**JOINT STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS AND\
COMMISSIONER JONATHAN S. ADELSTEIN,**

**CONCURRING**

Re: *In the Matter of Petition of Qwest Communications International
Inc. for Forbearance from Enforcement of the Commission's Dominant
Carrier Rules as They Apply After Section 272 Sunset*, WC Docket No.
05-333

In this Order, the Commission conditionally grants forbearance to allow
Qwest to provide long distance services on an integrated basis and
subject to non-dominant carrier regulations. We support a conditional
grant of relief here because the Commission must take into account the
rapidly changing long distance market and the unique competitive
position of the petitioner, and because this outcome is clearly superior
to allowing this petition to be granted by Commission inaction without
the safeguards described below. This Commission repeatedly has
recognized that Section 272 provides for structural and accounting
safeguards that form the principal guarantees against improper
accounting practices and cross-subsidization. We concur because we
remain concerned that the Commission has not completed its industry-wide
review of these issues and does not have in place a comprehensive
mechanism for monitoring changes in the marketplace (*e.g.*, in the long
distance, wireless, and access markets) that would enable the Commission
to reliably make decisions in this area.[^1]

Nearly four years ago the Commission issued the *Section 272 Sunset
Further Notice*, which was the second notice seeking comment on changes
to the long distance market and the appropriate regulatory framework for
carriers like the petitioner. That proceeding -- much like this
forbearance petition -- addresses the important issue of what rules
should govern Bell Operating Companies' (BOCs) provision of long
distance services after the sunset of the Section 272 separate affiliate
and related requirements. While we recognize that Congress specifically
contemplated that Section 272's separate affiliate and related
requirements sunset after three years, we have repeatedly urged the
Commission to engage in a rigorous analysis of the need for alternative
safeguards on an industry-wide basis.[^2] Yet, rather than complete this
rulemaking, the Commission adopts through this Order a combination of
conditions -- some voluntarily offered, others not -- in order to
facilitate the grant of a forbearance petition, which would raise
serious questions if granted as filed.[^3]

Although we would have preferred the Commission complete its Section 272
sunset proceeding, we recognize the efforts undertaken here to conduct a
rigorous market analysis to provide a picture of petitioner's unique
circumstances and the competitive landscape in which it operates.
Indeed, there are notable changes to the long distance market in
petitioner's territory that the Commission must account for. For many,
though not all, consumers, the available options are being reshaped by
the rise of wireless, cable, and over-the-top VoIP services. We have
also seen an increasing trend toward the availability and desirability
of bundled services. We appreciate that this Order acknowledges these
developments and takes steps to adjust our regulatory framework
accordingly. In particular, we find persuasive the relative market
shares of the petitioner in the long distance, and, in particular, the
wireless market, which make potential unlawful discrimination less
likely and relief more compelling in this case.

At the same time, it is not clear that all customers have benefited as
dramatically from these changes, as many customers lack an effective
choice of providers due to price or availability. It is imperative that
the Commission remain vigilant about the continued evolution of this
market. The most notable change in the long distance market, of course,
is the entry of the BOCs such as the petitioner, which less than 5 years
ago did not even compete in the long distance market. It therefore is
important to remember that the market share levels analyzed in this
Order have developed from a zero-baseline over a relatively short period
of time. We have also seen increasing consolidation in this industry,
including the merger of the two largest independent long distance
companies into the two largest incumbent LECs. There have also been
recent suggestions that the pricing for bundled services is evolving in
a duopolistic manner, with higher prices for consumers.[^4] We have
repeatedly stated that competition must mean more for consumers than a
choice between two providers, a cable and telephone company, and such a
result would be an unfortunate back-sliding for long distance customers.

We appreciate that the Commission does adopt some notable and necessary
safeguards in this Order to address some of these concerns. We were
particularly pleased that the petitioner has committed to offering
certain calling plans targeted for residential consumers who make
relatively few long distance calls and to provide call detail
information to enable consumers to make informed decisions about the
most cost effective long distance plans. Regrettably, the needs of low
volume consumers are often overlooked, although they have a real need
for our vigilance.

This Order also makes some important findings with respect to the
potential for price and performance discrimination. Notably, the Order
acknowledges that incumbent providers like the petitioner retain the
ability to raise their rivals' costs, and the Order maintains dominant
carrier regulation for critical access services used by alternative long
distance providers. The Order correctly concludes that certain
requirements of Section 272 will continue to apply and adopts rules for
imputation and reporting that should help the Commission and competitors
evaluate whether the petitioner is engaging in price discrimination. In
addition, we are pleased that petitioner has committed to comply with
special access performance metrics to ensure that it does not engage in
non-price discrimination in its provision of special access services.

Although these conditions may not be tailored in exactly the manner we
would have crafted, their adoption is certainly preferable to the
granting of the forbearance petition as filed. It is imperative for the
Commission to monitor the effect of these safeguards, and we encourage
the Commission to diligently verify whether its predictions about their
sufficiency are accurate. In the meantime, we again encourage the
Commission to return to its consideration of the Section 272 sunset
rulemaking proceeding expeditiously and to evaluate the need for
rigorous and more lasting conditions than the voluntary, time-limited
conditions offered here.

[^1]: *See Joint Statement of Commissioner Michael J. Copps and
    Commissioner Jonathan S. Adelstein, Concurring, Section 272(f)(1)
    Sunset of the BOC Separate Affiliate and Related Requirements*,
    Further Notice of Proposed Rulemaking, WC Docket No. 02-112, FCC
    03-111 (May 19, 2003) ("*Section 272 Sunset Further Notice*").

[^2]: Such an approach is also contemplated in the statute, which
    specifically preserves the Commission's ability to prescribe
    safeguards consistent with the public interest. *See* 47 U.S.C. §
    272(f)(3).

[^3]: While these conditions help to mitigate the concerns we have
    regarding petitioner's market power and the impact of integrating
    their businesses on residential and business consumers, petitioner
    does not exist in a vacuum and the question of whether these
    conditions are appropriate on an industry-wide basis is not before
    us. The fact may well be that they are insufficient as applied to
    the situation of industry participants not present here.

[^4]: *See* "Battle for the Bundle, 4Q06 Wireline Pricing Trends: Bells
    Turn the Corner on Price, Voice, & Data Bundles Up Y/Y", Bank of
    America (Jan. 24, 2007) (noting that "data appear to support our
    view that the emerging cable/telecom competitive price structure is
    unfolding in a duopolistic manner").