will be fully upgraded
    as of the end of 2006. *See id.* at 1-2.

[^151]: The Commission granted a six month transition plan in the *Qwest
    Omaha* decision, however, severe weather conditions did not exist in
    that market. *See* *Qwest Omaha Order*, 20 FCC Rcd at 19453, para.
    74. *See, e.g.*, GCI July 3, 2006 *Ex Parte*, Declaration of Kevin
    Sheridan at para. 22 (stating that the construction season extends
    from late May to September or October depending on the
    temperatures); GCI Nov. 14, 2006 Coverage *Ex Parte* Wolf Decl. at 5
    n.6 (explaining that the Municipality of Anchorage refuses to issue
    permits to occupy the rights of way -- including blocking the street
    -- from approximately October 15 to May 15 and that GCI attempts to
    use aerial drops where possible but, due to zoning restrictions and
    municipality preferences, seldom uses them); GCI Dec. 13, 2006 *Ex
    Parte* Letter at 2 (stating that, due to the shortened construction
    season in Anchorage, GCI would not be able to begin a transition to
    its own facilities until May or June -- near the end of a six-month
    transition period). In light of the obstacles GCI has identified, we
    reject ACS's suggestion that a three- to six- month transition
    period is warranted. ACS Dec. 7, 2006 *Ex Parte* Letter at 7
    (arguing that a three- to six-month transition period is sufficient
    because GCI during the winter months could lay cable drops on top of
    the ground or use temporary aerial facilities and then bury these
    facilities after the construction seasons begins in the spring).

[^152]: The Commission in the *Qwest Omaha Order* also required affected
    carriers to modify their interconnection agreements, including
    completing any change of law processes, by the conclusion of the
    transition period. *See* *Qwest Omaha Order*, 20 FCC Rcd at 19453,
    para. 74. This requirement addresses ACS's concern that the current
    language in the Anchorage interconnection agreement will pose a
    barrier to commercial negotiations. *See, e.g.*, ACS Dec. 8, 2006
    *Ex Parte* Letter at 2 (stating that the Commission should make
    clear that forbearance is effective immediately after the end of the
    transition period and to facilitate negotiation of a commercial
    agreement).

[^153]: *Qwest Omaha Order*, 20 FCC Rcd at 19453, para. 74.

[^154]: 47 U.S.C. § 160(a)(2).

[^155]: *See supra* para. 39. As explained above, we require as an
    express condition of our grant of forbearance that ACS continue to
    provide loops and certain subloops under commercially negotiated
    rates, terms, and conditions, and until then under the rates, terms,
    and conditions ACS and GCI have negotiated in Fairbanks, Alaska for
    loop access. *See* Letter from John T. Nakahata, Counsel for General
    Communication Inc., to Marlene H. Dortch, Secretary, FCC, WC Docket
    No. 05-281 at 1 (filed Dec. 5, 2006).

[^156]: We disagree with those commenters that argue GCI has simply
    chosen solely for economic reasons to use UNEs. *See, e.g.*, KPU
    Comments at 10; MTA Comments at 6 (stating, "that the record in the
    instant proceeding demonstrates that GCI has equal capability to
    that of Cox to compete with the incumbent provider on a facilities
    basis, but has elected not to do so for economic reasons"). The
    record shows that GCI continues to transition its customers from
    ACS's loops to its own facilities. *See, e.g.*, *supra* note Error:
    Reference source not found (discussing GCI's migration of customers
    from ACS's facilities to GCI's facilities).

[^157]: 47 U.S.C. § 160(b) (stating that "\[i\]f the Commission
    determines that such forbearance will promote competition among
    providers of telecommunications services, that determination may be
    the basis for a Commission finding that forbearance is in the public
    interest").

[^158]: 47 U.S.C. § 160(b).

[^159]: To the extent our predictive judgment proves incorrect, carriers
    can file appropriate petitions with the Commission and the
    Commission has the option of reconsidering this forbearance ruling.
    *See* *Federal-State Joint Board on Universal Service, Petition of
    TracFone Wireless, Inc. for Forbearance from 47 U.S.C. §
    214(e)(1)(A) and 47 C.F.R. § 54.201(i)*, CC Docket No. 96-45, Order,
    20 FCC Rcd 15095, 15099, para. 6 n.25 (2005) (conditionally granting
    a forbearance petition and stating that if the Commission's
    "predictive judgment proves incorrect and these conditions prove to
    be inadequate safeguards, then parties can file appropriate
    petitions with the Commission and the Commission has the option of
    reconsidering the forbearance ruling"); *see also* *Broadband 271
    Forbearance Order*, 19 FCC Rcd at 21509, para. 26 n.85; *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) (stating in a
    forbearance decision that to the extent carriers believe, in the
    future, that circumstances have changed and discriminatory practices
    have emerged with respect to these particular routes, they are free
    to file petitions); *CellNet Communications, Inc. v. FCC*, 149 F.3d
    429, 442 (6th Cir. 1998) (upholding the Commission's predictive
    judgment stating that "\[i\]f the FCC's predictions about the level
    of competition do not materialize, then it will of course need to
    reconsider its sunsetting provision in accordance with its
    continuing obligation to practice reasoned decision-making").

[^160]: *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); 47 C.F.R. §
    1.103(a).

[^161]: *See* 47 C.F.R. §§ 1.4, 1.13.

[^162]: *See also Concurring Statement of Commissioners Michael J. Copps
    and Jonathan S. Adelstein, Petition of Qwest Corporation for
    Forbearance Pursuant to 47 U.S.C. § 160(c) in the Omaha Metropolitan
    Statistical Area*, Memorandum Opinion and Order, FCC 05-170, WC
    Docket No. 04-223 (rel. Dec. 2, 2005) (*Qwest Omaha Order*)*.*