Before the

**Federal Communications Commission**

**Washington, D.C. 20554**

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| | In the Matters of      | * | CC Docket No. 98-184 |   |   |          |
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**MEMORANDUM OPINION AND ORDER**

**Adopted: May 19, 2003** **Released: May 20, 2003**

By the Chief, Enforcement Bureau:

**I. INTRODUCTION**

1.  In this Order, we deny Verizon Communications, Inc.'s ("Verizon")
    request to overturn or modify an Investigations and Hearings
    Division ("Division") interpretation regarding certain compliance
    requirements in the *Bell Atlantic/GTE Merger Order*.[^1]
    Specifically, we uphold the Division's interpretation of the formula
    Verizon must use to calculate certain voluntary payments that it
    makes under the *Bell Atlantic/GTE Merger Order's*
    Carrier-to-Carrier Performance Plan ("Performance Plan").

    **II. BACKGROUND**

2.  In the *Bell Atlantic/GTE Merger Order*, the Commission adopted,
    with modifications, certain voluntary conditions submitted by Bell
    Atlantic and GTE intended to mitigate any public interest harms that
    might otherwise arise from the merger.[^2] Under Condition V of the
    merger conditions -- the Performance Plan -- the merged company, now
    Verizon, must report performance measurements designed to help the
    Commission assess the quality of service elements that Verizon
    provides to competitive local exchange carriers ("CLECs").[^3] The
    Performance Plan acts as a self-executing mechanism to offset the
    risk that Verizon would discriminate against CLECs in the provision
    of unbundled network elements and other telecommunications
    services.[^4] The Performance Plan consists of two parts. First,
    Verizon must report monthly performance data that measures the
    quality of service that Verizon provides to CLECs. [^5] Second, if
    Verizon fails to meet certain performance goals established in the
    Performance Plan, it must make voluntary contributions to the U.S.
    Treasury.[^6] The merger conditions provide detailed instructions on
    how to calculate Verizon's voluntary payment obligations based on
    its monthly performance data.[^7]

3.  Verizon's compliance with the merger conditions, including the
    Performance Plan, is subject to an annual independent audit.[^8] In
    discussions with the audit staff of the Division, the independent
    auditor requested an interpretation of one provision of the
    Performance Plan's voluntary payment formula.[^9] Specifically, the
    independent auditor asked whether the payment formula for
    measurements using averages or means (*e.g.*, Trouble Duration
    Interval, OSS Response Time) permits Verizon to apply a cap---in
    addition to other caps included in the calculation formula---to a
    factor in the payment formula midway through the calculation
    process.[^10] On May 29, 2002, the Division responded that the
    formula does not allow Verizon to apply such a cap, *i.e.*, to cap
    the difference between the actual average service to CLECs and a
    certain calculated average reflecting the minimum acceptable level
    of Verizon's service.[^11] On September 20, 2002 and October 3,
    2002, Verizon submitted requests to the Bureau seeking review of the
    Division's interpretation.[^12] Verizon contends that the voluntary
    payment formula allows the use of an additional cap and that the
    Bureau should apply such a cap for Verizon because the Common
    Carrier Bureau had approved a similar cap for SBC Communications,
    Inc.'s ("SBC") Carrier-to-Carrier Performance Plan mandated by the
    *SBC/Ameritech Merger Order*.[^13]

    **III. DISCUSSION**

4.  We conclude that the merger conditions do not permit Verizon to
    apply an additional cap midway through the calculation process for
    performance measures using averages or means.[^14] In so ruling, we
    reject Verizon's claim that application of the formula without an
    additional cap will cause Verizon to make more voluntary payments
    than actual occurrences of the inadequate service. Finally, we
    disagree with Verizon that it is similarly situated to SBC, thereby
    warranting the requested cap. As discussed below, the public policy
    considerations that led to a modification of SBC's Performance Plan
    are not present here.[^15]

    **A.** ***The language and rationale of the voluntary payment
    formula do not require an additional cap to ensure that Verizon does
    not make contributions for more than the actual number of
    observations.***

5.  First, the formula for calculating voluntary payments for
    performance measurements using averages or means does not allow
    Verizon to apply an additional cap midway through the process. The
    Performance Plan requires Verizon to make voluntary payments to the
    U.S. Treasury based on the quality of its performance, the volume of
    activity in the service in question, and the dollar value assigned
    to each category of service.[^16] The Performance Plan spells out a
    four-step process for calculating the amount of Verizon's
    payments.[^17] First, Verzion must calculate the average or mean for
    the measurement that would yield a minimum acceptable value
    (referred to as "the Critical Z-value" in the technical language of
    the Performance Plan) that represents Verizon's minimum provision of
    service that, at the least, would not result in a voluntary payment
    obligation.[^18] Second -- and this is the step at issue -- Verizon
    must calculate "the percentage difference between the actual average
    and the calculated average" (*i.e.*, the "percentage difference").
    This second step measures the quality of Verizon's performance.[^19]
    Third, Verizon must multiply the total number of data points
    (*i.e.*, the volume of activity, also referred to as the number of
    "occurrences" or "observations") by the percentage difference.[^20]
    Finally, the payment formula requires Verizon to multiply the result
    derived from the previous three steps by the dollar value for each
    category of measurement.[^21] Pursuant to the merger conditions,
    Verizon must execute this process on its own and, to the extent it
    misses its minimum acceptable performance levels for three months in
    a row, make the appropriate voluntary payments to the U.S. Treasury
    by a certain deadline.[^22]

6.  In short, there is simply nothing in the plain language of the
    formula that supports Verizon's use of an additional cap in the
    second step, *i.e.*, a cap of 100% on the percentage difference in
    the second step.[^23] The merger conditions state that Verizon must
    "\[c\]alculate the percentage difference between the actual average
    and the calculated average." Nowhere does this instruction state or
    suggest that Verizon may limit the calculated result from this step
    to 100% or less. As the independent auditor correctly noted, the
    payment formula "does not explicitly cap the percentage difference
    between the actual means/averages and the relevant \[minimum
    acceptable performance value\]."[^24] We note that the merger
    conditions expressly provide for the use of caps in other aspects of
    the instructions for calculating voluntary payments.[^25] Given the
    express language of the payment formula, the omission of any
    language in the second step suggesting that an additional cap may be
    used, and the explicit provision for caps to the voluntary payments
    in other sections of the payment formula, we conclude that the
    condition does not allow the use of an additional cap.

7.  Notwithstanding the plain language of the *Bell Atlantic/GTE Merger
    Order*, Verizon argues that an additional cap in the second step is
    necessary to ensure that Verizon will not pay for more observations
    of poor performance than the number that actually occurred.[^26] As
    detailed above, the overall structure of the formula makes the
    amount of Verizon's voluntary payment a function of the minimum
    acceptable level of performance, the actual level of performance,
    the volume of activity, and the assigned dollar value for the
    measurement.[^27] In this way, the Performance Plan recognizes that
    significantly poor performance and substantial activity (*e.g*.,
    many trouble reports) warrant an appropriately larger payment to the
    U.S. Treasury.

8.  According to Verizon, because poor performance could (as a practical
    matter of mathematics) result in a final payment amount equal to a
    payment amount for a greater number of occurrences in the formula,
    Verizon argues that it should be allowed to limit the effect of its
    poor performance on its voluntary payments. In essence, Verizon is
    mixing the second and third steps of the payment formula. The steps
    in the formula must be distinguished from one another and applied in
    the proper sequence. The voluntary payment formula is precise---in
    the second step, Verizon calculates "the percentage difference"
    between its actual performance and its minimum acceptable
    performance (*i.e.*, the latter factor being the result of the first
    step). To the extent Verizon fails the minimum acceptable level of
    performance in the second step by a larger margin, the percentage
    difference will be larger, and, in turn, the voluntary payment will
    be larger. In cases of seriously poor performance, Verizon could
    calculate a percentage difference of greater than 100 percent.[^28]
    However, the second step calculation reflects only the relative
    quality of service---*i.e.*, the gap between ideal performance and
    Verizon's actual performance---and has nothing to do directly with
    the number of occurrences or observations. It is only after this
    second-step computation of the percentage difference that Verizon
    should proceed to the third step, in which it factors in the number
    of occurrences (*e.g.*, the number of trouble reports fixed during
    the reporting period). Thus, a cap on the second step percentage
    difference midway through the computation is not justified as a way
    of limiting the amount of Verizon's voluntary payments to the number
    of occurrences. Instead, the payment formula expressly provides for
    that limitation in the third step.[^29]

9.  In any case, other mechanisms under the plan address Verizon's
    concerns about excessive payments under the Performance Plan. In
    particular, Verizon's voluntary payments are capped by state and by
    time.[^30] In addition, the calculation methodology at issue -- that
    is, the very formula related to performance measurements using
    averages or means -- also protects Verizon from potential run-away
    payments by relying on the use of average performance.[^31]

    **B. *Issues of comity and administrative efficiency do not support
    the use of an additional cap*.**

10. Finally, we reject Verizon's argument that this Bureau should apply
    the same payment methodology to Verizon as the methodology applied
    to SBC pursuant to the *SBC/Ameritech Merger Order*.[^32] In its
    *October 3, 2002 Letter*, Verizon notes that the Common Carrier
    Bureau issued a letter that permitted SBC to cap the percentage
    difference in the second step, as Verizon wishes to do here.[^33] In
    that letter, however, the Common Carrier Bureau stressed that the
    plain language of the merger conditions did not permit the company
    to cap the percentage difference at the second step.[^34] As the
    Common Carrier Bureau noted, adding in another cap at the second
    step of the formula could reduce the voluntary payments paid for
    poor performance.[^35] However, the Common Carrier Bureau found
    compelling policy reasons to allow the company to apply such a cap
    because of actions taken by the Texas Public Utility Commission
    ("Texas Commission") to permit the use of such a cap for purposes of
    the Texas state plan. The Common Carrier Bureau concluded "that
    administrative efficiency would be served if SBC were permitted to
    apply this payment calculation in a fashion that mirrors the Texas
    performance plan" because part of the federal performance plans for
    most SBC states are expressly modeled after the Texas Commission
    plan.[^36]

11. Verizon argues that it is similarly situated to SBC in terms of
    comity and administrative efficiency, and that it would be
    unreasonable to permit SBC to apply an additional cap to the federal
    plans of other SBC states than Texas, while denying Verizon the
    ability to use that same cap. Verizon claims that, if the treatment
    of the federal plans in all Verizon states is not the same as the
    treatment of the federal plans in all SBC states other than Texas,
    then Verizon would be subject to an arbitrary distinction between
    similarly situated parties.[^37]

12. We reject this argument. By their express terms, the Verizon merger
    conditions require Verizon to apply the performance measurement
    plans and procedures adopted by the New York and California
    Commissions to the federal plans of the states in Verizon's service
    territory.[^38] In a similar manner, the *SBC/Ameritech Merger
    Order* conditions require SBC to apply the performance measurements
    plans and procedures adopted by the Texas Commission to the federal
    plans of ten of its thirteen states, *i.e.*, Texas, Oklahoma,
    Arkansas, Missouri, Kansas, Illinois, Michigan, Ohio, Wisconsin, and
    Indiana.[^39] Under each merger order, changes adopted by the
    relevant state commissions may be imported into the Performance Plan
    required by the federal merger conditions.[^40]

13. Unlike the circumstances facing SBC, we are not aware of any
    modifications allowing an additional cap midway through the payment
    formula in the New York or California state plans, and Verizon has
    not argued that these state commissions have made such modifications
    to their states plans. Accordingly, the considerations of comity and
    administrative efficiency on which Verizon relies are not in fact
    applicable to Verizon, and, therefore, SBC and Verizon are not
    similarly situated in the relevant sense. Furthermore, the *Bell
    Atlantic/GTE Merger Order* and the *SBC/Ameritech Merger Order* use
    different approaches to address unique harms that the Commission
    found in each case. As a result, their merger conditions differ in a
    variety of respects, including the details of the respective
    Performance Plans. We note that, to the extent the New York or
    California state commissions modify the payment formula, Verizon
    remains free to request comparable treatment at the federal level in
    accordance with the process that the Commission established in the
    merger conditions.

    **C. *Conclusion***

14. In sum, we conclude that neither the voluntary payment formula, an
    alleged excess of payments relative to occurrences, nor any comity
    or administrative considerations support allowing Verizon to cap the
    percentage difference term in the second step of the computation.
    Accordingly, we uphold the Division's earlier interpretation and
    deny Verizon's request.

# IV. ORDERING CLAUSES

15. For the reasons discussed above, IT IS ORDERED that, pursuant to
    sections 1, 4(i), and 4(j), of the Communications Act of 1934, as
    amended, 47 U.S.C. §§ 151, 154(i), 154(j), the requests dated
    September 20, 2002 and October 3, 2002, of Verizon Communications,
    Inc. ARE DENIED. IT IS FURTHER ORDERED that a copy of this Order
    shall be sent by Certified Mail/Return Receipt Requested to Verizon
    Communications, Inc., Joseph DiBella, Regulatory Counsel, 1515 North
    Courthouse Road, Suit 500, Arlington, Virginia 22201.

    FEDERAL COMMUNICATIONS COMMISSION

    David H. Solomon Chief, Enforcement Bureau

[^1]: *Applications of GTE Corporation, Transferor, and Bell Atlantic
    Corporation, Transferee, For Consent to Transfer Control of Domestic
    and International Sections 214 and 310 Authorizations and
    Application to Transfer Control of a Submarine Cable Landing
    License, CC Docket No. 98-184,* Memorandum Opinion and Order, 15 FCC
    Rcd 14032 (2000) ("*Bell Atlantic/GTE Merger Order*").

[^2]: *Id*. at para. 96. The merger conditions are contained primarily
    in Appendix D of the Merger Order.

[^3]: In particular, the Performance Plan requires Verizon to report on
    17 categories of measurements: OSS Response Time; OSS Availability;
    Order Confirmation Timeliness; Reject Timeliness; Percent Flow
    Through/Achieved Flow Through; Completed within Specified Number of
    Days (1-5 Lines); Missed Appointments; Facility Missed Orders;
    Installation Quality; Hot Cut Loops; Trouble Report Rate; Missed
    Repair Appointments; Trouble Duration Intervals; Repeat Trouble
    Reports; Percent Final Trunk Group Blockage; Collocation
    Performance; Timelines of Carrier Bill. *See id*. at Appendix D,
    Attach. A-1a, Attach. A-1b.

[^4]: *Bell Atlantic/GTE Merger Order* at para. 279-80.

[^5]: *Id*. at para. 279; *see id.* at Appendix D, para. 16 (describing
    Performance Plan), Attach. A (describing business rules for
    performance measurements). These measures were developed in state
    collaborative proceedings in New York and California under the
    auspices of their state public utility commissions. *See Bell
    Atlantic/GTE Merger Order* at para. 281.

[^6]: *Id.* at para. 280; *see id.* at Appendix D, para. 16.

[^7]: *Id*. at Appendix D, Attach. A-3, Attach. A-4, Attach. A-5.

[^8]: *Id*. at Appendix D, paras. 56-57. The audit function under the
    merger conditions was originally delegated to the Accounting
    Safeguards Division of the former Common Carrier Bureau. Effective
    March 25, 2002, this function was transferred to the Investigations
    and Hearings Division of the Enforcement Bureau. The review of
    Verizon's request for interpretation at issue here falls under that
    audit responsibility. *See Establishment of the Media Bureau, the
    Wireline Competition Bureau and the Consumer and Governmental
    Affairs Bureau, Reorganization of the International Bureau and Other
    Organizational Changes*, Order, 17 FCC Rcd 4672 (2002) (reorganizing
    the former Common Carrier Bureau into the Wireline Competition
    Bureau and delegating to the Enforcement Bureau certain audit
    functions formerly delegated to the Common Carrier Bureau). e

[^9]: *See* Letter from John Horan, PricewaterhouseCoopers, LLC, to
    Anthony Dale, Assistant Chief, Investigations and Hearings Division,
    Enforcement Bureau, FCC (April 1, 2002) ("*April 1, 2002 Auditor
    Letter*").

[^10]: *See id.* at 1-2. Verizon's voluntary payment amount is also
    subject to specific caps identified in the merger conditions and
    labeled as such. *See Bell Atlantic/GTE Merger Order* at Appendix D,
    Attach. A-4.

[^11]: *See* Letter from Maureen F. Del Duca, Deputy Chief,
    Investigations and Hearings Division, Enforcement Bureau, FCC to
    William M. Coburn and John Horan, PricewaterhouseCoopers, LLC (May
    29, 2002) ("*Division May 29, 2002 Letter*").

[^12]: *See* Letter from Joseph DiBella, Regulatory Counsel, Verizon, to
    David Solomon, Chief, Enforcement Bureau, FCC (September 20, 2002)
    ("*Verizon* *September* *20, 2002 Letter*"); Letter from Joseph
    DiBella, Regulatory Counsel, Verizon, to David Solomon, Chief,
    Enforcement Bureau, FCC (October 3, 2002) ("*Verizon* *October 3,
    2002 Letter*"). Verizon seeks Bureau review of the Division
    interpretation that will result in a formal Bureau order reviewable
    by the Commission under Section 1.115 of the Commission's rules.
    *See Verizon* *September* *20, 2002 Letter* at 1.

[^13]: *See* Applications of Ameritech Corp., Transferor, and SBC
    Communications, Inc., Transferee, For Consent to Transfer Control of
    Corporations Holding Commission Licenses and Lines Pursuant to
    Sections 214 and 310(d) of the Communications Act and Parts 5, 22,
    24, 25, 63, 90, 95 and 101 of the Commission's Rules, CC Docket
    98-141, *Memorandum Opinion and Order*, 14 FCC Rcd 14712 (1999
    ("*SBC/Ameritech Merger Order*").

[^14]: The *Bell Atlantic/GTE Merger Order*'s Performance Plan
    authorizes the use of two types of payment caps. First, the
    Performance Plan allows for "monthly state-specific caps" that
    total, across all states, as much as \$259 million in the first
    year, \$389 million in the second year, and \$516 million in the
    third year (*i.e.*, a total of up to \$1.164 billion over three
    years). *Bell Atlantic/GTE Merger Order* at para. 280. The amount of
    the monthly state-specific caps is contained in an attachment to the
    Performance Plan. *See id.* at Appendix D, Attach. A-6. Second, the
    Performance Plan allows for "Per Measurement/Per Occurrence Caps,"
    which cap the voluntary payment amount Verizon makes for each
    measurement. The amount of the Per Measurement/Per Occurrence Caps
    varies depending on the dollar value of the measurement (*i.e.*,
    High, Medium, or Low) and the size of the state in which Verizon
    failed the relevant performance standards. *See id.* at Appendix D,
    Attach. A-4.

[^15]: The practical effect of this decision applies to only a limited
    subset of measurements in the Performance Plan. Specifically, this
    decision governs the calculation of Verizon's voluntary payments for
    the three categories of performance measurements---Trouble Duration
    Interval, OSS Response Time, and Missed Appointments---that use
    averages or means. Of the 159 submetrics in the Performance Plan,
    these three categories account for eight submetrics, or 5% of the
    total. Moreover, under the terms of the merger conditions, the
    Performance Plan is no longer applicable in fourteen of Verizon's
    states. *See* Verizon No Longer Required to Report Rhode Island,
    Vermont, Maine, New Jersey, New Hampshire, Delaware, Virginia,
    Maryland, Washington D.C., and West Virginia Performance Measurement
    Results under Bell Atlantic/GTE Merger Conditions, Public Notice, DA
    03-1114 (WCB 2003). *See also* *Bell Atlantic/GTE Merger Order* at
    Appendix D, para. 17. In addition to the states listed in the
    foregoing Public Notice, Verizon no longer must report performance
    measurements for Massachusetts, Connecticut, Pennsylvania, and New
    York.

[^16]: *Bell Atlantic/GTE Merger Order* at para. 280; *see id.* at
    Appendix D, para. 16.

[^17]: The calculation formula varies slightly depending on whether the
    performance measurement uses an average (or means) or whether it
    uses some other number, such as a percentage. The payment formula
    discussed in this Order is used for the three measurements listed
    above, *i.e.,* Trouble Duration Interval, OSS Response Time, and
    Missed Appointments.

[^18]: In the technical language of the merger conditions, the Critical
    Z-value is the level at which Verizon could provide service to CLECs
    without incurring an obligation to make voluntary payments. *See
    Verizon September 30, 2002 Letter* at 2 (describing the Critical
    Z-value). In other words, the Critical Z-value establishes the
    minimum performance standard -- if Verizon's service quality drops
    below the Critical Z-value, it incurs payment obligations; if it
    meets or exceeds the Critical Z-value, Verizon incurs no payment
    obligations.

[^19]: If Verizon's performance fails to reach the minimum level by a
    wide margin, the resulting percentage difference could exceed 100%,
    and thereby yield a correspondingly large voluntary payment
    obligation. *See* paragraph 8, *infra*.

[^20]: *Bell Atlantic/GTE Merger Order* at Appendix D, Attach. A-3.
    Specifically, the language of the merger conditions states:

    > Step 1: Calculate the average or the mean for the measurement for
    > the CLEC that would yield the Critical Z-value for the third
    > consecutive month. Use the same denominator as the one used in
    > calculating the Z-statistic for the measurement.
    >
    > Step 2: Calculate the percentage difference between the actual
    > average and the calculated average (or benchmark value for
    > benchmark measures) for the third consecutive month.
    >
    > Step 3: Multiply the total number of data points by the percentage
    > calculated in the previous step. Calculate the average for three
    > months and multiply the result by \$1500, \$900, and \$600 for
    > Measurements that are designated as High, Medium, and Low
    > respectively, to determine the applicable assessment payable to
    > the U.S. Treasury for that measure.

    *Bell Atlantic/GTE Merger Order* at Appendix D, Attach. A-3 (at pg.
    A-3-4). Step 3 above actually consists of two sub-steps: (a)
    multiplying the result of Step 2 by the number of data points (also
    referred to as "occurrences" or "observations" ); and (b)
    multiplying that result by one of the three monetary amounts.

[^21]: The performance measurements are divided into three categories
    for assessing a dollar value for the purposes of voluntary payments.
    Verizon multiplies the result by \$1,500 for "High" category
    measurements, by \$900 for "Medium" category measurements, and by
    \$600 for "Low" category measurements. *See Bell Atlantic/GTE Merger
    Order* at Appendix D, Attach. A-4.

[^22]: Under the merger conditions, Verizon only makes voluntary
    contributions for poor performance if it failed the minimum
    acceptable performance levels for three months in a row. In these
    circumstances, the merger conditions require Verizon to make the
    payment approximately 60 days after the end of the three-month
    period. Thus, if Verizon misses the minimum acceptable performance
    levels for January, February, and March, it must make the correct
    voluntary payments in May.

[^23]: *Verizon September 20, 2002 Letter* at 2.

[^24]: *April 1, 2002 Auditor Letter* at 2.

[^25]: Ultimately, Verizon's voluntary payment amount is subject to the
    monthly state-specific caps and Per Measurement/Per Occurrence caps
    identified in the merger conditions and labeled as such. *See Bell
    Atlantic/GTE Merger Order* at para. 280; *see also id*. at Appendix
    D, Attach. A-4.

[^26]: *Verizon September Letter* at 2.

[^27]: *See* note 25, *supra*.

[^28]: For example, assume that, in a given month, Verizon actually
    provides circuits to CLECs in an average period of nine days and it
    provides circuits to itself in a calculated period of three days.
    Then the computation is: (\[9-3\]/3) = 2 x 100 = 200%. In these
    terms, Verizon is contending that the 200% figure reflects more
    payments than occurrences. With the proposed cap, the 200%
    difference between the actual average number of days and the
    calculated number of days would be reduced to 100%, effectively
    reducing by one-half the calculated payment.

[^29]: Verizon also claims that when it proposed the Performance Plan,
    its understanding was that payments would not exceed the
    per-occurrence amount times the number of occurrences for any
    performance measurements. *Verizon September Letter* at 2. However,
    Verizon makes no real showing that this logical and natural
    ramification of the formula was unforeseeable.

[^30]: *See* note 25, *supra*.

[^31]: By using average performance for certain measurements, the
    Performance Plan recognizes that, in many instances, Verizon may
    perform far worse than the minimum acceptable level of performance.
    At the same time, the Performance Plan recognizes that Verizon may
    perform far better than that level of performance. To implement this
    recognition, the Performance Plan only requires Verizon to make
    voluntary payments for measurements using averages or means (*e.g.*,
    Trouble Duration Interval) when Verizon's average performance falls
    below a certain specified level. In this way, the use of averages
    allows good performance to offset poor performance.

[^32]: *Verizon October 3, 2002 Letter* at 2-3.

[^33]: *Id*. at 2.

[^34]: Letter from Carol Mattey, Deputy Chief, Common Carrier Bureau,
    FCC to Caryn Moir, Vice President -- Federal Regulatory, SBC
    Telecommunications, Inc., 3 (Feb. 6, 2002). The letter states that
    "\[t\]he Performance Plan does not, on its face, cap the difference
    between the levels of service SBC provides to CLECs and the relevant
    performance standard (*i.e.*, the 'performance gap')." *Id*. at 2.

[^35]: *Id.*

[^36]: *Id.* at 2-3.

[^37]: *Verizon October 3, 2002 Letter* at 2-3, citing *Petroleum
    Communications, Inc, v. FCC*, 22 F.3d 1164, 1172 (D.C. Cir. 1994);
    *McElroy Electronics v. FCC*, 990 F.2d 1351, 1365.

[^38]: *Bell Atlantic/GTE Merger Order* at para. 281.

[^39]: *SBC/Ameritech Merger Order* at para. 379.

[^40]: *See Bell Atlantic/GTE Merger Order* at App. D, Attach. A, para.
    4 (allowing changes adopted in the New York and California state
    plans to be imported into the Verizon Performance Plan);
    *SBC/Ameritech Merger Order* at Appendix C, Attach. A, para. 4
    (allowing changes adopted in the Texas and California state plans to
    be imported into the SBC Performance Plan).