**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

In the Matters of )

)

Deployment of Wireline Services Offering ) CC Docket No. 98-147

Advanced Telecommunications Capability )

)

Petition of Bell Atlantic Corporation ) CC Docket No. 98-11

For Relief from Barriers to Deployment of )

Advanced Telecommunications Services )

)

Petition of U S WEST Communications, Inc. ) CC Docket No. 98-26

For Relief from Barriers to Deployment of )

Advanced Telecommunications Services )

)

Petition of Ameritech Corporation to ) CC Docket No. 98-32

Remove Barriers to Investment in )

Advanced Telecommunications Technology )

)

Petition of the Alliance for Public ) CCB/CPD No. 98-15

Technology Requesting Issuance of Notice ) RM 9244

of Inquiry and Notice of Proposed )

Rulemaking to Implement Section 706 of )

the 1996 Telecommunications Act )

)

Petition of the Association for Local ) CC Docket No. 98-78

Telecommunications Services (ALTS) for a )

Declaratory Ruling Establishing Conditions )

Necessary to Promote Deployment of )

Advanced Telecommunications Capability )

Under Section 706 of the Telecommunications )

Act of 1996 )

)

Southwestern Bell Telephone Company, ) CC Docket No. 98-91

Pacific Bell, and Nevada Bell Petition for )

Relief from Regulation Pursuant to Section )

706 of the Telecommunications Act of 1996 )

and 47 U.S.C. § 160 for ADSL )

Infrastructure and Service )

**ORDER ON RECONSIDERATION**

**Adopted: August 3, 2000 Released: August 4, 2000**

Before the Commission:

# INTRODUCTION

1.  On September 8, 1998, Bell Atlantic and SBC filed petitions for
    reconsideration of two aspects of our *Advanced Services First
    Report and Order*.[^1] Petitioners challenge our determination that
    section 706(a) of the Telecommunications Act of 1996 (1996 Act) does
    not constitute an independent grant of forbearance authority.[^2]
    Petitioners also challenge our determination that, under then
    existing rules, incumbent local exchange carriers (LECs) must
    provide unbundled loops conditioned to carry advanced services, even
    if the incumbent is not itself providing such services.[^3] For the
    reasons set forth below, we deny Bell Atlantic\'s and SBC\'s
    petitions.[^4]

# BACKGROUND

2.  Sections 251(c)(3) and (4) of the Communications Act of 1934, as
    amended, (Communications Act) require all incumbent LECs, including
    the Bell Operating Companies (BOCs), to provide nondiscriminatory
    access to unbundled network elements and to offer for resale, at
    wholesale rates, any telecommunications service the carrier provides
    at retail.[^5] Section 271(b)(1) provides that a BOC or BOC
    affiliate \"may provide interLATA services originating in any of its
    in-region States\" only \"if the Commission approves the application
    of such company for such State under \[section 271(d)(3)\].\"[^6]
    Under section 271(d)(3), the Commission may grant a BOC
    authorization to originate in-region, interLATA services only if it
    finds that the BOC has met the competitive checklist set forth in
    section 271(c)(2)(B) and other statutory requirements.[^7]

3.  Section 706(a) instructs the Commission and each state commission to
    \"encourage the deployment on a reasonable and timely basis of
    advanced telecommunications capability to all Americans . . . by
    utilizing, in a manner consistent with the public interest,
    convenience, and necessity, price cap regulation, regulatory
    forbearance, measures that promote competition in the local
    telecommunications market, or other regulating methods that remove
    barriers to infrastructure investment.\"[^8]

4.  Section 10 of the Communications Act requires the Commission to
    forbear from applying any regulation or any provision of the
    Communications Act to telecommunications carriers or
    telecommunications services, or classes thereof, if the Commission
    determines that certain conditions are satisfied.[^9] Section 10(d)
    specifies, however, that \"\[e\]xcept as provided in section 251(f),
    the Commission may not forbear from applying the requirements of
    section 251(c) or 271 under subsection (a) of this section until it
    determines that those requirements have been fully
    implemented.\"[^10] Section 10(e) provides that \"\[a\] State
    commission may not continue to apply or enforce any provision of
    this Act that the Commission has determined to forbear from applying
    under subsection (a).\"[^11]

5.  In the *Advanced Services Order*, we addressed, among other matters,
    petitions in which several BOCs, including Bell Atlantic and SBC,
    had requested that the Commission forbear from applying the
    provisions of sections 251(c) and 271 to their advanced services. In
    rejecting those requests, we explained in detail why, in light of
    the statutory language, the framework of the 1996 Act, its
    legislative history, and Congress\' policy objectives, the most
    logical statutory interpretation is that section 706(a) does not
    constitute an independent grant of authority.[^12] We concluded that
    the better interpretation of section 706(a) is that it directs us to
    use, among other authority, our forbearance authority under section
    10(a) to encourage the deployment of advanced services.[^13] We also
    recognized that section 10(d) precludes us from using our authority
    under section 10(a) to forbear from applying the requirements of
    section 251(c) or 271 prior to their full implementation.[^14]
    Because the BOCs had not suggested that either section 251(c) or 271
    had been fully implemented and because we had no record on which to
    determine that either had been fully implemented, we denied the
    BOCs\' requests that we forbear from applying sections 251(c) and
    271 to their advanced services operations.[^15]

# DISCUSSION

## Forbearance Authority

6.  In their petitions for reconsideration, Bell Atlantic and SBC
    challenge our determination in the *Advanced Services Order* that
    section 706(a) does not constitute an independent grant of
    forbearance authority. To a large extent, these challenges merely
    reiterate arguments that we fully addressed and properly rejected in
    the *Advanced Services Order*. We do not revisit those arguments
    here. Petitioners also present what amounts to a circular argument.
    They assume that section 706(a) grants independent forbearance
    authority. They then argue that this assumed authority cannot be
    subject to the limitations on forbearance stated in section 10(d)
    because the language of section 10(d) makes clear that those
    limitations come into play only with regard to forbearance \"*under
    subsection (a)*\" of section 10.[^16]

7.  This argument must fail because the language of section 10(d) has no
    bearing on whether section 706(a) constitutes an independent grant
    of forbearance authority in the first instance. As we determined in
    the *Advanced Services Order*, the text of section 706(a) does not
    make clear whether Congress intended that provision to constitute an
    independent grant of forbearance authority, rather than a directive
    that the Commission use forbearance authority granted elsewhere in
    encouraging the deployment of advanced services.[^17] It was this
    lack of clarity that made it necessary for us to examine, in the
    *Advanced Services Order*, the relationship between section 706(a)
    and section 10(d).[^18] For the reasons stated in that *Order*, we
    continue to believe that the broader statutory scheme makes clear
    that section 706(a) does not constitute an independent grant of
    forbearance authority.[^19]

8.  SBC also challenges our conclusion, in the *Advanced Services
    Order*, that the reference to \"regulatory forbearance\" in section
    706(a) directs us to use, among other authority, our forbearance
    authority under section 10(a) to encourage the deployment of
    advanced services.[^20] According to SBC, this conclusion
    essentially guts that reference of any meaning. SBC states that,
    because the preamble to the 1996 Act lists encouraging \"the rapid
    deployment of new telecommunications technologies\" as a statutory
    purpose, Congress had no need to enact section 706(a) simply to
    articulate a preference for speedy deployment of advanced
    services.[^21] Like other provisions of the 1996 Act,[^22] however,
    section 706(a) gives considerable specificity to statutory purposes
    stated in general terms in the preamble.

9.  In the *Advanced Services Order*, we concluded that interpreting
    section 706(a) as not providing the statutory authority to forbear
    from sections 251(c) and 271 will better promote Congress\'
    objectives in the 1996 Act than would a contrary
    interpretation.[^23] SBC contends that this conclusion cannot be
    correct because \"Congress designed sections 251(c) and 271
    specifically to open to competition the markets for conventional
    local exchange service\" and was not concerned with promoting
    competition for advanced services as well.[^24] In the *Advanced
    Services Remand Order*,[^25] we determined that incumbent LECs are
    subject to section 251(c) in their provision of advanced
    services.[^26] For the reasons stated in that *Order*, SBC\'s
    argument regarding sections 251(c) and 271 provides no reason to
    alter our conclusion that section 706(a) does not constitute an
    independent grant of forbearance authority.

## Loop Conditioning

10. In the *Advanced Services Order*, we concluded that the rules
    adopted in the *Local Competition First Report and Order* require
    that, to the extent technically feasible, an incumbent LEC must
    provide to competing carriers unbundled loops conditioned to carry
    advanced services, even if the incumbent is not itself providing
    such services.[^27] Bell Atlantic and SBC seek reconsideration of
    this conclusion. They argue that it is inconsistent with the
    decision of the United States Court of Appeals for the Eighth
    Circuit in *Iowa Utilities Board*.[^28]

11. In our *UNE Remand Order*,[^29] we concluded that a loop
    conditioning requirement is consistent with this Eighth Circuit
    decision and that incumbent LECs must provide requesting carriers
    with unbundled access to local loops conditioned to provide advanced
    services. For the reasons stated in that *Order*, we deny Bell
    Atlantic and SBC\'s request that we reconsider the loop conditioning
    requirement.

# ORDERING CLAUSE

12. Accordingly, IT IS ORDERED, pursuant to sections 1-4, 10, 201, 202,
    251-254, 271, and 303(r) of the Communications Act of 1934, as
    amended, 47 U.S.C. §§ 151-154, 160, 201, 202, 251-254, 271, and
    303(r), that the Petitions for Reconsideration filed September 8,
    1998, by Bell Atlantic and SBC ARE DENIED.

    FEDERAL COMMUNICATIONS COMMISSION

    Magalie Roman Salas

Secretary

# APPENDIX A \-- LIST OF PARTIES SUBMITTING

**COMMENTS AND REPLIES REGARDING**

**PETITIONS FOR RECONSIDERATION**

**Comments**

1\. Allegiance Telecom, Inc.

2\. Association for Local Telecommunications Services

3\. AT&T Corporation

4\. BellSouth Corporation

5\. Commercial Internet eXchange Association

6\. Competitive Telecommunications Association

7\. Covad Communications Company

8\. CTSL, Inc.

9\. DSL Access Telecommunications Alliance

10\. espire Communications, Inc.

11\. GST Telecom Inc. and KMC Telecom Inc.

12\. Hyperion Telecommunications, Inc.

13\. Level 3 Communications, Inc.

14\. MCI WorldCom, Inc.

15\. Network Access Solutions, Inc.

16\. Qwest Communications Corporation

17\. RCN Telecom Services, Inc.

18\. Sprint Corporation

19\. Telecommunications Resellers Association

20\. Transwire Communications, Inc.

21\. xDSL Networks, Inc.

**Replies**

1\. Bell Atlantic

2\. Commercial Internet Exchange Association

3\. CTSI, Inc.

4\. DSL Access Telecommunications Alliance

5\. KMC Telecom, Inc.

6\. National Cable Television Association

7\. Nextlink Communications, Inc.

8\. Florida Digital Network, Inc.

9\. RCN Telecom Services, Inc.

10\. SBC Communications, Inc., Southwestern Bell Telephone Company,
Pacific Bell, and Nevada Bell (SBC)

11\. Telehub Network Services Corporation

[^1]: *Deployment of Wireline Services Offering Advanced
    Telecommunications Capability*, CC Docket Nos. 98-147, *et al.,*
    Memorandum Opinion and Order, and Notice of Proposed Rulemaking, 13
    FCC Rcd 24012 (1998) (*Advanced Services Order*), *remanded U S WEST
    Communications, Inc. v. FCC*, No. 98-1410 (D.C. Cir. Aug. 25, 1999)
    (granting the Commission's motion for remand), *on remand* 15 FCC
    Rcd 385 (1999) (*Advanced Services Remand Order*, *appeals pending
    sub nom.* *MCI* *WorldCom*, *et al. v. FCC*, Nos. 00-1002, *et al*.
    (D.C. Cir. filed Jan. 3, 2000).

[^2]: Pub.L. 104‑104, Title VII, § 706(a), Feb. 8, 1996, 110 Stat. 153,
    *reproduce*d in notes under 47 U.S.C. § 157.

[^3]: For purposes of this order, we use the term \"advanced services\"
    to mean wireline, broadband telecommunications services. Today\'s
    broadband services include services that based on digital subscriber
    line technologies (commonly referred to as xDSL), such as ADSL
    (asymmetric digital subscriber line) and HDSL (high-speed digital
    subscriber line).

[^4]: An appendix to this *Order* lists the parties filing comments and
    replies in response to these petitions for reconsideration.

[^5]: *See* 47 U.S.C. §§ 251(c)(3), (4).

[^6]: 47 U.S.C. § 271(b)(1). Section 3(25) of the Communications Act
    defines local access and transport area (LATA) as:

    \[A\] contiguous geographic area \--

    > \(A\) established before the date of enactment of the
    > Telecommunications Act of 1996 by a Bell operating company such
    > that no exchange area includes points within more than 1
    > metropolitan statistical area, consolidated metropolitan
    > statistical area, or State, except as expressly permitted under
    > the AT&T Consent Decree; or
    >
    > \(B\) established or modified by a Bell operating company after
    > such date of enactment and approved by the Commission.

    47 U.S.C. § 153(25).

[^7]: 47 U.S.C. § 271(d)(3).

[^8]: 47 U.S.C. § 157 note.

[^9]: 47 U.S.C. § 160.

[^10]: 47 U.S.C. § 160(d).

[^11]: 47 U.S.C. § 160(e).

[^12]: *Advanced* *Services* *Order*, 13 FCC Rcd at ¶¶ 69-79.

[^13]: *Id.* at ¶ 77.

[^14]: *Id.* at ¶¶ 72 & 77.

[^15]: *Id.* at ¶ 77.

[^16]: Bell Atlantic Petition at 6; SBC Petition at 6-9.

[^17]: *Advanced* *Services* *Order*, 13 FCC Rcd at ¶ 70.

[^18]: *See id.* at ¶ 71.

[^19]: *Id.* at ¶¶ 72-74.

[^20]: *Id.* at ¶ 77.

[^21]: SBC Petition at 7 (*quoting* Pub. L. No. 104‑104, 110 Stat. 56
    (1996)).

[^22]: *See*, *e.g.*, 47 U.S.C.* *§ 254.

[^23]: *Advanced* *Services* *Order*, 13 FCC Rcd at ¶ 76.

[^24]: SBC Petition at 8.

[^25]: *Advanced Services Remand Order,* 15 FCC Rcd at ¶¶ 7-14.

[^26]: We note that this determination is on appeal.

[^27]: *Advanced* *Services* *Order*, 13 FCC Rcd at ¶ 53. (*quoting
    Implementation of the Local Competition Provisions in the
    Telecommunications Act of 1996*, CC Docket No. 96‑98, First Report
    and Order, 11 FCC Rcd 15499, 15692, ¶ 382 (1996) (*Local Competition
    First Report and Order*), *aff\'d in part and vacated in part sub
    nom. Competitive Telecommunications Ass\'n v. FCC*, 117 F.3d 1068
    (8th Cir. 1997) & *Iowa* *Util. Bd. v. FCC*, 120 F.3d 753 (8th Cir.
    1997), *affirmed in part, reversed in part, and remanded sub nom.
    AT&T v. Iowa Util. Bd*., 119 S.Ct at 721, 726-38 (1999) (*Iowa
    Utilities Board*), *aff'd in part and vacated in part sub nom. Iowa
    Util. Bd. v.* FCC, No*.* 96-3321 (8th Cir. July 18, 2000), *Order on
    Reconsideration*, 11 FCC Rcd 13042 (1996) (*Local Competition First
    Reconsideration Order*), *Second Order on Reconsideration*, 11 FCC
    Rcd 19738 (1996) (*Local Competition Second Reconsideration Order*),
    *Third Order on Reconsideration and Further Proposed Rulemaking*, 12
    FCC Rcd 12460 (1997) (*Local Competition Third Reconsideration
    Order*), *further recon. pending*.

[^28]: Bell Atlantic Petition at 3-4; SBC Petition at 4-5.

[^29]: *Implementation of the Local Competition Provisions of the
    Telecommunications Act of 1996*, Third Report and Order and Fourth
    Further Notice of Proposed Rulemaking, CC Docket No. 96-98, FCC
    99-238, at ¶¶ 172-73 (rel. Nov. 5, 1999) (*UNE Remand Order*) ),
    *appeals pending sub nom*. *USTA, et al. v. FCC*, Nos. 00-1015, *et
    al*. (D.C. Cir. filed Jan. 19, 2000).