*Pages 1--28 from  Microsoft Word - 44213.doc*
 Federal  Communications  Commission  FCC  04-  248 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 


 In  the  Matter  of 
 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  No.  01-  338 
 CC  Docket  No.  96-  98 
 CC  Docket  No.  98-  147 


 ORDER  ON  RECONSIDERATION 
 Adopted:  October  14,  2004  Released:  October  18,  2004 


 By  the  Commission:  Chairman  Powell,  Commissioners  Abernathy,  and  Martin  issuing  separate  statements;  Commissioner  Adelstein  concurring  in  part,  dissenting  in  part  and  issuing  a  statement;  Commissioner  Copps 
 dissenting  and  issuing  a  statement. 


 I.  INTRODUCTION 
 1.  In  this  Order,  we  address,  in  part,  BellSouths  and  SureWests  petitions  for  reconsideration  of  our  Triennial  Review  Order.  Specifically,  we  conclude  that  fiber-  to-  the  curb  (FTTC)  loops  shall  be 
 subject  to  the  same  unbundling  framework  that  the  Commission  established  for  fiber-  to-  the-  home  (FTTH)  loops.  1  We  also  clarify  that  incumbent  LECs  are  not  required  to  add  TDM  capabilities  into  new 
 packetized  transmission  facilities. 


 1  FTTC  loop  deployments  bring  fiber  from  the  central  office  to  a  location  near    but  not  all  the  way  to    the 
 customers  premises.  The  fiber  is  connected  to  an  optical  network  unit  (ONU)  or  similar  electronics  at  that  location,  from  which  copper  and,  often,  coaxial  cable  are  connected  to  each  customer  premises  to  provide  voice, 


 multichannel  video,  and  high-  speed  data  services.  An  ONU  typically  serves,  for  example,  eight  to  12  homes.  Letter  from  Glenn  Reynolds,  Vice  President    Federal  Regulatory,  BellSouth  to  Marlene  H.  Dortch,  Secretary,  FCC,  CC 
 Docket  No.  01-  338,  Att.  at  6  (filed  Sept.  17,  2003);  BellSouth  Petition  at  2-  6. 
1
 Federal  Communications  Commission  FCC  04-  248 
 2 
 II.  DISCUSSION 
 A.  Fiber-  to-  the-  Curb  Loops 
 1.  Background 
 2.  In  the  Triennial  Review  Order,  the  Commission  limited  the  unbundling  obligations  imposed  on  mass  market  FTTH  deployments  to  remove  disincentives  to  the  deployment  of  advanced 
 telecommunications  facilities  in  the  mass  market.  2  We  find  here  that  those  policy  considerations  are  furthered  by  extending  the  same  regulatory  treatment  to  incumbent  LECs  mass  market  FTTC 
 deployments.  Similarly,  just  as  we  found  no  impairment  with  respect  to  mass  market  FTTH  loops  in  the  Triennial  Review  Order,  we  also  find  that  the  level  playing  field  for  incumbents  and  competitors  seeking 
 to  deploy  FTTC  loops,  and  increased  revenue  opportunities  associated  with  those  deployments,  demonstrates  that  requesting  carriers  are  not  impaired  without  access  to  mass  market  FTTC  loops.  3 


 3.  The  Telecommunications  Act  of  1996  (the  1996  Act)  4  requires  that  incumbent  LECs  provide  UNEs  to  other  telecommunications  carriers.  5  In  particular,  section  251(  c)(  3)  of  the  Act  states  that 
 incumbent  LECs  have  a  duty  to 
 provide,  to  any  requesting  telecommunications  carrier  for  the  provision  of  a  telecommunications  service,  nondiscriminatory  access  to  network 
 elements  on  an  unbundled  basis  at  any  technically  feasible  point  on  rates,  terms,  and  conditions  that  are  just,  reasonable,  and  nondiscriminatory  in 


 2  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.  01-  338,  96-  98,  98-  147,  Report  and  Order  and  Order  on 


 Remand  and  Further  Notice  of  Proposed  Rulemaking,  18  FCC  Rcd  16978,  17145,  para.  278  (2003)  (Triennial  Review  Order),  corrected  by  Errata,  18  FCC  Rcd  19020  (2003)  (Triennial  Review  Order  Errata),  vacated  and 
 remanded  in  part,  affirmed  in  part,  United  States  Telecom  Assn  v.  FCC,  359  F.  3d  554  (D.  C.  Cir.  2004)  (USTA  II).  The  Commission  did  not  strictly  define  the  mass  market  in  its  Triennial  Review  Order.  The  Commission  has 
 solicited  comment  on  how  it  should  define  this  market  in  its  Triennial  Review  Order  remand  proceeding.  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  and  Notice  of  Proposed  Rulemaking,  FCC  04-  179,  para.  9  (rel.  Aug.  20,  2004)  (Interim  Order  and  NPRM). 


 3  Triennial  Review  Order,  18  FCC  Rcd  at  17143-  45,  paras.  275-  77. 
 4  Telecommunications  Act  of  1996,  Pub.  L.  No.  104-  104,  110  Stat.  56.  The  1996  Act  amended  the  Communications 
 Act  of  1934,  47  U.  S.  C.    151  et.  seq.  We  refer  to  these  Acts  collectively  as  the  Communications  Act  or  the  Act. 


 5  Section  153(  44)  of  the  Act  defines  a  telecommunications  carrier  as  any  provider  of  telecommunications  services, 
 except  that  such  term  does  not  include  aggregators  of  telecommunications  services  (as  defined  in  section  226).  47  U.  S.  C.    153(  44).  Section  153(  44)  also  states  that  [  a]  telecommunications  carrier  shall  be  treated  as  a  common 


 carrier  under  this  Act  only  to  the  extent  that  it  is  engaged  in  providing  telecommunications  services,  except  that  the  Commission  shall  determine  whether  the  provision  of  fixed  and  mobile  satellite  service  shall  be  treated  as  common 
 carriage.  Id. 
2
 Federal  Communications  Commission  FCC  04-  248 
 3 
 accordance  with  the  terms  and  conditions  of  the  agreement  and  the  requirements  of  this  section  and  section  252.  6 
 4.  The  1996  Act  also  establishes  a  general  federal  standard  for  use  in  determining  the  UNEs  that  must  be  made  available  by  the  incumbent  LECs  pursuant  to  section  251.  Section  251(  d)(  2)  provides  that 
 [i]  n  determining  what  network  elements  should  be  made  available  for  purposes  of  subsection  (c)(  3),  the  Commission  shall  consider,  at  a 
 minimum,  whether    (A)  access  to  such  network  elements  as  are  proprietary  in  nature  is  necessary;  and  (B)  the  failure  to  provide  access  to 
 such  network  elements  would  impair  the  ability  of  the  telecommunications  carrier  seeking  access  to  provide  the  services  that  it 
 seeks  to  offer.  7 
 5.  In  implementing  the  statutory  unbundling  requirements  for  mass  market  local  loops,  we  engage  in  a  balancing  test.  8  While  impairment  remains  the  statutory  touchstone,  we  do  not  rely  exclusively  on  an 
 impairment  analysis  to  make  our  unbundling  determination.  As  the  Commission  found  in  the  Triennial  Review  Order,  we  retain  the  flexibility  under  our  section  251(  d)(  2)  at  a  minimum  authority  to  consider 
 other  factors.  9  Although  we  use  this  flexibility  sparingly,  we  consider  the  goal  of  swift  ubiquitous  broadband  to  be  so  important  that  we  consider  the  statutory  goals  outlined  in  section  706  and  how  they 
 relate  to  broadband  as  additional  factors.  10  We  also  consider  the  comparative  weight  of  the  costs  versus  benefits  of  unbundling  and  the  effect  of  intermodal  competition.  11 


 6.  Accordingly,  in  the  Triennial  Review  Order,  the  Commission  applied  the  above  analysis  taking  into  account  impairment  as  well  as  the  goals  outlined  in  section  706  and  imposed  only  limited  unbundling 
 obligations  on  incumbent  LECs  fiber  loops.  In  USTA  II,  the  D.  C.  Circuit  upheld  these  rules.  12  The  Commission  granted  the  greatest  unbundling  relief  for  dark  or  lit  fiber  loops  serving  mass  market 
 customers  that  extend  to  the  customers  premises  (known  as  fiber-  to-  the-  home  or  FTTH  loops)  in  new  build  or  greenfield  situations.  For  those  loops,  the  Commission  determined  that  no  unbundling  is 
 required.  13  However,  where  a  FTTH  loop  is  deployed  in  overbuild,  or  brownfield,  situations,  the  Commission  determined  that  incumbent  LECs  must  either  provide  unbundled  access  to  a  64  kbps 
 transmission  path  over  the  fiber  loop  or  unbundled  access  to  a  spare  copper  loop.  14  We  noted  that  this  is 
 6  47  U.  S.  C.    251(  c)(  3). 
 7  Id.    251(  d)(  2). 
 8  See  Triennial  Review  Order,  18  FCC  Rcd  at  17121,  para.  234. 
 9  Triennial  Review  Order,  18  FCC  Rcd  at  17121,  para.  234;  USTA  II,  359  F.  3d  at  572,  579-  80. 
 10  Triennial  Review  Order,  18  FCC  Rcd  at  17121,  para.  234. 
 11  Id. 
 12  USTA  II,  359  F.  3d  at  578-  85. 
 13  Triennial  Review  Order,  18  FCC  Rcd  at  17143,  para.  275  (2003). 
 14  Triennial  Review  Order,  18  FCC  Rcd  at  17144-  45,  paras.  276-  77;  47  C.  F.  R.    51.319(  a)(  3)(  ii). 
3
 Federal  Communications  Commission  FCC  04-  248 
 4 
 a  very  limited  requirement  intended  only  to  ensure  continued  access  to  a  local  loop  suitable  for  providing  narrowband  services  to  the  mass  market  in  situations  where  an  incumbent  LEC  has  deployed  overbuild 
 FTTH  and  elected  to  retire  the  pre-  existing  copper  loops.  15  Under  the  Triennial  Review  Order,  incumbent  LECs  were  not  required  to  retire  pre-  existing  copper  loops.  For  hybrid  copper/  fiber  loops,  the 
 Commission  granted  unbundling  relief  for  the  packet-  switched  capabilities  of  those  loops,  but  required  incumbent  LECs  to  provide  unbundled  access  to  the  features,  functions,  and  capabilities  of  hybrid  loops 
 that  are  not  used  to  transmit  packetized  information.  16  The  Commission  concluded  that  when  a  requesting  carrier  seeks  access  to  a  hybrid  loop  to  provide  narrowband  service,  the  incumbent  LEC  may  provide 
 either  unbundled  access  to  an  entire  hybrid  loop  capable  of  voice  grade  transmission  path  service  or  provide  unbundled  access  to  a  spare  copper  loop.  17 


 7.  On  October  2,  2003,  BellSouth  filed  a  petition  for  reconsideration  of  several  issues  decided  in  the  Triennial  Review  Order.  18  In  the  MDU  Reconsideration  Order,  the  Commission  addressed  one  part  of 
 BellSouths  petition,  which  sought  clarification  and  reconsideration  of  several  aspects  of  the  Commissions  rules  regarding  fiber  loops.  19  In  particular,  the  Commission  concluded  that  the  FTTH  loop 
 rules  will  apply  to  fiber  loops  serving  multiple  dwelling  units  (MDUs)  that  are  predominantly  residential.  20  The  Commission  further  clarified  that  the  definition  of  FTTH  loops  includes  fiber  loops 
 deployed  to  the  minimum  point  of  entry  (MPOE)  of  MDUs,  regardless  of  the  ownership  of  the  inside  wiring.  21 


 8.  This  Order  addresses  an  additional  aspect  of  BellSouths  petition  for  reconsideration.  22  Specifically,  BellSouth  seeks  reconsideration  of  the  regulatory  treatment  of  FTTC  loops,  which  BellSouth 
 claims  is  sufficiently  similar  to  FTTH  loops  to  be  subject  to  the  same  broadband  loop  unbundling  rules.  23  BellSouth  argues  that  FTTC  loops  are  indistinguishable  from  FTTH  loops  in  their  ability  to  deliver 
 broadcast  or  better  quality,  multi-  channel  video  along  with  high  speed  data  and  voice  services.  24 
 15  Triennial  Review  Order,  18  FCC  Rcd  at  17145,  para.  277. 
 16  Triennial  Review  Order,  18  FCC  Rcd  at  17149-  90,  paras.  288-  89;  47  C.  F.  R.    51.319(  a)(  2)(  i),  (ii). 
 17  Triennial  Review  Order,  18  FCC  Rcd  at  17153-  54,  para.  296;  47  C.  F.  R.    51.319(  a)(  2)(  iii). 
 18  See  generally  BellSouth  Petition. 
 19  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.  01-  338,  96-  98,  98-  147,  Order  on  Reconsideration,  FCC 


 04-  191  (rel.  Aug.  9,  2004)  (MDU  Reconsideration  Order).  SureWest  also  filed  a  petition  seeking  reconsideration  of  the  Commissions  regulatory  treatment  of  MDUs,  among  other  issues.  See  SureWest  Petition  at  5-  7. 


 20  MDU  Reconsideration  Order  at  paras.  4-  9. 
 21  Id.  at  paras.  10-  11. 
 22  Parties  filing  comments  in  response  to  BellSouth  and  other  Petitions  for  Reconsideration  in  this  docket  are  listed  in 
 Appendix  A. 
 23  BellSouth  Petition  at  1-  9.  FTTC  loops  currently  are  subject  to  the  unbundling  rules  governing  hybrid  loops. 
 Triennial  Review  Order,  18  FCC  Rcd  at  17143-  44,  para.  275  n.  811. 
 24  BellSouth  Petition  at  5. 
4
 Federal  Communications  Commission  FCC  04-  248 
 5 
 Moreover,  BellSouth  contends  that  the  impairment  analysis  is  the  same  as  FTTH  loops  because  incumbent  LECs  have  no  economic  advantage  over  competitive  LECs  in  deploying  FTTC  loops.  25 
 Competitive  LEC  commenters  contend  that  unbundling  relief  is  not  warranted,  both  because  BellSouth  already  has  deployed  some  FTTC  networks  despite  the  existing  unbundling  requirements,  and  because 
 BellSouth  has  not  yet  utilized  the  full  capabilities  of  those  networks.  26  Moreover,  some  commenters  disagree  with  BellSouths  assertion  that  FTTC  loops  offer  the  comparable  broadband  capabilities  as 
 FTTH  loops,  citing  evidence  that  the  potential  future  capacity  of  FTTH  loops  is  greater  than  that  of  FTTC  loops.  27 


 2.  Discussion 
 9.  After  applying  section  251(  d)(  2)(  B)  and  balancing  any  impairment  competitive  carriers  may  face,  against  the  broadband  deployment  goals  of  section  706  in  the  specific  context  of  FTTC  loops,  we 
 conclude  that  the  record  here  demonstrates  that  the  same  unbundling  relief  as  provided  for  FTTH  loops  in  the  Triennial  Review  Order  and  MDU  Reconsideration  Order  is  warranted  for  FTTC  loops  provided 
 certain  architectural  requirements  are  met  as  discussed  below.  28  In  arriving  at  this  conclusion,  we  are  persuaded  that  making  such  a  change  in  our  rules  is  necessary  to  ensure  that  regulatory  disincentives  for 
 broadband  deployment  are  removed  for  carriers  seeking  to  provide  advanced  services  to  mass  market  customers  using  FTTC  technology.  29 


 10.  In  granting  such  relief,  we  first  define  FTTC  loops.  Specifically,  a  FTTC  loop  is  a  fiber  transmission  facility  connecting  to  copper  distribution  plant  that  is  not  more  than  500  feet  from  the 
 customers  premises.  30  The  record  reflects  that  when  fiber  is  brought  within  500  feet  of  a  subscribers 
 25  BellSouth  Petition  at  6-  7. 


 26  See,  e.  g.,  Allegiance  et  al.  Comments  at  11-  12;  ALTS  Comments  at  5;  AT&  T  Comments  at  6-  11;  MCI  Comments 
 at  9-  10;  NuVox  et  al.  Comments  at  6,  8;  PACE  Comments  at  11;  Sprint  Comments  at  8;  Letter  from  Leonard  Ray,  Vice  President  for  Business  Development,  Atlantic  Engineering  Group,  to  Marlene  H.  Dortch,  Secretary,  FCC,  CC 


 Docket  No.  01-  338,  Att.  2  at  3  (filed  June  2,  2004)  (Atlantic  Engineering  Group  June  2  Ex  Parte  Letter). 
 27  See,  e.  g.,  ALTS  Comments  at  6,  16;  AT&  T  Comments  at  10-  11;  NuVox  et  al.  Comments  at  8;  Letter  from  Walter 
 Steimel,  Jr.,  Counsel  for  FTTH  Council,  to  Marlene  H.  Dortch,  Secretary,  FCC,  CC  Docket  no.  01-  338,  Att.  (filed  Dec.  22,  2003)  (FTTH  Council  Dec.  22  Ex  Parte  Letter). 


 28  See  para.  17,  infra. 
 29  According  to  AT&  T,  BellSouths  petition  on  FTTC  loops  may  not  be  granted  because  the  evidence  relied  upon 
 could  have  been  filed  during  the  Triennial  Review  proceeding,  but  was  not.  AT&  T  Comments  at  12  (citing  47  C.  F.  R.    1.429(  b)).  As  we  held  in  the  MDU  Reconsideration  Order,  even  if  we  were  to  determine  that  BellSouths 


 petition  is  procedurally  flawed  under  section  1.429(  b)(  1)  and  (2)  of  our  rules,  the  importance  to  broadband  deployment  of  the  reconsideration  and  clarification  we  grant  would  warrant  our  discretionary  review  of  the 
 substance  of  the  petition.  MDU  Reconsideration  Order,  para.  4  n.  10;  see  also  47  C.  F.  R.    1.429(  b)(  3)(  a  petition  that  relies  on  facts  not  previously  presented  to  the  Commission  will  be  granted  where  [  t]  he  Commission  determines 
 that  consideration  of  the  facts  relied  on  is  required  in  the  public  interest.).  Therefore,  we  need  not  address  the  procedural  issue  raised  by  AT&  T. 


 30  As  noted  above,  FTTC  deployments  often  also  include  coaxial  cable  distribution  facilities,  in  addition  to  copper. 
 See  supra,  n.  1.  We  do  not  include  a  reference  to  coaxial  cable  in  our  definition  of  FTTC  loops,  however,  because  there  may  be  some  FTTC  deployments  where  it  is  not  needed,  and  because  the  referenced  copper  distribution 


 facility    which  is  present  in  all  FTTC  deployments    sufficiently  clarifies  the  scope  of  FTTC  deployments. 
5
 Federal  Communications  Commission  FCC  04-  248 
 6 
 premises,  carriers  can  provide  broadband  services  comparable  to  that  provided  by  FTTH  architecture,  including  data  speeds  of  10  megabits  per  second  (Mbps)  in  addition  to  high  definition  multi-  channel 
 video  services.  31  Indeed,  we  note  that  a  500  foot  maximum  copper  loop  length  is  the  standard  issued  by  Telcordia  for  FTTC  loops,  and  reflects  industry  consensus  that,  over  short  distances,  copper  exhibits  very 
 little  impedance,  thereby  enabling  significant  capacity  for  advanced  services.  32  We  further  specify  that  the  fiber  transmission  facility  in  a  FTTC  loop  must  connect  to  copper  distribution  plant  at  a  serving  area 
 interface  from  which  every  other  copper  distribution  subloop  also  is  not  more  than  500  feet  from  the  respective  customers  premises.  We  do  this  to  ensure  that  our  unbundling  relief  is  targeted  to  FTTC 
 deployments  that  are  designed  to  bring  increased  advanced  services  capability  to  users,  rather  than  extended  to  other  hybrid  loop  deployments  that  coincidentally  happen  to  have  individual  loops  with  less 
 than  500  feet  or  less  of  copper. 
 11.  We  decide  to  grant  further  unbundling  relief  for  FTTC  loops  for  two  reasons.  First,  we  conclude  that  requesting  carriers  are  not  impaired  in  greenfield  areas  and  face  only  limited  impairment  without 
 access  to  FTTC  loops  where  FTTC  loops  replace  pre-  existing  loops.  Second,  as  with  FTTH  loops,  competitive  LECs  deploying  FTTC  loops  have  increased  revenue  opportunities  through  the  ability  to 
 offer  voice,  multi-  channel  video,  and  high-  speed  data  services.  33  As  the  Commission  found  with  respect  to  FTTH  loops  in  the  Triennial  Review  Order,  the  substantial  revenue  opportunities  that  arise  from 
 offering  this  triple  play  of  services  helps  ameliorate  many  of  the  entry  barriers  presented  by  the  costs  and  scale  economies.  34 


 12.  First,  with  respect  to  new  FTTC  deployments  (  greenfield  deployments),  we  find  that  competitive  LECs  face  similar  barriers  to  deployment  as  incumbent  LECs.  35  In  the  Triennial  Review 
 Order,  the  Commission  found  that  entry  barriers  for  FTTH  deployments  were  largely  the  same  for  incumbent  and  competitive  carriers.  36  We  find  that  this  conclusion  remains  valid  regardless  of  the  loop 
 technology  deployed,  and  thus  equally  applies  to  greenfield  deployments  of  FTTC  loops.  In  particular,  when  deploying  FTTC  loops  in  greenfields,  both  incumbent  LECs  and  competitive  LECs  must  negotiate 


 31  See  Marconi  Reply  at  4-  5;  Letter  from  Stephen  L.  Goodman,  counsel  for  Marconi,  to  Marlene  H.  Dortch, 
 Secretary,  FCC,  CC  Docket  No.  01-  338,  Att.  at  6  (filed  Dec.  3,  2003)  (Marconi  Dec.  3  Ex  Parte  Letter). 
 32  See  Marconi  Reply  at  5-  6;  Catena  Comments  at  9. 


 33  See  Triennial  Review  Order,  18  FCC  Rcd  at  17142-  43,  para.  274  (discussing  evidence  from  Corning  that  carriers 
 can  earn  a  greater  return  on  their  FTTH  investment  due  to  the  ability  to  offer  voice,  data,  video,  and  other  services);  BellSouth  Petition  at  7  (asserting  that  FTTC  affords  carriers  the  same  revenue  opportunities  as  FTTH);  see  also 


 HTBC  Comments  at  9-  10;  Catena  Comments  at  9-  10;  Marconi  Reply  at  9. 
 34  Triennial  Review  Order,  18  FCC  Rcd  at  17142-  43,  para.  274. 


 35  BellSouth  Petition  at  6-  7;  BellSouth  Reply  at  4;  Catena  Comments  at  10,  12;  HTBC  Comments  at  9;  Marconi 
 Reply  at  12;  SBC  Comments  at  6-  7.  This  conclusion  is  not  diminished  by  the  claims  of  competitive  LECs  that,  unlike  the  evidence  of  competitive  FTTH  deployment  relied  upon  in  the  Triennial  Review  Order,  there  is  little 


 evidence  of  competitive  LEC  deployment  of  FTTC  loops  or  other  hybrid  loops  to  suggest  that  competing  carriers  are  not  impaired  in  the  absence  of  unbundling.  AT&  T  Comments  at  12,  14.  While  competitive  deployment  of 
 facilities  is  evidence  that  there  is  no  impairment,  the  absence  of  such  evidence  does  not  prove  that  competing  carriers  are  impaired  without  unbundled  access  to  such  facilities.  Triennial  Review  Order,  18  FCC  Rcd  at  17042- 
 43,  para.  94.  Further,  there  is  evidence  that  competing  LECs  have,  in  fact,  deployed  FTTC.  Marconi  Reply  at  10. 
 36  Triennial  Review  Order,  18  FCC  Rcd  at  17143,  para.  275. 
6
 Federal  Communications  Commission  FCC  04-  248 
 7 
 rights-  of-  way,  respond  to  bid  requests  for  new  housing  developments,  obtain  fiber  optic  cabling  and  other  materials,  develop  deployment  plans,  and  implement  construction  programs.  37  Nor  do  incumbent  LECs 
 have  any  advantages  with  respect  to  the  sunk  costs  of  FTTC  loops    both  incumbent  LECs  and  competitive  LECs  are  faced  with  the  same  issue[  s]  in  their  deployment  of  such  loops.  38  Accordingly,  as 
 with  FTTH  loops,  we  find  that  competitive  carriers  are  not  impaired  without  access  to  FTTC  loops  in  greenfield  deployments.  However,  just  as  overbuild  FTTH  deployments  merit[]  slightly  different 
 treatment  than  greenfield  FTTH  deployments,  so,  too,  do  overbuild  FTTC  deployments.  39  In  particular,  deploying  FTTC  loops  in  overbuild  situations  enables  an  incumbent  LEC  to  replace  and  ultimately  deny 
 access  to  the  already-  existing  copper  loops  that  competitive  LECs  were  using  to  serve  mass  market  customers.  40  Thus,  in  the  overbuild  context,  we  find  that  competitive  LECs  face  impairment  to  a  limited 
 extent. 
 13.  Second,  as  we  did  in  the  Triennial  Review  Order,  we  utilize  the  discretion  under  our  section  251(  d)(  2)  at  a  minimum  authority  to  consider  the  statutory  goals  of  section  706  which  requires  us  to 
 encourage  the  deployment  of  advanced  telecommunications  capability  to  all  Americans.  41  We  conclude  that  subjecting  FTTC  loops  to  the  same  unbundling  framework  adopted  for  FTTH  loops  furthers  the  goals 
 of  section  706.  The  record  here  demonstrates  that  further  reducing  the  unbundling  obligations  associated  with  FTTC  loops  would  eliminate  disincentives  to  invest  in  broadband  facilities  and,  therefore,  further 
 section  706s  goals.  42  FTTC  architecture  offers  considerable  capability  for  providing  advanced  services,  including  the  ability  to  offer  voice,  multi-  channel  video,  and  high  speed  data  services.  43  We  thus  expect 
 FTTC  deployments  to  lead  to  the  offering  of  this  triple  play  of  services  to  end-  users,  furthering  the  goals  of  section  706.  In  addition,  the  record  indicates  that,  particularly  in  the  overbuild  context,  FTTC 
 loops  require  substantial  investment,  more  akin  to  FTTH  loops.  FTTC  architecture  requires  the  deployment  of  new  serving  area  interfaces,  and  the  associated  deployment  of  new  loop  plant.  44 
 Consequently,  we  conclude  that,  treating  FTTC  loops  the  same  as  FTTH  loops  will  encourage  carriers  to  further  deploy  fiber  architectures  necessary  to  deploy  broadband  services  to  the  mass  market,  and  the 
 benefits  of  such  deployment  outweigh  the  limited  impairment  that  competitive  carriers  face.  45  We 
 37  Triennial  Review  Order,  18  FCC  Rcd  at  17143,  para.  275;  BellSouth  Petition  at  6-  7;  Catena  Comments  at  10; 
 HTBC  Comments  at  9;  BellSouth  Reply  at  4;  Marconi  Reply  at  11. 
 38  Triennial  Review  Order,  18  FCC  Rcd  at  17143,  para.  275;  BellSouth  Petition  at  6-  7;  HTBC  Comments  at  9; 
 BellSouth  Reply  at  4;  Marconi  Reply  at  11. 
 39  Triennial  Review  Order,  18  FCC  Rcd  at  17144,  para.  276. 


 40  Triennial  Review  Order,  18  FCC  Rcd  at  17144,  para.  277. 
 41  See  Triennial  Review  Order,  18  FCC  Rcd  at  17121,  para.  234.  The  D.  C.  Circuit  affirmed  the  Commissions  use  of 
 the  at  a  minimum  clause  in  this  manner  to  consider  investment  disincentives  pursuant  to  section  706.  USTA  II,  359  F.  3d  at  580. 


 42  BellSouth  Reply  at  5-  6;  Marconi  Reply  at  13-  16. 
 43  See,  e.  g.,  BellSouth  Petition  at  4;  Marconi  Reply  at  5-  6;  Catena  Comments  at  9;  Marconi  Dec.  3  Ex  Parte  Letter, 
 Att.  at  6. 
 44  BellSouth  Reply  at  4. 


 45  The  decision  to  grant  additional  unbundling  relief  for  FTTC  loops  also  is  supported  by  our  analysis  of  the  state  of 
 intermodal  competition.  Cable  companies  have  widely  deployed  broadband  service,  and  are  poised  to  offer  cable  (continued.) 
7
 Federal  Communications  Commission  FCC  04-  248 
 8 
 therefore  reconsider  our  determination  in  the  Triennial  Review  Order  that  FTTC  loops  should  be  characterized  as  hybrid  loop  architecture  for  the  purpose  of  our  unbundling  regulations,  and  revise  our 
 broadband  loop  unbundling  rules  to  regulate  FTTC  loops  in  the  same  manner  as  adopted  for  FTTH  loops  in  the  Triennial  Review  Order  and  the  MDU  Reconsideration  Order. 


 14.  Accordingly,  we  do  not  require  incumbent  LECs  to  provide  unbundled  access  to  new  mass  market  FTTC  loops  for  either  narrowband  or  broadband  services.  In  overbuild  situations,  because 
 incumbent  LECs  have  an  entry  barrier  within  their  sole  control,  we  conclude,  as  with  FTTH  loops,  that  competitive  LECs  should  have  continued  access  to  either  a  copper  loop  or  a  64  kbps  transmission  path  in 
 those  situations.  46  Finally,  we  note  that,  consistent  with  our  recent  MDU  Reconsideration  Order,  FTTC  loops  serving  predominantly  residential  MDUs  will  be  subject  to  the  same  unbundling  relief  as  FTTH 
 loops. 
 15.  In  reaching  this  determination,  we  reject  competitive  LEC  commenters  claims  that  because  incumbent  LECs  already  have  deployed  some  FTTC  networks,  unbundling  creates  no  disincentive  to 
 invest  in  such  next-  generation  facilities.  47  The  Commission  previously  confronted,  and  rejected,  this  argument  as  applied  to  other  broadband  loops.  For  example,  the  Commission  found  that,  although  hybrid 
 loops  had  been  deployed,  they  had  not  been  deployed  to  their  full  capacity  to  deliver  broadband  services  to  mass  market  customers,  and  that  unbundling  also  created  disincentives  for  competitive  LECs  to  invest 
 in  their  own  facilities.  48  The  Commission  also  found  that  unbundling  created  disincentives  for  competitive  LECs  to  invest  in  their  own  facilities.  49  In  USTA  II,  the  court  upheld  the  Commissions 
 reliance  on  such  investment  disincentives,  even  where  there  already  had  been  some  deployment  of  facilities.  50  We  find  that  the  same  analysis  is  true  with  regard  to  FTTC  loops.  Although  it  is  true  that 
 FTTC  networks  have  been  deployed  to  some  extent,  the  deployment  has  been  far  from  ubiquitous,  and  we  believe  that  the  architecture  has  not  been  deployed  to  its  full  potential.  51  In  addition,  the  record 


 (Continued  from  previous  page)  telephony  on  a  more  widespread  basis,  providing  them  the  ability  to  offer  the  voice,  high-  speed  data,  and  multi-channel 
 video  triple  play  of  services.  See  Triennial  Review  Order,  18  FCC  Rcd  at  17151,  para.  292.  Thus,  we  find  that  the  FTTC  loop  unbundling  relief  we  grant  here  will  give  incumbent  LECs  incentives  to  deploy  advanced 
 facilities  allowing  them  to  roll  out  their  own  triple  play  of  services  as  cable  competitors  roll  out  theirs. 
 46  Triennial  Review  Order,  18  FCC  Rcd  at  17144-  45,  para.  277;  see  also  HTBC  Comments  at  9;  BellSouth  Reply  at 
 4-  5.  We  reject  the  claims  of  commenters  that  the  ability  to  re-  use  existing  copper  facilities  gives  incumbent  LECs  an  additional  advantage  in  brownfield  deployments.  See,  e.  g.,  Allegiance  et  al.  Comments  at  6;  ALTS  Comments  at 


 8-  9  n.  9;  AT&  T  Comments  at  14;  AT&  T  Reply  at  5  n.  2.  We  find  that  incumbent  LECs  deploying  FTTC  loops  in  overbuild  situations  are  not  necessarily  able  to  re-  use  existing  copper  loops  due  to  the  different  network  design 
 associated  with  FTTC  loops.  See  BellSouth  Reply  at  4. 
 47  See,  e.  g.,  Allegiance  et  al.  Comments  at  11-  12;  ALTS  Comments  at  5;  AT&  T  Comments  at  6-  11;  MCI  Comments 
 at  9-  10;  NuVox  et  al.  Comments  at  8;  PACE  Comments  at  11;  Sprint  Comments  at  8. 
 48  Triennial  Review  Order,  18  FCC  Rcd  at  17150,  para.  290. 


 49  Id. 
 50  USTA  II,  359  F.  3d  at  581-  82. 
 51  Id.  (observing  that  while  some  deployment  of  fiber  feeder  and  associated  broadband  technology  had  occurred, 
 deployment  had  not  been  widespread).  Indeed,  the  record  indicates  that  even  within  BellSouth  territory,  93%  of  users  do  not  have  access  to  FTTC  loops.  Letter  from  Jonathan  Banks,  General  Attorney,  BellSouth  to  Marlene  H. 


 (continued.) 
8
 Federal  Communications  Commission  FCC  04-  248 
 9 
 demonstrates  that  the  costs  of  unbundling  hinder  deployment  of  FTTC  loops  that  otherwise  would  occur.  52  We  believe  that  by  providing  unbundling  relief  to  FTTC  loops,  incumbent  LECs  will  be 
 encouraged  to  further  deploy  FTTC  loops  and  make  the  required  investments  to  provide  advanced  services  over  those  facilities,  just  as  our  unbundling  relief  for  FTTH  loops  has  provided  incentives  for 
 carriers  to  invest  in  such  facilities.  53 
 16.  Moreover,  we  conclude  that  denying  unbundled  access  to  FTTC  loops  will  provide  competitive  LECs  incentives  to  seek  innovative  access  options,  including  the  deployment  of  their  own  facilities 
 necessary  for  providing  broadband  services  to  the  mass  market.  54  As  with  FTTH  loops,  both  incumbent  LECs  and  competitive  LECs  have  comparable  abilities  to  undertake  the  investment  risk  associated  with 
 deploying  FTTC  facilities.  The  USTA  II  court  recognized  that  [  a]  n  unbundling  requirement  under  these  circumstances  seems  likely  to  delay  infrastructure  investment,  with  CLECs  tempted  to  wait  for  ILECs  to 
 deploy  FTTH  and  ILECs  fearful  that  CLEC  access  would  undermine  the  investments  potential  return.  Absence  of  unbundling,  by  contrast,  will  give  all  parties  an  incentive  to  take  a  shot  at  this  potentially 
 lucrative  market.  55 
 17.  We  also  reject  the  claims  of  competitive  LECs  that  BellSouths  deployment  of  FTTC  loops  to  date  has  not  resulted  in  the  provision  of  advanced  services,  and  thus  such  deployment  does  not  further  the 
 goals  of  section  706.  56  First,  BellSouth  demonstrates  that  it  is  preparing  to  offer,  and  in  some  cases 
 (Continued  from  previous  page)  Dortch,  Secretary,  FCC,  CC  Docket  No.  01-  338,  Att.  at  2-  3  (filed  July  13,  2004)  (BellSouth  July  13  Ex  Parte 
 Letter). 
 52  Marconi  Dec.  3  Ex  Parte  Letter,  Att.  at  2. 


 53  In  particular,  BellSouth,  Verizon  and  SBC  issued  a  Request  for  Quote  for  passive  optical  networking  solutions  and 
 Verizon  and  SBC  both  have  announced  specific  FTTH  loop  deployment  plans.  Letter  from  Dan  Tatarka,  Executive  Director,  FTTH  Council,  to  Marlene  H.  Dortch,  Secretary,  FCC,  CC  Docket  No.  01-  338  at  11  (filed  Feb.  13,  2004) 


 (FTTH  Council  Feb.  13  Ex  Parte  Letter);  see  also,  e.  g.,  Catena  Comments  at  7-  8  (noting  increased  demand  for  equipment);  Verizon  News  Release,  Verizon,  in  Historic  First,  Begins  Large  Scale  Rollout  of  Advanced  Fiber-  Optic 
 Technology  with  Keller,  Texas,  Deployment;  Announces  Plans  for  Offering  New  Services  (rel.  May  19,  2004);  SBC  News  Release,  SBC  Communications  Announces  Advances  in  Initiative  to  Develop  IP-  Based  Residential  Network 
 for  Integrated  Video,  Internet,  VoIP  Services  (rel.  June  22,  2004). 
 54  Triennial  Review  Order,  18  FCC  Rcd  at  17150,  para.  290;  see  also  Marconi  Reply  at  14  (asserting  that  competing 
 carriers  have  sought  to  avoid  investing  in  their  own  facilities  when  they  can  take  advantage  of  incumbent  LECs  financial  risk  in  deploying  broadband  facilities  through  unbundled  access  to  such  facilities);  BellSouth  July  13  Ex 


 Parte  Letter,  Att.  at  2-  3  (contending  that  unbundling  relief  for  FTTC  loops  will  provide  both  incumbent  LECs  and  competitive  LECs  with  incentives  to  invest  in  FTTC  loops). 


 55  USTA  II,  359  F.  3d  at  584. 
 56  AT&  T  Comments  at  6-  11,  20;  NuVox  et  al.  Comments  at  6;  PACE  Comments  at  11;  Atlantic  Engineering  Group 
 June  2  Ex  Parte  Letter,  Att.  2  at  3.  In  addition,  some  commenters  note  that  the  long-  term  future  capabilities  of  entirely  fiber  architectures  exceed  that  of  fiber  architectures  that  include  even  a  small  amount  of  copper,  such  as 


 FTTC  loops.  See,  e.  g.,  Letter  from  Ruth  Milkman,  Counsel  for  MCI,  to  Marlene  H.  Dortch,  Secretary,  FCC,  CC  Docket  No.  01-  338,  Att.  at  2  (filed  July  1,  2004);  FTTH  Council  Feb.  13  Ex  Parte  Letter  at  7;  Letter  from  Jonathan 
 Askin,  ALTS,  to  Marlene  H.  Dortch,  Secretary,  FCC,  CC  Docket  No.  01-  338,  at  6  (filed  Jan.  23,  2004).  However,  as  the  Commission  concluded  in  the  MDU  Recon  Order,  where  facilities  today  provide  the  capability  of  offering 
 broadband  capability  that  is  enhanced  compared  to  copper  networks  (or  even  other  hybrid  loop  architectures),  the  goals  of  section  706  are  furthered  by  the  deployment  of  such  facilities.  MDU  Reconsideration  Order,  para.  11  n.  33. 
 (continued.) 
9
 Federal  Communications  Commission  FCC  04-  248 
 10 
 already  is  offering,  advanced  services  over  its  FTTC  facilities.  57  Second,  our  decision  to  provide  unbundling  relief  for  FTTC  loops  is  to  ensure  that  regulatory  disincentives  are  removed  for  all  carriers 
 seeking  to  provide  advanced  services  using  FTTC  technology.  Indeed,  other  commenters  cite  evidence  that  FTTC  loops  are  being  used  to  provide  advanced  services,  further  indicating  that  carriers  deploying 
 FTTC  loops  do  so  to  offer  advanced  services.  58  We  therefore  expect  that  carriers  deploying  FTTC  loops  will  offer  advanced  services,  such  as  the  triple  play  of  voice,  multi-  channel  video,  and  high-  speed  data, 
 using  those  facilities.  Third,  because  the  section  706  mandate  requires  the  Commission  to  encourage  the  deployment  of  advanced  telecommunications  capability,  the  Commission  is  required  to  make  a  predictive 
 judgment  regarding  the  impact  of  its  actions.  With  regard  to  FTTH  loops,  the  Commission  concluded  that  removing  most  unbundling  obligations  would  promote  deployment  of  such  facilities.  59  We  believe  that 
 similar  treatment  of  FTTC  loops  will  have  a  similar  impact  and  will  lead  to  additional  deployment  of  FTTC  architectures,  as  well  as  advanced  services  to  mass  market  customers.  Finally,  in  order  to  ensure 
 that  our  new  rules  promote  the  goals  of  section  706,  we  tailor  unbundling  relief  to  those  FTTC  deployments  specifically  designed  to  bring  advanced  services  to  users.  Accordingly,  we  are  requiring 
 that,  as  an  architectural  matter,  the  fiber  transmission  facility  in  a  FTTC  loop  must  connect  to  copper  distribution  plant  at  a  serving  area  interface  from  which  every  other  copper  distribution  subloop  also  is 
 not  more  than  500  feet  from  the  respective  customers  premises.  In  this  manner,  we  provide  those  incumbents  seeking  to  avail  themselves  of  this  unbundling  relief  an  incentive  to  reconfigure  their  network 
 to  bring  advanced  services  to  the  entire  geographic  area  rather  than  permitting  them  to  obtain  unbundling  relief  where,  by  happenstance,  there  may  be  an  existing  loop  with  500  feet  or  less  copper  distribution. 


 18.  Some  commenters  express  concern  that  if  unbundling  relief  is  tailored  on  an  architectural  basis,  they  might  have  difficulty  identifying  which  loops  are  FTTC  loops.  60  BellSouth  responds  that  both  FTTC 
 loops  and  FTTH  loops  bear  an  information  code  in  their  systems  distinguishing  those  loops  from  other  types  of  loop  facilities,  allowing  competitive  LECs  to  know  in  advance  whether  a  particular  loop  is  a 
 FTTC  loop  or  FTTH  loop.  61  We  agree  that  it  is  important  for  requesting  carriers  to  have  the  necessary  information  about  whether  particular  loops  would  qualify  as  FTTC  loops  or  FTTH  loops,  and  we  thus 
 reiterate  the  requirement,  stated  in  the  UNE  Remand  Order,  that  incumbent  LECs  OSS  must  provide  competitive  LECs  with  nondiscriminatory  access  to  the  same  detailed  information  about  the  loop  that  is 
 available  to  itself  and  such  information  must  be  provided  to  competitive  LECs  in  the  same  time  frame  as  provided  to  its  own  personnel.  62 


 (Continued  from  previous  page)  Since  FTTC  loops  provide  such  advanced  services  capability,  we  reject  commenters  claims  that  the  differences 
 between  FTTH  loops  and  FTTC  loops  preclude  granting  equivalent  unbundling  regulation  for  those  architectures. 
 57  BellSouth  Reply  at  6. 


 58  See,  e.  g.,  Marconi  Reply  at  10  (citing  customers  of  Marconi  FTTC  equipment  that  are  providing  voice,  video  and 
 data  services). 
 59  Triennial  Review  Order,  18  FCC  Rcd  at  17145,  para.  278.  We  note  that  the  evidence  available  to  date  indicates 
 that  we  were  correct  in  our  prediction.  See  supra,  n.  53. 
 60  See,  e.  g.,  Allegiance  et  al.  Comments  at  10;  NuVox  et  al.  Comments  at  5,  9. 


 61  BellSouth  Reply  at  6. 
 62  See  47  C.  F.  R.    51.307(  e)  (  An  incumbent  LEC  shall  provide  to  a  requesting  telecommunications  carrier  technical 
 information  about  the  incumbent  LECs  network  facilities  sufficient  to  allow  the  requesting  carrier  to  achieve  access  to  unbundled  network  elements  consistent  with  the  requirements  of  this  section.);  see  also  Implementation  of  the 


 (continued.) 
10
 Federal  Communications  Commission  FCC  04-  248 
 11 
 19.  We  also  disagree  with  the  assertion  of  some  commenters  that  we  should  refrain  from  providing  further  unbundling  relief  for  FTTC  loops  because  FTTH  architecture  is  a  superior  technology,  and 
 additional  unbundling  relief  for  FTTC  loops  would  reduce  carriers  incentives  to  deploy  FTTH  loops.  63  The  FTTH  loop  rules  adopted  in  the  Triennial  Review  Order  and  the  MDU  Reconsideration  Order,  and 
 the  FTTC  loop  unbundling  rules  adopted  in  this  Order  are  intended  to  promote  the  goals  of  section  706,  rather  than  to  promote  the  deployment  of  a  single,  specific  next-  generation  network  technology. 
 Comments  indicate  that  both  FTTH  loops  and  FTTC  loops  have  their  respective  merits  and  shortcomings  based  on  particular  economic  and  technological  factors,  and  we  conclude  that  the  decision  concerning 
 which  broadband  technologies  to  deploy  is  best  left  to  individual  carriers  operating  in  the  market  to  decide.  64  We  decline  to  second-  guess  or  skew  those  technology  choices  with  our  unbundling 
 requirements. 
 B.  Network  Modification  Rules 
 20.  In  the  Triennial  Review  Order,  the  Commission  required  incumbent  LECs  to  make  routine  network  modifications  to  unbundled  transmission  facilities  used  by  competitive  carriers  where  the 
 requested  transmission  facility  has  already  been  constructed.  65  In  defining  the  term  routine  network  modification  the  Commission  concluded  that  incumbent  LECs  must  perform  those  modifications  that 
 they  would  regularly  perform  for  their  own  retail  customers.  66  In  the  Triennial  Review  Order,  we  prohibited  any  incumbent  LEC  practice,  policy  or  procedure  that  has  the  effect  of  disrupting  or 
 degrading  access  to  the  TDM-  based  features,  functions,  and  capabilities  of  hybrid  loops.  67  BellSouth  and  SureWest  request  clarification  on  the  applicability  of  this  precedent  to  packet-  based  networks.  68 
 Our  rules  limit  the  unbundling  obligations  placed  on  hybrid  loop,  FTTH  loop,  and  now  FTTC  loop 


 (Continued  from  previous  page)  Local  Competition  Provisions  of  the  Telecommunications  Act  of  1996,  CC  Docket  No.  96-  98,  Third  Report  and 
 Order  and  Fourth  Further  Notice  of  Proposed  Rulemaking,  15  FCC  Rcd  3696,  3885-  86,  paras.  428-  29  (1999)  (UNE  Remand  Order). 


 63  See,  e.  g.,  ALTS  Comments  at  6,  16;  AT&  T  Comments  at  10-  11;  NuVox  et  al.  Comments  at  8;  FTTH  Council 
 Dec.  22  Ex  Parte  Letter,  Att. 
 64  See,  e.  g.,  HTBC  Comments  at  10  (  Carriers  should  be  permitted  to  design  their  networks  based  on  technological 
 and  economic  considerations,  such  as  the  ability  to  share  electronics  across  several  customers  or  to  power  electronics  either  in  the  field  or  at  the  customers  premises.);  Catena  Comments  at  10  (Carriers  should  decide 


 which  fiber  architecture  to  deploy  based  on  the  technical  and  economic  merits  of  FTTC  and  FTTH,  not  because  of  the  differing  regulatory  treatment  that  currently  applies  to  these  two  architectures.);  Letter  from  Sean  A.  Lev, 
 Counsel  for  Advanced  Fibre  Communications,  to  Marlene  H.  Dortch,  Secretary,  FCC,  CC  Docket  No.  01-  338,  Att.  at  10  (noting  that  different  locations  may  be  more  suitable  for  FTTH  loops  or  FTTC  loops  based  on  the  geography, 
 demographics,  and  construction  required);  FTTH  Council  Dec.  22  Ex  Parte  Letter,  Att.  at  18-  24  (business  case  analysis  supporting  the  deployment  of  FTTH  loops). 


 65  Triennial  Review  Order,  18  FCC  Rcd  at  17371-  72,  para.  632. 
 66  Id. 
 67  Triennial  Review  Order,  18  FCC  Rcd  at  17153,  para.  294.  In  USTA  II,  the  D.  C.  Circuit  upheld  the  Commissions 
 network  modification  rules.  USTA  II,  359  F.  3d  at  577-  78. 
 68  BellSouth  Petition  at  17;  SureWest  Petition  at  8. 
11
 Federal  Communications  Commission  FCC  04-  248 
 12 
 deployment.  Accordingly,  we  clarify  that  incumbent  LECs  are  not  obligated  to  build  TDM  capability  into  new  packet-  based  networks  or  into  existing  packet-  based  networks  that  never  had  TDM  capability.  69 
 21.  Verizon  states  that  where  incumbent  LECs  deploy  new  FTTH  loops  or  FTTC  loops  using  packet-based  equipment,  they  nevertheless  may  need  to  hand  off  a  signal  to  some  customers  in  TDM  format  in 
 order  to  be  compatible  with  an  end  users  customer  premises  equipment.  70  We  recognize  that  where  an  incumbent  has  deployed  FTTH  or  FTTC  loops  some  customers  may  require  a  modest  format  translation, 
 typically  at  the  customer  premises,  to  make  packet-  based  signals  compatible  with  legacy  customer  premises  equipment.  We  clarify  that  the  existence  of  this  TDM  handoff,  as  described  above  and  in 
 Verizon's  ex  parte,  does  not  change  the  scope  of  the  Commissions  unbundling  relief. 
 III.  PROCEDURAL  MATTERS 
 A.  Supplemental  Final  Regulatory  Flexibility  Analysis 
 22.  As  required  by  the  Regulatory  Flexibility  Act  of  1980,  as  amended  (RFA),  71  an  Initial  Regulatory  Flexibility  Analysis  (IRFA)  was  incorporated  in  the  NPRM.  72  The  Commission  sought  written  public 
 comment  on  the  proposals  in  the  NPRM,  including  comment  on  the  IRFA.  In  the  Triennial  Review  Order,  the  Commission  issued  a  Final  Regulatory  Flexibility  Analysis  (FRFA)  addressing  comments 
 submitted  with  regard  to  the  IRFA.  73  This  present  Order  addresses  issues  raised  by  two  petitions  for  reconsideration  of  the  Triennial  Review  Order.  Specifically,  the  Order  modifies  the  unbundling  rules 
 governing  fiber-  to-  the-  curb  (FTTC)  loops  in  response  to  a  petition  from  BellSouth.  The  Order  also  clarifies  existing  rules  regarding  network  modifications  in  response  to  petitions  from  BellSouth  and 
 SureWest.  This  present  Supplemental  FRFA  (Supplemental  FRFA)  conforms  to  the  RFA.  74 


 69  Of  course,  our  rules  addressing  routine  network  modifications  and  access  to  existing  TDM  capabilities  of  hybrid 
 loops  apply  only  where  the  loop  transmission  facilities  are  subject  to  unbundling,  and  do  not  apply  to  FTTH  loops  or  to  the  FTTC  loops. 


 70  Verizon  Oct.  6  Ex  Parte  Letter  at  2. 
 71  See  5  U.  S.  C.    603.  The  RFA,  see  5  U.  S.  C.    601-  12,  has  been  amended  by  the  Small  Business  Regulatory 
 Enforcement  Fairness  Act  of  1996  (SBREFA),  Pub.  L.  No.  104-  121,  Title  II,  110  Stat.  857  (1996). 
 72  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.  01-  338,  96-  98,  98-  147,  Notice  of  Proposed 


 Rulemaking,  16  FCC  Rcd  22781  (2001)  (NPRM). 
 73  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.  01-  338,  96-  98,  98-  147,  Report  and  Order  and  Order  on 


 Remand  and  Further  Notice  of  Proposed  Rulemaking,  18  FCC  Rcd  16978,  17416-  442,  paras.  730-  86  (2003)  (Triennial  Review  Order)  (subsequent  history  omitted). 


 74  See  5  U.  S.  C.    604. 
12
 Federal  Communications  Commission  FCC  04-  248 
 13 
 1.  Need  for,  and  Objectives  Of,  the  Rule 
 23.  In  response  to  BellSouths  petition  for  reconsideration  of  the  Triennial  Review  Order,  this  Order  promotes  investment  in  broadband  facilities  through  the  implementation  of  the  unbundling  requirements 
 of  section  251  of  the  Act.  Specifically,  the  Order  concludes  that  the  fiber-  to-  the-  home  (FTTH)  rules,  which  relieve  the  incumbent  LECs  from  certain  unbundling  obligations,  will  also  apply  to  FTTC  loops. 
 Specifically,  a  FTTC  loop  is  a  fiber  transmission  facility  connecting  to  copper  distribution  plant  that  is  not  more  than  500  feet  from  the  customers  premises.  The  Commission  further  specifies  that  the  fiber 
 transmission  facility  in  a  FTTC  loop  must  connect  to  copper  distribution  plant  at  a  serving  area  interface  from  which  every  other  copper  distribution  subloop  also  is  not  more  than  500  feet  from  the  respective 
 customers  premises.  In  the  Triennial  Review  Order  released  last  year,  the  Commission  concluded  that  the  broadband  capabilities  of  FTTH  loops  would  be  relieved  from  unbundling  under  section  251  of  the 
 Act.  Todays  action  builds  on  the  broadband  principles  of  the  Triennial  Review  Order  by  further  extending  the  unbundling  relief  FTTC  loops.  In  this  Order,  the  Commission  concludes  that,  as  with 
 FTTH,  competitors  are  not  impaired  without  access  to  FTTC  loops  in  new  build  (  greenfield)  situations.  While  requesting  carriers  may  face  limited  impairment  in  overbuild  (  brownfield)  situations,  that  is 
 addressed  by  requiring  unbundled  access  to  a  64  kbps  channel  or  unbundled  access  to  spare  copper  facilities.  Based  on  this  analysis  of  impairment  and  the  section  706  balancing  of  investment  incentives 
 against  the  costs  of  unbundling  for  FTTC,  the  Commission  concludes  that  FTTC  loops  should  have  the  same  unbundling  relief  as  FTTH  loops.  75 


 24.  Petitions  by  BellSouth  and  SureWest  also  sought  clarification  whether  the  Commissions  existing  unbundling  rules  require  incumbent  LECs  to  build  time  division  multiplexing  (TDM)  capabilities  into 
 networks  at  the  request  of  competitive  LECs.  Consequently,  this  Order  clarifies  that  incumbent  LECs  are  not  required  to  add  TDM  capabilities  into  new  packetized  transmission  facilities.  In  addition,  the  Order 
 also  clarifies  that  where  an  incumbent  LEC  has  deployed  FTTH  or  FTTC  loops  using  packet-  based  equipment,  and  they  nevertheless  need  to  hand  off  a  signal  to  some  customers  in  TDM  format  in  order  to 
 be  compatible  with  an  end  users  customer  premises  equipment,  this  TDM  handoff  does  not  change  the  scope  of  unbundling  relief. 


 2.  Summary  of  Significant  Issues  Raised  by  the  Public 
 25.  The  subject  petitions  for  reconsideration  were  not  submitted  in  response  to  the  previous  FRFA,  and  did  not  address  the  FRFA. 


 3.  Description  and  Estimate  of  the  Number  of  Small  Entities  To  Which  the  Proposed  Rules  Would  Apply 
 26.  The  RFA  directs  agencies  to  provide  a  description  of,  and,  where  feasible,  an  estimate  of,  the  number  of  small  entities  that  may  be  affected  by  the  rules  adopted  herein.  76  The  RFA  generally  defines 
 the  term  small  entity  as  having  the  same  meaning  as  the  terms  small  business,  small  organization,  and  small  governmental  jurisdiction.  77  In  addition,  the  term  small  business  has  the  same  meaning  as 


 75  For  a  more  detailed  discussion  of  the  impairment  analysis  and  section  706  balancing,  see  supra  paras.  11-  19. 
 76  5  U.  S.  C.    604(  a)(  3). 
 77  5  U.  S.  C.    601(  6). 
13
 Federal  Communications  Commission  FCC  04-  248 
 14 
 the  term  small  business  concern  under  the  Small  Business  Act.  78  A  small  business  concern  is  one  which:  (1)  is  independently  owned  and  operated;  (2)  is  not  dominant  in  its  field  of  operation;  and  (3) 
 satisfies  any  additional  criteria  established  by  the  Small  Business  Administration  (SBA).  79 
 27.  In  this  section,  we  further  describe  and  estimate  the  number  of  small  entity  licensees  and  regulatees  that  may  be  affected  by  the  revised  rule  adopted  in  this  Order.  The  most  reliable  source  of 
 information  regarding  the  total  numbers  of  certain  common  carrier  and  related  providers  nationwide,  as  well  as  the  number  of  commercial  wireless  entities,  appears  to  be  the  data  that  the  Commission  publishes 
 in  its  Trends  in  Telephone  Service  report.  80  The  SBA  has  developed  small  business  size  standards  for  wireline  small  businesses  within  the  commercial  census  category  of  Wired  Telecommunications 
 Carriers.  81  Under  this  category,  a  business  is  small  if  it  has  1,500  or  fewer  employees.  Below,  using  the  above  size  standards  and  others,  we  discuss  the  total  estimated  numbers  of  small  businesses  that  might  be 
 affected  by  our  actions. 
 28.  We  have  included  small  incumbent  local  exchange  carriers  in  this  present  RFA  analysis.  As  noted  above,  a  small  business  under  the  RFA  is  one  that,  inter  alia,  meets  the  pertinent  small  business 
 size  standard  (e.  g.,  a  telephone  communications  business  having  1,500  or  fewer  employees),  and  is  not  dominant  in  its  field  of  operation.  82  The  SBAs  Office  of  Advocacy  contends  that,  for  RFA  purposes, 
 small  incumbent  local  exchange  carriers  are  not  dominant  in  their  field  of  operation  because  any  such  dominance  is  not  national  in  scope.  83  We  have  therefore  included  small  incumbent  local  exchange 
 carriers  in  this  RFA  analysis,  although  we  emphasize  that  this  RFA  action  has  no  effect  on  Commission  analyses  and  determinations  in  other,  non-  RFA  contexts. 


 29.  Wired  Telecommunications  Carriers.  The  SBA  has  developed  a  small  business  size  standard  for  Wired  Telecommunications  Carriers,  which  consists  of  all  such  companies  having  1,500  or  fewer 
 employees.  84  According  to  Census  Bureau  data  for  1997,  there  were  2,225  firms  in  this  category,  total, 
 78  5  U.  S.  C.    601(  3)  (incorporating  by  reference  the  definition  of  small-  business  concern  in  the  Small  Business 
 Act,  15  U.  S.  C.    632).  Pursuant  to  5  U.  S.  C.    601(  3),  the  statutory  definition  of  a  small  business  applies  unless  an  agency,  after  consultation  with  the  Office  of  Advocacy  of  the  Small  Business  Administration  and  after  opportunity 


 for  public  comment,  establishes  one  or  more  definitions  of  such  term  which  are  appropriate  to  the  activities  of  the  agency  and  publishes  such  definition(  s)  in  the  Federal  Register. 


 79  15  U.  S.  C.    632. 
 80  FCC,  Wireline  Competition  Bureau,  Industry  Analysis  and  Technology  Division,  Trends  in  Telephone  Service 
 at  Table  5.3,  Page  5-  5  (Aug.  2003)  (Trends  in  Telephone  Service  August  2003  Report).  This  source  uses  data  that  are  current  as  of  December  31,  2001. 


 81  13  C.  F.  R.    121.201,  North  American  Industry  Classification  System  (NAICS)  code  517110. 
 82  15  U.  S.  C.    632. 
 83  Letter  from  Jere  W.  Glover,  Chief  Counsel  for  Advocacy,  SBA,  to  William  E.  Kennard,  Chairman,  FCC  (May  27, 
 1999).  The  Small  Business  Act  contains  a  definition  of  small-  business  concern,  which  the  RFA  incorporates  into  its  own  definition  of  small  business.  See  15  U.  S.  C.    632(  a)  (Small  Business  Act);  5  U.  S.  C.    601(  3)  (RFA). 


 SBA  regulations  interpret  small  business  concern  to  include  the  concept  of  dominance  on  a  national  basis.  13  C.  F.  R.    121.102(  b). 


 84  13  C.  F.  R.    121.201,  NAICS  code  517110. 
14
 Federal  Communications  Commission  FCC  04-  248 
 15 
 that  operated  for  the  entire  year.  85  Of  this  total,  2,201  firms  had  employment  of  999  or  fewer  employees,  and  an  additional  24  firms  had  employment  of  1,000  employees  or  more.  86  Thus,  under  this  size  standard, 
 the  majority  of  firms  can  be  considered  small. 
 30.  Incumbent  Local  Exchange  Carriers.  Neither  the  Commission  nor  the  SBA  has  developed  a  small  business  size  standard  specifically  for  incumbent  local  exchange  services.  The  appropriate  size 
 standard  under  SBA  rules  is  for  the  category  Wired  Telecommunications  Carriers.  Under  that  size  standard,  such  a  business  is  small  if  it  has  1,500  or  fewer  employees.  87  According  to  Commission  data,  88 
 1,337  carriers  have  reported  that  they  are  engaged  in  the  provision  of  incumbent  local  exchange  services.  Of  these  1,337  carriers,  an  estimated  1,032  have  1,500  or  fewer  employees  and  305  have  more  than  1,500 
 employees.  Consequently,  the  Commission  estimates  that  most  providers  of  incumbent  local  exchange  service  are  small  businesses  that  may  be  affected  by  our  proposed  action. 


 31.  Cable  and  Other  Program  Distribution.  In  addition,  the  SBA  has  developed  a  small  business  size  standard  for  Cable  and  Other  Program  Distribution,  89  which  includes  all  such  companies  generating  $12.5 
 million  or  less  in  annual  receipts.  90  According  to  Census  Bureau  data  for  1997,  there  were  a  total  of  1,311  firms  in  this  category,  total,  that  had  operated  for  the  entire  year.  91  Of  this  total,  1,180  firms  had  annual 
 receipts  of  under  $10  million,  and  an  additional  52  firms  had  receipts  of  $10  million  or  more  but  less  than  $25  million.  92  Consequently,  we  estimate  that  the  majority  of  providers  in  this  service  category  are  small 
 businesses  that  may  be  affected  by  the  proposed  rules  and  policies. 
 4.  Description  of  Projected  Reporting,  Recordkeeping,  and  Other  Compliance  Requirements  for  Small  Entities 


 32.  In  this  Order,  we  conclude  that  FTTC  loops  will  be  subject  to  the  same  unbundling  obligations  as  FTTH  loops.  This  rule  modification  will  relieve  the  providers  of  such  broadband  loops  from  unbundling 
 obligations  under  section  251  of  the  Act.  This  relieved  a  section  251  unbundling  requirement  currently  placed  on  such  providers. 


 85  1997  Economic  Census,  Establishment  and  Firm  Size,  Table  5,  NAICS  code  513310  (issued  Oct.  2000). 
 86  Id.  The  census  data  do  not  provide  a  more  precise  estimate  of  the  number  of  firms  that  have  employment  of  1,500 
 or  fewer  employees;  the  largest  category  provided  is  Firms  with  1,000  employees  or  more. 
 87  13  C.  F.  R.    121.201,  North  American  Industry  Classification  System  (NAICS)  code  517110. 


 88  FCC,  Wireline  Competition  Bureau,  Industry  Analysis  and  Technology  Division,  Trends  in  Telephone  Service 
 at  Table  5.3,  Page  5-  5  (Aug.  2003)  (Trends  in  Telephone  Service  August  2003  Report).  This  source  uses  data  that  are  current  as  of  December  31,  2001. 


 89  13  C.  F.  R.    121.201,  NAICS  code  517510. 
 90  Id. 
 91  U.  S.  Census  Bureau,  1997  Economic  Census,  Subject  Series:  Information,  Establishment  and  Firm  Size 
 (Including  Legal  Form  of  Organization),  Table  4  (issued  October  2000). 
 92  Id. 
15
 Federal  Communications  Commission  FCC  04-  248 
 16 
 5.  Steps  Taken  to  Minimize  Significant  Economic  Impact  on  Small  Entities,  and  Significant  Alternatives  Considered 
 33.  The  RFA  requires  an  agency  to  describe  any  significant  alternatives  that  it  has  considered  in  developing  its  approach,  which  may  include  the  following  four  alternatives  (among  others):  (  1)  the 
 establishment  of  differing  compliance  or  reporting  requirements  or  timetables  that  take  into  account  the  resources  available  to  small  entities;  (2)  the  clarification,  consolidation,  or  simplification  of  compliance 
 and  reporting  requirements  under  the  rule  for  such  small  entities;  (3)  the  use  of  performance  rather  than  design  standards;  and  (4)  an  exemption  from  coverage  of  the  rule,  or  any  part  thereof,  for  such  small 
 entities.  93 
 34.  In  this  Order,  we  conclude  that  FTTC  loops  should  be  governed  by  the  FTTH  loop  rules.  The  Order  considered,  and  rejected,  the  alternative  of  retaining  the  existing  unbundling  obligations  for  FTTC. 
 The  Order  reached  this  conclusion  by  applying  principles  established  in  the  Triennial  Review  Order  to  more  precisely  calibrate  the  Commissions  policy  for  broadband  loops.  In  response  to  petitions  for 
 reconsideration  requesting  that  the  Commission  look  more  closely  at  the  unbundling  requirements  for  FTTC  loops,  the  Order  considers  potential  impairment  faced  by  requesting  carriers  and  weighs  section 
 706s  broadband  deployment  goals,  and  concludes  that  the  record  demonstrates  that  FTTC  loops  should  have  the  same  unbundling  relief  as  FTTH  loops.  Although  this  rule  will  deny  unbundling  to  competitive 
 carriers  seeking  to  serve  customers  served  by  FTTC  loops,  the  Commission  concluded  that  requesting  carriers  face  no  impairment  in  greenfield  situations  and  only  limited  impairment  in  brownfield  situations, 
 which  is  addressed  through  access  to  a  64  kbps  channel  or  a  spare  copper  facility.  Further,  such  unbundling  relief  was  necessary  to  remove  disincentives  for  incumbent  LECs  to  deploy  FTTC  facilities.  94 
 Alternatives  considered,  including  the  denial  of  such  unbundling  relief  to  FTTC,  were  not  adopted  because  they  do  not  accomplish  the  Commissions  objectives  in  this  proceeding  of  promoting  broadband 
 deployment.  95 
 35.  Report  to  Congress:  The  Commission  will  send  a  copy  of  the  Order,  including  this  Supplemental  FRFA,  in  a  report  to  be  sent  to  Congress  pursuant  to  the  Congressional  Review  Act.  96  In 
 addition,  the  Commission  will  send  a  copy  of  the  Order,  including  this  Supplemental  FRFA,  to  the  Chief  Counsel  for  Advocacy  of  the  SBA.  A  copy  of  the  Order  and  Supplemental  FRFA  (or  summaries  thereof) 
 will  also  be  published  in  the  Federal  Register. 
 B.  Final  Paperwork  Reduction  Act  Analysis 
 36.  This  document  does  not  contain  new  or  modified  information  collection  requirements  subject  to  the  Paperwork  Reduction  Act  of  1995  (PRA),  Public  Law  104-  13.  In  addition,  therefore,  it  does  not 
 contain  any  new  or  modified  information  collection  burden  for  small  business  concerns  with  fewer  than  25  employees,  pursuant  to  the  Small  Business  Paperwork  Relief  Act  of  2002,  Public  Law  107-  198,  see 
 44  U.  S.  C.    3506(  c)(  4). 


 93  5  U.  S.  C.    603(  c)(  1)    (c)(  4). 
 94  See  paras.  7-  8,  supra. 
 95  See  paras.  7-  9,  supra. 
 96  See  5  U.  S.  C.    801(  a)(  1)(  A). 
16
 Federal  Communications  Commission  FCC  04-  248 
 17 
 IV.  ORDERING  CLAUSES 
 37.  IT  IS  ORDERED  that,  pursuant  to  the  authority  contained  in  sections  2,  4(  i)-  4(  j),  10(  d),  201,  251,  303(  r),  and  706  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    152,  154(  i)-  4(  j),  160(  d), 
 201,  251,  303(  r),  706  this  Order  on  Reconsideration  IS  ADOPTED,  and  that  part  51  of  the  Commissions  rules,  47  CFR  part  51,  is  amended  as  set  forth  in  Appendix  B  of  the  Order.  The  requirements  of  this 
 Order  shall  become  effective  30  days  after  publication  in  the  federal  register. 
 38.  IT  IS  FURTHER  ORDERED  that,  pursuant  to  the  authority  contained  in  sections  2,  4(  i)-  4(  j),  10(  d),  201,  251,  303(  r),  and  706  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    152, 
 154(  i)-  4(  j),  160(  d),  201,  251,  303(  r),  and  706,  the  petitions  for  reconsideration  filed  by  BellSouth  and  SureWest  ARE  GRANTED  IN  PART. 


 39.  IT  IS  FURTHER  ORDERED  that  the  Commissions  Consumer  and  Governmental  Affairs  Bureau,  Reference  Information  Center,  SHALL  SEND  a  copy  of  this  Order,  including  the  Supplemental 
 Final  Regulatory  Flexibility  Analysis,  to  the  Chief  Counsel  for  Advocacy  of  the  Small  Business  Administration. 


 FEDERAL  COMMUNICATIONS  COMMISSION 
 Marlene  H.  Dortch  Secretary 
17
 Federal  Communications  Commission  FCC  04-  248 
 18 
 APPENDIX  A 
 LIST  OF  COMMENTERS 
 Comments  Abbreviation  Association  for  Local  Telecommunications  Services  ALTS 
 Allegiance  Telecom  et.  al  AT&  T  Corporation  AT&  T 
 BellSouth  Corporation  BellSouth  Catena  Networks  ,  Inc.  Catena 
 Cellular  Mobile  Systems  of  St  Cloud  Covad  Communications  Covad 
 El  Paso  Networks/  Fibernet/  McLeodUSA  High  Tech  Broadband  Coalition 
 MCI  MCI  New  South  Communication,  Inc./  Comptel,  Inc./  Ascent  Alliance 
 PACE  Coalition  PACE  Qwest  Communications  Qwest 
 Rural  Independent  Competitive  Alliance  RICA  SBC  Communications,  Inc.  SBC 
 Sprint  Communications,  Inc.  Sprint  Talk  America  Inc./  Nu  Vox  Inc./  XO  Communications  Inc. 
 Verizon  Communications,  Inc.  Verizon  Z-  Tel  Communications,  Inc. 


 Reply  Comments  Allegiance  Telecom  et.  al. 
 AT&  T  Corporation  AT&  T  AT&  T  Wireless 
 BellSouth  Corporation  Coalition  for  High-  Speed  Online  Internet  Competition 
 and  Enterprise  CHOICE  Earthlink,  Inc. 
 El  Paso  Networks/  Fibernet/  McLeodUSA  Marconi  Corporation  Marconi 
 National  Association  of  State  Utility  Consumer  Advocates  NASUCA 
 Nextel  Communications  Qwest  Communications  Qwest 
 SBC  Communications,  Inc.  SBC  SureWest  Communications  SureWest 
 Telecommunications  Research  and  Action  Center  et.  al.  T-  Mobile  USA,  Inc. 
 Verizon  Communications,  Inc. 
18
 Federal  Communications  Commission  FCC  04-  248 
 19 
 APPENDIX  B    FINAL  RULES 
 PART  51  of  Title  47  of  the  Code  of  Federal  Regulations  is  amended  as  follows: 
 PART  51    INTERCONECTION 
 40.  Section  51.319  is  amended  by  revising  paragraph  (a)(  3)  as  follows: 
   51.319  Specific  unbundling  requirements. 
 (a)  ***  (3)  Fiber  loops. 


 (i)  Definitions. 
 (A)  Fiber-  to-  the-  home  loops.  A  fiber-  to-  the-  home  loop  is  a  local  loop  consisting  entirely  of  fiber  optic  cable,  whether  dark  or  lit,  serving  an  end  users  customer  premises  or, 
 in  the  case  of  predominantly  residential  multiple  dwelling  units  (MDUs),  a  fiber  optic  cable,  whether  dark  or  lit,  that  extends  to  the  multiunit  premises  minimum  point  of 
 entry  (MPOE). 
 (B)  Fiber-  to-  the-  curb  loops.  A  fiber-  to-  the-  curb  loop  is  a  local  loop  consisting  of  fiber  optic  cable  connecting  to  a  copper  distribution  plant  that  is  not  more  than  500  feet 
 from  the  customers  premises  or,  in  the  case  of  predominantly  residential  MDUs,  not  more  than  500  feet  from  the  MDUs  MPOE.  The  fiber  optic  cable  in  a  fiber-  to-  the-curb 
 loop  must  connect  to  a  copper  distribution  plant  at  a  serving  area  interface  from  which  every  other  copper  distribution  subloop  also  is  not  more  than  500  feet  from  the 
 respective  customers  premises. 
 (ii)  New  builds.  An  incumbent  LEC  is  not  required  to  provide  nondiscriminatory  access  to  a  fiber-  to-  the-  home  loop  or  a  fiber-  to-  the-  curb  loop  on  an  unbundled  basis  when  the 
 incumbent  LEC  deploys  such  a  loop  to  an  end  users  customer  premises  that  previously  has  not  been  served  by  any  loop  facility. 


 (iii)  Overbuilds.  An  incumbent  LEC  is  not  required  to  provide  nondiscriminatory  access  to  a  fiber-  to-  the-  home  loop  or  a  fiber-  to-  the-  curb  loop  on  an  unbundled  basis  when  the 
 incumbent  LEC  has  deployed  such  a  loop  parallel  to,  or  in  replacement  of,  an  existing  copper  loop  facility,  except  that: 


 (A)  The  incumbent  LEC  must  maintain  the  existing  copper  loop  connected  to  the  particular  customer  premises  after  deploying  the  fiber-  to-  the-  home  loop  or  the  fiber-to- 
 the-  curb  loop  and  provide  nondiscriminatory  access  to  that  copper  loop  on  an  unbundled  basis  unless  the  incumbent  LEC  retires  the  copper  loops  pursuant  to 
 paragraph  (a)(  3)(  iv)  of  this  section. 
 (B)  An  incumbent  LEC  that  maintains  the  existing  copper  loops  pursuant  to  paragraph  (a)(  3)(  iii)(  A)  of  this  section  need  not  incur  any  expenses  to  ensure  that  the  existing 
 copper  loop  remains  capable  of  transmitting  signals  prior  to  receiving  a  request  for 
19
 Federal  Communications  Commission  FCC  04-  248 
 20 
 access  pursuant  to  that  paragraph,  in  which  case  the  incumbent  LEC  shall  restore  the  copper  loop  to  serviceable  condition  upon  request. 
 (C)  An  incumbent  LEC  that  retires  the  copper  loop  pursuant  to  paragraph  (a)(  3)(  iv)  of  this  section  shall  provide  nondiscriminatory  access  to  a  64  kilobits  per  second 
 transmission  path  capable  of  voice  grade  service  over  the  fiber-  to-  the-  home  loop  or  fiber-  to-  the-  curb  loop  on  an  unbundled  basis. 


 (iv)  Retirement  of  copper  loops  or  copper  subloops.  Prior  to  retiring  any  copper  loop  or  copper  subloop  that  has  been  replaced  with  a  fiber-  to-  the-  home  loop  or  a  fiber-  to-  the-  curb  loop,  an 
 incumbent  LEC  must  comply  with: 
 (A)  The  network  disclosure  requirements  set  forth  in  section  251(  c)(  5)  of  the  Act  and  in    51.325  through    51.335;  and 


 (B)  Any  applicable  state  requirements. 
 ***** 
 41.  Section  51.325  is  amended  by  revising  paragraph  (a)(  4)  to  read  as  follows: 
   51.325  Notice  of  network  changes:  Public  notice  requirement. 
 (a)  ***  (4)  Will  result  in  the  retirement  of  copper  loops  or  copper  subloops,  and  the  replacement  of  such 
 loops  with  fiber-  to-  the-  home  loops  or  fiber-  to-  the-  curb  loops,  as  those  terms  are  defined  in    51.319(  a)(  3). 


 ***** 
 42.  Section  51.331  is  amended  by  revising  paragraph  (c)  to  read  as  follows: 
   51.331  Notice  of  network  changes:  Timing  of  notice. 
 ***** 
 (c)  Competing  service  providers  may  object  to  incumbent  LEC  notice  of  retirement  of  copper  loops  or  copper  subloops  and  replacement  with  fiber-  to-  the-  home  loops  or  fiber-  to-  the-  curb  loops  in  the  manner 
 set  forth  in    51.333(  c). 
 43.  Section  51.333  is  amended  by  revising  paragraphs  (b)  and  (c)  introductory  text,  and  by  revising  paragraph  (f)  to  read  as  follows: 


   51.333  Notice  of  Network  Changes:  Short  term  notice,  objections  thereto  and  objections  to  retirement  of  copper  loops  or  copper  subloops. 
 ***** 
20
 Federal  Communications  Commission  FCC  04-  248 
 21 
 (b)  Implementation  date.  The  Commission  will  release  a  public  notice  of  filings  of  such  short  term  notices  or  notices  of  replacement  of  copper  loops  or  copper  subloops  with  fiber-  to-  the-  home  loops  or 
 fiber-  to-  the-  curb  loops.  The  effective  date  of  the  network  changes  referenced  in  those  filings  shall  be  subject  to  the  following  requirements: 


 (i)  Short  term  notice.  Short  term  notices  shall  be  deemed  final  on  the  tenth  business  day  after  the  release  of  the  Commissions  public  notice,  unless  an  objection  is  filed  pursuant  to  paragraph  (c) 
 of  this  section. 
 (ii)  Replacement  of  copper  loops  or  copper  subloops  with  fiber-  to-  the-  home  loops  or  fiber-  to-the-  curb  loops.  Notices  of  replacement  of  copper  loops  or  copper  subloops  with  fiber-  to-  the-home 
 loops  or  fiber-  to-  the-  curb  loops  shall  be  deemed  approved  on  the  90th  day  after  the  release  of  the  Commissions  public  notice  of  the  filing,  unless  an  objection  is  filed  pursuant  to  paragraph 
 (c)  of  this  section.  Incumbent  LEC  notice  of  intent  to  retire  any  copper  loops  or  copper  subloops  and  replace  such  loops  or  subloops  with  fiber-  to-  the-  home  loops  or  fiber-  to-  the-  curb  loops  shall 
 be  subject  to  the  short  term  notice  provisions  of  this  section,  but  under  no  circumstances  may  an  incumbent  LEC  provide  less  than  90  days  notice  of  such  a  change. 


 (c)  Objection  procedures  for  short  term  notice  and  notices  of  replacement  of  copper  loops  or  copper  subloops  with  fiber-  to-  the-  home  loops  or  fiber-  to-  the-  curb  loops.  An  objection  to  an  incumbent  LECs 
 short  term  notice  or  to  its  notice  that  it  intends  to  retire  copper  loops  or  copper  subloops  and  replace  such  loops  or  subloops  with  fiber-  to-  the-  home  loops  or  fiber-  to-  the-  curb  loops  may  be  filed  by  an  information 
 service  provider  or  telecommunications  service  provider  that  directly  interconnects  with  the  incumbent  LECs  network.  Such  objections  must  be  filed  with  the  Commission,  and  served  on  the  incumbent  LEC, 
 no  later  than  the  ninth  business  day  following  the  release  of  the  Commissions  public  notice.  All  objections  filed  under  this  section  must: 


 ***** 
 (f)  Resolution  of  objections  to  replacement  of  copper  loops  or  copper  subloops  with  fiber-  to-  the-  home  loops  or  fiber-  to-  the-  curb  loops.  An  objection  to  a  notice  that  an  incumbent  LEC  intends  to  retire  any 
 copper  loops  or  copper  subloops  and  replace  such  loops  or  subloops  with  fiber-  to-  the-  home  loops  or  fiber-  to-  the-  curb  loops  shall  be  deemed  denied  90  days  after  the  date  on  which  the  Commission  releases 
 public  notice  of  the  incumbent  LEC  filing,  unless  the  Commission  rules  otherwise  within  that  time.  Until  the  Commission  has  either  ruled  on  an  objection  or  the  90-  day  period  for  the  Commissions  consideration 
 has  expired,  an  incumbent  LEC  may  not  retire  those  copper  loops  or  copper  subloops  at  issue  for  replacement  with  fiber-  to-  the-  home  loops  or  fiber-  to-  the-  curb  loops. 
21
 Federal  Communications  Commission  FCC  04-  248 
 22 
 STATEMENT  OF  CHAIRMAN  MICHAEL  K.  POWELL 
 Re:  Review  of  the  Section  251  Unbundling  Obligations  for  Incumbent  Local  Exchange  Carriers;  Implementation  of  the  Local  Competition  Provisions  of  the 
 Telecommunications  Act  of  1996  (CC  Docket  Nos.  01-  338,  96-  98);  Deployment  of  Wireline  Services  Offering  Advanced  Telecommunications  Capability  (CC  Docket 
 No.  98-  147),  Order  on  Reconsideration 


 Deep  fiber  networks  offer  consumers  a  triple  play  of  voice,  video  and  data  services  and  an  alternative  to  cable.  By  limiting  the  unbundling  obligations  of  incumbents  when  they  roll  out 
 deep  fiber  networks  to  residential  consumers,  we  restore  the  marketplace  incentives  of  carriers  to  invest  in  new  networks. 


 This  item  follows  on  from  the  Triennial  Review  Order,  where  the  Commission  limited  the  unbundling  obligations  imposed  on  mass  market  fiber-  to-  the-  home  (FTTH)  deployments  to 
 remove  disincentives  to  the  deployment  of  advanced  telecommunications  facilities  in  the  mass  market.  These  measures  have  proven  a  success  in  driving  the  deployment  of  next  generation 
 broadband.  Todays  order  promotes  incumbent  LEC  investment  in  broadband  facilities  by  extending  the  FTTH  rules  to  fiber-  to-  the-  curb  (FTTC)  loops,  as  well.  FTTC  and  FTTH 
 technologies  have  different  technological  and  cost  characteristics.  Carriers  are  continually  evaluating  new  equipment  and  transmission  technologies  that  offer  exceptionally  fast 
 connections.  This  dynamic  may  lead  individual  carriers  to  prefer  different  FTTH  or  FTTC  technologies  in  different  circumstances.  The  approach  in  this  item  is  to  ensure  that  regulation 
 does  not  skew  that  choice  one  way  or  another    so  long  as  consumers  receive  the  fully  panoply  of  next-  generation  services.  Our  Section  706  interests  are  satisfied  when  consumers  experience 
 speed  of  20  Mbs  or  higher,  speeds  that  are  well  in  excess  of  todays  DSL  or  cable  modem  services. 


 There  is,  however,  an  important  limiting  principle  in  this  item:  our  rules  demand  that  carriers  deploy  fiber  deep  into  neighborhoods    within  500  feet  of  a  customers  home.  Our 
 policy  is  designed  to  remove  regulatory  barriers  to  these  risky  investments;  but  we  will  remain  watchful  of  requests  that  would  back  the  Commission  up  from  the  broadband  future.  Consumers 
 deserve  information  at  the  speed  of  light  and  by  taking  action  today,  we  move  one  step  closer  to  that  result. 
22
 Federal  Communications  Commission  FCC  04-  248 
 24 
 DISSENTING  STATEMENT  OF  COMMISSIONER  MICHAEL  J.  COPPS 
 Re:  Review  of  the  Section  251  Unbundling  Obligations  for  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) 
 Though  todays  Order  speaks  in  glowing  terms  about  broadband  relief,  the  reality  is  far  less  radiant.  I  dont  believe  competitive  telecommunications  have  been  faring  very  well  under 
 our  watch  and  this  particular  proceeding  strikes  me  as  yet  another  in  a  series  of  prescriptions  this  Commission  is  willing  to  write  to  end  competitive  access  to  last  mile  facilities.  It  seems  every 
 month  brings  a  new  onslaught. 
 I  did  not  support  the  basic  approach  embraced  here  when  the  Commission  set  out  to  restrict  access  to  fiber  loops  in  the  Triennial  Review.  So  it  will  surprise  no  one  that  I  do  not 
 support  it  here  with  the  majority  venturing  even  deeper  into  the  denial  of  access  to  bottleneck  facilities.  By  expanding  the  fiber-  to-  the-  home  unbundling  exemption  to  fiber-  to-  the-  curb 
 architectures  a  huge  step  even  in  light  of  the  dramatic  competitive  restrictions  in  the  Triennial  Review  this  decision  restricts  broadband  competition  for  residential  consumers.  It  also 
 constitutes  an  ominous  precedent  for  the  small  business  community.  Neither  does  it  bode  well  for  independent  providers  of  VoIP  services  who  dont  own  or  control  the  physical  layer  of  the 
 network. 
 Here  is  why  I  think  this  approach  is  dangerous.  The  loop  represents  the  prized  last  mile  of  communications.  Putting  it  beyond  the  reach  of  competitors  can  only  entrench  incumbents 
 who  already  hold  sway.  Monopoly  control  of  the  last  mile  created  all  kinds  of  problems  for  basic  telephone  service  in  the  last  century,  and  now  we  seem  bent  on  replicating  that  sad  story 
 for  advanced  services  in  the  digital  age.  Unfortunately,  the  digital  age  is  going  to  take  a  lot  longer  to  get  here  because  of  the  blows  we  are  inflicting  on  competition.  In  the  Triennial 
 Review,  the  majority  started  down  a  hazardous  path.  They  began  by  exempting  fiber-  to-  the-home  loops  from  competition.  Last  summer  the  majority  extended  this  exemption  to  primarily 
 residential  buildings.  In  doing  so,  they  blurred  the  line  between  mass  market  and  small  business  customers.  As  a  result,  millions  of  small  businesses  located  in  buildings  that  also  have 
 residential  apartments  are  now  going  to  be  denied  the  enhanced  services  and  lower  prices  that  competition  can  bring.  Now,  today,  the  Commission  treks  even  further  down  this  road  by 
 exempting  fiber-  to-  the-  curb  facilities  from  competition.  And  they  add  to  the  damage  by  adopting  an  incomprehensible  routine  network  modification  policy. 


 If  we  arent  going  to  listen  to  consumers,  one  would  think  this  Commission  would  at  least  listen  to  the  investors  who  wrote  us  again  last  week  that  our  broadband  policies  are 
 undermining  competition,  undermining  facilities-  based  carriers  who  need  last-  mile  access  to  service  small  business  customers,  and  undermining  the  confidence  of  investors  who  want  to  put 
 money  into  this  kind  of  competition  in  fact  who  have  already  done  so! 
24
 Federal  Communications  Commission  FCC  04-  248 
 25 
 It  doesnt  take  a  compass  to  see  what  direction  this  is  heading.  With  fewer  and  fewer  loops  available  to  competitors,  more  and  more  control  will  be  wrestled  away  from  consumers 
 and  placed  with  the  entrenched  owner  of  the  last  mile  facility.  By  shutting  off  the  last  mile  to  competitors,  the  Commission  is  not  ushering  in  a  new  era  of  broadband.  It  is  returning  to  the 
 failed  and  non-  competitive  policies  of  the  past.  Residential  consumers,  small  businesses,  edge  providers  of  VoIP  and  others  who  rely  on  competitive  broadband  will  be  stuck  with  the 
 consequences,  and  the  consequences  will  be  with  us  for  a  long  time  and  will,  I  predict,  kick  us  further  down  that  broadband  penetration  ladder  where  your  country  and  mine  now  ranks  Number 
 11.  Number  11.  I  think  the  policy  is  wrong,  I  think  its  dangerous,  I  think  it  runs  against  the  direction  set  by  Congress,  and  I  feel  compelled  to  dissent. 
25
 Federal  Communications  Commission  FCC  04-  248 
 26 
 STATEMENT  OF  COMMISSIONER  KEVIN  J  .  MARTIN 
 Re:  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;  Order  on  Reconsideration,  CC  Docket  Nos.  01-  338,  96- 
 98,  98-  147. 


 Today,  the  Commission  continues  its  effort  to  promote  the  deployment  of  new  broadband  networks  throughout  the  nation.  Investment  in  broadband  facilities  and  high-  speed  networks  is 
 critical  to  providing  American  consumers  with  21  st  century  advanced  services  and  capabilities. 
 In  providing  the  same  regulatory  relief  for  fiber-  to-  the-  curb  (  FTTC)  loops  as  we  established  for  fiber-  to-  the-  premises  (  FTTP)  loops,  we  encourage  the  deployment  of  new 
 packetized  fiber  networks  and  bring  the  potential  for  new  advanced  services  closer  to  the  American  consumer. 


 I  am  pleased  that  todays  action  continues  our  effort  to  lift  legacy  regulations  on  new  broadband  investment.  We  also  clarify  that  our  intention  was  to  preserve  access  to  the 
 incumbent  LECs  existing  network  facilities,  and  to  provide  access  to  DS-  1  loops  only  over  TDM  capable  hybrid  network  facilities  and  not  over  packetized  network  facilities.  In  the 
 Triennial  Review  Order,  we  held  that  ILECs  need  not  unbundle  their  packet-  based  networks,  including  any  packetized  transmission  path. 


 In  particular,  we  recognize  that  where  ILECs  deploy  new  packet-  based  networks  they  nevertheless  may  need  to  hand-  off  a  signal  to  some  customers  in  TDM  format  in  order  to  be 
 compatible  with  an  end  users  customer  premises  equipment.  The  decision  makes  clear  that  carriers  that  choose  to  deploy  new  packet-  based  networks  will  not  be  required  to  unbundle  their 
 new  packet-  based  networks  regardless  of  whether  they  hand  off  a  signal  in  a  TDM  format  to  any  such  customer. 


 I  look  forward  to  working  with  my  colleagues  on  our  on-  going  effort  to  ensure  that  we  provide  significant  relief  from  legacy  regulations  to  continue  to  spur  investment  and  deployment 
 of  new  packetized  networks  and  facilities  that  will  bring  new  broadband  services  to  all  Americans  throughout  the  nation. 
26
 Federal  Communications  Commission  FCC  04-  248 
 27 
 STATEMENT  OF  COMMISSIONER  JONATHAN  S.  ADELSTEIN 
 CONCURRING  IN  PART,  DISSENTING  IN  PART 
 Re:  Review  of  Section  251  Unbundling  Obligations  of  Incumbent  Local  Exchange  Carriers,  Implementation  of  the  Local  Competition  Provisions  of  the  Telecommunications  Act  of  1996, 
 Deployment  of  Wireline  Service  Offering  Advanced  Telecommunications  Capability,  CC  Docket  Nos.  01-  338,  96-  98,  98-  147 


 In  this  Order,  we  once  again  reconsider  portions  of  our  Triennial  Review  Order  and  our  unbundling  rules  for  high-  speed  fiber  loops  capable  of  delivering  advanced  data,  video  and  voice 
 service  to  the  mass  market.  Throughout  this  proceeding,  I  have  sought  to  take  a  careful  and  balanced  view  of  the  benefits  and  burdens  of  our  unbundling  rules.  In  our  prior  Orders,  that 
 approach  led  me  to  support  measured  unbundling  relief  for  broadband  investment  in  so-  called  greenfield  areas,  where  there  is  no  existing  loop  plant  and  competitors  and  incumbents  stand 
 on  equal  footing.  I  concur  in  much  of  this  Order  in  that  I  support  granting  targeted  additional  unbundling  relief  for  fiber-  to-  the  curb  (FTTC)  loops  to  serve  mass  market  customers  in 
 greenfield  areas.  I  cannot,  however,  join  in  the  full  decision  because  it  is  unnecessarily  overbroad  and  lacks  the  analytical  depth  to  address  the  specific  requirements  of  the  Act. 


 Ensuring  that  all  Americans  have  reasonable  and  timely  access  to  broadband  services  is  our  charge  under  the  Act  and  is  an  issue  of  critical  importance  to  the  health  of  our  economy  and 
 the  vibrancy  of  our  nation.  I  concur  in  todays  decision  because  it  extends  symmetry  to  our  treatment  of  two  closely  related  network  architectures,  fiber-  to-  the-  home  (FTTH)  and  FTTC, 
 each  of  which  make  possible  the  next  generation  broadband  services  that  Congress  directed  us  to  promote.  Given  the  close  functional  characteristics  of  FTTH  and  FTTC,  I  support  the  Orders 
 conclusion  that  unbundling  relief  in  greenfield  areas  should  encourage  investment  in  broadband  facilities  to  serve  mass  market  customers. 


 The  decision  to  impose  or  lift  unbundling  requirements  under  section  251  is  not  a  trivial  matter.  The  Acts  local  competition  provisions  are  of  enormous  importance  to  providers,  both 
 competitors  and  incumbents,  alike,  and,  ultimately,  to  American  consumers.  Consistent  with  Congress  vision,  where  barriers  to  deployment  are  equivalent,  we  should  give  providers  every 
 incentive  to  invest  in  and  roll-  out  next  generation  facilities  that  will  bring  the  benefit  of  advanced  services  to  American  consumers.  That  is  what  the  Commission  does  in  the 
 greenfields  portion  of  this  Order.  I  can  only  concur  in  my  support,  however,  because  I  believe  that  this  Order  could  have  provided  much  more  analytical  depth.  The  Order  is  lacking  in  its 
 factual  consideration  of  impairment,  failing  to  address  in  any  comprehensive  way  the  level  of  competition  between  incumbents  and  new  entrants  to  deploy  FTTC  or  FTTH  loops.  One 
 predicate  of  the  original  Triennial  Review  Order  was  that  unbundling  relief  would  create  incentives  for  both  incumbents  and  competitors  to  deploy  last  mile  FTTH  loops.  Yet,  the  Order 
 includes  no  new  analysis  of  the  level  of  FTTH  deployment  to  mass  market  customers  by  competitors,  whether  intramodal  or  intermodal,  despite  the  fact  that  this  approach  has  now  been 
 in  place  for  well-  over  a  year  and  it  has  been  over  two  years  since  the  record  closed  on  the  original  proceeding. 
27
 Federal  Communications  Commission  FCC  04-  248 
 28 
 The  lack  of  analysis  of  deployment  by  competitors  is  perhaps  more  stark  in  the  consideration  of  so-  called  brownfield  developments,  where  providers  are  overbuilding  their 
 existing  networks.  In  my  view,  the  Commission  once  again  fails  to  delve  deeply  to  address  these  very  different  factual  scenarios.  I  have  similar  concerns  about  the  Orders  revision  of  our 
 network  modification  rules,  which  seems  to  invite  more  questions  than  it  answers.  Given  this  lack  of  evidence  and  analysis,  I  cannot  join  these  portions  of  the  Order. 


 I  am  also  concerned  that,  despite  the  functional  similarities  between  FTTH  and  FTTC  architectures,  the  Commission  moves  the  bar  in  this  Order  without  a  clear  vision  for  the 
 evolution  of  these  technologies.  By  extending  relief  here  we  shift  the  clear  distinctions  drawn  between  FTTH  loops  and  hybrid  loops,  which  use  combinations  of  fiber  and  copper 
 technology  and  which  warranted  a  separate  analysis  and  regulatory  treatment  under  our  previous  orders.  While  this  Order  rests  on  standards  for  functionality  supported  by  industry  consensus,  I 
 question  whether  the  Order  articulates  a  clear  standard  that  will  serve  us  for  long  in  this  quickly  evolving  technological  marketplace. 


 This  Order  does  respond  partially  to  one  of  my  chief  concerns  about  our  prior  Order  concerning  fiber-  to-  multi-  dwelling  units,  adopted  earlier  this  year,  by  explicitly  confining  its 
 relief  to  mass  market  customers.  This  is  a  useful  clarification,  though  the  Commission  would  assist  all  parties  by  providing  a  clear  definition  of  that  line,  something  that  is  once  again  missing 
 in  this  item.  The  importance  of  competitive  choice  for  small  business  consumers  has  been  widely  recognized  as  a  driver  of  economic  growth,  so  it  is  unclear  why  the  Commission  once 
 again  fails  to  articulate  clearly  our  rules  in  this  area. 
 For  these  reasons,  I  concur  in  part  and  dissent  in  part. 
28