FOR IMMEDIATE RELEASE NEWS MEDIA CONTACT

September 15, 1999 Mike Balmoris (202) 418-0253

fcc PROMOTES local telecommunications competition

*Adopts Rules on Unbundling of Network Elements*

Washington, D.C. \-- The Federal Communications Commission (FCC) adopted
rules today that specify the portions of the nation's local telephone
networks that incumbent local telephone companies must make available to
competitors seeking to provide competitive local telephone service. This
FCC decision removes a major uncertainty surrounding the unbundling
obligations of the Telecommunications Act of 1996 and is expected to
accelerate the development of competitive choices in local services for
consumers. Unbundling allows competitors to lease portions of the
incumbent's network to provide telecommunications services.

Today's order responds to a U.S. Supreme Court decision which generally
affirmed the FCC's implementation of the pro-competition goals of the
Telecommunications Act, but which required the Commission to re-evaluate
the standard it uses to determine which network elements the incumbent
local phone companies must unbundle.

Today's order adopts a standard for determining whether incumbents must
unbundle a network element. Applying the revised standard, the
Commission reaffirmed that incumbents must provide unbundled access to
six of the original seven network elements that it required to be
unbundled in the original order in 1996:

(1) loops, including loops used to provide high-capacity and advanced
    telecommunications services;

(2) network interface devices;

(3) local circuit switching (except for larger customers in major urban
    markets);

(4) dedicated and shared transport;

(5) signaling and call-related databases; and,

(6) operations support systems.

The Commission determined that it is generally no longer necessary for
incumbent LECs to provide competitive carriers with the seventh element
of the original list \-- access to their operator and directory
assistance services. The Commission concluded that the market has
developed since 1996 to where competitors can and do self-provision
these services, or acquire them from alternative sources.

The Commission also concluded, in light of competitive deployment of
switches in the major urban areas, that, subject to certain conditions,
incumbent LECs need not provide access to unbundled local circuit
switching for customers with four or more lines that are located in the
densest parts of the top 50 Metropolitan Statistical Areas (MSAs).

The Commission also addressed the unbundling obligations for network
elements that were not on the original list in 1996. The Commission
required incumbents to provide unbundled access to subloops, or portions
of loops, and dark fiber optic loops and transport. In addition, the
Commission declined, except in limited circumstances, to require
incumbent LECs to unbundle the facilities used to provide high-speed
Internet access and other data services, specifically, packet switches
and digital subscriber line access multiplexers (DSLAMs). Given the
nascent nature of this market and the desire of the Commission to do
nothing to discourage the rapid deployment of advanced services, the
Commission declined to impose an obligation on incumbents to provide
unbundled access to packet switching or DSLAMs at this time. The
Commission further noted that competing carriers are aggressively
deploying such equipment in order to serve this emerging market sector.

Finally, the Commission also concluded that the record in this
proceeding does not address sufficiently issues surrounding the ability
of carriers to use certain unbundled network elements as a substitute
for the incumbent LECs' special access services. The Commission
therefore adopted a Further Notice of Proposed Rule Making (NPRM)
seeking comment on these issues.

Action by the Commission, September 15, 1999, by Third Report and Order
and Fourth Further Notice of Proposed Rulemaking in CC Docket No. 96‑98
(FCC 99‑238). Chairman Kennard, Commissioners Ness and Tristani, with
Commissioner Furchtgott-Roth concurring in part and dissenting in part
and Commissioner Powell dissenting in part. Commissioners Ness,
Furchtgott-Roth and Powell issuing statements.

-FCC-

Common Carrier Bureau Contacts:

Carol Mattey , Claudia Fox, Jake Jennings at (202) 418-1580

Report No. CC 99-41

# SUMMARY

**[Network Elements that Must be Unbundled]{.underline}**

-   [Loops]{.underline}. Incumbent local exchange carriers (LECs) must
    offer unbundled access to loops, including high-capacity lines,
    xDSL-capable loops, dark fiber, and inside wire owned by the
    incumbent LEC. The unbundling of the high frequency portion of the
    loop is being considered in another proceeding.

-   [Subloops]{.underline}. Incumbent LECs must offer unbundled access
    to subloops, or portions of the loop, at any accessible point. Such
    points include, for example, a pole or pedestal, the network
    interface device, the minimum point of entry to the customer
    premises, and the feeder distribution interface located in, for
    example, a utility room, a remote terminal, or a controlled
    environment vault. If parties are unable to reach an agreement
    pursuant to voluntary negotiations about the technical feasibility
    of unbundling the loop at a specific point, the incumbent LEC will
    have the burden to demonstrate to the state that it is not
    technically feasible to unbundle the subloop at these points.

-   [Network Interface Device (NID)]{.underline}. Incumbent LECs must
    offer unbundled access to NIDs throughout their service territory.
    The NID is a device used to connect loop facilities to inside
    wiring.

-   [Circuit Switching]{.underline}. Incumbent LECs must offer unbundled
    access to local circuit switching, except for switching used to
    serve end users with four or more lines in access density zone 1
    (the densest areas) in the top 50 Metropolitan Statistical Areas
    (MSAs), provided that the incumbent LEC provides non-discriminatory,
    cost-based access to the enhanced extended link. (An enhanced
    extended link (EEL) consists of a combination of an unbundled loop,
    multiplexing/concentrating equipment, and dedicated transport. The
    EEL allows new entrants to serve customers without having to
    collocate in every central office in the incumbent's territory.)

-   [Interoffice Transmission Facilities]{.underline}. Incumbent LECs
    must unbundle dedicated interoffice transmission facilities, or
    transport, including dark fiber. Incumbent LECs must also unbundle
    shared transport (or interoffice transmission facilities that are
    shared by more than one carrier, including the incumbent) where
    unbundled local circuit switching is provided.

-   [Signaling and Call-Related Databases]{.underline}. Incumbent LECs
    must unbundle signaling links and signaling transfer points (STPs)
    in conjunction with unbundled switching, and on a stand-alone basis.
    Incumbent LECs must also offer unbundled access to call-related
    databases, including, but not limited to, the Line Information
    database (LIDB), Toll Free Calling database, Number Portability
    database, Calling Name (CNAM) database, Operator Services/Directory
    Assistance databases, Advanced Intelligent Network (AIN) databases,
    and the AIN platform and architecture. The Commission found that
    incumbent LECs need not unbundle certain AIN software.

-   [Operations Support Systems (OSS)]{.underline}. Incumbent LECs must
    unbundle OSS throughout their service territory. OSS consists of
    pre-ordering, ordering, provisioning, maintenance and repair, and
    billing functions supported by an incumbent LEC's databases and
    information. The OSS element includes access to all loop
    qualification information contained in any of the incumbent LEC's
    databases or other records needed for the provision of advanced
    services.

    **[Network Elements that Need Not be Unbundled]{.underline}**.

-   [Operator Services and Directory Assistance (OS/DA)]{.underline}.
    Incumbent LECs are not required to unbundle their OS/DA services
    pursuant to section 251(c)(3), except in the limited circumstance
    where an incumbent LEC does not provide customized routing to a
    requesting carrier to allow it to route traffic to alternative OS/DA
    providers. Operator services are any automatic or live assistance to
    a consumer to arrange for billing or completion of a telephone call.
    Directory assistance is a service that allows subscribers to
    retrieve telephone numbers of other subscribers. Incumbent LECs,
    however, remain obligated under the non-discrimination requirements
    of section 251(b)(3) to comply with the reasonable request of a
    carrier that purchases the incumbents' OS/DA services to rebrand or
    unbrand those services, and to provide directory assistance listings
    and updates in daily electronic batch files.

-   [Packet Switching]{.underline}. Incumbent LECs are not required to
    unbundle packet switching, except in the limited circumstance in
    which a requesting carrier is unable to install its Digital
    Subscriber Line Access Multiplexer (DSLAM) at the incumbent LEC's
    remote terminal, and the incumbent LEC provides packet switching for
    its own use. Packet switching involves the routing of individual
    data message units based on address or other routing information and
    includes the necessary electronics (*e.g*., DSLAMs).

**[Modification of the National List]{.underline}**.

-   The Order recognizes that rapid changes in technology, competition,
    and the economic conditions of the telecommunications market will
    require a reevaluation of the national unbundling rules
    periodically. In order to encourage a reasonable period of certainty
    in the market, the Commission expects to reexamine the national list
    of unbundled network elements in three years.

-   The Order permits state commissions to require incumbent LECs to
    unbundle additional elements as long as the obligations are
    consistent with the requirements of section 251 and the national
    policy framework instituted in this Order. The Order further
    concludes that the goals of the Act will better be served if network
    elements are not removed from the unbundling obligations of the Act
    on a state-by-state basis, at this time.

    **[Combinations of Network Elements]{.underline}**.

-   Pursuant to section 51.315(b) of the Commission's rules, incumbent
    LECs are required to provide access to combinations of loop,
    multiplexing/concentrating equipment and dedicated transport if they
    are currently combined.

-   The Order does not address whether an incumbent LEC must combine
    network elements that are not already combined in the network,
    because that issue is pending before the Eighth Circuit Court of
    Appeals.

    [**Further Notice: Use of Unbundled Network Elements to Provide
    Exchange Access Service**.]{.underline}

-   The Commission sought comment on the legal and policy bases for
    precluding requesting carriers from substituting dedicated transport
    for special access entrance facilities.