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 Federal  Communications  Commission  FCC  02-  63 
 Before  the  Federal  Communications  Commission 
 Washington,  D.  C.  20554 


 In  the  Matter  of 
 Application  by  Verizon  New  England  Inc.,  Bell  Atlantic  Communications,  Inc.  (d/  b/  a 
 Verizon  Long  Distance),  NYNEX  Long  Distance  Company  (d/  b/  a  Verizon  Enterprise 
 Solutions),  Verizon  Global  Networks  Inc.,  and  Verizon  Select  Services  Inc.,  for 
 Authorization  To  Provide  In-  Region,  InterLATA  Services  in  Rhode  Island 


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 CC  Docket  No.  01-  324 


 MEMORANDUM  OPINION  AND  ORDER 
 Adopted:  February  22,  2002  Released:  February  22,  2002 
 By  the  Commission:  Commissioner  Copps  concurring  and  issuing  a  statement;  Commissioner  Martin  approving  in  part,  concurring  in  part,  and  issuing  a  statement. 


 Paragraph 
 I.  INTRODUCTION..............................................................................................................  1 
 II.  BACKGROUND................................................................................................................  4 
 III.  CHECKLIST  COMPLIANCE.......................................................................................  18 
 A.  CHECKLIST  ITEM  2    UNBUNDLED  NETWORK  ELEMENTS..............................................  20  1.  Pricing  of  Network  Elements............................................................................  20 


 2.  Operations  Support  Systems  .............................................................................  58  3.  UNE  Combinations...........................................................................................  72 
 B.  OTHER  ITEMS.................................................................................................................  73  1.  Checklist  Item  1    Interconnection...................................................................  73 
 2.  Checklist  Item  4    Unbundled  Local  Loops  .....................................................  76  3.  Checklist  Item  5    Transport  ............................................................................  91 
 4.  Checklist  Item  14    Resale  ...............................................................................  94  C.  REMAINING  CHECKLIST  ITEMS  (3,  6-  13)........................................................................  97 


 IV.  COMPLIANCE  WITH  SECTION  271(  c)(  1)(  A)...........................................................  98 
 V.  SECTION  272  COMPLIANCE....................................................................................  101 
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 VI.  PUBLIC  INTEREST  ANALYSIS................................................................................  102 
 A.  PRICE  SQUEEZE  ARGUMENTS  ......................................................................................  107  B.  ASSURANCE  OF  FUTURE  COMPLIANCE.........................................................................  108 


 VII.  SECTION  271(  d)(  6)  ENFORCEMENT  AUTHORITY.............................................  111 
 VIII.  CONCLUSION  ..............................................................................................................  114 
 IX.  ORDERING  CLAUSES................................................................................................  115 
 APPENDIX  A:  LIST  OF  COMMENTERS  APPENDIX  B:  RHODE  ISLAND  PERFORMANCE  DATA 
 APPENDIX  C:  MASSACHUSETTS  PERFORMANCE  DATA  APPENDIX  D:  STATUTORY  REQUIREMENTS 


 I.  INTRODUCTION 
 1.  On  November  26,  2001,  Verizon  New  England  Inc.,  Bell  Atlantic  Communications,  Inc.  (d/  b/  a  Verizon  Long  Distance),  NYNEX  Long  Distance  Company  (d/  b/  a 


 Verizon  Enterprise  Solutions),  Verizon  Global  Networks  Inc.,  and  Verizon  Select  Services  Inc.  (Verizon)  filed  this  application  pursuant  to  section  271  of  the  Communications  Act  of  1934,  as 
 amended,  1  for  authority  to  provide  in-  region,  interLATA  service  originating  in  the  State  of  Rhode  Island  and  Providence  Plantations  (Rhode  Island).  We  grant  the  application  in  this  Order 
 based  on  our  conclusion  that  Verizon  has  taken  the  statutorily  required  steps  to  open  its  local  exchange  markets  in  Rhode  Island  to  competition. 


 2.  According  to  Verizon,  competing  carriers  in  Rhode  Island  serve  approximately  119,000  lines  (counting  competitive  lines  served  by  resale,  unbundled  network  elements,  and 
 competitive  LEC  facilities),  or  nearly  16  percent  of  the  total  access  lines  in  the  state.  2  Across  the  state,  competitors  serve  approximately  94,000  lines  using  unbundled  network  elements  or  their 


 1  We  refer  to  the  Communications  Act  of  1934,  as  amended  by  the  Telecommunications  Act  of  1996  and  other 
 statutes,  as  the  Communications  Act,  or  the  Act.  See  47  U.  S.  C.    151  et  seq.  We  refer  to  the  Telecommunications  Act  of  1996  as  the  1996  Act.  See  Telecommunications  Act  of  1996,  Pub.  L.  No.  104-  104,  110  Stat.  56  (1996). 


 2  See  Letter  from  Clint  E.  Odom,  Director  -  Federal  Regulatory,  Verizon,  to  Magalie  Roman  Salas,  Secretary, 
 Federal  Communications  Commission,  CC  Docket  No.  01-  324  (filed  Dec.  11,  2001)  (clarifying  information  contained  in  Verizon  Application,  App.  A,  Vol.  3,  Tab  F,  Local  Competition  in  Rhode  Island  (Verizon  Local 


 Competition  Report))  (Verizon  Dec.  11  Ex  Parte  Letter)  and  Letter  from  Clint  E.  Odom,  Director    Federal  Regulatory,  Verizon,  to  Magalie  Roman  Salas,  Secretary,  Federal  Communications  Commission,  CC  Docket  No. 
 01-  324  (filed  Dec.  20,  2001)  (providing  retail  line  counts  for  Verizon  Rhode  Island  and  clarifying  information  contained  in  Verizon  Local  Competition  Report)  (Verizon  Dec.  20  Ex  Parte  Letter)  (citing  confidential  portion);  see 
 also  Letter  from  Clint  E.  Odom,  Directory  -  Federal  Regulatory,  Verizon,  to  Magalie  Roman  Salas,  Secretary,  Federal  Communications  Commission,  CC  Docket  No.  01-  324  (filed  Jan.  25,  2002)  (attaching  Declaration  of  Paula 
 L.  Brown). 
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 own  facilities,  and  approximately  25,000  lines  through  resale.  3  Almost  38  percent  of  competitors  lines  are  residential.  4 
 3.  In  granting  this  application,  we  wish  to  recognize  the  hard  work  of  the  Rhode  Island  Public  Utilities  Commission  (Rhode  Island  Commission)  in  laying  the  foundation  for 
 approval  of  this  application.  The  Rhode  Island  Commission  has  conducted  proceedings  concerning  Verizons  section  271  compliance,  which  have  been  open  to  participation  by  all 
 interested  parties.  In  addition,  the  Rhode  Island  Commission  has  adopted  a  broad  range  of  performance  measures  and  standards  as  well  as  a  Performance  Assurance  Plan  designed  to  create 
 a  financial  incentive  for  post-  entry  compliance  with  section  271.  As  the  Commission  has  recognized  previously,  state  proceedings  such  as  these  serve  a  vitally  important  role  in  the 
 section  271  process. 
 II.  BACKGROUND 
 4.  In  the  1996  amendments  to  the  Communications  Act,  Congress  required  that  the  BOCs  demonstrate  compliance  with  certain  market-  opening  requirements  contained  in  section 


 271  of  the  Act  before  providing  in-  region,  interLATA  long  distance  service.  Congress  provided  for  Commission  review  of  BOC  applications  to  provide  such  service  in  consultation  with  the 
 affected  state  and  the  Attorney  General.  5 
 5.  We  rely  heavily  in  our  examination  of  this  application  on  the  work  completed  by  the  Rhode  Island  Commission.  Beginning  in  1997,  the  Rhode  Island  Commission  began  what 


 would  become  a  four  and  one-  half  year  series  of  proceedings  to  set  rates  for  unbundled  network  elements  (UNEs).  6  The  Rhode  Island  Commission  also  conducted  an  extensive  proceeding, 
 which  was  open  to  participation  by  all  interested  parties,  to  facilitate  competition  in  local  exchange  markets,  starting  with  a  docket  opened  in  September  of  2000  to  establish  carrier-  to- 


 3  See  Verizon  Dec.  11  Ex  Parte  Letter  and  Verizon  Dec.  20  Ex  Parte  Letter. 
 4  See  Verizon  Dec.  11  Ex  Parte  Letter  and  Verizon  Dec.  20  Ex  Parte  Letter. 
 5  The  Commission  has  summarized  the  relevant  statutory  framework  in  prior  orders.  See,  e.  g.,  Joint  Application 
 by  SBC  Communications  Inc.,  Southwestern  Bell  Tel.  Co.,  and  Southwestern  Bell  Communications  Services,  Inc.,  d/  b/  a  Southwestern  Bell  Long  Distance  for  Provision  of  In-  Region,  InterLATA  Services  in  Kansas  and  Oklahoma, 


 Memorandum  Opinion  and  Order,  16  FCC  Rcd  6237,  6241-  42,  paras.  7-  10  (2001)  (SWBT  Kansas/  Oklahoma  Order),  affd  in  part,  remanded  in  part  sub  nom.  Sprint  Communications  Co.  v.  FCC,  No.  01-  1076  (D.  C.  Cir.  Dec. 
 28,  2001);  Application  by  SBC  Communications  Inc.,  Southwestern  Bell  Tel.  Co.,  and  Southwestern  Bell  Communications  Services,  Inc.  d/  b/  a  Southwestern  Bell  Long  Distance  pursuant  to  Section  271  of  the 
 Telecommunications  Act  of  1996  To  Provide  In-  Region,  InterLATA  Services  in  Texas,  Memorandum  Opinion  and  Order,  15  FCC  Rcd  18354,  18359-  61,  paras.  8-  11  (2000)  (SWBT  Texas  Order);  Application  by  Bell  Atlantic  New 
 York  for  Authorization  Under  Section  271  of  the  Communications  Act  to  Provide  In-  Region,  InterLATA  Service  in  the  State  of  New  York,  Memorandum  Opinion  and  Order,  15  FCC  Rcd  3953,  3961-  63,  paras.  17-  20  (1999)  (Bell 
 Atlantic  New  York  Order),  affd,  AT&  T  Corp.  v.  FCC,  220  F.  3d  607  (D.  C.  Cir.  2000). 
 6  A  more  detailed  history  of  the  UNE  pricing  proceeding  is  provided  below.  See  infra  Part  III.  A.  1.  a. 
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 carrier  wholesale  performance  measurements  standards.  7  In  that  proceeding,  the  Rhode  Island  Commission  adopted  a  Performance  Assurance  Plan  (PAP)  modeled  on  the  plan  in  use  in  New 
 York,  and  also  adopted  performance  measures  based  on  the  measures  in  use  in  New  York.  8  On  July  25,  2001,  Verizon  made  a  compliance  filing  for  section  271  approval  with  the  Rhode  Island 
 Commission.  9  On  December  14,  2001,  the  Rhode  Island  Commission  recommended  that  the  Federal  Communications  Commission  (the  Commission)  grant  Verizons  application  for 
 authorization  to  provide  in-  region,  interLATA  services  in  Rhode  Island.  10  Specifically,  the  Rhode  Island  Commission  found  that  Verizon  met  the  requirements  of  each  of  the  14 
 competitive  checklist  items  contained  in  section  271  of  the  Act.  11  Additionally,  the  Rhode  Island  Commission  found  that  Verizon  complied  with  section  271(  c)(  1)(  A)  because  Verizon  has 
 entered  into  over  100  binding  interconnection  agreements  with  unaffiliated  competitive  LECs  and  local  exchange  service  is  being  provided  to  both  business  and  residential  customers  by  at 
 least  one  unaffiliated  competitive  LEC.  12  Finally,  the  Rhode  Island  Commission  found  that  approval  of  Verizons  section  271  application  by  the  Commission  is  in  the  public  interest.  13 


 6.  The  Department  of  Justice  recommends  approval  of  Verizons  application  for  section  271  authority  in  Rhode  Island,  stating  that: 
 While  there  is  significantly  less  competition  to  serve  customers  by  means  of  the  UNE-  platform,  the  Department  does 
 not  believe  there  are  any  material  non-  price  obstacles  to  competition  in  Rhode  Island.  Verizon  has  submitted  evidence  to 
 show  that  its  [operations  support  systems]  in  Rhode  Island  are  the  same  as  those  in  Massachusetts,  and  that  aspects  of  its  [operations 
 support  systems]  that  were  not  tested  in  Massachusetts  are  generally  satisfactory  in  Rhode  Island.  Moreover,  there  have  been 
 few  complaints  regarding  Verizons  Rhode  Island  [operations  support  systems].  14 


 7  Rhode  Island  PUC,  Verizon-  Rhode  Islands  Proposed  Carrier-  to-  Carrier  Performance  Standards  and  Reports 
 and  Performance  Assurance  Plan  for  Rhode  Island,  Report  and  Order,  Docket  Nos.  3195  &  3256  (rel.  Dec.  3,  2001)  at  1-  2  (Rhode  Island  PUC  C2C  and  PAP  Order). 


 8  See  id.;  Verizon  Application  App.  A,  Vol.  3,  Tab  C,  Joint  Declaration  of  Elaine  M.  Guerard,  Julie  A.  Canny, 
 and  Beth  A.  Abesamis  at  paras.  27-  30  (Verizon  Guerard/  Canny/  Abesamis  Decl.). 
 9  The  Rhode  Island  Commission  concludes  this  proceeding  with  comments  filed  in  this  docket.  See  Rhode  Island 
 Commission  Comments  at  4-  8. 
 10  Rhode  Island  Commission  Comments  at  2. 


 11  Id.  at  189. 
 12  Id.  at  9-  10. 
 13  Id.  at  189. 
 14  Department  of  Justice  Evaluation  at  6  (footnote  omitted). 
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 While  the  Department  of  Justice  does  not  believe  that  there  exist  non-  price  obstacles  to  competition  in  Rhode  Island,  it  notes  that  several  commenters  raised  issues  about  pricing  in 
 Rhode  Island  and  urges  the  Commission  to  look  carefully  at  these  comments  in  determining  whether  Verizons  prices  are  cost-  based.  15  The  Department  recommends  approval  of 
 Verizons  application  for  Section  271  authority  in  Rhode  Island,  subject  to  the  Commission  satisfying  itself  as  to  .  .  .  pricing  issues.  16  We  give  substantial  weight  to  the  Departments 
 evaluation,  as  required  by  section  271(  d)(  2)(  A).  17 
 7.  Before  evaluating  Verizons  compliance  with  the  requirements  of  section  271,  however,  we  discuss  why  we  accord  evidentiary  weight  to  rate  reductions  that  Verizon  filed  on 


 day  80.  The  Commission  maintains  certain  procedural  requirements  governing  BOC  section  271  applications.  18  In  particular,  the  complete-  as-  filed  requirement  provides  that  when  an 
 applicant  files  new  information  after  the  comment  date,  the  Commission  reserves  the  right  to  start  the  90-  day  review  period  again  or  to  accord  such  information  no  weight  in  determining 
 section  271  compliance.  19  We  maintain  this  requirement  to  afford  interested  parties  a  fair  opportunity  to  comment  on  the  BOCs  application,  to  ensure  that  the  Attorney  General  and  the 
 state  commission  can  fulfill  their  statutory  consultative  roles,  and  to  afford  the  Commission  adequate  time  to  evaluate  the  record.  20  The  Commission  can  waive  its  procedural  rules, 
 however,  if  special  circumstances  warrant  a  deviation  from  the  general  rule  and  such  deviation  will  serve  the  public  interest.  21 


 15  Id.  at  6. 
 16  Id.  at  2. 
 17  47  U.  S.  C.    271(  d)(  2)(  A). 
 18  See  Updated  Filing  Requirements  for  Bell  Operating  Company  Applications  Under  Section  271  of  the 
 Communications  Act,  Public  Notice,  DA  01-  734  (CCB  rel.  Mar.  23,  2001)  (Mar.  23,  2001  Public  Notice);  Application  of  Verizon  Pennsylvania  Inc.,  Verizon  Long  Distance,  Verizon  Enterprise  Solutions,  Verizon  Global 


 Networks  Inc.  for  Authorization  To  Provide  In-  Region,  InterLATA  Services  in  Pennsylvania,  Memorandum  Opinion  and  Order,  16  FCC  Rcd  17419,  17472-  73,  para.  98  (2001)  (Verizon  Pennsylvania  Order);  Application  of  Verizon 
 New  York  Inc.,  Verizon  Long  Distance,  Verizon  Enterprise  Solutions,  Verizon  Global  Networks  Inc.,  for  Authorization  to  Provide  In-  Region,  InterLATA  Services  in  Connecticut,  Memorandum  Opinion  and  Order,  16  FCC 
 Rcd  14147,  14163-  64,  paras.  34-  38  (2001)  (Verizon  Connecticut  Order);  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6247-  50,  paras.  20-  27;  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3968-  69,  paras.  32-  37;  Application  of 
 Ameritech  Michigan  Pursuant  to  Section  271  of  the  Communications  Act  of  1934,  as  amended,  To  Provide  In-Region,  InterLATA  Services  in  Michigan,  Memorandum  Opinion  and  Order,  12  FCC  Rcd  20543,  20570-  76,  paras. 
 49-  59  (1997)  (Ameritech  Michigan  Order). 
 19  See  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6247,  para.  21. 


 20  See  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20572-  73,  paras.  52-  54. 
 21  Northeast  Cellular  Tel.  Co.  v.  FCC,  897  F.  2d  1164,  1166  (D.  C.  Cir.  1990);  WAIT  Radio  v.  FCC,  418  F.  2d  1153 
 (D.  C.  Cir.  1969);  see  also  47  U.  S.  C.    154(  j);  47  C.  F.  R.    1.3. 
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 8.  We  waive  the  complete-  as-  filed  requirement  on  our  own  motion  pursuant  to  section  1.3  of  the  Commissions  rules  22  to  the  extent  necessary  to  consider  rate  reductions  filed 
 by  Verizon  on  day  80  of  the  90-  day  period  for  Commission  review  of  the  Rhode  Island  application.  23  We  conclude  that  the  special  circumstances  before  us  here  warrant  a  deviation 
 from  the  general  rules  for  consideration  of  late-  filed  information  or  developments  that  take  place  during  the  application  review  period.  In  particular,  as  we  discuss  below,  we  find  that  the 
 interests  our  normal  procedural  requirements  are  designed  to  protect  are  not  affected  by  our  consideration  of  these  late-  filed  rate  reductions.  In  addition,  we  also  conclude  that  consideration 
 of  the  rate  reductions  will  serve  the  public  interest.  We  will  continue  to  enforce  our  procedural  requirements  in  future  section  271  applications,  however,  in  the  absence  of  such  special 
 circumstances,  in  order  to  ensure  a  fair  and  orderly  process  for  the  consideration  of  section  271  applications  within  the  90-  day  statutory  deadline. 


 9.  There  are  special  circumstances  here  that  satisfy  the  first  element  of  the  test  for  grant  of  a  waiver  described  above.  Indeed,  the  circumstances  are  unique,  and,  based  on  our 
 experience  in  reviewing  over  a  dozen  section  271  applications,  we  expect  that  they  will  not  recur.  First,  at  the  time  Verizon  filed  its  application  with  us  on  November  26,  2001,  the  UNE 
 rates  that  were  in  effect  in  New  York  served  as  a  legitimate  benchmark  comparison  by  which  Verizon  might  demonstrate  that  its  Rhode  Island  rates  were  TELRIC-  compliant.  24  Yet  on 
 January  28,  2002    day  63  of  our  review  of  Verizons  Rhode  Island  application    the  New  York  Public  Service  Commission  (New  York  Commission)  resolved  a  long-  standing  dispute  by 
 lowering  Verizons  switching  rates  in  that  state  by  approximately  50  percent.  25  Commenters  asserted  that  the  old  New  York  rates  could  no  longer  serve  as  a  benchmark  from  which  to  judge 
 whether  Verizons  rates  in  Rhode  Island  were  TELRIC-  compliant.  26  Indeed,  AT&  T  suggested  in 
 22  47  C.  F.  R.    1.3. 
 23  See  Letter  from  Dee  May,  Assistant  Vice  President  -  Federal  Regulatory,  Verizon,  to  William  Caton,  Acting 
 Secretary,  Federal  Communications  Commission,  CC  Docket  No.  01-  324  (Feb.  14,  2002)  (attaching  Rhode  Island  revised  tariff  filing)  (Verizon  Feb.  14  Ex  Parte  Letter);  Public  Notice,  Comments  Requested  in  Connection  with 


 Verizons  Section  271  Application  for  Rhode  Island,  CC  Docket  No.  01-  324,  DA  02-  356  (rel.  Feb.  14,  2002)  (Feb.  14  Public  Notice). 


 24  As  we  explain  in  more  detail  infra  part  III.  A.  1.  b(  ii),  when  a  state  commission  does  not  apply  TELRIC 
 principles  or  does  so  improperly,  then  we  will  look  at  whether  a  comparison  of  the  rates  in  the  applicant  state  to  rates  that  were  approved  in  other  section  271  applications  nonetheless  evidences  that  the  applicants  rates  fall  within 


 the  range  that  a  reasonable  TELRIC-  based  rate  proceeding  would  produce.  See  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6276-  78,  paras.  82-  84.  We  note  that  there  was  considerable  dispute  in  the  record  regarding  whether 
 Verizons  rates  as  originally  filed  would  satisfy  a  benchmark  comparison  to  the  rates  in  effect  in  New  York  at  that  time.  Because  the  New  York  Commission  has  modified  its  rates,  we  need  not  resolve  this  dispute  with  respect  to 
 the  rates  that  are  no  longer  in  effect. 
 25  New  York  PSC,  Proceeding  on  Motion  of  the  Commission  to  Examine  New  York  Telephone  Companys  Rates 
 for  Unbundled  Network  Elements,  Case  98-  1357,  Order  on  Unbundled  Network  Element  Rates  (rel.  Jan  28,  2002). 
 26  Letter  from  Robert  W.  Quinn,  Jr.,  Vice  President,  Federal  Government  Affairs,  AT&  T,  to  William  F.  Caton, 
 Acting  Secretary,  Federal  Communications  Commission,  CC  Docket  No.  01-  324  (Feb.  12,  2002);  Letter  from  Robert  W.  Quinn,  Jr.,  Vice  President,  Federal  Government  Affairs,  AT&  T,  to  William  F.  Caton,  Acting  Secretary, 


 Federal  Communications  Commission,  CC  Docket  No.  01-  324  (Feb.  1,  2002)  (AT&  T  Feb.  1  Ex  Parte  Letter);  (continued.) 
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 an  ex  parte  presentation  on  February  1,  2002,  that  this  Commission  could  only  grant  Verizons  Rhode  Island  application  if  Verizon  lowered  its  rates  in  Rhode  Island  to  New  York  levels.  27  In 
 response,  Verizon  filed  reduced  rates  with  the  Rhode  Island  Commission,  and  filed  with  us  evidence  that  it  had  done  so.  28  This  unique  change  in  circumstances    the  New  York 
 Commissions  long-  awaited  decision  to  modify  Verizons  switching  rate    was  not  within  Verizons  control.  Verizon  could  not  have  known  either  when  the  New  York  Commission 
 would  lower  rates  in  that  state  or  the  exact  rates  that  the  New  York  Commission  would  adopt.  Thus,  this  is  not  a  situation  where  a  BOC  has  attempted  to  maintain  high  rates  only  to  lower 
 them  voluntarily  at  the  eleventh  hour  in  order  to  gain  section  271  approval.  Rather,  this  is  a  situation  where  a  core  element  of  the  BOCs  evidence  in  support  of  its  section  271  filing 
 changed  outside  of  its  control,  and  the  BOC  promptly  took  affirmative  steps  to  adjust  its  showing  to  demonstrate  compliance  with  section  271. 


 10.  Second,  the  rate  changes  at  issue  are  limited.  Verizon  lowered  only  its  port  and  switching  usage  rates.  29  Verizon  has  not  modified  the  rate  structure  or  implemented  a 
 combination  of  decreases  and  increases.  As  a  result,  addressing  the  effect  of  this  rate  reduction  placed  a  limited  additional  analytical  burden  on  the  Commission  staff  and  commenting  parties, 
 in  contrast  to  the  burden  that  would  have  been  caused  by  the  consideration  of  more  complex  rate  revisions.  Moreover,  Verizons  rate  reductions  have  already  taken  effect,  30  so  there  is  no 
 concern  that  the  Commission  is  approving  a  promise[]  of  future  performance.  31  Nor  is  this  a  situation  where  the  BOC  implements  measures  (such  as  changes  to  its  OSS)  designed  to  achieve 
 nondiscriminatory  performance  in  the  applicants  provision  of  service  to  competitive  LECs,  the  effectiveness  of  which  would  be  difficult  to  measure  in  advance. 


 11.  Third,  interested  parties  have  had  an  opportunity  to  evaluate  the  new  rates  and  to  comment.  Numerous  parties  had  already  commented  or  made  ex  parte  filings  regarding 
 Verizons  Rhode  Island  rates  as  compared  with  existing  and  proposed  New  York  rates,  and  then 
 (Continued  from  previous  page)  Letter  from  Keith  L.  Seat,  Senior  Counsel,  WorldCom,  to  Magalie  Roman  Salas,  Secretary,  Federal 


 Communications  Commission,  CC  Docket  No.  01-  324  (Jan.  31,  2002)  (WorldCom  Jan.  31  Ex  Parte  letter);  Letter  from  Clint  E.  Odom,  Director  -  Federal  Regulatory,  Verizon,  to  Commissioner  Kathleen  Q.  Abernathy,  Federal 
 Communications  Commission,  CC  Docket  No.  01-  324  (Feb.  8,  2002)  (Verizon  Feb.  8  Ex  Parte  Letter). 
 27  AT&  T  Feb.  1  Ex  Parte  Letter,  at  16  (  Thus,  even  under  Verizons  view  of  the  NYPSC  decision,  the 
 Commission  cannot  grant  an  application  on  February  24,  2002  unless  it  finds  that  Verizon  will  reduce  Rhode  Island  rates  to  the  New  York  levels  no  later  than  March  1,  2002.). 


 28  See  Verizon  Feb.  14  Ex  Parte  Letter. 
 29  Verizon  Feb.  14  Ex  Parte  Letter.  The  rates  for  reciprocal  compensation,  which  are  based  on  these  switching 
 rates,  are  also  correspondingly  reduced.  See  id.  Attach.  at  2. 
 30  See  Letter  from  Clint  E.  Odom,  Director  -  Federal  Regulatory,  Verizon,  to  William  Caton,  Acting  Secretary, 
 Federal  Communications  Commission,  CC  Docket  No.  01-  324  (Feb.  21,  2002)  (attaching  Rhode  Island  PUC,  Unbundled  Local  Switching  and  Analog  Line  Port  Rates  -  Verizon  Rhode  Islands  Section  271  Compliance  Filing, 


 Docket  No.  3363,  Order  (rel.  Feb.  21,  2002)  (Second  Rhode  Island  Switching  Order)). 
 31  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20573,  para.  55  (emphasis  omitted). 
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 on  the  effect  of  the  New  York  Commissions  reduction  of  rates,  even  prior  to  Verizons  filing  of  its  new  rates  in  Rhode  Island.  32  Thus,  it  was  not  unduly  burdensome  for  commenters  to  respond 
 to  Verizons  actual  reduction  of  a  limited  number  of  rates  in  a  relatively  short  period  of  time.  Moreover,  the  very  limited  nature  of  these  rate  changes  has  permitted  the  Commission  staff  to 
 evaluate  the  change  within  the  90-  day  review  period.  In  addition,  the  Rhode  Island  Commission  approved  the  new  rates  expeditiously  and  made  them  effective  February  20,  2002.  33  The 
 Department  of  Justice  did  not  comment  on  the  rates,  but  in  its  initial  comments  states  that  [  b]  ecause  of  the  Commissions  experience  and  expertise  in  rate-  making  issues  .  .  .  the 
 Department  will  not  attempt  to  make  its  own  independent  determination  whether  prices  are  appropriately  cost-  based.    34  Because  the  Commission  and  commenters  have  had  sufficient  time 
 and  information  to  evaluate  Verizons  application,  we  see  no  need  to  restart  the  90-  day  clock.  35 
 12.  Finally,  in  this  instance  Verizon  has  responded  to  criticism  in  the  record  by  taking  positive  action  that  will  foster  the  development  of  competition.  This  is  very  different  from  the 


 situation  in  which  late-  filed  material  consists  of  additional  arguments  or  information  concerning  whether  current  performance  or  pricing  satisfies  the  requirements  of  section  271.  In  addition, 
 this  application  is  otherwise  persuasive  and  demonstrates  a  commitment  to  opening  local  markets  to  competition  as  required  by  the  1996  Act. 


 13.  We  also  conclude  that  grant  of  this  waiver  will  serve  the  public  interest  and  thus  satisfy  the  second  element  of  the  waiver  standard  described  above.  In  particular,  grant  of  this 
 waiver  permits  the  Commission  to  act  on  this  section  271  application  quickly  and  efficiently  without  the  delays  inherent  in  restarting  the  90-  day  clock.  Grant  of  this  waiver  also  serves  to 
 credit  Verizons  decision  to  respond  positively  to  criticism  in  the  record  concerning  its  rate  levels  by  making  pro-  competitive  rate  reductions.  Given  that  interested  parties  have  had  an 
 opportunity  to  comment  on  these  rate  reductions,  we  do  not  believe  that  the  public  interest  would  be  served  in  this  instance  by  strict  adherence  to  our  procedural  rules.  Nor  do  we  need  to  delay 
 the  effectiveness  of  this  Order,  as  we  did  in  the  SWBT  Kansas/  Oklahoma  Order.  36  In  contrast  to  that  situation,  here  the  New  York  Commission  dictated  the  timing  by  its  resolution  of  the  long-pending 
 rate  proceeding.  As  we  have  made  clear  above,  however,  we  do  not  intend  to  allow  a  pattern  of  late-  filed  changes  to  threaten  the  Commissions  ability  to  maintain  a  fair  and  orderly 
 process  for  consideration  of  section  271  applications. 


 32  See  supra  n.  26;  ASCENT  Comments  at  6-  9;  AT&  T  Comments  at  15;  WorldCom  Comments  at  9-  10. 
 33  See  Second  Rhode  Island  Switching  Order  at  3. 
 34  See  Department  of  Justice  Evaluation  at  6  (quoting  Evaluation  of  the  Department  of  Justice,  in  Joint 
 Application  by  SBC  Communications,  Inc.  et  al.  for  Provision  of  In-  Region  InterLATA  Services  in  Kansas  and  Oklahoma,  CC  Docket  No.  00-  207  (Dec.  4,  2001)). 


 35  See  AT&  T  Supp.  Comments  at  2  &  n.  1,  3  &  n.  2. 
 36  See  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6249,  para.  26,  6263,  para.  52,  6270,  para.  72.  We 
 disagree  with  AT&  T  that  delaying  the  effectiveness  of  section  271  authorization  is  an  ineffective  deterrent  and  remedy  for  violation  of  the  complete-  as-  filed  rule,  but  we  do  not  invoke  that  remedy  here  because,  as  described 


 above,  Verizon  was  not  engaging  in  gamesmanship  by  resisting  rate  reductions. 
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 14.  Under  the  unique  circumstances  presented  in  this  application,  we  cannot  agree  with  the  commenting  parties    AT&  T  and  ASCENT    that  urge  us  to  decline  to  consider  these 
 rate  revisions  or  to  treat  these  revisions  as  a  new  filing  that  starts  a  new  90-  day  review  period.  37  First,  we  note  that  neither  commenter  even  suggested  that  Verizons  modified  switching  rates  for 
 Rhode  Island  do  not  benchmark  favorably  against  the  new  New  York  rates,  or  that  the  new  New  York  rates  are  not  TELRIC-  compliant.  To  the  contrary,  AT&  T  has  urged  the  Commission  to  do 
 exactly  what  it  is  doing    benchmarking  Verizons  Rhode  Island  rates  against  the  new  New  York  rates.  38  Rather  than  address  the  outcome  on  this  point,  parties  comments  focused  on  the  process 
 the  Commission  ought  to  use  in  conducting  its  proceeding. 
 15.  With  respect  to  the  parties  process  arguments,  we  disagree  that  consideration  of  these  rate  reductions  permits  Verizon  to  game  the  process,  and  benefit  by  delaying  the  opening 


 of  its  local  market  in  Rhode  Island  to  UNE-  based  competition.  39  As  explained  above,  we  do  not  hold  Verizon  responsible  for  the  timing  of  the  New  York  Commissions  order  lowering  rates, 
 and  note  that  Verizon  responded  very  quickly  to  seek  a  corresponding  rate  reduction  in  Rhode  Island.  Moreover,  we  disagree  with  ASCENTs  suggestion  that  the  Commission  must  deny  this 
 waiver  request  to  allow  time  to  measure  the  impact  of  the  new  rates  on  competition.  40  The  statute  simply  does  not  require  such  an  analysis,  or  require  that  a  BOC  demonstrate  that  it  has 
 been  in  compliance  with  section  271  for  any  period  of  time  before  it  files  a  section  271  application.  41 


 16.  Second,  we  disagree  that  the  Commission  and  interested  parties  had  too  little  time  to  analyze  Verizons  reduced  switching  rates,  and  that  parties  had  too  little  time  to  prepare 
 comments.  42  As  explained  above,  Verizons  rate  reductions  were  limited  and  straightforward,  and  required  only  to  be  compared  with  the  new  switching  rates  for  New  York.  Indeed,  parties 
 had  already  made  a  preliminary  comparison  in  their  earlier  comments  and  ex  parte  presentations.  43  Moreover,  no  party  has  asserted  that,  given  more  time,  it  would  even  seek  to 
 demonstrate  that  Verizons  switching  rates  in  New  York  or  Rhode  Island  are  not  TELRIC-compliant.  44  We  also  disagree  with  AT&  T  that  it  could  not  file  meaningful  comments  without 


 37  See  ASCENT  Supp.  Comments  at  2,  6-  14;  AT&  T  Supp.  Comments  at  2  &  n.  1,  3  &  n.  2. 
 38  See  AT&  T  Feb.  1  Ex  Parte  Letter  at  16;  see  also  AT&  T  Comments  at  15  (comparing  Verizons  Rhode  Island 
 switching  rates  to  rates  recommended  by  ALJ  in  New  York). 
 39  See  AT&  T  Supp.  Comments  at  2-  3;  ASCENT  Supp.  Comments  at  8-  9. 


 40  See  ASCENT  Supp.  Comments  at  10-  11. 
 41  See  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6250,  para.  27. 
 42  See  AT&  T  Supp.  Comments  at  2. 
 43  See  supra  para.  11  &  n.  26;  see  also  infra  part  III.  A.  1.  b(  ii). 
 44  As  noted  previously,  AT&  T  in  an  earlier  filing  urged  the  Commission  to  benchmark  Verizons  Rhode  Island 
 rates  against  its  new  New  York  rates.  See  AT&  T  Feb.  1  Ex  Parte  Letter  at  16. 
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 more  analysis  of,  or  information  about,  the  derivation  of  Verizons  lowered  rates.  45  As  explained  in  more  detail  below,  our  benchmark  analysis  is  a  comparison  of  costs  and  rates  in  two  states  and 
 does  not  require  more  than  what  Verizon  placed  in  the  record  on  February  14.  46 
 17.  Finally,  we  share,  to  some  extent,  commenters  concerns  that  incentives  may  exist  for  applicants  to  withhold  rate  reductions  until  the  eleventh  hour.  47  As  noted  above,  however, 


 granting  this  waiver  does  not  encourage  further  late  filings  because  the  unique  circumstance  present  here  resulted  from  the  New  York  Commissions  order  modifying  Verizons  switching 
 rates.  Moreover,  notwithstanding  the  Commissions  decision  occasionally  to  waive  its  general  procedural  rules  governing  section  271  applications,  where  warranted,  we  believe  that  our 
 procedural  requirements  have  led  to  the  filing  of  applications  that  contain  a  tremendous  amount  of  detail  and  are  largely  complete.  The  vast  amount  of  evidence  that  BOCs  submit  on  the  day  of 
 filing  dwarfs  the  relatively  small  amount  of  subsequent  evidence  we  have  considered  pursuant  to  waiver. 


 III.  CHECKLIST  COMPLIANCE 
 18.  As  in  recent  section  271  orders,  we  will  not  repeat  here  the  analytical  framework  and  particular  legal  showing  required  to  establish  compliance  with  every  checklist  item.  Rather, 


 we  rely  on  the  legal  and  analytical  precedent  established  in  prior  section  271  orders,  and  we  attach  comprehensive  appendices  containing  performance  data  and  the  statutory  framework  for 
 evaluating  section  271  applications.  48  Our  conclusions  in  this  Order  are  based  on  performance  data  as  reported  in  carrier-  to-  carrier  reports  reflecting  service  in  the  most  recent  four  months 
 before  filing  (July  through  October  2001).  Verizon  has  also  submitted  November  performance  data  for  our  review.  We  elect  in  this  proceeding  only  to  examine  November  data  in  a  few 
 instances  for  the  limited  purpose  of  supplementing  our  findings  concerning  Verizons  performance  that  is  demonstrated  by  performance  data  from  earlier  months.  We  generally  limit 
 our  review  to  performance  data  filed  with  the  initial  application  or  shortly  thereafter,  in  accordance  with  our  procedural  rules  for  reviewing  section  271  applications,  although  we  have 
 considered  an  additional  later  month  of  data  in  certain  circumstances.  49  Limiting  our  review  in  this  way  presents  commenters  a  fuller  opportunity  to  comment  on  the  evidence  that  the  company 
 relies  on  for  its  showing,  and  is  administratively  more  convenient  for  the  Commission. 


 45  See  AT&  T  Supp.  Comments  at  2. 
 46  See  infra  part  III.  A.  1.  b(  ii). 
 47  See  ASCENT  Supp.  Comments  at  10-  14;  AT&  T  Supp.  Comments  at  3. 
 48  See  In  the  matter  of  Joint  Application  by  SBC  Communications  Inc.,  Southwestern  Bell  Telephone  Company, 
 and  Southwestern  Bell  Communications  Services,  Inc.,  d/  b/  a/  Southwestern  Bell  Long  Distance  Pursuant  to  Section  271  of  the  Telecommunications  Act  of  1996  To  Provide  In-  Region  ,  InterLATA  Services  in  Arkansas  and  Missouri, 


 16  FCC  Rcd  20719,  20797-  882,  Appendices.  B,  C,  and  D  (2001)  (SWBT  Arkansas/  Missouri  Order);  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17508-  45,  Appendices  B  &  C. 


 49  See  SWBT  Texas  Order,  15  FCC  Rcd  at  18372,  para.  39  (considering  April  2000  performance  data,  when 
 application  was  filed  on  April  5,  2000,  and  comments  on  the  application  were  due  on  April  26,  2000). 
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 19.  We  focus  in  this  Order  on  the  issues  in  controversy  in  the  record.  Accordingly,  we  begin  by  addressing  checklist  item  two    access  to  unbundled  network  elements.  Next,  we 
 address  checklist  items  one  (interconnection),  four  (unbundled  local  loops),  five  (unbundled  transport),  and  fourteen  (resale).  The  remaining  checklist  items  are  discussed  briefly.  We  find, 
 based  on  our  review  of  the  evidence  in  the  record,  that  Verizon  satisfies  all  checklist  requirements. 


 A.  Checklist  Item  2    Unbundled  Network  Elements 
 1.  Pricing  of  Unbundled  Network  Elements 
 a.  Background 
 20.  Section  252(  d)(  1)  requires  state  determinations  regarding  the  rates,  terms,  and  conditions  for  unbundled  network  elements  to  be  based  on  cost  and  nondiscriminatory,  and 


 allows  the  rates  to  include  a  reasonable  profit.  50  The  Commissions  pricing  rules  require,  among  other  things,  that  an  incumbent  LEC  provide  unbundled  network  elements  based  on  the  TELRIC 
 pricing  methodology.  51  Although  the  United  States  Court  of  Appeals  for  the  Eighth  Circuit  stayed  the  Commissions  pricing  rules  in  1996,  52  the  Supreme  Court  restored  the  Commissions 
 pricing  authority  on  January  25,  1999,  and  remanded  to  the  Eighth  Circuit  for  consideration  of  the  merits  of  the  challenged  rules.  53  On  remand  from  the  Supreme  Court,  the  Eighth  Circuit 
 concluded  that,  while  TELRIC  is  an  acceptable  method  for  determining  costs,  certain  of  the  Commissions  pricing  rules  were  contrary  to  congressional  intent.  54  The  Eighth  Circuit  has 
 stayed  the  issuance  of  its  mandate  55  pending  appeal  before  the  Supreme  Court,  which  has  granted 


 50  47  U.  S.  C.    252(  d)(  1). 
 51  See  47  C.  F.  R.    51.501-  09. 
 52  Iowa  Utils.  Bd.  v.  FCC,  120  F.  3d  753,  800,  804,  805-  06  (8  th  Cir.  1997). 
 53  American  Tel.  &  Tel  Co.  v.  Iowa  Utils.  Bd.,  525  U.  S.  366  (1999)  (AT&  T  v.  Iowa  Utils.  Bd.).  In  reaching  its 
 decision,  the  Court  acknowledged  that  section  201(  b)  explicitly  grants  the  FCC  jurisdiction  to  make  rules  governing  matters  to  which  the  1996  Act  applies.  Id.  at  380.  Furthermore,  the  Court  determined  that  section 


 251(  d)  also  provides  evidence  of  an  express  jurisdictional  grant  by  requiring  that  the  Commission  [shall]  complete  all  actions  necessary  to  establish  regulations  to  implement  the  requirements  of  this  section.  Id.  at  382.  The  Court 
 also  held  that  the  pricing  provisions  implemented  under  the  Commissions  rulemaking  authority  do  not  inhibit  the  establishment  of  rates  by  the  states.  The  Court  concluded  that  the  Commission  has  jurisdiction  to  design  a  pricing 
 methodology  to  facilitate  local  competition  under  the  1996  Act,  including  pricing  for  interconnection  and  unbundled  access,  as  it  is  the  States  that  will  apply  those  standards  and  implement  that  methodology,  determining  the  concrete 
 result.  Id. 
 54  Iowa  Utils.  Bd.  v.  FCC,  219  F.  3d  744  (8  th  Cir.  2000),  petition  for  cert.  granted  sub  nom.  Verizon 
 Communications  v.  FCC,  121  S.  Ct.  877,  148  L.  Ed.  2d  788,  69  USLW  3269,  69  USLW  3490,  69  USLW  3495  (U.  S.  Jan.  22,  2001). 


 55  Iowa  Utils.  Bd.  v.  FCC,  No.  96-  3321  et  al.  (8  th  Cir.  Sept.  25,  2000). 
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 certiorari  and  recently  heard  oral  argument  in  the  case.  56  Accordingly,  the  Commissions  rules  remain  in  effect  for  purposes  of  this  application. 
 21.  On  November  24,  1997,  the  Rhode  Island  Commission  began  what  would  become  a  four  and  one-  half  year  series  of  proceedings  to  set  rates  for  unbundled  network  elements 
 (UNEs).  In  these  proceedings,  the  Rhode  Island  Division  of  Public  Utilities  and  Carriers  (Rhode  Island  Division),  the  entity  responsible  for  executing  all  laws  and  regulations  pertaining  to  public 
 utilities  and  carriers,  represented  Rhode  Island  ratepayers.  A  variety  of  parties  participated  in  the  proceedings.  57  Verizon  and  AT&  T  filed  separate  cost  studies  based  on  different  models  in 
 the  proceedings.  58  On  August  18,  1999,  the  Rhode  Island  Commission  adopted  stipulated,  interim  rates,  that  for  the  most  part  reflected  the  [Rhode  Island  Divisions]  position  in  the  .  .  . 
 proceedings.  59  In  general,  the  Division-  recommended,  interim  rates  were  lower  than  the  rates  Verizon  proposed  at  the  beginning  of  the  proceedings.  For  example,  the  interim  statewide 
 average  rate  for  a  two-  wire  analog  loop  was  $15.00,  while  Verizons  proposed  rate  was  $21.69.  60 
 22.  On  April  11,  2001,  the  Rhode  Island  Commission  adopted  these  interim  rates  as  permanent  rates,  simultaneously  ordering  that  the  rates  incorporate  a  7.11  percent  across-  the-board 


 reduction  to  account  for  savings  from  Verizon  mergers  and  process  re-  engineering  occurring  since  the  rate  proceeding  had  begun.  61  In  adopting  the  rates,  the  Rhode  Island 
 Commission  found  that  they  were  consistent  with  the  [Commissions]  TELRIC  methodology  and,  therefore,  will  facilitate  the  development  of  local  telephone  exchange  competition  in  Rhode 
 Island.  62  The  Rhode  Island  Commission  also  ordered  Verizon  to  file  new  cost  studies  using  certain  specific  assumptions  as  part  of  a  new  UNE  rate  proceeding  which  is  scheduled  to  begin 
 no  later  than  May  1,  2002,  and  in  which  the  Rhode  Island  Commission  expects  to  adopt  new  UNE  rates  by  the  end  of  2002.  63  The  Rhode  Island  Commission  has  indicated  that  it  required 
 these  new  cost  studies  because  it  wanted  to  receive  and  review  more  recent  evidence.  64  The 


 56  Verizon  Communications  v.  FCC,  121  S.  Ct.  877,  148  L.  Ed.  2d  788,  69  USLW  3269,  69  USLW  3490,  69 
 USLW  3495  (Jan.  22,  2001). 
 57  Rhode  Island  PUC,  Review  of  Bell  Atlantic-  Rhode  Island  TELRIC  Study,  Report  and  Order  at  4,  Docket  No. 
 2681  (rel.  Nov.  18,  2001)  (Rhode  Island  TELRIC  Order);  Rhode  Island  Commission  Comments  at  43;  Verizon  Application,  App.  A,  Vol.  3,  Tab  D,  Joint  Declaration  of  Donna  Cupelo,  Patrick  Garzillo  and  Michael  Anglin 


 (Verizon  Cupelo/  Garzillo/  Anglin  Decl.)  at  5,  para.  17. 
 58  Rhode  Island  TELRIC  Order  at  4;  Verizon  Cupelo/  Garzillo/  Anglin  Decl.  at  6,  para.  19 


 59  Rhode  Island  Commission  Comments  at  43. 
 60  Verizon  Cupelo/  Garzillo/  Anglin  Decl.  at  7-  8,  para.  26. 
 61  Rhode  Island  TELRIC  Order  at  5. 
 62  Id.  at  4. 
 63  Id.  at  75-  76;  Rhode  Island  Commission  Reply  at  3. 
 64  Rhode  Island  Commission  Reply  at  3. 
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 Rhode  Island  Commission  has  stated  that  the  new  rate  proceeding  will  in  no  way  affect  our  conclusion  that  [Verizons]  currently  effective  UNE  rates  are  TELRIC-  compliant.  65 
 23.  On  November  15,  2001,  in  a  separate  proceeding,  the  Rhode  Island  Commission  adopted  discounted  switching  rates  that  Verizon  had  voluntarily  proposed  in  seeking  the  Rhode 
 Island  Commissions  approval  of  its  section  271  application.  66  The  discounted  rates  are  similar  to  rates  proposed  by  Verizon  in  an  ongoing  Massachusetts  rate  proceeding  and  are  based  on  new 
 Verizon  cost  studies  supporting  the  proposed  Massachusetts  rates.  67  The  Rhode  Island  Commission  reviewed  the  discounted  switching  rates  and  found  that,  when  aggregate  UNE  rates 
 in  Rhode  Island  were  compared  to  aggregate  UNE  rates  in  Massachusetts,  the  aggregate  Rhode  Island  rates  fell  within  a  reasonable  TELRIC  range.  68  The  Rhode  Island  Commission  noted  that 
 the  discounted  rates  are  not  only  lower  than  Rhode  Islands  current  UNE  rates,  but  also  lower  than  Massachusettss  comparable  UNE  rates  in  April  2001  when  the  [Commission]  approved 
 Massachusettss  Section  271  application.  69  The  Rhode  Island  Commission  also  relied  on  a  showing  by  AT&  T  that  the  new  rates  would  result  in  a  wholesale  cost  of  $25.45  for  the  UNE-Platform, 
 which  is  lower  than  the  $28.95  price  of  Verizons  Unlimited  Local  Calling  Offer.  70 
 24.  On  November  15,  2001,  the  Rhode  Island  Commission  also  adopted  permanent  rates  for  sixteen  additional  elements  identified  as  UNEs  in  our  UNE  Remand  Order.  71  Verizon 


 had  proposed  these  rates  on  September  29,  2000,  and  revised  them  on  May  24,  2001  to  reflect  the  modified,  TELRIC-  compliant  assumptions  and  7.11  percent  reduction  mandated  by  the 
 Rhode  Island  Commission  on  April  11,  2001.  72  After  discovery  and  testimony,  the  Rhode  Island  Commission  reviewed  the  rates  and  found  them  to  be  within  a  reasonable  range  of  rates  that  a 


 65  Rhode  Island  Commission  Comments  at  43,  n.  138;  see  also  Rhode  Island  PUC,  Verizon-  Rhode  Islands 
 TELRIC  Studies-  UNE  Remand,  Report  and  Order  at  15,  Docket  No.  2681  (rel.  Dec.  3,  2001)  (Rhode  Island  UNE  Remand  Order). 


 66  Rhode  Island  PUC,  Unbundled  Local  Switching  Rate  Verizon-  Rhode  Islands  Section  271  Compliance  Filing, 
 Report  and  Order  at  2,  Docket  No.  3363  (rel.  Nov.  28,  2001)  (Rhode  Island  Switching  Order);  Rhode  Island  Commission  Comments  at  42;  Verizon  Cupelo/  Garzillo/  Anglin  Decl.  at  10,  para.  37. 


 67  Rhode  Island  Commission  Comments  at  42;  Verizon  Cupelo/  Garzillo/  Anglin  Decl.  at  10-  11,  para.  38. 
 68  Rhode  Island  Switching  Order  at  4-  5. 
 69  Rhode  Island  Switching  Order  at  5;  see  also  Rhode  Island  Commission  Comments  at  42. 
 70  Rhode  Island  Switching  Order  at  5-  6  (citing  Rhode  Island  PUC,  Unbundled  Local  Switching  Rates  Verizon-Rhode 
 Islands  Section  271  Compliance  Filing,  AT&  T  Post  Hearing  Brief  at  7-  8,  Docket  No.  3363  (Nov.  2,  2001)). 
 71  Implementation  of  the  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  (1999)  (UNE  Remand  Order). 


 72  Rhode  Island  UNE  Remand  Order  at  4. 
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 correct  application  of  TELRIC  principles  would  produce.  73  These  rates  are  not  contested  in  this  proceeding. 
 25.  On  January  28,  2002,  the  New  York  Public  Service  Commission  (New  York  Commission)  concluded  a  complex  TELRIC  rate  proceeding  begun  even  before  the  Commission 
 granted  Verizons  application  for  section  271  approval  in  New  York.  74  The  New  York  Commission  adopted  significantly  reduced  UNE  rates,  including  switching  rates  approximately 
 half  of  Verizons  prior  switching  rates  in  effect  when  the  Commission  granted  Verizons  petition  for  section  271  approval  in  New  York.  75  This  action  significantly  affects  our  conclusions  in  this 
 proceeding,  and  is  discussed  in  detail  below. 
 26.  On  February  21,  2002,  also  as  part  of  its  review  of  Verizons  section  271  application,  the  Rhode  Island  Commission  adopted  further  discounted  switching  rates  voluntarily 


 proposed  by  Verizon.  76  Verizon  proposed  these  new,  lower  rates  to  respond  to  commenters  criticism  of  its  reliance  on  rates  superseded  by  the  New  York  Commissions  January  28,  2002  to 
 demonstrate  that  its  Rhode  Island  non-  loop  rates  were  within  a  reasonable  TELRIC  range.  The  Rhode  Island  Commission  reviewed  the  further  discounted  switching  rates  and  found  that  they 
 fell  within  a  reasonable  TELRIC  range. 
 b.  Discussion 
 27.  Based  on  the  evidence  in  the  record,  we  find  that  Verizons  Rhode  Island  UNE  rates  are  just,  reasonable,  and  nondiscriminatory  in  compliance  with  checklist  item  two.  The 


 Commission  has  previously  held  that  it  will  not  conduct  a  de  novo  review  of  a  states  pricing  determinations  and  will  reject  an  application  only  if  either  basic  TELRIC  principles  are  violated 
 or  the  state  commission  makes  clear  errors  in  factual  findings  on  matters  so  substantial  that  the  end  result  falls  outside  the  range  that  the  reasonable  application  of  TELRIC  principles  would 
 produce.  77  The  Rhode  Island  Commission  concluded  that  Verizons  UNE  rates  satisfied  the  requirements  of  checklist  item  two.  78  While  we  have  not  conducted  a  de  novo  review  of  the 
 Rhode  Island  Commissions  pricing  determinations,  we  have  followed  the  urging  of  the 
 73  Id.  at  15;  see  also  Verizon  Cupelo/  Garzillo/  Anglin  Decl.  at  10,  para.  34. 
 74  New  York  PSC,  Proceeding  on  Motion  of  the  Commission  to  Examine  New  York  Telephone  Companys  Rates 
 for  Unbundled  Network  Elements,  Case  98-  1357,  Order  on  Unbundled  Network  Element  Rates  (rel.  Jan.  28,  2002)  (New  York  UNE  Rate  Order).  The  New  York  Commission  based  its  order  on  an  Administrative  Law  Judges 


 (ALJs)  Recommended  Decision  released  on  May  16,  2001.  Until  the  New  York  Commissions  order,  the  ALJs  recommendations  were  not  final  and  subject  to  change. 


 75  Id. 
 76  Rhode  Island  PUC,  Unbundled  Local  Switching  Rates  Verizon-  Rhode  Islands  Section  271  Compliance  Filing, 
 Order  at  3,  Docket  No.  3363  (rel.  Feb.  21,  2002)  (Second  Rhode  Island  Switching  Order). 
 77  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6266,  para.  59;  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at 
 4084,  para.  244. 
 78  Rhode  Island  TELRIC  Order  at  4;  Rhode  Island  Commission  Comments  at  43. 
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 Department  of  Justice  that  we  look  carefully  at  commenters  complaints  regarding  UNE  pricing.  79  Certain  flaws  in  the  Rhode  Island  Commissions  initial  TELRIC  proceeding  preclude 
 us  from  concluding  that  Verizons  original,  April  11,  2001,  UNE  rates  fall  within  the  reasonable  range  that  correct  application  of  TELRIC  principles  would  produce.  Nonetheless,  after 
 reviewing  Verizons  more  recent  UNE  rates,  we  conclude  that  Verizons  Rhode  Island  UNE  rates  fall  within  the  reasonable  range  that  correct  application  of  TELRIC  principles  would 
 produce. 
 28.  We  commend  the  Rhode  Island  Commission  for  its  prodigious  effort  to  establish  TELRIC-  compliant  rates  and  note  that  its  orders  in  the  UNE  rate  proceeding  demonstrate  a 


 commitment  to  basic  TELRIC  principles.  After  two  and  one-  half  years  of  discovery,  briefings,  and  hearings,  which  included  the  examination  of  competing  cost  studies  filed  by  Verizon  and 
 AT&  T,  the  Rhode  Island  Commission  adopted  interim  rates  that  incorporated  many  of  the  TELRIC-  compliant  assumptions  recommended  by  its  own  Division  of  Utilities  and  Carriers.  80 
 Subsequently  it  adopted  these  interim  rates  as  permanent  rates,  81  and  twice  adjusted  the  permanent  switching  rates  downward  in  response  to  criticism  that  they  were  too  high  to  be 
 TELRIC-  based.  82  Finally,  the  Rhode  Island  Commission  adopted  rates  for  the  sixteen  additional  elements  required  by  our  UNE  Remand  Order,  and  the  TELRIC-  compliance  of  these  rates  is  not 
 contested  here.  83 
 29.  To  understand  our  analysis,  it  is  important  to  distinguish  the  various  rates  adopted  over  time  by  the  Rhode  Island  Commission  and  how  we  are  considering  each  of  them.  First,  on 


 April  11,  2001,  the  Rhode  Island  Commission  adopted  overall  UNE  rates  after  a  lengthy  proceeding.  84  Verizon  contends,  and  the  Rhode  Island  Commission  agrees,  that  the  switching 
 rates  contained  in  these  UNE  rates,  referred  to  as  Verizons  April  11  switching  rates,  are  TELRIC-  compliant.  85  Subsequently,  Verizon  twice  voluntarily  discounted  its  switching  rates  in 
 seeking  approval  of  its  section  271  application.  86  The  Rhode  Island  Commission  adopted  the  first  discounted  switching  rates,  referred  to  as  the  November  15  switching  rates,  on  November 
 15,  2001.  87  Most  recently,  the  Rhode  Island  Commission  adopted  further  discounted  switching 
 79  Department  of  Justice  Evaluation  at  6. 


 80  Rhode  Island  Commission  Comments  at  42.  Based  upon  this  record,  we  reject  AT&  Ts  claim  that  the  interim 
 rates  were  unlitigated.  AT&  T  Comments  at  3. 
 81  See  generally  Rhode  Island  TELRIC  Order. 


 82  See  Rhode  Island  Switching  Order  and  Second  Rhode  Island  Switching  Order. 
 83  See  generally  Rhode  Island  UNE  Rate  Order. 
 84  Rhode  Island  TELRIC  Order  at  5. 
 85  Verizon  Application  at  88,  Verizon  Cupelo/  Garzillo/  Anglin  Decl.  at  10,  para.  38;  Rhode  Island  TELRIC  Order 
 at  5. 
 86  Verizon  Cupelo/  Garzillo/  Anglin  Decl.  at  10,  para.  38;  Verizon  Feb.  14  Ex  Parte  Letter. 


 87  Rhode  Island  Switching  Order  at  5. 
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 rates,  referred  to  as  the  February  21  switching  rates,  on  February  21,  2002.  88  Although  contending  that  its  April  11  rates  are  TELRIC  compliant,  Verizon  now  alternatively  relies  on 
 these  February  21  switching  rates  in  seeking  the  Commissions  approval  of  its  271  application  in  this  proceeding.  Because  Verizon  asserts  in  this  proceeding  that  its  April  11  rates  were 
 TELRIC-  compliant,  and  because  the  Rhode  Island  Commission  relied  upon  its  own  finding  that  the  April  11  switching  rates  were  TELRIC-  compliant  in  subsequently  adopting  Verizons 
 November  15  switching  rates,  89  we  review  certain  contested  decisions  the  Rhode  Island  Commission  made  regarding  the  April  11  switching  rates.  Because  the  Rhode  Island 
 Commission  adopted  Verizons  February  21  switching  rates  without  a  rate  proceeding  and  a  thorough  record  that  would  allow  us  to  determine  whether  the  faulty  assumptions  underlying  its 
 original  rates  were  corrected,  we  review  the  February  21  rates  using  our  benchmark  analysis.  90 
 30.  We  find  that  the  Rhode  Island  Commission  properly  applied  the  TELRIC  methodology  with  respect  to  several  issues  disputed  by  the  parties.  Both  AT&  T  and  WorldCom 


 assert  that  UNE  rates  in  Rhode  Island  are  not  TELRIC  compliant  because  they  fail  to  incorporate  the  specific  assumptions  mandated  by  the  Rhode  Island  Commission  on  April  11,  2001.  91  This 
 assertion  is  incorrect.  For  example,  the  April  11  rates  incorporate  Commission-  prescribed  depreciation  lives  and  a  9.5  percent  cost  of  capital.  92  These  Rhode  Island  Division-  recommended 
 assumptions  are  consistent  with  assumptions  the  Commission  has  found  to  comply  with  TELRIC  principles  in  reviewing  other  section  271  applications.  93  Loop  rates  also  incorporate  assumptions 
 regarding  fill  factors  that  the  Division  recommended  and  the  Commission  has  found  to  be  consistent  with  TELRIC  principles.  94  No  party  has  presented  arguments  or  facts  in  this 
 proceeding  which  would  cause  us  to  find  that  these  assumptions  are  inconsistent  with  TELRIC  principles  as  applied  to  Verizon  in  Rhode  Island. 


 88  Second  Rhode  Island  Switching  Order  at  3. 
 89  Rhode  Island  Switching  Order  at  5. 
 90  Where  a  state  has  not  conducted  a  TELRIC  rate  proceeding,  its  rates  may  nonetheless  be  found  to  be  TELRIC 
 compliant  if  they  pass  our  benchmark  test.  See  SWBT  Missouri/  Arkansas  Order  at  paras.  67-  68. 
 91  AT&  T  Comments  at  3-  4  and  6;  WorldCom  Comments  at  3.  The  assertion  by  AT&  T  and  WorldCom  that  the 
 Rhode  Island  Commission  mandated  the  assumptions  is  incorrect.  The  Rhode  Island  Commission  adopted  rebuttable  presumptions  for  its  upcoming  rate  proceeding,  many  of  which  were  recommended  by  its  own  Division 


 of  Public  Utilities  and  Carriers,  or  the  Rhode  Island  ratepayer  advocate.  Rhode  Island  TELRIC  Order  at  21,  24,  and  35;  Rhode  Island  Commission  Comments  at  43,  n.  139;  Rhode  Island  Reply  at  2;  Verizon  Cupelo/  Garzillo/  Anglin 
 Decl.  at  16-  17,  paras.  49,  50. 
 92  Rhode  Island  TELRIC  Order  at  24,  21;  Rhode  Island  Commission  Comments  at  43,  n.  139;  Rhode  Island  Reply 
 at  2;  Verizon  Cupelo/  Garzillo/  Anglin  Decl.  at  16-  17,  paras.  49,  50. 
 93  See,  e.  g.,  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17454,  para.  57. 


 94  See,  e.  g.,  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9007,  para.  39;  SWBT  Kansas/  Oklahoma  Order,  16 
 FCC  Rcd  at  6237,  paras.  79-  80. 
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 31.  We  disagree  with  claims  by  AT&  T  and  WorldCom  that  Verizons  UNE  rates  are  not  TELRIC  compliant  because  the  Rhode  Island  Commission  will  soon  begin  a  new  rate 
 proceeding  in  which  it  will  reconsider  certain  assumptions  underlying  the  rates.  95  The  fact  that  the  Rhode  Island  Commission  has  scheduled  a  rate  proceeding  to  update  existing  rates  does  not, 
 in  itself,  prove  that  existing  rates  are  not  TELRIC  compliant.  Indeed,  the  Commission  has  recognized  that  rates  may  well  evolve  over  time  to  reflect  new  information  on  cost  study 
 assumptions  and  changes  in  technology,  engineering  practices,  or  market  conditions.  96  The  United  States  Court  of  Appeals  for  the  D.  C.  Circuit  agrees: 


 [W]  e  suspect  that  rates  may  often  need  adjustment  to  reflect  newly  discovered  information,  like  that  about  Bell  Atlantics  future 
 discounts.  If  new  information  automatically  required  rejection  of  section  271  applications,  we  cannot  imagine  how  such  applications 
 could  ever  be  approved  in  this  context  of  rapid  regulatory  and  technological  change.  97 


 32.  Despite  the  fact  that  the  Rhode  Island  Commission  has  demonstrated  a  commitment  to  basic  TELRIC  principles  and  has  correctly  applied  these  principles  in  many 
 instances,  for  the  reasons  discussed  below,  we  cannot  find  that  Verizon  has  proven  that  its  UNE  rates  were  adopted  through  a  proceeding  which  correctly  applied  TELRIC  principles  in  all 
 instances.  Therefore,  we  evaluate  Verizons  current  Rhode  Island  UNE  rates  based  upon  our  benchmark  analysis.  As  discussed  below,  Verizons  Rhode  Island  UNE  rates  pass  our 
 benchmark  test,  and,  therefore,  satisfy  the  requirements  of  checklist  item  two. 
 (i)  Switching  Rates 
 33.  As  discussed  above,  the  Rhode  Island  Commission  adopted  UNE  rates,  including  switching  rates  that  it  found  to  be  TELRIC  compliant,  on  April  11,  2001  after  a  lengthy  rate 


 proceeding.  Subsequently,  on  November  15,  2001,  and  February  21,  2002,  the  Rhode  Island  Commission  adopted  reduced  switching  rates  that  Verizon  had  voluntarily  discounted  in  seeking 
 approval  of  its  section  271  application.  AT&  T  and  WorldCom  criticize  specific  assumptions  underlying  the  April  11  switching  rates,  and  the  switching  rates  adopted  November  15,  2001. 
 AT&  T  and  WorldComs  criticisms  of  these  rates  prompt  us  to  consider  both  the  Rhode  Island  rate  proceeding  underlying  the  April  11  switching  rates,  and  the  Rhode  Island  Commissions 
 actions  in  subsequently  adopting  discounted  switching  rates. 
 34.  A  central  issue  contested  by  the  parties  is  the  appropriate  discount  for  Verizons  switches.  Verizons  Rhode  Island  switching  rates  are  based  on  the  assumption  that  it  will  not 


 replace  any  switches  in  Rhode  Island,  but  only  expand  switch  capacity  through  growth  additions  to  existing  switches.  Typically,  vendors  provide  greater  discounts  for  new,  replacement  switches 


 95  AT&  T  Comments  at  4;  WorldCom  Comments  at  3-  4. 
 96  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4085-  86,  para.  247. 
 97  AT&  T  Corp.  v.  FCC,  22  F.  3d  607,  617-  18  (D.  C.  Cir.  2000). 
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 than  for  growth  additions  to  existing  switches.  AT&  T  and  WorldCom  contend  that  Verizons  assumption  of  no  new,  replacement  switches  and  only  growth  additions  is  inconsistent  with 
 TELRIC  principles.  98  While  the  Commission  has  not  to  date  specified  an  appropriate  split  between  new,  replacement  switches  and  growth  additions,  we  strongly  question  an  assumption  of 
 only  growth  additions,  as  proposed  by  Verizon  and  incorporated  in  the  April  11  rates  adopted  by  the  Rhode  Island  Commission.  Even  if  some  growth  additions  may  be  used  in  a  forward-  looking 
 network,  the  absence  of  any  new  switches  is  inconsistent  with  the  assumption  in  TELRIC  pricing  of  a  forward-  looking  network  built  from  scratch,  given  the  location  of  the  existing  wire  centers.  99 
 Although  an  efficient  competitor  might  anticipate  some  growth  additions  over  the  long  run,  rates  based  on  an  assumption  of  all  growth  additions  and  no  new  switches  do  not  comply  with 
 TELRIC  principles.  We  also  note  that  the  Rhode  Island  Commission  determined  that  Verizons  assumptions  for  switch  cost  recovery  in  the  new  UNE  rate  proceeding  will  be  based  on  a 
 rebuttable  presumption  of  90  percent  new  switches  to  10  percent  growth  additions.  100 
 35.  We  also  agree  with  AT&  T  and  WorldCom  that  Verizon  used  a  questionable  installation  factor  for  its  switches.  The  installation  factor  is  the  percentage  amount  of  the 


 original  switch  price  added  to  the  switch  price  to  recover  the  costs  of  installation.  Specifically,  AT&  T  and  WorldCom  claim  that  Verizons  installation  factor  of  more  than  60  percent  of  the 
 switch  cost  is  inflated.  101  Verizon  derives  this  factor  from  the  cost  of  installing  the  switch  itself  rather  than  having  the  switch  installed  by  the  vendor.  102  The  Rhode  Island  Commission 
 expressed  concern  regarding  Verizons  installation  factor,  but,  because  it  found  the  record  before  it  insufficient  to  establish  a  new  factor,  deferred  a  specific  determination  to  the  new  rate 
 proceeding.  103  Specifically,  the  Rhode  Island  Commission  stated:  [  T]  he  Commission  is  concerned  that  [Verizon]  may  not  be  as  efficient  in  [installing  switches]  as  it  could  be:  perhaps 
 Verizon  should  consider  letting  the  switch  manufacturer  install  the  switch,  as  do  most  Bell  companies.  104  The  Rhode  Island  Commission  further  required  Verizon  to  submit  substantial 
 additional  evidence  on  its  installation  costs  in  the  upcoming  rate  proceeding.  105  Again,  although  the  Rhode  Island  Commission  found  that  the  rates  it  ultimately  adopted  were  TELRIC 
 compliant,  its  decision  does  not  provide  us  with  sufficient  evidence  to  conclude  that  this  installation  factor  accurately  reflects  cost  recovery  of  an  efficient,  forward-  looking  network 
 pursuant  to  TELRIC  principles.  We  also  note  that  because  the  installation  factor  is  a  multiplier, 


 98  AT&  T  Comments  at  8,  12;  WorldCom  Comments  at  5-  7. 
 99  Local  Competition  Order,  11  FCC  Rcd  at  15848-  49,  para.  685,  15845,  n.  1682;  see  also  47  C.  F.  R.    51.505. 
 100  Rhode  Island  TELRIC  Order  at  35. 
 101  AT&  T  Comments  at  42-  43;  WorldCom  Comments  at  6-  7. 
 102  Id. 
 103  Rhode  Island  TELRIC  Order  at  36-  37. 
 104  Id.  at  36. 
 105  Id.  at  37-  38. 
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 its  application  to  the  switch  price  magnifies  the  effect  of  any  other  problematic  assumptions  underlying  switching  rates,  such  as  inaccurate  assumptions  for  new  versus  growth  switch 
 discounts. 
 36.  As  discussed  above,  parties  raised  serious  questions  about  whether  Verizons  April  11  switching  rates  are  TELRIC  compliant.  Verizon  contends  that  these  rates  are  TELRIC-compliant, 


 but  does  not  rely  on  them  in  this  proceeding.  Rather,  Verizon  first  relied  on  the  voluntarily  discounted  switching  rates  adopted  by  the  Rhode  Island  Commission  on  November 
 15,  2001,  and  now  relies  on  the  voluntarily  discounted  switching  rates  adopted  by  the  Rhode  Island  Commission  on  February  21,  2002.  Therefore,  because  we  base  our  determination  of 
 compliance  with  checklist  item  two  on  the  February  21  rates,  we  need  not  decide  the  question  of  whether  Verizons  April  11  switching  rates  are  TELRIC  compliant  here.  Verizons  subsequent 
 adoption  of  discounted  switching  rates  did  not  result  from  a  rate  proceeding  with  a  thorough  record  that  would  allow  us  to  determine  whether  the  faulty  assumptions  underlying  its  original 
 rates  were  corrected.  We  therefore  review  the  switching  rates  Verizon  now  relies  on  to  satisfy  checklist  item  two,  the  February  21  switching  rates,  using  our  benchmark  analysis. 


 (ii)  Benchmark  Analysis 
 37.  States  have  considerable  flexibility  in  setting  UNE  rates,  and  certain  flaws  in  a  cost  study,  by  themselves,  may  not  result  in  rates  that  are  outside  the  reasonable  range  that  a 


 correct  application  of  our  TELRIC  rules  would  produce.  Given  our  findings  concerning  the  assumptions  for  new  versus  growth  switch  discounts  and  the  installation  factor  underlying 
 Verizons  switching  rates,  we  must  determine  whether  Verizon  can  show  that  its  voluntarily  reduced  switching  rates  nonetheless  fall  within  the  range  that  reasonable  application  of  TELRIC 
 principles  would  produce  by  applying  our  benchmark  test. 
 38.  The  Commission  has  stated  that,  when  a  state  commission  does  not  apply  TELRIC  principles  or  does  so  improperly  (e.  g.,  the  state  commission  made  a  major 


 methodological  mistake  or  used  an  incorrect  input  or  several  smaller  mistakes  or  incorrect  inputs  that  collectively  could  render  rates  outside  the  reasonable  range  that  TELRIC  would  permit), 
 then  we  will  look  to  rates  in  other  section  271-  approved  states  to  see  if  the  rates  nonetheless  fall  within  the  range  that  a  reasonable  TELRIC-  based  rate  proceeding  would  produce.  106  To 
 determine  whether  a  comparison  is  reasonable,  the  Commission  will  consider  whether  the  two  states  have  a  common  BOC;  whether  the  two  states  have  geographic  similarities;  whether  the 
 two  states  have  similar,  although  not  necessarily  identical,  rate  structures  for  comparison  purposes;  and  whether  the  Commission  has  already  found  the  rates  in  the  comparison  state  to  be 
 TELRIC-  compliant.  107 


 106  See  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6276,  para.  82. 
 107  See  SWBT  Missouri/  Arkansas  Order  at  para.  56;  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17457,  para.  63. 
 We  note,  however,  that  in  the  Verizon  Pennsylvania  Order,  we  found  that  several  of  these  criteria  should  be  treated  as  indicia  of  the  reasonableness  of  the  comparison.  Id.  at  para.  64.  See  also  Verizon  Massachusetts  Order,  16  FCC 


 Rcd  at  9002,  para.  28;  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6276,  para.  82. 
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 39.  Verizon  here  chooses  to  rely  on  a  benchmark  comparison  of  its  rates  in  Rhode  Island  to  its  rates  in  New  York.  While  we  accept  Verizons  reliance  on  New  York  rates  for 
 purposes  of  this  application,  we  note  that  in  future  applications,  Verizon  and  other  BOCs  are  free  to  rely  on  benchmark  comparisons  to  rates  in  other  appropriate,  section  271-  approved  states,  as 
 described  in  the  preceding  paragraph,  as  evidence  that  rates  in  the  applicant  state  satisfy  checklist  item  two.  Of  course,  Verizon  and  other  BOCs  may  also  demonstrate  in  future 
 applications  that  their  rates  result  from  a  state  rate  proceeding  correctly  applying  TELRIC  principles  without  regard  to  any  benchmark  analysis. 


 40.  We  consider  the  reasonableness  of  loop  and  non-  loop  rates  separately.  108  Where  the  Commission  finds  that  the  state  commission  correctly  applied  TELRIC  principles  for  one 
 category  of  rates,  it  will  use  a  benchmark  analysis  to  evaluate  the  rates  of  the  other  category.  If,  however,  there  are  problems  with  the  application  of  TELRIC  for  both  loop  and  non-  loop  rates, 
 then  the  same  benchmark  state  must  be  used  for  all  rate  comparisons  to  prevent  an  incumbent  LEC  from  choosing  for  its  comparisons  the  highest  approved  rates  for  both  loop  and  non-  loop 
 UNEs.  109  In  addition,  we  combine  per-  minute  switching  with  other  non-  loop  rates  such  as  port,  signaling,  and  transport  rates  because  competing  LECs  most  often  purchase  them  together  rather 
 than  separately,  and  because  state  commissions  often  differ  in  determining  how  to  recover  certain  costs.  For  example,  in  some  states  shared  trunk  port  costs  are  recovered  through  a 
 separate  rate,  while  in  other  states  these  costs  are  recovered  as  part  of  switching  rates. 
 41.  The  New  York  Commissions  recent  adoption  of  substantially  reduced  switching  rates  110  has  generated  some  question  in  this  proceeding  about  which  rates  to  use  in  performing 


 our  benchmark  analysis.  Verizon  claimed  at  the  outset  of  this  proceeding  that  its  November  15  switching  rates  satisfied  checklist  item  two  because  they  passed  a  benchmark  comparison  to  its 
 original  switching  rates  in  New  York  and  to  its  Massachusetts  switching  rates,  which  are  based  on  its  original  New  York  switching  rates.  111  When  the  New  York  Commission  adopted  new  rates 
 superseding  the  rates  Verizon  had  relied  on,  commenters  contended  that  Verizons  reliance  on  the  superseded  New  York  rates  had  become  unreasonable.  112  Verizon  then  filed  the  February  21 
 switching  rate  reductions  with  the  Rhode  Island  Commission  to  address  commenters  contentions. 


 42.  First,  we  find  Verizons  reliance  on  Massachusetts  rates  for  a  benchmark  comparison  to  be  inappropriate.  The  Commission  found  that  Verizons  Massachusetts  rates 
 satisfied  checklist  item  two  based  on  a  benchmark  analysis  comparing  Massachusetts  rates  to 
 108  See,  e.  g.,  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17457,  para.  67;  Verizon  Massachusetts  Order,  16  FCC 
 Rcd  at  9000-  02,  paras.  23-  27.  Loop  rates  consist  of  charges  for  the  local  loop,  and  non-  loop  rates  consist  of  charges  for  switching,  signaling,  and  transport. 


 109  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17458,  para.  66;  SWBT  Missouri/  Arkansas  Order  at  para.  58. 
 110  See  generally  New  York  UNE  Rate  Order. 
 111  Verizon  Application  at  91;  Verizon  Cupelo/  Garzillo/  Anglin  Decl.  at  17-  19,  paras.  51-  56. 
 112  See  AT&  T  Feb.  1  Ex  Parte  Letter;  WorldCom  Jan.  31  Ex  Parte  Letter. 
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 New  York  rates.  113  To  allow  section  271  applicants  to  use  benchmark-  approved  rates  in  performing  a  subsequent  benchmark  analysis  would  compound  any  variations  from  rates  in  the 
 state  found  to  have  correctly  applied  TELRIC  principles  in  a  full  rate  proceeding.  Verizons  reliance  on  Massachusetts  rates  is  particularly  inappropriate  when  the  Commission  found  that 
 Massachusetts  rates  satisfied  checklist  item  two  based  on  a  benchmark  comparison  to  New  York  rates  that  have  now  been  superseded. 


 43.  On  December  22,  1999,  the  Commission  granted  Verizons  section  271  application  in  New  York,  deferring  to  the  New  York  Commission  on  the  issue  of  switch 
 discounts  and  finding  that  the  New  York  switching  rates  fell  within  the  reasonable  range  that  a  correct  application  of  TELRIC  principles  would  produce.  114  The  Commission  noted  that  the  New 
 York  Commission  was  reexamining  switching  prices  and  would  be  revising  them.  115  The  Court  of  Appeals  for  the  D.  C.  Circuit  agreed  with  the  Commissions  analysis,  noting  both  that  the  New 
 York  Commission  has  said  it  will  reexamine  switching  discounts,  ordering  refunds  if  appropriate  and  that  requiring  rejection  of  section  271  applications  due  to  ongoing  rate 
 proceedings  would  cripple  the  section  271  process.  116 
 44.  At  the  time  Verizon  applied  for  section  271  approval  in  Massachusetts,  the  New  York  Commission  had  not  yet  concluded  its  reexamination  of  switching  prices.  The 


 Commission  approved  the  Massachusetts  application,  finding  that  the  Massachusetts  rates  were  comparable  to  New  York  rates  and  passed  a  benchmark  analysis.  117  The  Commission  rejected 
 parties  arguments  that  the  New  York  switching  rates  were  defective  and  subject  to  a  reexamination  proceeding  and,  therefore,  could  not  be  relied  on  for  a  benchmark  analysis.  118  The 
 order  stated,  however,  that,  depending  on  the  New  York  Commissions  final  conclusions,  Verizon  might  be  precluded  from  relying  on  New  York  switching  rates  as  a  basis  for  a  future 
 benchmark  comparison: 
 If  the  New  York  Commission  adopts  modified  UNE  rates,  future  section  271  applicants  could  no  longer  demonstrate  TELRIC 


 compliance  by  showing  that  their  rates  in  the  applicant  state  are  equivalent  to  or  based  on  the  current  New  York  rates,  which  will 
 have  been  superseded.  Moreover,  because  Verizon  would  have  us  rely  on  switching  rates  from  the  New  York  proceeding,  a  decision 
 by  the  New  York  Commission  to  modify  these  UNE  rates  may  undermine  Verizons  reliance  on  those  rates  in  Massachusetts  and 


 113  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9000,  para  23. 
 114  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4083-  84,  para.  242;  4084-  85,  para.  245. 
 115  Id.  at  4085-  86,  para.  247. 
 116  AT&  T  Corp.  v.  FCC,  220  F.  3d  at  618. 
 117  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9000,  para.  23. 
 118  Id.  at  9003,  para.  31. 
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 its  compliance  with  the  requirements  of  section  271,  depending  on  the  New  York  Commissions  conclusions.  119 
 45.  In  an  order  issued  January  28,  2002,  the  New  York  Commission  completed  its  reexamination  of  switching  rates,  adopting  many  recommendations  of  an  ALJ  who  conducted 
 hearings  on  the  issues,  and  rejecting  many  exceptions  to  the  ALJs  Recommended  Decision.  120  Regarding  the  contested  issue  of  new  versus  growth  discounts  for  switches,  the  New  York 
 Commission  found  that,  although  switching  costs  should  not  be  predicated  exclusively  on  new  switch  discounts,  it  has  been  clear  since  [early  1999]  that  relatively  deep  new  switch  discounts 
 are  not  limited  to  full-  scale  switch  replacements,  and  there  is  no  basis  for  agreeing  with  Verizon  that  incremental  replacement  of  the  system  over  time  would  entail  growth  discounts  only.  121  On 
 February  19,  2002,  Verizon  filed  new  rates  to  comply  with  the  New  York  Commissions  order  that  are  approximately  50  percent  lower  than  the  original  New  York  switching  rates.  122 


 46.  Given  these  findings  by  the  New  York  Commission,  AT&  T  and  WorldCom  assert  that  Verizon  cannot  rely  on  a  benchmark  comparison  to  superseded  New  York  switching  rates  to 
 establish  that  its  current  Rhode  Island  switching  rates  are  within  a  reasonable  TELRIC  range.  123  The  Commission  previously  has  held  that  the  existence  of  a  new  cost  proceeding  is  insufficient 
 reason  to  find  that  a  states  existing  rates  do  not  satisfy  TELRIC  principles.  124  We  also  believe  that  the  existence  of  a  new  rate  proceeding  is  insufficient  reason  to  disallow  a  states  rates  for 
 benchmarking  purposes.  As  the  Court  of  Appeals  for  the  D.  C.  Circuit  has  recognized,  rates  require  continual  adjustment  to  reflect  changing  information,  and  section  271  applications  would 
 never  be  granted  if  such  adjustment  required  denial.  125  The  need  for  such  continual  adjustment,  however,  also  requires  us  to  consider  carefully  any  reliance  on  benchmarking  to  rates  that  have 


 119  Id.  at  9002-  03,  paras.  29-  30.  We  note  that  this  Commission  order  was  approved  by  two  Commissioners,  with 
 one  concurrence  and  one  dissent.  In  his  separate  statement,  Chairman  Powell  explained  the  situation  as  follows:  If  New  York  in  fact  revises  its  rates  downward  after  concluding  that  its  prior  determinations  were  not  soundly  cost-based, 


 neither  Verizon  nor  anyone  else  could  properly  rely  in  future  applications  on  the  rates  we  approved  in  the  Bell  Atlantic  New  York  Order  without  new  substantiation.  Furthermore,  depending  on  the  scope  of  the  New  York 
 Commissions  upcoming  decision  on  rates,  this  Commission  might  determine  that  Verizon  has  subsequently  ceased  to  meet  [one]  of  the  conditions  required  for  [section  271]  approval,    thereby  empowering  us  to  take  remedial  action 
 under  section  271(  d)(  6).  Id.  at  9143. 
 120  See  generally  New  York  UNE  Rate  Order. 


 121  Id.  at  28. 
 122  Among  other  things,  the  New  York  Commission  adjusted  how  much  of  the  cost  of  switching  is  recovered 
 through  the  flat-  rated  port  charge  and  how  much  is  recovered  through  traffic-  sensitive  per-  minute  charges,  raising  the  portion  recovered  through  flat  charges  and  reducing  the  portion  recovered  through  per-  minute  charges.  Id.  at 


 36. 
 123  AT&  T  Feb.  1  Ex  Parte  Letter;  WorldCom  Jan.  31  Ex  Parte  Letter. 


 124  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4085-  86,  para.  247,  affd,  AT&  T  Corp.  v.  FCC,  220  F.  3d  at  617. 
 125  AT&  T  Corp.  v.  FCC,  22  F.  3d  at  617-  18. 
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 been  superseded  by  order  of  a  state  commission.  To  do  otherwise  would  be  to  forever  freeze  TELRIC  ratemaking  to  the  first  TELRIC  rate  proceeding  and  de  facto  fail  to  recognize  increased 
 sophistication  in  modeling  or  newly  available  evidence  that  could  produce  different,  more  precise  TELRIC  refinements  that  result  in  increased  or  decreased  wholesale  prices  for  UNEs. 
 This  requirement  is  particularly  compelling  here,  where  parties  questioned  Verizons  New  York  switching  rates  during  the  section  271  proceeding  and  the  New  York  Commission  expressly 
 rejected  Verizons  discredited  claim  of  no  further  new  switch  discounts.  126  We  must  also  consider  the  experience  we  have  gained  in  approving  additional  section  271  applications.  We 
 note  that  Verizons  superseded  New  York  switching  rates  are  considerably  higher  than  other  switching  rates  that  the  Commission  has  found  to  be  TELRIC  compliant  in  approving  other 
 section  271  applications.  For  example,  Verizons  superseded  New  York  switching  rates  are  significantly  higher  than  switching  rates  in  Texas,  Kansas,  Oklahoma,  Pennsylvania,  Missouri 
 and  Arkansas.  127  Thus,  we  conclude  that  it  would  be  inappropriate  to  evaluate  Verizons  Rhode  Island  rates  based  on  a  benchmark  comparison  to  superseded  New  York  rates. 


 47.  As  noted  above,  in  response  to  criticism  of  Verizons  use  of  superseded  New  York  switching  rates  as  evidence  that  its  Rhode  Island  switching  rates  fell  within  a  reasonable 
 TELRIC  range,  Verizon  filed  new,  lower  switching  rates  with  the  Rhode  Island  Commission  on  February  14,  2002.  128  The  Rhode  Island  Commission  adopted  these  new,  lower  switching  rates 
 on  February  21,  2002.  129  Verizon  maintains  that  its  old  Rhode  Island  switching  rates  were  TELRIC  compliant  and  that  its  new,  lower  switching  rates  are  well  below  the  level  that  any 
 reasonable  measure  of  TELRIC  costs  would  produce.  130  Verizons  February  21  Rhode  Island  switching  rates  compare  favorably  with  the  new  New  York  switching  rates  when  evaluated  using 
 our  benchmark  analysis.  We  consider,  therefore,  whether  the  new  New  York  switching  rates  are  an  appropriate  benchmark  for  determining  whether  Verizons  February  21  Rhode  Island 
 switching  rates  fall  within  a  reasonable  TELRIC  range. 
 48.  We  find  that  the  new  rates  adopted  by  the  New  York  Commission  are  appropriate  comparison  rates  in  this  instance.  Several  facts  unique  to  this  application  permit  us  to  use  the 


 new  New  York  rates  in  our  benchmark  analysis. 
 49.  First,  although  Verizon  did  not  introduce  the  deliberations  of  the  New  York  Commission  into  the  record  in  this  proceeding  when  it  initially  filed  its  Rhode  Island  section  271 


 application,  the  Commission  has  been  aware  of  the  existence  of  the  New  York  rate  proceeding 


 126  New  York  UNE  Rate  Order  at  21. 
 127  See  SWBT  Texas  Order,  15  FCC  Rcd  at  18471-  77,  paras.  231-  242;  SWBT  Kansas/  Oklahoma  Order,  16  FCC 
 Rcd  at  6264,  para.  55,  6273,  para.  73,  6274-  75,  para.  77;  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17458-  59,  para.  67;  SWBT  Missouri  Arkansas  Order  at  paras  60,  67. 


 128  See  Verizon  Feb.  14  Ex  Parte  Letter;  Feb.  14  Public  Notice. 
 129  Second  Rhode  Island  Switching  Order  at  3. 
 130  Verizon  Feb.  14  Ex  Parte  Letter  at  2. 
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 since  it  first  granted  Verizon  section  271  approval  in  New  York.  131  Further,  AT&  T  and  WorldCom  were  cognizant  of  the  New  York  Commissions  impending  action,  as  they  argued 
 that  a  significant  reduction  in  New  York  switching  rates  was  imminent  and  should  be  used  in  a  benchmark  comparison  in  this  proceeding.  132  Finally,  AT&  T,  WorldCom,  and  Verizon  notified 
 us  of  the  New  York  Commissions  new  rate  determinations  shortly  after  release  of  the  New  York  Commissions  order.  133  In  fact,  AT&  T  now  contends  that  the  new  New  York  rates  are  the  only 
 evidence  Verizon  can  rely  on  to  demonstrate  that  its  Rhode  Island  rates  satisfy  checklist  item  two.  134  Therefore,  we,  along  with  parties  to  this  proceeding,  have  been  well  aware  of  the 
 outcome  and  impact  of  the  New  York  rate  proceeding  since  late  January  2002,  and  have  had  an  opportunity  to  review  the  new  rates. 


 50.  We  commend  the  New  York  Commissions  efforts  in  conducting  a  detailed  and  lengthy  rate  review  in  which  many  of  the  issues  debated  by  the  parties  here  were  thoroughly 
 evaluated.  135  The  rate  review  began  in  February  2000,  involved  the  filing  of  testimony,  responsive  testimony  or  rebuttal  testimony  by  almost  a  dozen  parties,  including  AT&  T  and 
 WorldCom,  seven  days  of  hearings  and  several  conferences,  and  hundreds  of  pages  of  briefs.  This  process  resulted  in  a  Recommended  Decision  by  ALJ  Linsider  on  May  16,  2001. 
 Thereafter,  for  eight  months,  the  New  York  Commission  considered  the  Recommended  Decision  as  well  as  exceptions  filed  by  nearly  a  dozen  parties,  again  including  AT&  T  and  WorldCom, 
 with  accompanying  briefs  and  reply  briefs.  On  January  28,  2002,  in  a  detailed,  162-  page  order,  the  New  York  Commission  reached  a  final  determination  regarding  the  numerous  UNE  rate 
 issues  it  considered.  In  this  order,  the  New  York  Commission  made  a  reasonable,  downward  adjustment  to  switching  rates  in  response  to  criticism  of  the  superseded  New  York  switching 
 rates  that  were  at  issue  in  the  New  York  Commissions  original  UNE  rate  proceeding,  the  Commissions  New  York  section  271  proceeding,  and  the  subsequent  Massachusetts  section  271 
 proceeding.  136  Specifically,  the  New  York  Commission  reduced  the  switching  rates  after  considering  new  evidence  that  Verizon  continues  to  receive  deep  discounts  on  its  new 
 switches.  137  In  adopting  the  lower  rates,  the  New  York  Commission  expressly  provided  for  possible  refunds  to  competing  LECs  who  had  paid  the  superseded  (and  discredited)  interim 


 131  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4085-  86,  para.  247. 
 132  AT&  T  Comments  at  15;  WorldCom  Comments  at  10. 
 133  AT&  T  Feb.  1  Ex  Parte  Letter;  WorldCom  Jan.  31  Ex  Parte  Letter;  Verizon  Feb.  8  Ex  Parte  Letter. 
 134  AT&  T  Feb.  1  Ex  Parte  letter  at  16. 
 135  See  New  York  UNE  Rate  Order  at  20-  33. 
 136  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4085-  86,  para.  247;  Verizon  Massachusetts  Order,  16  FCC  Rcd 
 at  9004,  para.  33. 
 137  New  York  UNE  Rate  Order  at  21. 
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 rates.  138  Indeed,  Verizon  and  other  parties  to  the  New  York  rate  proceedings  recently  filed  a  settlement  agreement  providing  for  such  refunds.  139 
 51.  In  considering  whether  the  new  New  York  rates  are  an  appropriate  benchmark  to  demonstrate  TELRIC  compliance,  we  place  significant  weight  on  the  input  of  commenters  on 
 this  issue.  In  particular,  as  noted  above,  even  before  the  New  York  Commission  adopted  the  new  rates,  AT&  T  and  WorldCom  advocated  both  to  the  Rhode  Island  Commission  and  in  this 
 proceeding  that  the  rates  proposed  by  the  New  York  ALJ  more  than  nine  months  ago  were  the  appropriate  benchmark  rates.  140  In  fact,  WorldCom  asserted  in  this  proceeding  that  Verizon 
 should  adopt  in  Rhode  Island  the  revised  UNE  rates  of  the  New  York  ALJ  .  .  .  as  a  suitable  proxy  for  TELRIC  rates.  141  Immediately  upon  the  New  York  Commissions  adoption  of  the  ALJs 
 recommendation,  moreover,  AT&  T  reiterated  to  this  Commission  that  only  by  lowering  the  Rhode  Island  rates  to  meet  a  benchmark  comparison  to  the  new  New  York  rates  could  Verizon 
 satisfy  checklist  item  two.  142  Further,  when  we  sought  comment  on  the  question  of  using  new  New  York  rates  as  a  benchmark,  143  no  party  suggested  that  the  new  New  York  rates  are  not 
 TELRIC-  compliant  or  are  an  inappropriate  benchmark. 
 52.  The  New  York  Commission  has  demonstrated  an  admirable  commitment  to  accurate,  cost-  based  rate  making  both  in  the  recent  rate  case  and  in  the  proceedings  that  the 


 Commission  and  the  United  States  Court  of  Appeals  for  the  D.  C.  Circuit  evaluated  in  granting  and  reviewing  the  decision  to  grant  section  271  approval  in  New  York.  This  conclusion  is 
 buttressed  by  the  fact  that  Verizons  new  New  York  switching  rates  are  approximately  half  of  the  superseded  rates  and  much  closer  to  switching  rates  in  states  where  section  271  approval  has 
 been  granted  more  recently  than  in  New  York.  Verizons  new  New  York  non-  loop  rates  more  closely  compare  to  non-  loop  rate  levels  in  Texas,  Oklahoma,  Pennsylvania,  and  Missouri. 


 53.  In  sum,  we  base  our  conclusion  to  use  the  new  New  York  rates  as  a  benchmark  in  this  proceeding  on  four  factors.  First,  we  rely  on  our  previous  conclusion  that  the  New  York 
 Commission  had  conducted  a  TELRIC  compliant  proceeding  when  it  set  Bell  Atlantics  original  UNE  rates  and  our  affirmative  finding  that  the  resulting  rates  fell  within  a  reasonable  TELRIC 
 range    a  finding  affirmed  by  the  D.  C.  Circuit.  144  Second,  we  rely  on  the  fact  that,  in  a 


 138  Id.  at  22;  see  also  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4085-  86,  para.  247. 
 139  AT&  T  Feb.  12  Ex  Parte  Letter  at  3. 
 140  AT&  T  Comments  at  15;  WorldCom  Comments  at  10. 
 141  WorldCom  Comments  at  iii.  AT&  T  also  stated:  To  the  extent  that  a  benchmark  analysis  is  used  in  this  case, 
 [the  New  York  ALJ  recommended  rates]  are  the  appropriate  benchmark  comparisons  for  Rhode  Island  at  the  present  time.  AT&  T  Comments  at  15. 


 142  AT&  T  Feb.  1  Ex  Parte  Letter  at  16. 
 143  See  Feb.  14  Public  Notice. 
 144  AT&  T  Corp.  v.  FCC,  220  F.  3d  607  (D.  C.  Cir.  2000) 
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 proceeding  that  spanned  two  years,  included  nearly  a  dozen  parties,  and  generated  almost  5000  pages  of  transcript,  the  New  York  Commission  specifically  addressed,  among  numerous 
 TELRIC  questions,  the  precise  issue  that  was  heavily  debated  in  our  initial  consideration  of  Verizons  superseded  New  York  rates.  Third,  we  rely  on  the  fact  that  no  commenter  has 
 asserted,  or  submitted  any  evidence  to  indicate,  that  when  the  New  York  Commission  adopted  the  new  New  York  rates,  it  violated  basic  TELRIC  principles  [or  made]  clear  errors  in  factual 
 findings  on  matters  so  substantial  that  the  end  result  falls  outside  the  range  that  the  reasonable  application  of  TELRIC  principles  would  produce.  145  In  fact,  to  the  contrary,  commenters 
 asserted  that  the  new  New  York  rates  should  serve  as  a  benchmark  in  this  proceeding.  146  Finally,  we  rely  on  the  fact  that  the  new  New  York  rates  are  both  lower  and  more  in  line  with  the  rates 
 we  have  approved  in  considering  other  section  271  applications.  Under  these  circumstances,  we  find  that,  on  the  record  before  us,  Verizons  new  New  York  rates  fall  within  a  reasonable 
 TELRIC  range  and  are,  therefore,  an  appropriate  benchmark  for  Rhode  Island. 
 54.  We  also  note  that  Verizons  February  21  Rhode  Island  switching  rates,  which  are  much  closer  to  its  new  New  York  switching  rates,  will  soon  be  subjected  to  the  additional 


 scrutiny  of  the  Rhode  Island  Commission.  Although  this  additional  scrutiny  is  not  a  basis  for  our  decision,  it  demonstrates  that  commissions  significant  commitment  to  TELRIC  principles. 
 The  Rhode  Island  Commission  also  has  indicated  a  commitment  to  complete  its  new  rate  case  expeditiously,  with  an  expectation  of  adopting  permanent  rates  by  the  end  of  2002.  147 


 55.  As  discussed  at  part  II,  above,  we  waive  our  complete  when  filed  rule  in  the  unique  circumstances  presented  by  this  application  to  consider  Verizons  February  21  Rhode 
 Island  switching  rates  as  evidence  of  compliance  with  checklist  item  two.  148  Having  determined  that  the  new  New  York  rates  are  appropriate  rates  for  our  benchmark  comparison,  we  now 
 compare  Verizons  Rhode  Island  non-  loop  rates  to  new  New  York  non-  loop  rates  using  our  benchmark  analysis.  In  taking  a  weighted  average  of  non-  loop  rates  in  Rhode  Island  and  New 
 York,  we  find  that  Rhode  Islands  non-  loop  rates  are  roughly  three  percent  lower  than  New  York  non-  loop  rates.  149  Taking  a  weighted  average  of  Rhode  Island  and  New  York  costs,  we  also  find 


 145  See,  e.  g.,  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6266,  para.  59. 
 146  See  AT&  T  Feb.  1  Ex  Parte  Letter  at  16;  AT&  T  Comments  at  15;  WorldCom  Comments  at  iii. 
 147  Rhode  Island  Commission  Reply  at  3. 
 148  See  the  discussion  of  our  waiver  of  our  complete  when  filed  rule  supra  part  II. 
 149  In  reaching  this  conclusion,  we  used  state-  specific  Dial  Equipment  Minutes  (DEM)  rather  than  nationwide  data 
 to  compute  minutes  of  use  for  the  benchmark  analysis.  We  also  used  data  submitted  by  Verizon  regarding  interswitch  versus  intraswitch  and  originating  versus  terminating  minutes  of  use.  See  Letters  from  Clint  E.  Odom, 


 Director  -  Federal  Regulatory,  Verizon  to  William  F.  Caton,  Acting  Secretary,  Federal  Communications  Commission,  Feb.  19,  2002,  Jan.  18,  2002,  and  Jan.  16,  2002.  We  used  these  data  because,  where  available, 
 verifiable,  state-  specific  data  provide  a  more  valid  comparison.  We  note  that  our  use  of  this  data  has  a  very  small  effect  on  the  outcome  of  the  benchmark  comparison.  We  also  note  that  Verizons  new  New  York  non-  loop  rates 
 contain  both  a  digital  and  an  analog  port  rate.  The  New  York  rate  structure  uses  the  digital  port  rate  of  $2.57  as  the  rate  charged  for  ports  that  are  purchased  as  part  of  the  UNE-  Platform.  Therefore,  for  purposes  of  our  benchmark 
 (continued.) 
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 that  Rhode  Island  non-  loop  costs  are  roughly  three  percent  lower  than  New  York  non-  loop  costs.  We  conclude,  therefore,  that  Verizons  Rhode  Island  non-  loop  rates  compare  favorably  to  its 
 New  York  non-  loop  rates,  and,  therefore,  satisfy  our  benchmark  analysis  and  the  requirements  of  checklist  item  two. 


 (iii)  Loop  Rates 
 56.  We  now  evaluate  the  TELRIC  compliance  of  Verizons  Rhode  Island  loop  rates.  Only  WorldCom  criticizes  Verizons  loop  rates,  claiming  that  they  are  not  TELRIC-  compliant 


 because  they  are  based  on  cost  studies  with  flawed  assumptions.  150  We  reject  several  of  WorldComs  claims.  Specifically,  WorldCom  objects  to  Verizons  assumptions  regarding  fill 
 factors,  fiber  feed,  structure-  sharing,  and  use  of  more  efficient  integrated  digital  loop  carrier.  The  Rhode  Island  Commission  considered  all  of  WorldComs  claims  in  its  lengthy  UNE  rate 
 proceeding.  First,  Verizons  loop  rates  incorporate  fill  factors    75  percent  for  feeder,  50  percent  for  distribution,  and  60  percent  for  interoffice  transport    recommended  by  the  Rhode  Island 
 Division  151  and  which  the  Commission  has  found  to  be  TELRIC-  compliant  in  approving  271  applications  in  other  states.  152  Second,  based  on  the  Rhode  Island  Divisions  recommendation, 
 the  Rhode  Island  Commission  accepted  an  assumption  that  Verizon  would  use  100  percent  fiber  feeder,  finding  that  on  a  forward-  looking  basis,  the  industry  is  moving  toward  increased  and 
 exclusive  use  of  fiber-  optic  feeder  cables.  .  .  .  153  This  assumption  is  consistent  with  Commission  findings  in  approving  section  271  applications  in  other  states,  which  have  been 
 upheld  in  federal  court.  154  We  find  that  WorldCom  presents  no  new  arguments  or  facts  in  this  proceeding  which  would  cause  us  to  find  that  these  assumptions  are  inconsistent  with  TELRIC 
 principles  as  applied  to  Verizon  in  Rhode  Island. 
 57.  We  note  that  WorldCom  alleges  additional  specific  TELRIC  violations  not  addressed  above.  155  Assuming  arguendo  that  WorldComs  other  claims  regarding  flawed 


 assumptions  are  valid,  we  conclude  that  the  alleged  errors  do  not  result  in  rates  outside  the 
 (Continued  from  previous  page)  analysis,  we  have  compared  Verizons  New  York  digital  port  rate  of  $2.57,  rather  than  the  analog  port  rate  of  $4.22, 


 or  any  blend  of  the  two  rates,  to  Verizons  February  21  single  Rhode  Island  port  rate  of  $1.86. 
 150  WorldCom  Comments  at  10. 


 151  Rhode  Island  TELRIC  Order  at  51-  52;  Rhode  Island  Commission  Comments  at  43,  n.  139;  Verizon 
 Cupelo/  Garzillo/  Anglin  Decl.  at  13-  14,  para.  44. 
 152  See,  e.  g.,  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9007,  para.  39;  SWBT  Kansas/  Oklahoma  Order,  16 
 FCC  Rcd  at  6275,  paras.  79,  80. 
 153  Rhode  Island  TELRIC  Order  at  40. 


 154  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4087-  88,  paras.  248-  249;  AT&  T  Corp.  v.  FCC,  220  F.  3d  at  618- 
 619  (upholding  the  Commissions  finding  that  rates  based  on  an  assumption  of  100  percent  fiber  feeder  were  consistent  with  TELRIC  principles);  see  also  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17455,  para.  59. 


 155  Specifically,  WorldCom  claims  that  loop  rates  do  not  incorporate  TELRIC-  compliant  assumptions  for  structure 
 sharing  and  use  of  integrated  digital  loop  carrier.  WorldCom  Comments  at  11-  12. 
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 reasonable  range  that  a  correct  application  of  TELRIC  principles  would  produce.  Applying  our  benchmark  analysis  to  New  York  and  Rhode  Island  loop  rates,  we  conclude  that  Rhode  Island 
 loop  rates  fall  within  the  range  that  a  TELRIC-  based  rate  proceeding  would  produce.  This  result  occurs  whether  we  use  Verizons  superseded  New  York  loop  rates  or  its  new  New  York  loop 
 rates  in  our  benchmark  comparison.  156  Specifically,  in  taking  a  weighted  average  in  New  York  and  Rhode  Island,  we  find  that  Verizons  Rhode  Island  loop  rates  are  roughly  the  same  as  its 
 superseded  New  York  loop  rates,  even  though  the  USF  cost  model  suggests  that  loop  costs  in  Rhode  Island  are  28.42  percent  higher  than  New  York.  157  We  also  find  that  Verizons  Rhode 
 Island  weighted  average  loop  rates  are  roughly  22  percent  higher  than  the  new  New  York  weighted  average  loop  rates,  even  though  Rhode  Island  weighted  average  loop  costs  are  roughly 
 28.45  percent  higher  than  New  York  weighted  average  loop  costs.  We  conclude  that  Verizons  Rhode  Island  loop  rates  pass  our  benchmark  comparison  to  both  superseded  and  new  New  York 
 loop  rates,  and  satisfy  checklist  item  two. 
 2.  Operations  Support  Systems 
 58.  We  find,  as  did  the  Rhode  Island  Commission,  that  Verizon  provides  nondiscriminatory  access  to  its  Operations  Support  Systems  (OSS)  in  Rhode  Island.  158 


 Consistent  with  more  recent  Commission  orders,  we  do  not  address  each  OSS  element  in  detail  where  our  review  of  the  record  satisfies  us  that  there  is  little  or  no  dispute  that  Verizon  meets  the 
 nondiscrimination  requirements.  159  In  this  case,  commenters  have  raised  no  concerns  with  any  aspect  of  Verizon  Rhode  Islands  OSS.  Nonetheless,  because  Verizon  argues  that  it  employs  the 
 same  OSS  in  Rhode  Island  that  the  Commission  reviewed  in  the  Verizon  Massachusetts  Order,  we  address  those  aspects  of  its  OSS  that  have  changed  since  the  time  of  that  order    primarily 
 Verizons  loop  qualification  functions.  We  also  address  those  aspects  of  Verizons  Rhode  Island  OSS  involving  minor  performance  discrepancies  or  otherwise  requiring  explanation:  order 
 rejection  notices,  electronic  jeopardies,  UNE-  Platform  provisioning,  and  billing. 
 a.  OSS  Testing  and  Relevance  of  Massachusetts  Performance 
 59.  Consistent  with  our  precedent,  Verizon  relies  in  this  application  on  evidence  that  its  Rhode  Island  and  Massachusetts  OSS  are  the  same.  160  Specifically,  Verizon  asserts  that  it 


 156  We  note  that  Verizons  new  New  York  loop  rates  resulted  from  the  same  comprehensive  UNE  rate  proceeding 
 described  in  detail  at  paras.  50-  53,  supra. 
 157  See  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17458,  n.  249;  Verizon  Massachusetts  Order,  16  FCC  Rcd  at 
 9001,  n.  65,  for  a  discussion  of  what  assumptions  are  made  and  how  costs  are  compared  using  the  USF  cost  model. 
 158  Rhode  Island  Commission  Comments  at  92. 


 159  See  Verizon  Connecticut  Order,  16  FCC  Rcd  at  14151,  para.  8;  see  also  Verizon  Pennsylvania  Order,  16  FCC 
 Rcd  at  17425,  para.  12. 
 160  See  Appendix  D  at  para.  32. 
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 provides  the  same  OSS  to  competing  carriers  in  Massachusetts  and  Rhode  Island.  161  To  support  its  claim,  Verizon  submits  reports  from  two  third-  party  consultants.  162  In  the  first  instance, 
 Pricewaterhouse  Coopers  (PwC)  evaluated  the  five  OSS  functions  that  provide  competing  LECs  access  to  Verizons  systems  and  found  them  to  be  identical  in  Rhode  Island  and 
 Massachusetts.  163  In  the  second  instance,  KPMG  concluded  that  the  systems  or  interfaces,  processes,  personnel,  facilities,  management  structures,  and  performance  measures  were  the 
 same  for  both  Rhode  Island  and  Massachusetts.  164  The  Rhode  Island  Commission  also  engaged  KPMG  to  conduct  three  stand-  alone  tests  in  connection  with  Verizons  OSS,  reviewing 
 electronic  jeopardies,  line  loss  reports,  and  line  sharing.  165  The  Rhode  Island  Commission  also  concluded  that  Verizon  uses  a  common  OSS  in  both  states.  166 


 60.  We  conclude  that  Verizon,  through  the  PwC  report,  its  declaratory  evidence,  and  the  KPMG  report,  demonstrates  that  the  OSS  in  Massachusetts  are  the  same  as  the  OSS  in  Rhode 
 Island  and,  therefore,  evidence  concerning  its  OSS  in  Massachusetts  is  relevant  and  should  be  considered  in  our  evaluation  of  Verizons  OSS  in  Rhode  Island.  Verizons  showing  enables  us 
 to  rely,  for  instance,  on  findings  relating  to  Verizons  OSS  from  the  Verizon  Massachusetts  Order  in  our  analysis  of  Verizons  OSS  in  Rhode  Island.  In  addition,  because  the  OSS  are  the 
 same  in  both  states,  where  low  volumes  in  Verizons  performance  data  in  Rhode  Island  yield  only  inconclusive  and  inconsistent  statistical  findings  concerning  Verizons  compliance  with  the 
 competitive  checklist,  we  will  examine  data  reflecting  Verizons  performance  in  Massachusetts. 
 b.  Verizons  Loop  Qualification  Process 
 61.  Based  on  the  evidence  in  the  record,  we  find,  as  the  Rhode  Island  Commission  did,  that  Verizon  provides  access  to  loop  qualification  information  in  a  manner  consistent  with 


 the  requirements  of  the  UNE  Remand  Order.  167  Specifically,  we  find  that  Verizon  provides 
 161  Verizon  Application  at  58;  Verizon  McLean/  Wierzbicki  Decl.  at  paras.  23,  50,  86,  90,  102,  115,  134,  and  Tab  2 
 at  1,  9,  11. 
 162  The  PwC  report  explains  the  similarities  among  the  OSS  in  the  Verizon  New  England  states  (Massachusetts  and 
 Rhode  Island,  as  well  as  Maine,  New  Hampshire  and  Vermont).  Verizon  Application  App.  B,  Tab  3,  PricewaterhouseCoopers  LLP  report  offered  as  Verizons  response  to  WorldCom  data  request  1-  5  (PwC  Report). 


 The  KPMG  report  explains  only  the  similarities  of  Massachusetts  and  Rhode  Island  systems  and  describes  three  stand-  alone  tests  of  Rhode  Island  OSS  elements  that  were  not  previously  evaluated  in  Massachusetts.  Verizon 
 Application  App.  E,  Tab  11,  KPMG  Report  (KPMG  Report). 
 163  See  PwC  Report  at  9. 


 164  See  KPMG  Report  at  13.  Only  in  a  single  area,  Metrics  Change  Management,  did  KPMG  conclude  that  there 
 were  existing  material  differences.  KPMG  found  that  these  differences  reflected  enhancements  to  Verizons  OSS  since  the  time  of  the  Massachusetts  test.  KPMG  Report  at  13. 


 165  Id.  at  5. 
 166  Rhode  Island  Commission  Comments  at  92. 
 167  UNE  Remand  Order,  15  FCC  Rcd  at  3885-  87,  paras.  427-  31  (1999);  Rhode  Island  Commission  Comments  at 
 92. 
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 competitors  with  access  to  all  of  the  same  detailed  information  about  the  loop  that  is  available  to  itself,  and  in  the  same  time  frame  as  any  of  its  personnel  could  obtain  it.  168  Verizon  provides  four 
 ways  for  competing  carriers  to  obtain  loop  make-  up  information:  (1)  access  to  loop  make-  up  information  in  its  Loop  Facility  Assignment  and  Control  System  (LFACS)  database;  (2)  manual 
 loop  qualification;  (3)  mechanized  loop  qualification  based  on  information  in  its  LiveWire  database;  and  (4)  engineering  record  requests.  We  evaluate  all  four  of  these  methods  below,  and 
 we  pay  particular  attention  to  the  permanent  OSS  Verizon  has  implemented  since  the  time  of  the  Verizon  Massachusetts  Order  to  enhance  the  first  two  aspects  of  the  OSS  described  above: 
 access  to  loop  make-  up  information  in  LFACS  and  manual  loop  qualification.  169  No  commenter  has  raised  concerns  with  regard  to  any  aspect  of  Verizons  loop  qualification  OSS. 


 62.  Access  to  LFACS.  Since  the  adoption  of  the  Verizon  Massachusetts  Order,  Verizon  has  implemented  a  transaction  by  which  competing  LECs  can  obtain  access  to  the  loop 
 make-  up  information  contained  in  Verizons  LFACS  database.  170  Verizon  now  returns  loop  make-  up  information  in  LFACS  to  requestors  in  a  parsed  format,  which  permits  competing  LECs 
 to  integrate  the  information  between  the  pre-  ordering  and  ordering  systems.  Verizon  also  now  responds  to  requests  for  information  from  LFACS  in  real  time.  171  We  commend  Verizon  for 
 making  these  improvements  to  its  loop  qualification  OSS,  and  we  find  that  Verizon  satisfies  this  element  of  checklist  item  two. 


 63.  Manual  Loop  Qualification.  Since  the  time  of  the  Verizon  Massachusetts  Order,  Verizon  has  implemented  a  pre-  order  transaction  by  which  competing  LECs  can  request  that 
 Verizon  perform  a  manual  loop  qualification.  172  Using  this  transaction,  competing  LECs  can  request  manual  loop  qualification  prior  to  actually  placing  their  orders  for  the  loops.  173  Verizon 


 168  See  Verizon  Massachusetts  Order,  15  FCC  Rcd  at  9016-  17,  para.  54.  Additional  support  can  be  found  in  the 
 PwC  and  KPMG  reports.  See  PwC  Report  at  17-  18;  KPMG  Report  at  20. 
 169  The  Commission  stated  in  the  Verizon  Pennsylvania  Order  that  it  intended  to  evaluate  Verizons  permanent 
 loop  qualification  OSS  in  section  271  applications  Verizon  filed  after  October  2001.  See  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17447-  48,  para.  45.  This  is  the  first  such  application. 


 170  See  Verizon  McLean/  Wierzbicki  Decl.  at  para.  46. 
 171  See  Verizon  McLean/  Wierzbicki  Decl.  Tab  2,  at  5;  Letter  from  Clint  Odom,  Director,  Federal  Regulatory,  to 
 Magalie  Roman  Salas,  Secretary,  Federal  Communications  Commission,  CC  Docket  No.  01-  324  (filed  Jan.  11,  2002)  (Verizon  Jan.  11  Ex  Parte  Letter).  There  are  no  performance  measures  to  illustrate  the  timeliness  of 


 competitive  LEC  access  to  the  LFACS  information.  To  demonstrate  timeliness,  Verizon  conducted  a  special  study  of  Loop  Make-  Up  transaction  performance  for  the  months  of  November  and  December  2001.  During  this  time 
 there  were  no  competitive  LEC  transactions  regarding  loop  make-  up  in  Rhode  Island.  Additionally,  there  were  no  competitive  LEC  requests  using  the  CORBA  interface  for  loop  make-  up  information  in  any  area  within  the  former 
 Bell  Atlantic  footprint.  There  were  12  requests  using  EDI  and  the  average  response  time  was  13.16  seconds.  There  were  544  requests  using  the  Web  GUI  interface  and  the  average  response  time  for  these  was  15.06  seconds.  See 
 Verizon  Jan.  11  Ex  Parte  Letter. 
 172  See  Verizon  McLean/  Wierzbicki  Decl.  at  para.  45.  Cf.  Verizon  Massachusetts  Order,  15  FCC  Rcd  at  9023-  24, 
 para.  65. 
 173  Cf.  Verizon  Massachusetts  Order,  15  FCC  Rcd  at  9023-  24,  para.  65. 
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 consistently  responds  to  manual  loop  qualification  requests  within  the  48-  hour  benchmark  in  Rhode  Island.  174  We  commend  Verizon  for  implementing  these  enhancements,  and  we  find  that 
 Verizons  manual  loop  qualification  process  complies  with  the  requirements  of  this  checklist  item. 


 64.  Mechanized  Loop  Qualification.  We  find  that  Verizon  continues  to  provide  competing  LECs  with  timely  and  nondiscriminatory  access  to  the  mechanized  loop  qualification 
 information  contained  in  its  LiveWire  database.  175  Verizon  also  continues  to  provide  competing  LECs  with  the  ability  to  obtain  loop  pre-  qualification  information  in  bulk,  by  downloading 
 files  from  Verizons  server  that  contain  information  on  all  pre-  qualified  loops  served  by  a  single  central  office.  176  Thus,  we  find  that  this  process  complies  with  the  requirements  of  the  UNE 
 Remand  Order  and  section  271. 
 65.  Engineering  Record  Requests.  We  find  that  Verizon  continues  to  offer  competing  LECs  nondiscriminatory  access  to  engineering  record  requests,  as  it  did  at  the  time  of  the 


 Verizon  Massachusetts  Order.  177  Accordingly,  we  find  Verizon  complies  with  section  271  in  regards  to  access  to  engineering  records. 


 c.  Ordering  Issues 
 (i)  Order  Rejection  Notices  and  Order  Rejections 
 66.  We  find,  as  the  Rhode  Island  Commission  did,  178  that  Verizon  provides  competing  carriers  with  order  rejection  notices  in  a  manner  that  allows  them  a  meaningful  opportunity  to 


 compete.  We  recognize  that,  at  first  glance,  Verizons  performance  data  do  not  demonstrate  that  it  notifies  competing  LECs  promptly  on  rejecting  their  orders.  179  Verizon  explains  that,  in  fact,  it 


 174  See  Verizon  Guerard/  Canny/  Abesamis  Decl.  Tab  4. 
 175  See  Verizon  McLean/  Wierzbicki  Decl.  Tab  2,  at  1-  3.  Verizons  Rhode  Island  performance  data  demonstrate,  in 
 each  month  for  which  data  exist,  that  it  provides  access  to  LiveWire  within  the  timeframe  adopted  by  the  Rhode  Island  Commission.  See  PO  1-  6-  6020  (Facility  Availability  (Loop  Qualification)    EDI),  PO  1-  6-  6030  (Facility 


 Availability  (Loop  Qualification)    CORBA)  (no  activity);  PO  1-  6-  6050  (Facility  Availability  (Loop  Qualification)  -  Web  GUI).  Because  Verizon  only  began  reporting  on  its  EDI  interface  in  Rhode  Island  in  October,  we  look  to  the 
 Massachusetts  data  to  support  our  finding.  In  Massachusetts,  Verizon  met  the  same  standard  of  timely  access  in  all  months  (July  to  October).  PO-  1-  6-  6020  (Facility  Availability  (Loop  Qualification)    EDI);  PO  1-  6-  6050  (Facility 
 Availability  (Loop  Qualification)  -  Web  GUI);  see  also  KPMG  Report  at  25  (POP  1-  4-  1  Pre-  Order  Response  Timeliness). 


 176  See  Verizon  McLean/  Wierzbicki  Decl.  Tab  2,  at  3. 
 177  See  Verizon  Massachusetts  Order,  15  FCC  Rcd  at  9020,  para.  59;  see  also  Verizon  McLean/  Wierzbicki  Decl. 
 Tab  2,  at  6-  7.  Verizon  states  that  it  received  no  requests  for  engineering  records  in  July,  August,  or  September  in  either  Rhode  Island  or  Massachusetts.  See  Verizon  McLean/  Wierzbicki  Decl.  at  para.  49. 


 178  See  Rhode  Island  Commission  Comments  at  92-  95. 
 179  Specifically,  Verizon  has  not  consistently  provided  95%  of  reject  notices  within  established  timeframes,  as 
 required  by  the  Rhode  Island  Commission.  See  OR-  2-  04-  2320  (resale  POTS  reject  timeliness    1-  5  lines)  (showing  (continued.) 
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 has  consistently  sent  rejection  notices  in  a  timely  fashion,  but  its  data  do  not  reflect  this  performance  because  of  a  software  problem  that  affected  how  Verizons  OSS  captured  its 
 performance  data  under  this  metric.  Specifically,  Verizon  incorrectly  included  some  orders  for  six  or  more  lines  (which  have  a  72-  hour  benchmark)  in  the  metric  for  orders  of  one  to  five  lines 
 (which  have  a  24-  hour  benchmark).  180  Verizon  states  that  it  corrected  this  data  capture  problem  in  October;  the  correction  is  borne  out  by  the  fact  that  Verizons  November  performance 
 consistently  satisfies  the  relevant  benchmarks.  181  No  commenter  has  raised  any  concern  regarding  Verizons  rejection  notices. 


 (ii)  Jeopardy  Information 
 67.  We  find  that  Verizon  provides  jeopardy  information  to  competing  LECs    that  is,  notification  that  an  order  may  not  be  provisioned  on  the  designated  due  date    in  substantially 


 the  same  time  and  manner  as  it  makes  this  information  available  to  its  retail  operations.  Verizon  provided  competing  LECs  with  manual  access  to  jeopardy  notices  at  the  time  of  the 
 Massachusetts  filing,  but  has  recently  begun  also  providing  active  jeopardy  notices  to  competing  LECs.  182  Notwithstanding  the  availability  of  this  new  process,  Verizon  still  provides  competing 
 LECs  with  manual  access  to  jeopardy  information  in  Rhode  Island.  We  base  our  finding  of  checklist  compliance  in  this  instance,  as  did  the  Rhode  Island  Commission,  on  Verizons  manual 
 jeopardy  process.  183  We  do  not  rely  on  Verizons  electronic  process  in  reaching  this  conclusion, 
 (Continued  from  previous  page)  timeliness  rates  of  92%,  92%,  93%,  and  92%);  OR-  2-  04-  2200  (resale  specials  reject  timeliness)  (showing  timeliness 


 rates  of  81%,  100%,  90%,  and  90%);  OR-  2-  04-  3331  (UNE  loop/  pre-  qualified  complex/  LNP  reject  timeliness    1-  5  lines)  (showing  timeliness  rates  of  89%,  96%,  82%,  and  94%). 


 180  See  Verizon  McLean/  Wierzbicki  Decl.  at  para.  72;  Verizon  Guerard/  Canny/  Abesamis  Decl.  at  para.  37. 
 181  In  November,  Verizon  satisfied  the  relevant  benchmarks  for  all  metrics  mentioned  supra  n.  179.  Verizons 
 performance  has  been  inconsistent  under  two  other  metrics  that  are  not  affected  by  the  data  capture  problem  identified  by  Verizon.  See  OR-  2-  06-  3331  (UNE  loop/  pre-  qualified  complex/  LNP  reject  timeliness    6  or  more 


 lines)  (showing  timeliness  rates  of  94%,  92%,  100%,  and  91%);  see  also  OR-  2-  04-  2200  (resale  specials  reject  timeliness)  (showing  timeliness  rates  of  81%,  100%,  90%,  and  90%).  We  find  that  these  performance  disparities 
 are  slight,  and  note  that  Verizons  average  timeliness  rate  for  the  past  five  months  has  been  95%  and  94%  respectively  for  these  two  measurements.  Because  this  average  performance  meets,  or  is  so  close  to,  the  95% 
 benchmark,  we  do  not  find  Verizons  occasionally  late  performance  in  sending  out  rejection  notices  as  reflected  in  these  metrics  to  be  competitively  significant. 


 182  See  Verizon  McLean/  Wierzbicki  Decl.  at  paras.  76-  83.  In  the  New  York  and  Massachusetts  proceedings, 
 Verizon  provided  evidence  that  it  provided  competitive  LECs  with  Open  Query  System  (OQS)  reports,  which  notify  competitive  LECs  that  a  provisioning  order  or  maintenance  appointment  may  be  in  jeopardy,  and  that  this  system 


 was  as  good  as  the  system  used  by  Bell  Atlantic  for  its  own  provisioning  and  maintenance.  The  Rhode  Island  Commission  found  that  Verizon  still  has  this  system  in  place  and  therefore  passes  this  checklist  item.  Rhode  Island 
 Commission  Comments  at  68.  Electronic  jeopardies  have  not  been  found  by  the  Commission  to  be  necessary  for  checklist  compliance.  See  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4051,  para.  184;  see  also  Verizon 
 Massachusetts  Order,  16  FCC  Rcd  at  9034,  para.  85. 
 183  As  we  stated  in  the  Verizon  Massachusetts  Order,  although  Verizons  implementation  of  a  system  of  active 
 jeopardy  notices  likely  will  provide  additional  benefit  to  carriers,  it  is  not  relevant  to  our  determination  here  that  its  current  system  is  nondiscriminatory.  See  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9034  n.  264. 
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 as  the  evidence  provided  by  Verizon  does  not  allow  us  to  determine  that  its  electronic  process  provides  competing  LECs  with  sufficient  and  reliable  jeopardy  notices.  We  note  that  KPMG 
 tested  Verizons  new  electronic  jeopardy  process,  but  found  that  the  results  were  inconclusive.  184  Verizon  does  not  provide  performance  data  or  other  evidence  to  support  its  claims  regarding  its 
 electronic  jeopardy  process. 
 68.  At  this  time,  we  conclude  that  Verizon  complies  with  this  checklist  item  with  regard  to  electronic  jeopardies  because  of  Verizons  past  compliance  in  this  area  and  the  absence 


 of  any  record  evidence  to  the  contrary.  We  certainly  encourage  BOC  innovation  in  bringing  new  OSS  features  to  competitive  LECs.  We  also  expect,  however,  that  any  such  changes  will  operate 
 in  a  manner  that  enhances,  rather  than  impairs,  competitive  LECs  ability  to  compete.  We  will  continue  to  monitor  this  issue  and  its  effect  on  competitive  LECs. 


 d.  Provisioning  Issues 
 69.  Average  Interval  Completed  Metrics.  Based  on  the  evidence  in  the  record,  we  find  that  Verizon  provisions  competitive  LEC  orders  for  UNE-  Platform  and  resale  services  in  a 


 nondiscriminatory  manner.  We  note  that  Verizon  has  demonstrated  that  the  provisioning  systems  and  processes  used  in  Rhode  Island  for  UNE  and  resale  service  orders  are  the  same  as 
 those  the  Commission  reviewed  in  the  Massachusetts  section  271  proceeding.  In  order  to  make  our  determination  that  Verizons  performance  reflects  parity,  we  review  performance  measures 
 comparable  to  those  we  have  relied  upon  in  prior  section  271  orders.  185 
 70.  We  recognize  that  Verizons  performance  with  respect  to  one  specific  performance  metric,  which  measures  the  time  it  takes  Verizon  to  complete  competing  LEC 


 orders  for  UNE-  Platform  service,  186  appears  to  be  out  of  parity  in  Rhode  Island  for  several  recent  months.  We  find,  however,  that  Verizons  performance  with  regard  to  this  metric  does  not 
 warrant  a  finding  of  checklist  non-  compliance.  First,  we  note  that  Verizons  performance  reflected  by  another  metric  measuring  provisioning    the  missed  appointments  metric   
 reflects  parity  performance  with  respect  to  UNE-  Platform  orders  for  the  relevant  months.  187  The  Commission  has  given  substantial  weight  to  this  metric  in  previous  section  271  applications. 
 Second,  we  note  that  the  average  completed  interval  metric,  because  of  the  way  it  is  designed,  may  not  be  an  accurate  indicator  of  Verizons  provisioning  performance.  Verizon  has  explained 
 that,  while  retail  and  wholesale  orders  are  provisioned  according  to  the  same  list  of  standard 


 184  The  KPMG  test  analyzed  over  400  orders.  Only  10  orders  required  jeopardy  notices.  A  jeopardy  notice  was 
 provided  in  6  of  those  instances.  Of  the  four  for  which  a  jeopardy  notice  was  not  issued,  Verizon  sent  a  query  notice  instead  of  a  jeopardy  notice  three  times.  See  KPMG  Report  at  29,  POP-  1-  17-  1. 


 185  See  Appendix  D  at  para.  37;  see  also  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9078-  79,  para.  162. 
 186  OR  2-  1-  3140  (Average  Completed  Interval  -  Av.  Completed  Interval  -  Total  No  Dispatch). 
 187  PR  4-  4-  3140  (Provisioning  -  Missed  Appointments  -  %  Missed  Appt.    Verizon    Dispatch). 
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 intervals,  these  intervals  vary  from  product  to  product.  188  Accordingly,  this  metric  could  suggest  unequal  treatment  simply  because  a  competing  LEC  orders  a  disproportionate  share  of 
 products  with  a  longer-  than-  average  standard  provisioning  interval.  189  Significantly,  the  Commission  has  discounted  the  relevance  of  this  metric  in  prior  section  271  orders  where  there 
 is  evidence  of  this  order  mix  concern.  190  We  also  take  note  of  the  fact  that  the  Carrier  Working  Group  in  New  York  has  decided  to  eliminate  the  average  interval  completed  series  of 
 metrics.  191  Finally,  even  setting  aside  the  questions  about  the  accuracy  of  this  metric,  we  find  that  the  performance  differences  reported  under  this  metric  are  relatively  slight  and  do  not  appear 
 to  be  competitively  significant  to  competing  LECs.  192  Indeed,  no  commenter  has  indicated  that  UNE-  Platform  provisioning  is  a  problem  in  Rhode  Island.  As  the  Commission  has  stated  in  the 
 past,  isolated  cases  of  performance  disparity,  especially  when  the  margin  of  disparity  is  small,  generally  will  not  result  in  a  finding  of  checklist  noncompliance.  193 


 e.  Billing 
 71.  We  find,  as  did  the  Rhode  Island  Commission,  that  Verizon  provides  nondiscriminatory  access  to  the  functionality  of  its  billing  systems  in  Rhode  Island.  194  Verizon 


 provides  competing  LECs  with  usage  information  necessary  to  bill  their  end  users,  and  it  provides  competing  carriers  with  wholesale  bills.  195  Verizon  also  demonstrates,  through  the  PwC 
 report,  the  KPMG  report,  and  its  declarations,  that  its  billing  systems  in  Rhode  Island  are  the  same  as  its  Massachusetts  systems,  which  the  Commission  found  to  comply  with  the 
 requirements  of  this  checklist  item.  196  Verizon  explains  in  this  proceeding  that  its  billing  system  in  Rhode  Island  is  different  from  the  billing  system  in  Pennsylvania  because  the  relevant  aspects 


 188  See  Letter  from  Clint  Odom,  Director,  Federal  Regulatory,  Verizon,  to  Magalie  Roman  Salas,  Secretary, 
 Federal  Communications  Commission,  CC  Docket  No.  01-  324  at  2  (filed  Jan.  8,  2002)  (Verizon  Jan.  8  Ex  Parte  Letter). 


 189  See  Verizon  Jan.  8  Ex  Parte  Letter  at  2. 
 190  See  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9038-  39,  para.  92;  see  also  Bell  Atlantic  New  York  Order,  15 
 FCC  Rcd  at  4061-  62,  paras.  203-  05. 
 191  See  infra  para.  86. 


 192  PR  2-  01-  3140  differences  of  .51  to  1.37  days  are  reported  for  the  last  four  months  of  data. 
 193  See  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9055-  56,  para.  122. 
 194  Rhode  Island  Commission  Comments  at  95. 
 195  Verizon  McLean/  Wierzbicki  Decl.  at  paras.  103-  05. 
 196  PwC  Report  at  33-  41;  KPMG  Report  at  145-  89;  Verizon  McLean/  Wierzbicki  Decl.  at  paras.  102-  11;  Verizon 
 Guerard/  Canny/  Abesamis  Decl.  at  paras.  68-  73. 
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 of  its  Rhode  Island  and  Pennsylvania  billing  systems  evolved  separately  after  divestiture  in  1984.  197  No  commenter  has  raised  concerns  with  Verizons  billing  OSS  in  this  proceeding.  198 
 3.  UNE  Combinations 
 72.  In  order  to  comply  with  checklist  item  two,  a  BOC  also  must  demonstrate  that  it  provides  nondiscriminatory  access  to  network  elements  in  a  manner  that  allows  requesting 


 carriers  to  combine  such  elements  and  that  the  BOC  does  not  separate  already-  combined  elements,  except  at  the  specific  request  of  the  competitive  carrier.  199  Based  upon  the  evidence  in 
 the  record,  we  conclude,  as  did  the  Rhode  Island  Commission,  that  Verizon  demonstrates  that  it  provides  nondiscriminatory  access  to  network  element  combinations  as  required  by  the  Act  and 
 our  rules.  200  Additionally,  no  commenter  raised  any  concerns  with  Verizon  providing  nondiscriminatory  access  to  UNE  combinations. 


 B.  Other  Items 
 1.  Checklist  Item  1    Interconnection 
 73.  Section  271(  c)(  2)(  B)(  i)  requires  the  BOC  to  provide  equal-  in-  quality  interconnection  on  terms  and  conditions  that  are  just,  reasonable  and  nondiscriminatory  in 


 accordance  with  the  requirements  of  sections  251  and  252.  201  Based  on  our  review  of  the  record,  we  conclude,  as  did  the  Rhode  Island  Commission,  202  that  Verizon  complies  with  the 
 requirements  of  this  checklist  item.  In  reaching  this  conclusion,  we  have  examined  Verizons  performance  with  respect  to  collocation  and  interconnection  trunks,  as  we  have  done  in  prior 
 section  271  proceedings.  203  We  find  that  Verizons  performance  generally  satisfies  the  applicable  benchmark  or  retail  comparison  standards.  204  As  described  below,  we  also  examine 


 197  See  Letter  from  Clint  Odom,  Director,  Federal  Regulatory,  Verizon,  to  Magalie  Roman  Salas,  Secretary, 
 Federal  Communications  Commission,  CC  Docket  No.  01-  324  at  1-  3  (filed  Jan.  7,  2002)  (Verizon  Jan.  7  Ex  Parte  Letter). 


 198  We  note  that  although  Z-  Tel  raised  the  billing  concerns  with  regard  to  Verizons  Pennsylvania  section  271 
 application,  the  Verizon  Massachusetts  billing  systems  was  applauded.  See  Z-  Tel  Comments  on  the  Application  by  Verizon  Pennsylvania  Inc.,  Verizon  Long  Distance,  Verizon  Enterprise  Solutions,  Verizon  Global  Networks,  Inc., 


 and  Verizon  Select  Services  Inc.,  for  Authorization  to  Provide  In-  Region,  InterLATA  Services  in  Pennsylvania,  CC  Docket  No.  01-  138,  at  6  (filed  Aug.  6,  2001). 


 199  47  U.  S.  C.    271(  c)(  2)(  B)(  ii);  47  C.  F.  R.    51.313(  b). 
 200  Rhode  Island  Commission  Comments  at  43. 
 201  See  Appendix  D  at  para.  17. 
 202  Rhode  Island  Commission  Comments  at  33. 
 203  See,  e.  g.,  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9092-  95,  9098,  paras.  183-  87,  195. 
 204  See  Appendix  B. 
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 Verizons  compliance  with  the  Commissions  more  recent  Collocation  Remand  Order.  205  Finally,  we  note  that  no  commenter  raises  issues  concerning  Verizons  interconnection  offering. 
 74.  On  August  8,  2001,  the  Commission  released  its  Collocation  Remand  Order,  which  changed  the  collocation  obligations  of  incumbent  LECs  in  response  to  the  D.  C.  Circuits 
 remand  of  certain  aspects  of  the  Commissions  earlier  collocation  order.  206  In  particular,  the  Commission  established  the  criteria  for  equipment  that  is  necessary  for  interconnection  or 
 access  under  section  251(  c)(  6);  required  incumbents  to  provide  cross-  connects  between  collocated  carriers;  and  established  principles  for  physical  collocation  space  and 
 configuration.  207  Verizon  states  that  it  has  modified  its  Rhode  Island  collocation  offering  to  comply  with  the  order,  and  has  filed  amendments  to  both  its  federal  and  state  collocation  tariffs 
 to  reflect  the  new  order    both  of  which  have  gone  into  effect.  208  Based  on  the  record  in  this  proceeding,  we  find  that  Verizons  collocation  offerings  in  Rhode  Island  satisfy  the  new 
 requirements  set  forth  in  the  Collocation  Remand  Order. 
 75.  Verizon  also  states  that  its  collocation  offering  meets  the  requirements  of  its  September  14,  2001  consent  decree  with  the  Commission  to  assure  that  Verizon  complies  with 


 the  information  posting  requirements  of  the  Commissions  collocation  rules.  209  We  note  that  the  Bell  Atlantic-  GTE  auditing  process  will  assure  that  Verizon  does,  and  will  continue  to,  fulfill  the 
 consent  decree  and  meet  the  requirements  of  checklist  item  one.  210 


 205  Deployment  of  Wireline  Services  Offering  Advanced  Telecommunications  Capability,  Fourth  Report  and  Order, 
 CC  Docket  No.  98-  147,  16  FCC  Rcd  15435  (rel.  Aug.  8,  2001)  (Collocation  Remand  Order)  (on  remand  from  GTE  Service  Corp.  v.  FCC,  205  F.  3d  416  (D.  C.  Cir.  2000));  petition  for  recon.  pending,  Petition  for  Partial  Clarification 


 or  Reconsideration  of  the  Association  for  Local  Telecommunications  Services,  et  al.,  CC  Docket  No.  98-  147  (filed  Sept.  19,  2001);  petitions  for  review  pending  sub  nom.  Verizon  California  Inc.,  et  al.  v.  FCC,  D.  C.  Circuit  Nos.  01-1371 
 et  al.  (filed  Aug.  23,  2001).  We  address  Verizons  compliance  with  this  order  for  the  first  time  here,  as  this  is  the  first  section  271  application  Verizon  has  filed  since  that  order  took  effect. 


 206  See  Collocation  Remand  Order,  16  FCC  Rcd  at  15435;  see  also  Deployment  of  Wireline  Services  Offering 
 Advanced  Telecommunications  Capability,  CC  Docket  No.  98-  147,  First  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  14  FCC  Rcd  4761,  4773-  74,  paras.  23-  24  (1999),  aff'd  in  part,  vacated  and  remanded  in 


 part  sub  nom.  GTE  Service  Corp.  v.  FCC,  205  F.  3d  416  (D.  C.  Cir.  2000),  on  recon.,  Collocation  Reconsideration  Order,  15  FCC  Rcd  at  17806-  39,  paras.  1-  69; 


 207  Collocation  Remand  Order,  16  FCC  Rcd  at  15436,  para.  2. 
 208  See  Verizon  Application  at  23;  Lacouture/  Ruesterholz  Decl.  at  para.  54  and  Attach.  7  at  1,  3,  4,  11  (Rhode 
 Island  wholesale  tariff);  Tariff  F.  C.  C.  No.  11,  Part  27. 
 209  See  Verizon  Application  at  23;  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  49;  Verizon  Communications  Inc., 
 Order  and  Consent  Decree,  File  No.  EB-  01-  IH-  0236,  16  FCC  Rcd  16270  (EB  2001). 
 210  See  Application  of  GTE  Corp.,  Transferor,  and  Bell  Atlantic  Corp.,  Transferee,  for  Consent  To  Transfer 
 Control  of  Domestic  and  International  Sections  214  and  310  Authorizations  and  Application  To  Transfer  Control  of  a  Submarine  Cable  Landing  License,  Order,  15  FCC  Rcd  14032,  14327-  28,  App.  D,  para.  56  (2000). 
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 2.  Checklist  Item  4    Unbundled  Local  Loops 
 76.  Section  271(  c)(  2)(  B)(  iv)  of  the  Act  requires  that  a  BOC  provide  [  l]  ocal  loop  transmission  from  the  central  office  to  the  customers  premises,  unbundled  from  local  switching 


 or  other  services.  211  Based  on  the  evidence  in  the  record,  we  conclude,  as  did  the  Rhode  Island  Commission,  that  Verizon  provides  unbundled  local  loops  in  accordance  with  the  requirements 
 of  section  271  and  our  rules.  212  Our  conclusion  is  based  on  our  review  of  Verizons  performance  for  all  loop  types,  which  include,  as  in  past  section  271  orders,  voice  grade  loops  (including  hot 
 cut  provisioning),  xDSL-  capable  loops,  digital  loops,  and  high  capacity  loops,  and  our  review  of  Verizons  processes  for  line  sharing  and  line  splitting.  As  of  September  2001,  competitors  have 
 acquired  and  placed  into  use  over  28,000  stand-  alone  loops  (including  DSL  loops)  from  Verizon  in  Rhode  Island.  213  Finally,  we  note  that  commenters  have  not  raised  any  issues  with  respect  to 
 any  aspect  of  Verizons  loop  performance. 
 77.  Consistent  with  prior  section  271  orders,  we  do  not  address  every  aspect  of  Verizons  loop  performance  where  our  review  of  the  record  satisfies  us  that  Verizons 


 performance  is  in  compliance  with  the  parity  and  benchmark  measures  established  in  Rhode  Island.  214  Instead,  we  focus  our  discussion  on  those  areas  where  the  record  indicates  minor 
 discrepancies  in  performance  between  Verizon  and  its  competitors.  As  in  past  section  271  proceedings,  in  the  course  of  our  review,  we  look  for  patterns  of  systemic  performance 
 disparities  that  have  resulted  in  competitive  harm  or  that  have  otherwise  denied  new  entrants  a  meaningful  opportunity  to  compete.  215  Isolated  cases  of  performance  disparity,  especially  when 
 the  margin  of  disparity  is  small,  generally  will  not  result  in  a  finding  of  checklist  noncompliance.  216  We  note  that,  when  reviewing  Verizons  performance  with  respect  to  a 
 certain  category  of  loop  in  a  given  month,  the  volume  of  orders  may  be  too  low  to  provide  a  meaningful  result.  Because  we  find  that  Verizon  uses  the  same  provisioning  and  maintenance 


 211  47  U.  S.  C.    271(  c)(  2)(  B)(  iv);  see  Appendix  D  at  paras.  48-  52  (regarding  requirements  under  checklist  item 
 four). 
 212  See  Rhode  Island  Commission  Comments  at  133-  36.  The  Department  of  Justice  concluded  that  Verizon  has 
 generally  succeeded  in  opening  its  local  markets  in  Rhode  Island  to  competition.  Department  of  Justice  Evaluation  at  6.  The  Department  cites  Verizons  estimate  that  using  all  modes  of  entry,  for  business  and  residential  customers 


 combined,  competitors  serve  approximately  119,000  lines  in  Rhode  Island,  around  16%  of  all  lines  in  the  state.  Id.  at  4. 


 213  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  86.  As  of  September,  2001,  Verizon  had  provisioned 
 approximately  28,000  stand-  alone  loops  (including  DSL  loops),  300  high  capacity  DS1  loops,  approximately  58  digital  loops  (from  July-  October)  and  4  line  sharing  arrangements.  See  Verizon  Lacouture/  Ruesterholz  Decl.  at 


 paras.  86,  118,  and  175;  see  also  PR  6-  03-  3341. 
 214  See,  e.  g.,  Verizon  Connecticut  Order,  16  FCC  Rcd  at  14151-  52,  para.  9. 


 215  See  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9055-  56,  para.  122. 
 216  See  id. 
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 and  repair  processes  in  Massachusetts  and  Rhode  Island,  we  may  look  to  Verizons  performance  in  Massachusetts  to  inform  our  analysis.  217 
 78.  xDSL-  Capable  Loops.  Based  on  the  evidence  in  the  record,  we  find,  as  did  the  Rhode  Island  Commission,  that  Verizon  demonstrates  that  it  provides  stand-  alone  xDSL-  capable 
 loops  in  accordance  with  the  requirements  of  checklist  item  four.  218  Verizon  makes  available  xDSL-  capable  loops  in  Rhode  Island  through  interconnection  agreements  and  pursuant  to  tariffs 
 approved  by  the  Rhode  Island  Commission.  219  In  analyzing  Verizons  showing,  we  review  performance  measures  comparable  to  those  the  Commission  has  relied  upon  in  prior  section  271 
 orders:  order  processing  timeliness,  installation  timeliness,  missed  installation  appointments,  installation  quality,  and  the  timeliness  and  quality  of  the  maintenance  and  repair  functions.  220 
 Based  on  our  analysis  of  Verizons  performance  under  these  measures,  we  conclude  that  Verizons  performance  for  competitive  LECs  has  generally  met  the  benchmark  and  parity 
 standards  established  in  Rhode  Island.  221 
 79.  Upon  initial  review,  the  overall  level  of  trouble  reports  for  stand-  alone  xDSL-capable  loops  in  Rhode  Island  appears  to  be  out  of  parity.  222  The  current  version  of  the  relevant 


 performance  metric  used  in  Rhode  Island  compares  competitive  LEC  troubles  to  those  experienced  by  Verizons  advanced  services  affiliate.  However,  the  New  York  Commission 
 recently  established  retail  POTS  service  as  the  applicable  comparison  group.  223  As  described  above,  the  New  York  Commission  developed  Verizons  performance  measurements,  business 


 217  KPMG  Consulting  found  that  the  systems  or  interfaces,  processes,  personnel,  facilities,  management  structures, 
 and  performance  measures  were  the  same  for  both  Rhode  Island  and  Massachusetts.  See  KPMG  Report  at  13. 
 218  Rhode  Island  Commission  Comments  at  133-  36. 


 219  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  131. 
 220  See  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17462-  63,  para.  79;  Verizon  Connecticut  Order,  16  FCC  Rcd 
 at  15153-  56,  paras.  15-  20;  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9056,  para.  123,  and  9059,  para.  130;  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6326-  27,  paras.  181-  82.  We  note  that  individual  states  and  BOCs 


 may  define  performance  measures  in  different  ways.  We  look  to  those  measurements,  however,  that  provide  data  most  similar  to  data  we  have  relied  upon  in  past  orders. 


 221  See  supra  part  III.  A.  2.  c(  i). 
 222  See  MR  2-  02-  3342  (Network  Trouble  Report  Rate    Loop).  Since  July,  Verizon  has  not  achieved  parity.  See 
 also  MR  2-  03-  3342  (Network  Trouble  Report  Rate    Central  Office).  Verizon  missed  parity  in  July  and  September.  During  the  months  of  July  through  September,  0.56%  of  DSL  loops  in  Rhode  Island  reported  troubles  found  in 


 either  the  outside  plant  (MR-  2-  02)  or  the  central  office  (MR-  2-  03),  compared  to  0.09%  for  the  current  retail  comparison  group  (VADI). 


 223  For  the  MR-  2  through  MR-  5  metrics,  the  New  York  Commission  adjusted  the  retail  analogue  to  compare 
 Verizons  performance  for  competitors  with  Verizons  own  retail  POTS  service  rather  than  its  DSL  service  because  the  Carrier  Working  Group  reached  consensus  that  retail  POTS  troubles  are  more  similar  (than  VADI  line  sharing 


 troubles)  to  2-  Wire  digital  and  2-  Wire  xDSL  Loop  troubles.  See  Verizon  Application  App.  N,  Tab  6,  State  of  New  York  Public  Service  Commission  Order  Modifying  Existing  and  Establishing  Additional  Inter-  Carrier  Service 
 Quality  Guidelines  at  Attach.  1,  Section  E,  page  29  (Oct.  29,  2001)  (New  York  Commission  October  Order). 
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 rules  and  standards  in  a  collaborative  state  proceeding  with  input  from  competing  carriers,  and  the  Rhode  Island  Commission  has  adopted  these  performance  measures,  business  rules  and 
 standards.  224  Accordingly,  we  agree  that  retail  POTS  service  appears  to  be  a  more  probative  comparison  in  this  context.  225  Verizon  has  calculated  its  performance  using  the  revised  analogue, 
 and  it  is  in  parity.  226 
 80.  Digital  Loops.  Based  on  the  evidence  in  the  record,  we  find,  as  did  the  Rhode  Island  Commission,  that  Verizons  performance  with  respect  to  digital  loops  complies  with 


 checklist  item  four.  227  For  the  relevant  four  month  period,  Verizon  provisioned,  on  average,  only  14.5  digital  loops  per  month  in  Rhode  Island.  228  Because  these  volumes  are  insufficient  upon 
 which  to  make  a  finding,  we  look  at  Massachusetts  data,  which  show  that  Verizons  performance  with  respect  to  digital  loops  continues  to  meet  the  requirements  of  checklist  item  four.  229  We 
 reach  this  conclusion  despite  the  fact  that  the  measures  for  Installation  Trouble  230  and  Repeat  Trouble  Reports  231  show  Verizons  performance  to  be  out  of  parity  for  almost  every  month 
 reported. 


 224  See  supra  part  II. 
 225  In  prior  section  271  proceedings,  the  Commission  has  given  deference  to  business  rules  developed  in  a 
 collaborative  state  proceeding.  See  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9057,  para.  126. 
 226  During  July,  August  and  September,  2001,  1.11%  of  DSL  loops  in  Rhode  Island  reported  troubles  found  in 
 either  the  outside  plant  or  the  central  office,  compared  to  1.24%  for  the  retail  comparison  group  (retail  POTS  service).  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  157,  Attach.  38. 


 227  See  Rhode  Island  Commission  Comments  at  133-  36. 
 228  The  number  of  digital  loops  provisioned  on  average  for  July-  October  was  taken  from  the  performance  data 
 provided  for  the  PR  6-  03-  3341  (Percent  Installation  Troubles  Reported  Within  30  Days    FOK/  TOK/  CPE)  measure. 
 229  Verizons  performance  for  timeliness  of  order  confirmation  notices  in  Massachusetts  generally  meets  or 
 exceeds  the  benchmark  from  July  through  October.  See  OR  1-  02-  3331  (Percent  On  Time  LSRC    Flow  Through),  OR  1-  04-  3331  (Percent  On  Time  LSRC/  ASRC    No  Facility  Check),  and  OR  1-  06-  3331  (Percent  On  Time 


 LSRC/  ASRC    Facility  Check).  Verizon  is  also  provisioning  digital  loops  in  a  timely  manner  in  Massachusetts.  For  PR  4-  04-  3341  (Percent  Missed  Appointments    Dispatch)  and  PR  4-  05-  3341  (Percent  Missed  Appointments    No 
 Dispatch),  Verizons  performance  is  at  parity  for  non-  dispatch  from  July  through  October,  and  better  than  parity  for  dispatch  for  this  same  period  of  time.  Also,  Verizons  performance  for  most  maintenance  and  repair  functions  for 
 digital  loops  is  comparable  for  Verizon  retail  customers  and  competitive  LECs.  For  example,  the  Mean  Time  to  Repair  for  digital  loops  exceeded  parity  from  July  through  October.  See  MR  4-  01-  3341  (Mean  Time  to  Repair   
 Total).  However,  between  July  and  October,  Network  Trouble  reports  for  competitive  LECs  found  in  either  the  outside  plant  or  the  central  office  were  reported  slightly  more  often  than  for  Verizons  retail  customers,  but,  on 
 average,  still  less  than  3%  of  the  time  (1.  55%  for  MR-  2-  02  and  0.  36%  for  MR-  2-  03).  See  MR  2-  02-  3341  (Network  Trouble  Report  Rate    Loop)  and  MR  2-  03-  3341  (Network  Trouble  Report  Rate    Central  Office). 


 230  See  PR  6-  01-  3341  (Percent  Installation  Troubles  Within  30  Days).  The  July-  October  average  for  this  measure 
 is  12.  85%  for  competitive  LECs  and  1.  28%  for  Verizon  retail. 
 231  See  MR  5-  01-  3341  (Percent  Repeat  Reports  Within  30  Days).  The  July-  October  average  for  this  measure  is 
 34.46%  for  competitive  LECs  and  19.69%  for  Verizon  retail.  However,  as  it  did  with  xDSL-  capable  loops,  the  (continued.) 
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 81.  According  to  Verizon,  however,  the  disparate  performance  results  are  not  the  result  of  discriminatory  conduct,  but  rather  the  result  of  a  flawed  metric.  Verizon  argues  that  the 
 Installation  Trouble  measure  may  not  be  an  accurate  indicator  of  Verizons  performance  because  the  retail  comparison  group  for  this  metric  (Verizon  retail)  does  not  provide  an  apples-  to-apples 
 comparison.  232  For  example,  Verizon  explains  that  most  of  the  competitor  LEC  2-  wire  digital  loops  are  provisioned  using  fiber,  while  most  of  the  orders  in  the  retail  comparison  group 
 are  provisioned  using  copper.  233  Verizon  also  explains  that  competitive  LEC  loops  are  predominantly  used  for  data  transmission  (IDSL),  while  the  retail  comparison  group  loops  are 
 predominantly  used  for  voice  transmission  (either  POTS  or  ISDN).  234  Accordingly,  we  agree  with  Verizon  that  this  metric  may  appear  to  suggest  unequal  treatment  simply  because  of  the 
 comparison  group  used.  In  addition,  we  find  that  Verizons  disparate  performance  under  the  Repeat  Trouble  Report  metric  apparently  is  the  result  of  a  flawed  measurement.  First,  as 
 explained  above,  for  the  MR-  2  through  MR-  5  metrics,  the  New  York  Commission  recently  established  retail  POTS  service  as  the  applicable  comparison  group  for  2-  Wire  digital  and  xDSL-capable 
 loops.  235  Second,  as  explained  in  more  detail  below,  the  New  York  Commission  has  also  further  revised  the  MR-  5  measure  (the  Repeat  Trouble  Report  metric)  for  all  loop  types  to 
 exclude  misdirected  dispatches  in  order  to  more  accurately  capture  performance  for  which  Verizon  is  responsible.  236  We  believe  that  these  revisions  reasonably  demonstrate  that  the 
 current  version  of  the  Repeat  Trouble  Report  metric  is  flawed,  which  likely  accounts  for  some  of  the  performance  disparities. 


 82.  Moreover,  given  Verizons  generally  acceptable  performance  for  all  other  categories  of  loops,  and  recognizing  that  digital  loops  represent  only  a  small  percentage  of 
 overall  loop  orders  in  Rhode  Island,  237  we  do  not  believe  that  the  uncertain  performance  for  digital  loops  discussed  above  merits  a  finding  of  checklist  noncompliance.  Commenters  in  this 
 proceeding  do  not  criticize  Verizons  performance  with  regard  to  digital  loops. 
 83.  Hot  Cut  Activity.  Based  on  the  evidence  in  the  record,  we  find,  as  did  the  Rhode  Island  Commission,  that  Verizon  is  providing  voice  grade  loops  through  hot-  cuts  in  Rhode 


 (Continued  from  previous  page)  New  York  Commission  has  adjusted  the  retail  analogue  for  digital  loops  to  compare  Verizons  performance  for 
 competitors  with  Verizons  own  retail  POTS  service.  See  supra  n.  223. 
 232  See  Letter  from  Clint  Odom,  Director,  Federal  Regulatory,  Verizon  to  Magalie  Roman  Salas,  Secretary,  Federal 
 Communications  Commission,  CC  Docket  No.  01-  324  at  1  (filed  Jan.  17,  2002)  and  Verizon  Jan.  8  Ex  Parte  Letter  at  6. 


 233  Id. 
 234  Id. 
 235  See  supra  para.  79  and  n.  223. 
 236  See  infra  para.  85  and  n.  247. 
 237  In  July,  Verizon  provisioned  approximately  28  digital  loops  for  competitors;  in  August,  it  provisioned 
 approximately  19  digital  loops;  in  September,  it  provisioned  approximately  5  digital  loops;  and  in  October,  Verizon  provisioned  approximately  6  digital  loops  for  competitors.  See  PR  6-  03-  3341. 
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 Island  in  accordance  with  the  requirements  of  checklist  item  four.  238  Verizon  has  satisfied  its  benchmark  for  on-  time  performance  for  hot-  cuts  for  the  relevant  four  month  period,  239  and 
 Verizon  indicates  that  trouble  reports  received  within  seven  days  of  installation  have  been  fewer  than  one  percent.  240  In  addition,  Verizon  indicates  that  during  July,  August  and  September  2001, 
 it  completed  hot-  cuts  in  Rhode  Island  within,  on  average,  5.19  days,  which  is  just  slightly  longer  than  the  standard  five  day  interval  for  orders  of  one  to  nine  lines.  241  We  note,  however,  that  the 
 performance  metric  that  captures  Verizons  performance  includes  orders  for  both  one  to  nine  lines  (which  have  a  five  day  standard  provisioning  interval)  as  well  as  orders  for  ten  or  greater 
 lines  (which  have  a  negotiated  provisioning  interval).  242  Accordingly,  we  find  that  the  difference  between  Verizons  overall  hot-  cut  performance  and  the  five  day  benchmark  is  not  competitively 
 significant  in  these  circumstances.  No  commenter  has  raised  concerns  with  Verizons  hot-  cut  provisioning. 


 84.  Voice  Grade  Loops.  Based  on  the  evidence  in  the  record,  we  find,  as  did  the  Rhode  Island  Commission,  that  Verizon  provisions  voice  grade  loops  in  a  nondiscriminatory 
 manner.  243  In  order  to  determine  that  Verizons  performance  reflects  parity,  we  review  performance  measures  comparable  to  those  we  have  relied  upon  in  prior  section  271  orders.  244 
 We  note  that  no  commenter  has  raised  an  issue  relating  to  provisioning  of  voice  grade  loops. 
 85.  We  recognize  that  Verizons  performance  with  respect  to  two  specific  performance  metrics  appears  to  be  out  of  parity  in  Rhode  Island  for  several  recent  months.  We 


 find,  however,  that  this  performance  does  not  warrant  a  finding  of  checklist  noncompliance.  First,  upon  initial  review,  Verizons  performance  with  respect  to  a  maintenance  and  repair 
 measure    the  repeat  trouble  report  rate    appears  to  be  out  of  parity  in  two  of  the  last  four  months.  245  According  to  Verizon,  however,  when  its  performance  under  this  metric  is 
 recalculated  under  the  new  guidelines  adopted  by  the  New  York  Commission,  its  performance 


 238  See  Rhode  Island  Commission  Comments  at  133-  36. 
 239  See  PR  9-  01-  3520  (Percent  On  Time  Performance    Hot  Cut). 
 240  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  115;  see  also  PR  6-  02-  3520  (Percent  Installation  Troubles 
 Reported  Within  7  Days    Hot  Cut  Loop).  Verizons  performance  exceeds  the  benchmark  for  hot  cuts  in  Rhode  Island  for  July-  October. 


 241  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  113.  See  also  PR  2-  01-  3111  (Average  Completed  Interval-Total 
 No  Dispatch    Hot  Cut  Loop). 
 242  See  PR  2-  01-  3111  (Average  Completed  Interval-  Total  No  Dispatch    Hot  Cut  Loop). 


 243  See  Rhode  Island  Commission  Comments  at  133-  36. 
 244  See  Appendix  D  at  para.  37;  see  also  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9078-  79,  para.  162. 
 245  For  repeat  trouble  reports  within  30  days,  MR  5-  01-  3550,  Verizon  did  not  achieve  parity  in  July  and  October. 
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 under  this  measure  is  at  parity.  246  Verizon  explains  that  the  New  York  Commission  has  recently  revised  the  repeat  trouble  report  rate  to  account  for  misdirected  dispatches  that  skew 
 performance  results  by  overstating  repeat  troubles.  247  We  agree  that  the  revised  metric  will  more  accurately  reflect  Verizons  performance.  248 


 86.  Second,  Verizons  performance  with  respect  to  a  provisioning  timeliness  metric    the  average  completed  interval  metric    appears  to  be  out  of  parity  in  Rhode  Island  for  several 
 recent  months.  249  We  note,  however,  that  Verizons  performance  reflected  by  another  provisioning  timeliness  metric    the  missed  appointment  metric    satisfies  the  benchmark  for 
 all  relevant  months.  250  Next,  as  explained  in  more  detail  above,  this  metric,  because  of  the  way  it  is  designed,  may  not  be  an  accurate  indicator  of  Verizons  performance.  251  Furthermore,  the 
 Carrier  Working  Group  in  New  York,  working  through  the  collaborative  process,  has  agreed  to  the  deletion  of  this  provisioning  timeliness  metric.  252  Finally,  even  setting  aside  the  questions 


 246  During  July,  August,  and  September  2001,  Verizons  repeat  trouble  report  rate  in  Rhode  Island  under  the  new 
 business  rules  was  16.67%  for  competitive  LECs  and  16.63%  for  the  retail  comparison  group.  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  104  and  Attach.  21. 


 247  In  its  Order,  the  New  York  Commission  states  that  the  Carrier  Working  Group  reached  consensus  to  exclude 
 misdirected  dispatches  from  the  MR-  5  metric  to  more  accurately  capture  performance  for  which  Verizon  is  responsible.  Specifically,  the  New  York  Commission  modified  the  guidelines  for  the  MR-  5  measure  to  eliminate 


 the  so-  called  double-  trouble  phenomenon,  which  occurs  when  the  competitive  LEC  misdirects  Verizon  to  dispatch  a  technician  either  inside  or  outside  the  central  office  and  no  trouble  is  found.  Verizon  explains  that  when 
 this  occurs,  the  trouble  ticket  must  be  closed  and  the  competitive  LEC  must  initiate  a  second  (  double)  trouble  ticket  directing  dispatch  in  the  opposite  direction.  See  New  York  Commission  October  Order  at  4;  see  also  Verizon 
 Lacouture/  Ruesterholz  Decl.  at  para.  104. 
 248  See  supra  n.  225. 


 249  Verizon  missed  parity  from  July-  October.  In  July,  Verizon  completed  POTS  loop  orders  of  1-  5  lines  in  2.40 
 days  for  Verizon  retail  and  4.55  days  for  competitors.  The  comparable  numbers  for  August  were  2.51  for  the  Verizon  retail  affiliate  and  6.  27  for  competitors  and  4.  28  for  Verizon  retail  and  5.  48  for  competitors  in  September 


 and  3.  56  for  Verizon  retail  and  4.  84  for  competitors  in  October.  For  November,  performance  data  demonstrate  that  Verizon  provisioned  voice  grade  loops  to  competitors  at  parity  with  its  own  retail  customers.  See  PR  2-  03-  3112 
 (Average  Completed  Interval    Dispatch  (1-  5  lines)    Loop). 
 250  See  PR  4-  04-  3113  (Percent  Missed  Appointment    Dispatch    Loop  New).  In  the  Bell  Atlantic  New  York 
 Order,  the  Commission  found  the  missed  rate  of  installation  appointments  to  be  the  most  accurate  indicator  of  Bell  Atlantics  ability  to  provision  unbundled  loops.  See  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4103,  para.  288. 


 251  See  supra  part  III.  A.  2.  d.;  Verizon  Jan.  8  Ex  Parte  Letter  at  2-  3. 
 252  The  New  York  Commission  has  issued  an  order  eliminating  the  average  interval  completed  PR-  2  measures 
 from  the  Carrier-  to-  Carrier  Performance  Reports.  See  New  York  Commission  October  Order  at  3.  Specifically,  the  New  York  Commission  indicates  that  the  Carrier  Working  Group  agreed  to  eliminate  this  metric  because  other 


 metrics  capture  performance  in  this  area:  PR-  1  captures  the  provisioning  interval  offered,  while  PR-  3  Percent  Completed  Within  X  Days  and  PR-  4  Missed  Appointments  adequately  measure  success  meeting  the  promised 
 interval.  Id.  In  past  orders,  we  have  accorded  much  weight  to  the  judgment  of  collaborative  state  proceedings  and  encouraged  carriers  to  work  together  in  such  fora  to  resolve  metrics  and  other  issues.  See  Verizon  Massachusetts 
 Order,  16  FCC  Rcd  at  9057,  para.  126. 
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 about  the  accuracy  of  this  metric,  we  find  that  the  performance  differences  reported  under  this  metric  are  relatively  slight  and  do  not  appear  to  be  competitively  significant  to  competing 
 LECs.  253  Indeed,  no  commenter  has  indicated  that  the  provisioning  of  voice  grade  loops  is  a  problem  in  Rhode  Island.  As  the  Commission  has  stated  in  the  past,  isolated  cases  of 
 performance  disparity,  especially  when  the  margin  of  disparity  is  small,  generally  will  not  result  in  a  finding  of  checklist  noncompliance.  254 


 87.  High  Capacity  Loops.  Based  on  the  record,  we  find,  as  did  the  Rhode  Island  Commission,  that  Verizons  performance  complies  with  the  requirements  for  checklist  item 
 four.  255  From  July  through  September,  Verizon  provisioned  approximately  ten  DS-  1  loops  in  Rhode  Island.  256  Because  these  volumes  are  insufficient  upon  which  to  make  a  finding,  we  look 
 at  Massachusetts  data,  which  show  that  Verizons  performance  with  respect  to  high  capacity  loops  meets  the  requirements  of  checklist  item  four. 


 88.  We  note  that  Verizons  performance  in  Massachusetts  with  respect  to  high  capacity  loops  has  generally  improved  since  grant  of  section  271  authority  in  Massachusetts.  257 
 While  the  installation  troubles  reported  and  network  trouble  report  rate  in  Massachusetts  have  been  out  of  parity  for  competitive  LECs  for  almost  all  reported  months,  we  find  that  these 
 disparities  are  slight  and  thus  not  competitively  significant.  258  Moreover,  given  Verizons  generally  acceptable  performance  for  all  other  categories  of  loops,  and  recognizing  that  high 
 capacity  loops  represent  only  a  small  percentage  of  overall  loop  orders  in  Rhode  Island  and  Verizons  improved  performance  in  regard  to  high  capacity  loops,  we  find  that  Verizons 
 performance  is  in  compliance  with  checklist  item  four.  We  note  that  commenters  in  this  proceeding  do  not  criticize  Verizons  performance  with  regard  to  high  capacity  loops. 


 89.  Line  Sharing.  Based  on  the  evidence  in  the  record,  we  find,  as  did  the  Rhode  Island  Commission,  259  that  Verizon  demonstrates  that  it  provides  nondiscriminatory  access  to  the 
 253  Verizon  explains  that  the  average  completed  interval  for  August  through  November  in  Rhode  Island  was  5.28 
 days  for  competitive  LECs  and  3.54  days  for  the  retail  comparison  group,  a  difference  of  only  1.74  days.  In  addition,  competitive  LECs  average  completed  intervals  in  Rhode  Island  have  decreased  from  August-  November 


 (6.  27,  5.  48,  4.  84,  and  4.  80)  even  as  competitive  LEC  volumes  have  generally  increased  (22,  33,  43,  and  20).  See  Verizon  Jan.  8  Ex  Parte  Letter  at  4. 


 254  See  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9055-  56,  para.  122. 
 255  See  Rhode  Island  Commission  Comments  at  133-  36. 
 256  See  Verizon  Application  at  42.  High  capacity  loops  in  Rhode  Island  represent  less  than  1%  of  all  unbundled 
 loops  provisioned  to  competitors.  See  id. 
 257  See  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9075-  76,  para.  156. 


 258  For  PR  6-  01-  3200  (Percent  Installation  Troubles  Within  30  Days),  Verizon  performed  slightly  better  for  its 
 own  retail  affiliate  from  July-  September.  In  October,  it  performed  at  parity.  For  MR  2-  01-  3200  (Network  Trouble  Report  Rate),  Verizon  states  that  during  July,  August  and  September,  the  percentages  have  generally  been  under 


 2%.  In  October,  the  percentage  was  under  2%  as  well.  See  also  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  126. 
 259  See  Rhode  Island  Commission  Comments  at  133-  36. 
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 high  frequency  portion  of  the  loop.  260  Through  September  2001,  Verizon  had  completed  approximately  four  line  sharing  orders  in  Rhode  Island  for  unaffiliated  competitive  LECs  261  and 
 the  Rhode  Island  performance  data  show  almost  no  competitive  LEC  activity  for  line  shared  DSL  services  in  September  and  October.  262  Although  there  has  been  very  little  ordering  activity 
 in  Rhode  Island  for  line  sharing  for  the  months  reported,  there  has  been  much  ordering  activity  in  Massachusetts  during  the  same  period  of  time.  263  Verizons  Massachusetts  performance  data 
 demonstrate  that  it  is  provisioning  line  shared  DSL  loops  to  competitors  at  parity  with  its  own  retail  provisioning,  and  that  its  maintenance  and  repair  performance  is  also  acceptable.  264 


 90.  Line  Splitting.  Based  on  the  evidence  in  the  record,  we  find,  as  did  the  Rhode  Island  Commission,  265  that  Verizon  complies  with  its  line-  splitting  obligations  and  provides 
 access  to  network  elements  necessary  for  competing  carriers  to  provide  line  splitting.  266  Verizon  provides  access  to  the  same  pre-  ordering  capabilities  to  carriers  that  purchase  line  splitting  as  it 


 260  As  part  of  KPMGs  stand-  alone  testing  in  Rhode  Island,  KPMG  evaluated  Verizons  line  sharing  installations 
 in  Massachusetts  to  validate  that  Verizons  technicians  performed  all  of  the  required  tasks  defined  in  the  line  sharing  documentation.  KMPG  examined  line  sharing  in  Massachusetts  rather  than  in  Rhode  Island  because 


 Massachusetts  line  sharing  volumes  were  greater.  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  176.  Verizon  received  a  satisfied  rating  based  on  KPMG  Consulting  evaluation  criteria.  See  KPMG  Report  at  13.  Specifically, 
 during  78  ADSL  Line  Sharing  installations,  KPMG  Consulting  observed  Verizon-  MA  technicians  execute  624  installation  tasks.  Verizon-  MA  technicians  executed  615  (99%)  of  these  tasks  as  defined  in  their  documentation. 
 See  KPMG  Report  at  93.  We  encourage  state  commissions  and  BOCs  to  engage  in  testing  of  new  or  changed  aspects  of  a  BOCs  OSS.  See  also  Verizon  Lacouture/  Ruesterholz  Decl.  at  paras.  165-  66. 


 261  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  175. 
 262  See  the  PR-  6  Installation  Quality  metrics. 
 263  Through  September  2001,  Verizon  had  completed  over  3,600  line  sharing  orders  for  unaffiliated  competitive 
 LECs  in  Massachusetts.  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  175. 
 264  See  PR  1-  01-  3343  (Average  Interval  Offered    Total  No  Dispatch)  and  PR  1-  02-  3343  (Average  Interval 
 Offered    Total  Dispatch);  PR  2-  01-  3343  (Average  Interval  Completed    Total  No  Dispatch)  and  PR  2-  02-  3343  (Average  Interval  Completed    Total  Dispatch);  and  PR  4-  05-  3343  (Percent  Missed  Appointments    No  Dispatch). 


 For  PR  6-  01-  3343  (Percent  Installation  Troubles  Reported  Within  30  Days),  Verizons  performance  with  regard  to  installation  troubles  reported  within  30  days  in  Massachusetts  is  out  of  parity  for  September  and  October,  but  from 
 July-  October,  the  rate  of  such  installation  troubles  was  less  than  2%  for  both  competing  LECs  and  Verizons  own  affiliate.  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  188;  see  also  MR  2-  03-  3343  (Network  Trouble  Report 
 Rate    Central  Office)  and  MR  4-  03-  3343  (Mean  Time  to  Repair    Central  Office  Trouble). 
 265  See  Rhode  Island  Commission  Comments  at  133-  36. 


 266  See  Deployment  of  Wireline  Services  Offering  Advanced  Telecommunications  Capabilities  and  Implementation 
 of  the  Local  Competition  Provisions  of  the  Telecommunications  Act  of  1996,  Third  Report  and  Order  on  Reconsideration,  CC  Docket  No.  98-  147;  Fourth  Report  and  Order  on  Reconsideration,  CC  Docket  No.  96-  98; 


 Third  Further  Notice  of  Proposed  Rulemaking,  CC  Docket  No.  98-  147;  Sixth  Further  Notice  of  Proposed  Rulemaking,  CC  Docket  No.  96-  98,  16  FCC  Rcd  2101,  2111,  para.  20.  Verizon  states,  however,  that  it  is  not  aware 
 of  any  competitive  LECs  that  are  engaging  in  line  splitting  in  Rhode  Island  or  Massachusetts  using  existing  network  elements.  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  193. 
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 does  to  carriers  that  purchase  unbundled  DSL  loops  or  line  sharing.  267  In  addition,  working  with  the  competitive  LECs  through  the  New  York  DSL  Collaborative,  Verizon  implemented  a 
 permanent  OSS  process  for  line  splitting  throughout  the  Verizon  East  territory,  including  Rhode  Island,  on  October  20,  2001.  268  Thus,  Verizon  has  met  its  goal  to  implement  permanent  OSS  by 
 October  2001.  269  Competitive  LECs  have  raised  no  complaints  about  this  new  process.  We  find,  therefore,  given  the  record  before  us,  that  Verizons  process  for  line-  splitting  orders  is  in 
 compliance  with  the  requirements  of  this  checklist  item  at  this  time.  270  As  competing  LEC  needs  continue  to  evolve,  however,  we  may  revisit  Verizons  line  splitting  OSS  in  a  future  section  271 
 proceeding  that  includes  more  or  different  evidence  in  the  record. 
 3.  Checklist  Item  5    Transport 
 91.  Section  271(  c)(  2)(  B)(  v)  of  the  competitive  checklist  requires  a  BOC  to  provide  [  l]  ocal  transport  from  the  trunk  side  of  a  wireline  local  exchange  carrier  switch  unbundled  from 


 switching  or  other  services.  271  Based  on  our  review  of  the  record,  272  we  conclude,  as  did  the  Rhode  Island  Commission,  273  that  Verizon  complies  with  the  requirements  of  this  checklist  item. 


 92.  In  past  orders,  the  Commission  has  relied  on  the  missed  appointment  rate  to  determine  whether  a  BOC  is  provisioning  transport  to  its  competitors  in  a  nondiscriminatory 
 fashion.  274  The  volume  of  transport  orders  in  Rhode  Island  is  extremely  low,  275  but  Verizons 


 267  Competitive  LECs  have  a  choice  of  submitting  pre-  ordering  queries  over  either  the  Web  GUI,  EDI,  or  CORBA 
 electronic  interfaces.  See  Verizon  McLean/  Wierzbicki  Decl.  Attach.  2  at  11. 
 268  Specifically,  Verizon  began  offering  new  OSS  functionality  that  enables  a  competitor  to  submit  a  single  Local 
 Service  Request  (LSR)  to  add  DSL  capability  to  a  loop  in  an  existing  UNE-  Platform  arrangement  while  re-  using  the  same  network  elements,  including  the  loop,  if  it  is  DSL-  capable.  In  addition,  Verizon  implemented  the  ability  for  a 


 competitive  LEC  to  convert  from  line  sharing  to  line  splitting  using  a  single  LSR,  or  drop  data  from  a  line-  splitting  arrangement  and  revert  back  to  UNE-  Platform  with  a  single  LSR.  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para. 
 202;  see  also  Verizon  McLean/  Wierzbicki  Decl.  Attach.  2  at  12. 
 269  See  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9091-  92,  para.  181  (Verizon  agreed  to  an  implementation 
 schedule  to  offer  line  splitting-  specific  OSS  capabilities  under  the  supervision  of  the  New  York  Commission  in  response  to  concerns  raised  by  WorldCom.). 


 270  As  of  November  9,  2001,  Verizon  had  received  10  commercial  line  splitting  orders  from  competitive  LECs 
 (utilizing  the  new  line  splitting  OSS  capabilities)  outside  of  the  pilot.  None  of  these  orders  was  submitted  in  Rhode  Island  or  Massachusetts.  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  202. 


 271  47  U.  S.  C.    271(  c)(  2)(  B)(  v);  see  also  Appendix  D  at  para.  53. 
 272  See  Verizon  Application  at  46-  47,  and  Exh.  A;  Verizon  Lacouture/  Ruesterholz  Decl.  at  paras.  236-  47. 
 273  Rhode  Island  Commission  Comments  at  144. 
 274  See,  e.  g.,  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9106-  07,  para.  210. 
 275  Verizon  provisioned  21  orders  to  competitors  from  July  through  October,  but  only  one  retail  DS3  order    the 
 accepted  retail  analogue  for  this  metric    during  the  same  period.  See  PR-  4-  01-  3530  (%  missed  appointments    (continued.) 
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 performance  for  this  metric  in  Massachusetts  during  July  through  October  shows  that  Verizon  missed  fewer  appointments  provisioning  transport  to  its  competitors  than  for  its  own  retail 
 customers.  276 
 93.  We  disagree  with  CTCs  argument  that  Verizons  dark  fiber  offering  does  not  comply  with  the  requirements  of  this  checklist  item.  CTC  argues  that  we  should  condition 


 Verizons  section  271  authority  on  Verizons  compliance  with  a  recent  Rhode  Island  Commission  order  that  requires  Verizon  to  splice  dark  fiber  at  any  technically  feasible  point  so 
 as  to  make  dark  fiber  continuous  through  one  or  more  intermediate  central  offices  without  requiring  a  CLEC  to  be  collocated  at  any  such  intermediate  office.  277  We  reject  CTCs  claim. 
 Verizon  has  amended  its  tariff  in  Rhode  Island  to  accommodate  these  new  requirements  effective  February  1,  2002,  278  and  the  time  to  appeal  the  order  in  Rhode  Island  has  elapsed.  279  CTC  also 
 argues  generally  that  Verizons  dark  fiber  offering  does  not  satisfy  section  251(  c)(  3).  280  CTC  does  not,  however,  support  its  assertions  with  references  to  our  rules  or  precedent.  We  will  not 
 find  noncompliance  based  on  such  vague  assertions. 
 4.  Checklist  Item  14    Resale 
 94.  Section  271(  c)(  2)(  B)(  xiv)  of  the  Act  requires  that  a  BOC  make  [  t]  elecommunications  services  .  .  .  available  for  resale  in  accordance  with  the  requirements  of 


 section  251(  c)(  4)  and  section  252(  d)(  3).  281  Based  on  the  record  in  this  proceeding,  we  conclude, 
 (Continued  from  previous  page)  Verizon    Total-  IOF).  It  is  thus  not  possible  to  determine,  based  on  this  metric,  whether  Verizons  transport 
 provisioning  has  been  nondiscriminatory.  We  note,  however,  that  Verizon  missed  only  14%  of  appointments  for  competitors  during  this  period.  See  id. 


 276  See  PR-  4-  01-  3530  (%  missed  appointments    Verizon    Total-  IOF).  In  July  2001,  Verizon  missed  50%  of  its 
 appointments  for  its  own  customers,  but  only  3.23%  of  those  for  its  competitors.  Figures  for  August,  September  and  October,  2001,  are  similar:  66.67%  vs.  2.38%;  80%  vs.  no  appointments  missed;  and  66.67%  vs.  no 


 appointments  missed,  respectively. 
 277  CTC  Comments  at  8-  9  (quoting  Letter  from  Clint  Odom,  Director,  Federal  Regulatory,  Verizon,  to  Magalie 
 Roman  Salas,  Secretary,  Federal  Communications  Commission,  CC  Docket  No.  01-  324  (filed  Dec.  4,  2001),  Attach.  at  19  (Rhode  Island  PUC  Dec.  3  Order)). 


 278  See  Letter  from  Clint  Odom,  Director,  Federal  Regulatory,  Verizon,  to  Magalie  Roman  Salas,  Secretary, 
 Federal  Communications  Commission,  CC  Docket  No.  01-  324  (filed  Dec.  19,  2001)  (Verizon  New  England  Inc.  Rates  and  Charges  Effective  in  the  State  of  Rhode  Island  PUC  RI  No.  18),  at  Part  10.2.1.  G  (  The  Telephone 


 Company  will  not  require  collocation  at  an  intermediate  office  if  it  can  provide  intermediate  cross  connections  between  fiber  distribution  frames  or  can  splice  fibers  at  any  technically  feasible  point  in  the  intermediate 
 office(  s).). 
 279  We  note  that  the  time  for  VZ-  RI  to  appeal  our  decision  on  dark  fiber  has  expired  pursuant  to  R.  I.  G.  L.    39-  5- 
 1.  In  addition,  on  December  14,  2001,  VZ-  RI  made  a  compliance  filing  in  conformity  with  our  order  regarding  dark  fiber.  Rhode  Island  Commission  Reply  at  4  (footnotes  omitted). 


 280  See  CTC  Comments  at  11. 
 281  47  U.  S.  C.    271(  c)(  2)(  B)(  xiv);  see  Appendix  D  at  para.  67. 
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 as  did  the  Rhode  Island  Commission,  282  that  Verizon  satisfies  the  requirements  of  this  checklist  item  in  Rhode  Island.  283  Importantly,  none  of  the  commenting  parties  questions  Verizons 
 showing  of  compliance  with  the  requirements  of  this  checklist  item,  including  the  area  of  resale  of  Verizon  Advanced  Data  Inc.  s  (VADI)  retail  DSL-  based  telecommunications  service  offering 
 (DSL  resale).  284 
 95.  We  conclude  that  Verizon  demonstrates  current  compliance  with  the  checklist  requirements  with  regard  to  DSL  resale  as  articulated  in  our  recent  section  271  orders.  285  First, 


 Verizon  already  offers  the  resale  of  DSL  services  when  Verizon  provides  voice  services  on  the  line  involved.  286  Second,  in  accordance  with  the  United  States  Court  of  Appeals  decision  in 
 ASCENT  v.  FCC,  VADI  has  made  enhancements  to  its  federal  tariff.  Specifically,  VADI  has  made  resold  DSL  over  resold  voice  lines,  Verizons  expanded  DSL  resale  offering,  available  in 
 Rhode  Island.  287  This  offering  became  effective  November  21,  2001  and  is  the  same  as  that  in  Connecticut  and  Pennsylvania  except  for  certain  implementation  details.  288  Verizon  has  also 
 implemented  OSS  changes  that  enable  Verizon  to  receive  VADIs  expanded  DSL  resale  orders  via  the  EDI  interface  and  to  track  those  orders  through  the  provisioning  process.  289 


 96.  We  also  conclude  that  Verizon  has  appropriate  resold  DSL  order  processing  procedures  in  place.  In  the  Verizon  Connecticut  Order,  the  Commission  indicated  that  several 


 282  See  Rhode  Island  Commission  Comments  at  186-  88. 
 283  Verizon  has  a  concrete  and  specific  legal  obligation  in  its  interconnection  agreements  and  tariffs  to  make  its 
 retail  services  available  for  resale  to  competing  carriers  at  wholesale  rates.  See  Verizon  Application  at  56,  n.  52;  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  386. 


 284  In  this  proceeding,  unlike  in  the  SWBT  Arkansas/  Missouri  Order,  no  party,  including  Verizon,  has  questioned 
 the  applicability  of    251(  c)(  4)  to  VADIs  DSL  resale  service.  Cf.  SWBT  Arkansas/  Missouri  Order,  16  FCC  Rcd  at  20758-  59,  paras.  79-  81. 


 285  See  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17471,  para.  94;  Verizon  Connecticut  Order,  16  FCC  Rcd  at 
 14164-  65,  para.  39. 
 286  See  Verizon  F.  C.  C.  Tariff  No.  20,  Section  5.1. 


 287  Association  of  Communications  Enterprises  v.  FCC,  235  F.  3d  662  (D.  C.  Cir.  2000);  see  also  Tariff  Revision 
 filed  by  VADI  to  VADI  F.  C.  C.  Tariff  F.  C.  C.  No.  1  under  Transmittal  Number  22  (Nov.  20,  2001). 
 288  See  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  416.  Verizon  uses  the  same  checklist-  compliant  processes 
 and  procedures  to  provide  this  new  service  as  it  uses  in  Pennsylvania,  except  that,  in  Rhode  Island,  Verizon  has  not  placed  any  limits  on  the  number  of  orders  that  Verizon  will  commit  to  process  each  day.  See  Verizon  Application  at 


 57-  58. 
 289  Verizon  Lacouture/  Ruesterholz  Decl.  at  para.  417.  Despite  these  enhancements  in  the  former  Bell  Atlantic 
 states  where  VADI  operates,  no  reseller  has  submitted  orders    other  than  test  orders    to  Verizon  for  resold  DSL  over  resold  voice  lines  service.  Only  six  test  orders  were  submitted  and  they  were  completed  successfully  by 


 Verizon.  See  Letter  from  Clint  E.  Odom,  Director,  Federal  Regulatory,  Verizon  to  Magalie  Roman  Salas,  Secretary,  Federal  Communications  Commission,  CC  Docket  No.  01-  324  at  3  (filed  Jan.  7,  2002)  (Verizon  Jan.  7  Ex  Parte 
 Letter). 
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 aspects  of  Verizons  expanded  DSL  resale  OSS  should  be  revised  as  Verizon  develops  permanent  order  processing  procedures.  290  Verizon  addresses  each  of  these  issues,  but  concedes 
 that  its  permanent  ordering  procedures  continue  to  evolve.  291  As  a  result,  it  has  not  yet  developed  permanent  ordering  procedures  that  fully  satisfy  all  three  expectations  in  Rhode  Island.  Because 
 no  carrier  has  placed  an  order  for  resold  DSL  in  Rhode  Island,  however,  and  no  carrier  commented  on  this  issue  in  this  proceeding,  we  have  no  basis  for  evaluating  whether  the  absence 
 of  these  changes  has  any  impact  on  competition.  Moreover,  as  explained  below,  we  accept  Verizons  explanation  regarding  why  it  has  not  fully  implemented  these  changes,  for  the  purpose 
 of  this  proceeding.  In  particular,  the  Commission  expected  that  Verizons  performance  in  providing  an  expanded  DSL  resale  offering  would  be  reflected  in  its  performance  data.  292 
 Verizon  indicates  that  it  has  implemented  enhancements  to  its  systems  to  allow  it  to  capture  performance  data  for  its  resold  DSL  over  resold  voice  lines  offering,  and  it  will  begin  reporting 
 data  after  performance  measures  are  developed  by  the  states.  293  The  Commission  also  expected  that  permanent  ordering  procedures  would  eliminate  Verizons  requirement  that  it  disconnect 
 resold  DSL  service  if  the  customer  switches  from  the  reseller  back  to  Verizon  as  the  underlying  voice  provider.  294  Verizon  indicates  that,  to  date,  it  has  not  received  any  such  requests,  but  it 
 confirms  that  it  will  work  to  avoid  any  disconnection  when  it  begins  receiving  orders.  295  Lastly,  the  Commission  expected  that  permanent  order  processing  procedures  would  eliminate 
 Verizons  requirement  that  the  reseller  must  already  be  the  voice  provider  on  the  line  involved  before  Verizon  can  process  orders  for  DSL  resale.  296  According  to  Verizon,  however,  the  voice 
 service  must  be  established  first  because  the  data  provider  is  considered  a  sub-  tenant  on  the  line  involved.  297  Verizon  indicates  that  this  is  true  whether  Verizon,  a  competitive  LEC,  or  a 
 reseller  is  the  voice  provider.  298 
 C.  Remaining  Checklist  Items  (3,  6-  13) 


 290  See  Verizon  Connecticut  Order,  16  FCC  Rcd  at  14166,  para.  42. 
 291  See  Verizon  Jan.  7  Ex  Parte  Letter  at  3-  4. 
 292  See  Verizon  Connecticut  Order,  16  FCC  Rcd  at  14166,  para.  42. 
 293  See  Verizon  Jan.  7  Ex  Parte  Letter  at  4.  However,  as  Verizon  also  notes,  performance  measures  specific  to 
 resold  DSL  over  resold  voice  lines  have  yet  to  be  developed  in  the  state  collaboratives.  Id. 
 294  See  Verizon  Connecticut  Order,  16  FCC  Rcd  at  14166,  para.  42. 


 295  According  to  Verizon,  [  it]  has  not  received  any  orders  where  an  end  user  seeks  to  switch  its  voice  service  back 
 to  Verizon  while  retaining  the  reseller  providing  DSL  service.  Nevertheless,  if  such  an  order  were  received,  Verizon  would  endeavor  to  complete  the  order  without  disconnection  of  the  DSL  service.  See  Verizon  Jan.  7  Ex 


 Parte  Letter  at  4 
 296  Id. 


 297  According  to  Verizon,  when  voice  and  data  are  established  on  a  single  line,  the  voice  provider  controls  the 
 line,  and  the  data  provider  is  a  sub-  tenant.  As  a  result,  the  voice  service  must  be  established  first.  Id. 
 298  Id. 
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 97.  In  addition  to  showing  that  it  is  in  compliance  with  the  requirements  discussed  above,  an  applicant  under  section  271  must  demonstrate  that  it  complies  with  checklist  item  3 
 (access  to  poles,  ducts,  and  conduits),  299  item  6  (unbundled  local  switching),  300  item  7  (911/  E911  access  and  directory  assistance/  operator  services),  301  item  8  (white  pages  directory  listings),  302 
 item  9  (numbering  administration),  303  item  10  (databases  and  associated  signaling),  304  item  11  (number  portability),  305  item  12  (local  dialing  parity),  306  and  item  13  (reciprocal  compensation).  307 
 Based  on  the  evidence  in  the  record,  we  conclude  that  Verizon  demonstrates  that  it  is  in  compliance  with  these  checklist  items  in  Rhode  Island.  308  We  also  note  that  the  Rhode  Island 
 Commission  concludes  that  Verizon  complies  with  the  requirements  of  each  of  these  checklist  items.  309  None  of  the  commenting  parties  challenges  Verizons  compliance  with  these  checklist 
 items. 
 IV.  COMPLIANCE  WITH  SECTION  271(  c)(  1)(  A) 
 98.  In  order  for  the  Commission  to  approve  a  BOCs  application  to  provide  in-  region,  interLATA  services,  a  BOC  must  first  demonstrate  that  it  satisfies  the  requirements  of  either 


 section  271(  c)(  1)(  A)  (Track  A)  or  section  271(  c)(  1)(  B)  (Track  B).  310  To  qualify  for  Track  A,  a 


 299  47  U.  S.  C.    271(  c)(  2)(  B)(  iii). 
 300  Id.    271(  c)(  2)(  B)(  vi). 
 301  Id.    271(  c)(  2)(  B)(  vii). 
 302  Id.    271(  c)(  2)(  B)(  viii). 
 303  Id.    271(  c)(  2)(  B)(  ix). 
 304  Id.    271(  c)(  2)(  B)(  x). 
 305  Id.    271(  c)(  2)(  B)(  xi). 
 306  Id.    271(  c)(  2)(  B)(  xii). 
 307  Id.    271(  c)(  2)(  B)(  xiii). 
 308  See  Verizon  Application  at  49  (checklist  item  3),  45  (checklist  item  6),  49-  51  (checklist  item  7),  52-  53 
 (checklist  item  8),  53  (checklist  item  9),  53-  54  (checklist  item  10),  54-  55  (checklist  item  11),  55  (checklist  items  12  and  13);  Lacouture/  Ruesterholz  Decl.  at  paras.  268-  91  (checklist  item  3),  paras.  211-  35  (checklist  item  6),  paras. 


 292-  324  (checklist  item  7),  paras.  325-  41  (checklist  item  8),  paras.  342-  46  (checklist  item  9),  paras.  347-  72  (checklist  item  10),  paras.  373-  76  (checklist  item  11),  paras.  378-  82  (checklist  item  12),  paras.  383-  86  (checklist 
 item  13);  see  also  Appendices  B  and  C. 
 309  See  Rhode  Island  Commission  Comments  at  95-  102  (checklist  item  3),  145-  54  (checklist  item  6),  154-  62 
 (checklist  item  7),  162-  64  (checklist  item  8),  165-  66  (checklist  item  9),  166-  71  (checklist  item  10),  172-  74  (checklist  item  11),  174-  77  (checklist  item  12),  177-  80  (checklist  item  13). 


 310  47  U.  S.  C.    271(  d)(  3)(  A). 
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 BOC  must  have  interconnection  agreements  with  one  or  more  competing  providers  of  telephone  exchange  service  .  .  .  to  residential  and  business  customers.  311 
 99.  We  conclude,  as  the  Rhode  Island  Commission  did,  312  that  Verizon  satisfies  the  requirements  of  Track  A  in  Rhode  Island.  We  base  this  decision  on  interconnection  agreements 
 Verizon  has  with  Cox  Communications,  Inc.  (Cox),  Network  Plus,  Choice  One,  WorldCom,  Conversent,  and  AT&  T.  313  Cox  and  Network  Plus  provide  telephone  exchange  service  to  a 
 substantial  number  of  residential  and  business  subscribers  in  Rhode  Island  predominantly  over  their  own  facilities.  314  Choice  One,  WorldCom,  Conversent,  and  AT&  T  serve  business 
 customers. 
 100.  We  conclude  that  a  sufficient  number  of  residential  and  business  customers  are  being  served  by  competing  LECs  through  the  use  of  their  own  facilities  to  demonstrate  that  there 


 is  an  actual  commercial  alternative  in  Rhode  Island.  Verizon  has  shown  that  facilities-  based  carriers  serve  more  than  a  de  minimis  number  of  residential  and  business  customers  in  Rhode 
 Island.  315  No  commenter  has  challenged  Verizons  assertion  that  it  satisfies  the  requirements  for  Track  A  in  Rhode  Island. 


 V.  SECTION  272  COMPLIANCE 
 101.  Section  271(  d)(  3)(  B)  provides  that  the  Commission  shall  not  approve  a  BOCs  application  to  provide  interLATA  services  unless  the  BOC  demonstrates  that  the  requested 


 authorization  will  be  carried  out  in  accordance  with  the  requirements  of  section  272.  316  Based  on  the  record,  we  conclude  that  Verizon  has  demonstrated  that  it  will  comply  with  the 
 requirements  of  section  272.  317  Significantly,  Verizon  provides  evidence  that  it  maintains  the  same  structural  separation  and  nondiscrimination  safeguards  in  Rhode  Island  as  it  does  in 
 Pennsylvania,  New  York,  Connecticut,  and  Massachusetts    states  in  which  Verizon  has  already  received  section  271  authority.  318  No  party  challenges  Verizons  section  272  showing.  319 


 311  47  U.  S.  C.    271(  c)(  1)(  A). 
 312  Rhode  Island  Commission  Comments  at  10. 
 313  Verizon  Application  at  7-  11;  Verizon  Local  Competition  Report  (citing  confidential  portion)  paras.  31-  32,  35- 
 44  . 
 314  Id. 


 315  Verizon  Application  at  7-  11;  Verizon  Local  Competition  Report  (citing  confidential  portion)  paras.  31-  32,  35- 
 44.  Cf.  SWBT  Oklahoma  Order,  12  FCC  Rcd  at  8695,  para.  14. 
 316  47  U.  S.  C.    271(  d)(  3)(  B);  Appendix  D  at  paras.  68-  69. 


 317  See  Verizon  Application  at  73-  78;  Verizon  Application  App.  A,  Vol.  3,  Tab  E,  Declaration  of  Susan  C. 
 Browning  at  para  4.  (Verizon  Browning  Decl.). 
 318  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17486,  para.  124;  Verizon  Connecticut  Order,  16  FCC  Rcd  at 
 14179,  para.  73;  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9114-  17,  paras.  226-  31;  Bell  Atlantic  New  York  (continued.) 
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 VI.  PUBLIC  INTEREST  ANALYSIS 
 102.  Apart  from  determining  whether  a  BOC  satisfies  the  competitive  checklist  and  will  comply  with  section  272,  Congress  directed  the  Commission  to  assess  whether  the  requested 


 authorization  would  be  consistent  with  the  public  interest,  convenience,  and  necessity.  320  At  the  same  time,  section  271(  d)(  4)  of  the  Act  states  in  full  that  [  t]  he  Commission  may  not,  by  rule  or 
 otherwise,  limit  or  extend  the  terms  used  in  the  competitive  checklist  set  forth  in  subsection  (c)(  2)(  B).  321  Accordingly,  although  the  Commission  must  make  a  separate  determination  that 
 approval  of  a  section  271  application  is  consistent  with  the  public  interest,  convenience,  and  necessity,  it  may  neither  limit  nor  extend  the  terms  of  the  competitive  checklist  of  section 
 271(  c)(  2)(  B).  Thus,  the  Commission  views  the  public  interest  requirement  as  an  opportunity  to  review  the  circumstances  presented  by  the  application  to  ensure  that  no  other  relevant  factors 
 exist  that  would  frustrate  the  congressional  intent  that  markets  be  open,  as  required  by  the  competitive  checklist,  and  that  entry  will  serve  the  public  interest  as  Congress  expected. 


 103.  We  conclude  that  approval  of  this  application  is  consistent  with  the  public  interest.  From  our  extensive  review  of  the  competitive  checklist,  which  embodies  the  critical 
 elements  of  market  entry  under  the  Act,  we  find  that  barriers  to  competitive  entry  in  the  local  exchange  markets  have  been  removed  and  the  local  exchange  markets  today  are  open  to 
 competition.  We  further  find  that  the  record  confirms  our  view,  as  noted  in  prior  section  271  orders,  that  BOC  entry  into  the  long  distance  market  will  benefit  consumers  and  competition  if 
 the  relevant  local  exchange  market  is  open  to  competition  consistent  with  the  competitive  checklist.  322 


 104.  We  disagree  with  commenters  that  assert  that  under  our  public  interest  standard,  we  must  consider  the  market  share  of  each  entry  strategy  for  each  type  of  service.  Sprint  argues 
 that  low  levels  of  residential  UNE  and  resale  service  in  Rhode  Island  indicate  that  meaningful 
 (Continued  from  previous  page)  Order,  15  FCC  Rcd  at  4152-  61,  paras.  401-  21;  Verizon  Application  at  73-  78;  Verizon  Browning  Decl.  at  paras.  4- 


 17. 
 319  We  recognize  that  the  first  independent  audit  of  Verizons  section  272  compliance  conducted  pursuant  to 
 section  53.209  of  the  Commissions  rules  is  now  complete.  See  Letter  from  PricewaterhouseCoopers  LLP  to  Magalie  Roman  Salas,  Secretary,  Federal  Communications  Commission  (June  11,  2001)  (transmitting  audit  report). 


 While  the  audit  raises  issues  that  may  require  further  investigation,  the  audit  results  are  not  a  legal  determination  of  Verizons  section  272  compliance.  Parties  were  required  to  submit  comments  on  the  audit  report  no  later  than 
 January  24,  2002.  See  Accounting  Safeguards  Under  the  Telecommunications  Act  of  1996,  Order,  16  FCC  Rcd  20301  (2001)  (extending  deadline  for  filing  comments).  Because  the  Commission  will  not  have  had  the  opportunity 
 to  complete  its  own  review  of  the  audit  results  before  it  is  required  to  issue  a  decision  on  this  section  271  application,  and  because  no  party  cites  the  audit  findings  as  evidence  of  noncompliance  (or  even  challenges 
 Verizons  showing  generally),  there  is  no  reason  to  consider  the  audit  as  evidence  of  shortcomings  in  Verizons  section  272  compliance. 


 320  47  U.  S.  C.    271(  d)(  3)(  C);  Appendix  D  at  paras.  70-  71. 
 321  Id.    271(  d)(  4). 
 322  See  SWBT  Texas  Order,  15  FCC  Rcd  at  18558-  89,  para.  419. 
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 competition  does  not  exist  in  Rhode  Island.  323  Given  an  affirmative  showing  that  the  competitive  checklist  has  been  satisfied,  low  customer  volumes  in  any  one  particular  mode  of  entry  or  in 
 general  do  not  necessarily  undermine  that  showing.  As  the  Commission  has  said  in  previous  section  271  orders,  factors  beyond  the  control  of  the  BOC,  such  as  individual  competitive  LEC 
 entry  strategies,  might  explain  a  low  residential  customer  base.  324 
 105.  We  also  disagree  with  Sprints  argument  that  Cox  does  not  provide  meaningful  competition  with  respect  to  customers  who  do  not  subscribe  to  Coxs  cable  or  data  services, 


 since  the  price  for  cable  telephony  to  those  customers  exceeds  Verizons  price  for  local  service.  325  Sprint  notes  that  Cox  currently  offers  cable  telephony  at  a  low  price  for  its  cable  or 
 data  subscribers.  326  Customers  who  want  cable  telephony  without  Coxs  cable  or  data  offering  pay  a  higher  price  for  this  service.  327  We  are  not  persuaded  by  Sprints  argument.  Cox  has  the 
 capability  to  provide  cable  telephony  service  to  75  to  95  percent  of  Rhode  Island  customers,  and  a  substantial  number  of  those  potential  customers  have  in  fact  chosen  Cox  as  their  local 
 telephone  carrier.  328  The  fact  that  a  substantial  number  of  residential  customers  have  chosen  Cox  to  provide  their  local  phone  service  provides  us  with  assurance  that  Cox  is  a  meaningful 
 competitor  to  Verizon.  329 
 106.  Sprint  also  argues  that  the  fact  that  the  BOCs  have  generally  chosen  not  to  compete  against  each  other  out  of  region  (particularly  against  Verizon  in  Rhode  Island)  and  the 


 continuing  bankruptcy  of  competitive  LECs  mean  that  the  public  interest  is  not  served  by  granting  Verizon  section  271  approval  in  Rhode  Island.  330  We  reject  these  arguments.  Factors 
 beyond  the  control  of  the  applicant,  such  as  a  weak  economy,  individual  competing  LEC  and  out-  of-  region  BOC  business  plans,  or  poor  business  planning  by  potential  competitors  can 
 explain  the  lack  of  entry  into  a  particular  market. 
 A.  Price  Squeeze  Arguments 
 107.  Given  Verizons  substantial  voluntary  reduction  of  its  Rhode  Island  switching  rates,  we  find  that  AT&  T,  WorldCom,  and  ASCENT  have  not  established  the  existence  of  a 


 price  squeeze  in  Rhode  Island  such  that  grant  of  Verizons  application  would  violate  section 


 323  See  Sprint  Comments  at  7-  11. 
 324  See  Verizon  Pennsylvania  Order,  16  FCC  Rcd  at  17487,  para.  126. 
 325  Sprint  Comments  at  8-  9. 
 326  Id.  at  9. 
 327  Id.  at  8-  9. 
 328  Verizon  Application  at  9-  10  (citing  confidential  portions). 
 329  See  Verizon  Local  Competition  Report  (citing  confidential  portion),  paras.  31-  32. 
 330  Sprint  Comments  at  4-  7. 
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 271s  public  interest  requirement.  331  In  Sprint  Communications  Co.  L.  P.  v.  FCC,  332  the  Court  of  Appeals  for  the  D.  C.  Circuit  remanded  to  the  Commission  for  further  consideration  how 
 allegations  of  a  price  squeeze  by  a  BOC  should  be  examined  as  part  of  a  section  271  applications  public  interest  analysis.  In  the  Commissions  SWBT  Kansas/  Oklahoma  Order,  the 
 Commission  declined  to  consider  allegations  that  a  section  271  applicant  should  fail  the  14-  point  checklist  because  competitors  are  unable  to  make  a  profit  in  the  residential  market  via  the  UNE-Platform. 
 333  We  need  not  address  the  issues  raised  in  these  proceedings  in  this  order.  We  have 
 examined  AT&  T  and  WorldComs  price  squeeze  claims  334  and,  determined  that,  even  if  we  accept  their  assertion  that  a  price  squeeze  analysis  is  mandated  by  section  271s  public  interest 


 requirement  and  their  framework  for  determining  whether  a  price  squeeze  exists,  there  is  no  price  squeeze  in  Rhode  Island.  Using  AT&  T  and  WorldComs  calculation  of  anticipated  profit 
 margins  on  UNE-  Platform-  based,  residential  service  in  Rhode  Island,  these  profit  margins  are  significantly  higher  when  recalculated  using  the  new  Rhode  Island  rates.  Neither  AT&  T, 
 WorldCom,  nor  ASCENT  argued  that  there  was  a  price  squeeze  in  Rhode  Island  when  the  Rhode  Island  Commission  adopted  Verizons  February  21  switching  rates.  Therefore,  we  conclude  that 
 Verizons  Rhode  Island  UNE  rates  do  not  create  a  price  squeeze  such  that  grant  of  its  section  271  application  would  not  be  in  the  public  interest. 


 B.  Assurance  of  Future  Compliance 
 108.  As  set  forth  below,  we  find  that  the  performance  assurance  plan  (  PAP)  currently  in  place  in  Rhode  Island  will  provide  assurance  that  the  local  market  will  remain  open 


 after  Verizon  receives  section  271  authorization.  335  We  have  examined  certain  key  aspects  of  Verizons  PAP  and  we  find  that  the  plan  falls  within  a  zone  of  reasonableness  and  is  likely  to 
 provide  incentives  that  are  sufficient  to  foster  post-  entry  checklist  compliance.  The  Rhode  Island  Commission  adopted  a  self-  executing  PAP,  modeled  on  the  PAP  adopted  in 
 Massachusetts  and  New  York,  that  exposes  Verizon  to  the  same  level  of  liability  as  in  Massachusetts.  336  While  the  Massachusetts  and  New  York  PAPs  form  the  basis  for  the  Rhode 


 331  AT&  T  Comments  at  17,  AT&  T  Reply  Comments  at  4-  9;  Letter  from  Peter  D.  Keisler,  Sidley  Austin  Brown  & 
 Wood,  LLP,  to  William  F.  Caton,  Acting  Secretary,  Federal  Communications  Commission  dated  Feb.  8,  2002  at  2-  13  and  Supplemental  Declaration  of  Michael  Lieberman  at  2-  11,  paras.  3-  26  and  various  Exhibits;  WorldCom 


 Reply  Comments  at  1-  5  and  Reply  Declaration  of  Vijetha  Huffman  at  3-  4,  paras.  7-  9  and  Attachment  1;  ASCENT  Comments  at  2-  4. 


 332  Sprint  Communications  Co.  L.  P.  v.  FCC,  274  F.  3d  549  (D.  C.  Cir.  2001). 
 333  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6269,  para.  65  and  6280-  81,  para.  92. 
 334  While  ASCENT  also  raised  price  squeeze  concerns,  it  did  not  supply  specific  alleged  profit  margins  that  we  can 
 evaluate  in  this  proceeding. 
 335  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20748-  50,  paras.  393-  98.  We  note  that  in  all  of  the  previous 
 applications  that  we  have  granted  to  date,  the  applicant  was  subject  to  an  enforcement  plan  administered  by  the  relevant  state  commission  to  protect  against  backsliding  after  BOC  entry  into  the  long-  distance  market. 


 336  Rhode  Island  PUC  C2C  and  PAP  Order  at  35.  The  Massachusetts  and  Rhode  Island  PAPs  place  39%  of 
 Verizons  yearly  net  income  for  each  state  at  risk. 
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 Island  PAP,  the  Rhode  Island  PAP  differs  from  those  PAPs  in  certain  details  to  reflect  the  specific  concerns  of  competitive  LECs  doing  business  in  Rhode  Island.  337  The  Rhode  Island 
 Commission  decided  to  distribute  penalty  amounts  differently  among  the  metrics,  including  placing  penalties  on  missed  critical  billing  metrics  and  doubling  the  penalty  amount  allocated  to 
 UNE  flow  through.  Additionally,  the  Rhode  Island  Commission  ordered  the  creation  of  several  new  metrics  including  a  critical  measure  for  2-  wire  digital  loops  and  2-  wire  xDSL  loops.  Also, 
 the  Rhode  Island  PAP  has  created  small  sample  size  tables  for  benchmark  metrics  with  standards  of  80  percent,  85  percent,  90  percent,  and  95  percent,  while  the  other  PAPs  only  include  such  a 
 table  for  metrics  with  a  benchmark  standard  of  95  percent.  We  conclude  that  the  Rhode  Island  modifications  appear  reasonable  and  do  not  detract  from  the  overall  effectiveness  of  the  plan. 
 The  Rhode  Island  Commission  also  has  the  authority  to  reallocate  the  monthly  distribution  of  bill  credits  among  any  provisions  of  the  PAP  and  adopt  new  metrics  if  there  is  a  specific  concern  to 
 Rhode  Island  competitive  LECs.  338 
 109.  As  in  prior  section  271  orders,  our  conclusions  are  based  on  a  review  of  several  key  elements  in  any  performance  remedy  plan:  total  liability  at  risk  in  the  plan;  performance 


 measurement  and  standards  definitions;  structure  of  the  plan;  self-  executing  nature  of  remedies  in  the  plan;  data  validation  and  audit  procedures  in  the  plan;  and  accounting  requirements.  339  We 
 discuss  only  those  elements  that  commenters  have  raised  in  the  record  before  us. 
 110.  We  disagree  with  AT&  T  that  the  Rhode  Island  Commissions  PAP  does  not  adequately  address  the  issue  of  small  samples.  Specifically,  AT&  T  is  concerned  that  Verizon  is 


 temporarily  using  less  accurate  statistical  tests  (t  tests  and  binomial  tests)  that  are  easier  to  administer,  rather  than  the  permutation  test,  which  is  computationally  more  difficult  but  is  more 
 accurate.  340  Additionally,  AT&  T  questions  why  permutation  tests  are  not  being  done  in  Rhode  Island,  given  that  AT&  T  believes  that  Verizon  is  currently  doing  permutation  tests  in  an 
 automated  fashion  in  other  states.  341  In  its  reply,  Verizon  clarifies  that  it  is  not  currently  using  an  automated  permutation  test  in  New  York  or  any  other  former  Bell  Atlantic  state.  342  Verizon 
 further  clarifies  that  it  currently  uses  permutation  tests  in  a  manual,  or  case-  by-  case  basis,  when 
 337  Rhode  Island  Commission  Comments  at  189. 
 338  Rhode  Island  PUC  C2C  and  PAP  Order  at  10,  44-  45. 
 339  See,  e.  g.,  Verizon  Massachusetts  Order,  16  FCC  Rcd  at  9121-  25,  paras.  240-  49;  SWBT  Kansas/  Oklahoma 
 Order,  16  FCC  Rcd  at  6377-  81,  paras.  273-  80. 
 340  If  the  performance  is  worse  for  the  CLEC  than  Verizon-  RI,  Verizon  RI  will  use  the  t  distribution  or  binomial 
 (counted  or  measured)  until  such  time  as  a  permutation  test  can  be  run  in  an  automated  fashion.  Letter  from  Bruce  P.  Beausejour,  Vice  President  and  General  Counsel    New  England,  Verizon,  to  Luly  E.  Massaro,  Commission 


 Clerk,  Rhode  Island  Public  Utilities  Commission,  Docket  No.  3256  at  Appendix  D,  2.  (filed  Dec.  6,  2001)  (RI  PAP). 


 341  It  is  AT&  Ts  understanding  that  Verizon  is  currently  running  automated  permutation  tests  for  its  wholesale 
 operations  in  New  York.  AT&  T  Comments  at  18. 
 342  Verizon  Reply,  App.  A,  Reply  Declaration  of  Elaine  M.  Guerard,  Julie  A.  Canny,  and  Beth  A.  Abesamis  at 
 para.  8  (Verizon  Guerard/  Canny/  Abesamis  Reply  Decl.). 
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 appropriate.  343  Verizon  plans  to  automate  the  permutation  test  by  the  end  of  2002.  344  Moreover,  there  is  an  exception  provision  in  the  Rhode  Island  PAP  that  allows  a  CLEC  to  raise  issues 
 relating  to  a  metric  with  a  small  sample  size.  345  And  we  are  reassured  by  the  Rhode  Island  Commissions  determination  that  it  will  accept  Verizons  proposed  statistical  methodology  but 
 reserves  the  right  to  modify  it  in  the  future.  346 
 VII.  SECTION  271(  d)(  6)  ENFORCEMENT  AUTHORITY 
 111.  Section  271(  d)(  6)  of  the  Act  requires  Verizon  to  continue  to  satisfy  the  conditions  required  for  .  .  .  approval  of  its  section  271  application  after  the  Commission 


 approves  its  application.  347  Thus,  the  Commission  has  a  responsibility  not  only  to  ensure  that  Verizon  is  in  compliance  with  section  271  today,  but  also  that  it  remains  in  compliance  in  the 
 future.  As  the  Commission  has  already  described  the  post-  approval  enforcement  framework  and  its  section  271(  d)(  6)  enforcement  powers  in  detail  in  prior  orders,  it  is  unnecessary  to  do  so  again 
 here.  348 
 112.  Working  in  concert  with  the  Rhode  Island  Commission,  we  intend  to  monitor  closely  Verizons  post-  approval  compliance  for  Rhode  Island  to  ensure  that  Verizon  does  not 


 cease[]  to  meet  any  of  the  conditions  required  for  [section  271]  approval.  349  We  stand  ready  to  exercise  our  various  statutory  enforcement  powers  quickly  and  decisively  in  appropriate 


 343  Verizon  Guerard/  Canny/  Abesamis  Reply  Decl.  at  paras.  7-  8.  And  as  Verizon  further  explained: 
 If  Verizons  performance  for  the  CLECs  is  worse  than  Verizons  performance  for  the  retail  comparison  group,  then: 


   For  average  measurements  (measured  variables),  Verizon  will  run  a  permutation  test  whenever  the  sample  size  for  the  CLEC  observations  or  the  retail 
 comparison  group  is  less  than  30 
   For  percentage  measurements  (counted  variables),  Verizon  will  employ  Fishers  Exact  Test,  whenever  the  result  of  the  equation  n    p(  1-  p)  is  less  than  5  for  either 


 the  CLECs  or  the  retail  comparison  group  (where  n  is  the  number  of  observations  and  p  is  the  reported  percentage). 


 Letter  from  Clint  E.  Odom,  Director,  Federal  Regulatory,  Verizon,  to  Magalie  Roman  Salas,  Secretary,  Federal  Communications  Commission,  CC  Docket  No.  01-  324  at  2  (filed  Jan.  17,  2002). 
 344  Verizon  Guerard/  Canny/  Abesamis  Reply  Decl.  at  para.  9. 
 345  Rhode  Island  PUC  C2C  and  PAP  Order  at  43. 
 346  Rhode  Island  PUC  C2C  and  PAP  Order  at  43. 
 347  47  U.  S.  C.    271(  d)(  6). 
 348  See,  e.  g.,  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6382-  84,  paras.  283-  85;  SWBT  Texas  Order,  15  FCC 
 Rcd  at  18567-  68,  paras.  434-  36;  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4174-  77,  paras.  446-  53. 
 349  47  U.  S.  C.    271(  d)(  6)(  A). 
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 circumstances  to  ensure  that  the  local  market  remains  open  in  Rhode  Island.  We  are  prepared  to  use  our  authority  under  section  271(  d)(  6)  if  evidence  shows  market  opening  conditions  have  not 
 been  maintained. 
 113.  We  require  Verizon  to  report  to  the  Commission  all  Rhode  Island  carrier-  to-carrier  performance  metrics  results  and  Performance  Assurance  Plan  monthly  reports  beginning 


 with  the  first  full  month  after  the  effective  date  of  this  Order,  and  for  each  month  thereafter  for  one  year  unless  extended  by  the  Commission.  These  results  and  reports  will  allow  us  to  review, 
 on  an  ongoing  basis,  Verizons  performance  to  ensure  continued  compliance  with  the  statutory  requirements.  We  are  confident  that  cooperative  state  and  federal  oversight  and  enforcement  can 
 address  any  backsliding  that  may  arise  with  respect  to  Verizons  entry  into  the  Rhode  Island  long  distance  market.  350 


 VIII.  CONCLUSION 
 114.  For  the  reasons  discussed  above,  we  GRANT  Verizons  application  for  authorization  under  section  271  of  the  Act  to  provide  in-  region,  interLATA  services  in  the  State 


 of  Rhode  Island  and  Providence  Plantations. 
 IX.  ORDERING  CLAUSES 
 115.  Accordingly,  IT  IS  ORDERED  that,  pursuant  to  sections  4(  i),  4(  j),  and  271  of  the  Communications  Act  of  1934,  as  amended,  47  U.  S.  C.    154(  i),  154(  j),  and  271,  Verizons 


 application  to  provide  in-  region,  interLATA  service  in  the  State  of  Rhode  Island  and  Providence  Plantations,  filed  on  November  26,  2001,  IS  GRANTED. 


 116.  IT  IS  FURTHER  ORDERED  that  this  Order  SHALL  BECOME  EFFECTIVE  March  4,  2002. 
 FEDERAL  COMMUNICATIONS  COMMISSION 


 350  See,  e.  g.,  Bell  Atlantic-  New  York,  Authorization  Under  Section  271  of  the  Communications  Act  To  Provide  In-Region, 
 InterLATA  Service  in  the  State  of  New  York,  Order,  15  FCC  Rcd  5413-  23  (2000)  (adopting  consent  decree  between  the  Commission  and  Bell  Atlantic  that  included  provisions  for  Bell  Atlantic  to  make  a  voluntary  payment 


 of  $3,000,000  to  the  United  States  Treasury,  with  additional  payments  if  Bell  Atlantic  failed  to  meet  specific  performance  standards  and  weekly  reporting  requirements  to  gauge  Bell  Atlantics  performance  in  correcting  the 
 problems  associated  with  its  electronic  ordering  systems). 
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 William  F.  Caton  Acting  Secretary 
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 Appendix  A  Commenters  in  CC  Docket  No.  01-  324 
 Comments  Abbreviation 
 Association  of  Communications  Enterprises  ASCENT 
 AT&  T  AT&  T 
 CTC  Communications  Corporation  CTC 
 Department  of  Justice  Department  of  Justice 
 Rhode  Island  Public  Utilities  Commission  Rhode  Island  Commission 
 Sprint  Communications  Company  Sprint 
 WorldCom  WorldCom 


 Letter  Commenters  in  CC  Docket  No.  01-  324 
 Rhode  Island  Urban-  League 
 Honorable  Patrick  J.  Kennedy,  Congressman 
 Honorable  Lincoln  Almond,  Governor  of  the  State  of  Rhode  Island 
 Honorable  Charles  J.  Fogarty,  Lieutenant  Governor  of  Rhode  Island 
 Sheldon  Whitehouse,  Attorney  General  of  the  State  of  Rhode  Island 


 Reply  Commenters 
 Replies 
 AT&  T  AT&  T 
 Rhode  Island  Public  Utilities  Commission  Rhode  Island  Commission 
 Verizon  Verizon 
 WorldCom  WorldCom 


 Supplemental  Reply  Comments 
 AT&  T  AT&  T 
 Association  of  Communications  Enterprises  ASCENT 
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 Appendix  B  Rhode  Island  Performance  Data 
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 Appendix  C  Massachusetts  Performance  Data 
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 Appendix  D  Statutory  Requirements 
 I.  STATUTORY  FRAMEWORK 
 1.  The  1996  Act  conditions  BOC  entry  into  the  market  for  provision  of  in-  region  interLATA  services  on  compliance  with  certain  provisions  of  section  271.  1  BOCs  must  apply  to 


 the  Federal  Communications  Commission  (Commission  or  FCC)  for  authorization  to  provide  interLATA  services  originating  in  any  in-  region  state.  2  The  Commission  must  issue  a  written 
 determination  on  each  application  no  later  than  90  days  after  receiving  such  application.  3  Section  271(  d)(  2)(  A)  requires  the  Commission  to  consult  with  the  Attorney  General  before 
 making  any  determination  approving  or  denying  a  section  271  application.  The  Attorney  General  is  entitled  to  evaluate  the  application  using  any  standard  the  Attorney  General 
 considers  appropriate,  and  the  Commission  is  required  to  give  substantial  weight  to  the  Attorney  Generals  evaluation.  4 


 2.  In  addition,  the  Commission  must  consult  with  the  relevant  state  commission  to  verify  that  the  BOC  has  one  or  more  state-  approved  interconnection  agreements  with  a  facilities-based 
 competitor,  or  a  Statement  of  Generally  Available  Terms  and  Conditions  (SGAT),  and  that  either  the  agreement(  s)  or  general  statement  satisfy  the  competitive  checklist.  5  Because  the 
 Act  does  not  prescribe  any  standard  for  the  consideration  of  a  state  commissions  verification  under  section  271(  d)(  2)(  B),  the  Commission  has  discretion  in  each  section  271  proceeding  to 


 1  For  purposes  of  section  271  proceedings,  the  Commission  uses  the  definition  of  the  term  Bell  Operating 
 Company  contained  in  47  U.  S.  C.    153(  4). 
 2  47  U.  S.  C.    271(  d)(  1).  For  purposes  of  section  271  proceedings,  the  Commission  utilizes  the  definition  of  the 
 term  in-  region  state  that  is  contained  in  47  U.  S.  C.    271(  i)(  1).  Section  271(  j)  provides  that  a  BOCs  in-  region  services  include  800  service,  private  line  service,  or  their  equivalents  that  terminate  in  an  in-  region  state  of  that 


 BOC  and  that  allow  the  called  party  to  determine  the  interLATA  carrier,  even  if  such  services  originate  out-  of-region.  Id.    271(  j).  The  1996  Act  defines  interLATA  services  as  telecommunications  between  a  point  located 
 in  a  local  access  and  transport  area  and  a  point  located  outside  such  area.  Id.    153(  21).  Under  the  1996  Act,  a  local  access  and  transport  area  (LATA)  is  a  contiguous  geographic  area  (A)  established  before  the  date  of 
 enactment  of  the  [1996  Act]  by  a  [BOC]  such  that  no  exchange  area  includes  points  within  more  than  1  metropolitan  statistical  area,  consolidated  metropolitan  statistical  area,  or  State,  except  as  expressly  permitted  under 
 the  AT&  T  Consent  Decree;  or  (B)  established  or  modified  by  a  [BOC]  after  such  date  of  enactment  and  approved  by  the  Commission.  Id.    153(  25).  LATAs  were  created  as  part  of  the  Modification  of  Final  Judgments  (MFJ) 
 plan  of  reorganization.  United  States  v.  Western  Elec.  Co.,  569  F.  Supp.  1057  (D.  D.  C.  1983),  affd  sub  nom.  California  v.  United  States,  464  U.  S.  1013  (1983).  Pursuant  to  the  MFJ,  all  [BOC]  territory  in  the  continental 
 United  States  [was]  divided  into  LATAs,  generally  centering  upon  a  city  or  other  identifiable  community  of  interest.  United  States  v.  Western  Elec.  Co.,  569  F.  Supp.  990,  993-  94  (D.  D.  C.  1983). 


 3  47  U.  S.  C.    271(  d)(  3). 
 4  Id.    271(  d)(  2)(  A). 
 5  Id.    271(  d)(  2)(  B). 
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 determine  the  amount  of  weight  to  accord  the  state  commissions  verification.  6  The  Commission  has  held  that,  although  it  will  consider  carefully  state  determinations  of  fact  that  are  supported  by 
 a  detailed  and  extensive  record,  it  is  the  FCCs  role  to  determine  whether  the  factual  record  supports  the  conclusion  that  particular  requirements  of  section  271  have  been  met.  7 


 3.  Section  271  requires  the  Commission  to  make  various  findings  before  approving  BOC  entry.  In  order  for  the  Commission  to  approve  a  BOCs  application  to  provide  in-  region, 
 interLATA  services,  a  BOC  must  first  demonstrate,  with  respect  to  each  state  for  which  it  seeks  authorization,  that  it  satisfies  the  requirements  of  either  section  271(  c)(  1)(  A)  (Track  A)  or 
 271(  c)(  1)(  B)  (Track  B).  8  In  order  to  obtain  authorization  under  section  271,  the  BOC  must  also  show  that:  (1)  it  has  fully  implemented  the  competitive  checklist  contained  in  section 
 271(  c)(  2)(  B);  9  (2)  the  requested  authorization  will  be  carried  out  in  accordance  with  the  requirements  of  section  272;  10  and  (3)  the  BOCs  entry  into  the  in-  region  interLATA  market  is 
 consistent  with  the  public  interest,  convenience,  and  necessity.  11  The  statute  specifies  that,  unless  the  Commission  finds  that  these  criteria  have  been  satisfied,  the  Commission  shall  not 
 approve  the  requested  authorization.  12 
 II.  PROCEDURAL  AND  ANALYTICAL  FRAMEWORK 
 4.  To  determine  whether  a  BOC  applicant  has  met  the  prerequisites  for  entry  into  the  long  distance  market,  the  Commission  evaluates  its  compliance  with  the  competitive  checklist, 


 6  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3962,  para.  20;  Application  of  Ameritech  Michigan  Pursuant  to 
 Section  271  of  the  Communications  Act  of  1934,  as  amended,  CC  Docket  No.  97-  137,  12  FCC  Rcd  20543,  20559-  60  (1997)  (Ameritech  Michigan  Order).  As  the  D.  C.  Circuit  has  held,  [  a]  lthough  the  Commission  must  consult 


 with  the  state  commissions,  the  statute  does  not  require  the  Commission  to  give  State  Commissions  views  any  particular  weight.  SBC  Communications  Inc.  v.  FCC,  138  F.  3d  410,  416  (D.  C.  Cir.  1998). 


 7  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20560;  SBC  Communications  v.  FCC,  138  F.  3d  at  416-  17. 
 8  47  U.  S.  C.    271(  d)(  3)(  A).  See  Section  III,  infra,  for  a  complete  discussion  of  Track  A  and  Track  B 
 requirements. 
 9  Id.    271(  c)(  2)(  B),  271(  d)(  3)(  A)(  i). 


 10  Id.    272;  see  Implementation  of  the  Non-  Accounting  Safeguards  of  Sections  271  and  272  of  the 
 Communications  Act  of  1934,  as  amended,  CC  Docket  No.  96-  149,  First  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  11  FCC  Rcd  21905  (1996)  (Non-  Accounting  Safeguards  Order),  recon.,  Order  on 


 Reconsideration,  12  FCC  Rcd  2297  (1997),  review  pending  sub  nom.,  SBC  Communications  v.  FCC,  No.  97-  1118  (D.  C.  Cir.,  filed  Mar.  6,  1997)  (held  in  abeyance  pursuant  to  court  order  filed  May  7,  1997),  remanded  in  part  sub 
 nom.,  Bell  Atlantic  Telephone  Companies  v.  FCC,  No.  97-  1067  (D.  C.  Cir.,  filed  Mar.  31,  1997),  on  remand,  Second  Order  on  Reconsideration,  FCC  97-  222  (rel.  June  24,  1997),  petition  for  review  denied  sub  nom.  Bell  Atlantic 
 Telephone  Companies  v.  FCC,  113  F.  3d  1044  (D.  C.  Cir.  1997);  Implementation  of  the  Telecommunications  Act  of  1996;  Accounting  Safeguards  Under  the  Telecommunications  Act  of  1996,  Report  and  Order,  11  FCC  Rcd  17539 
 (1996). 
 11  47  U.  S.  C.    271(  d)(  3)(  C). 


 12  Id.    271(  d)(  3);  see  SBC  Communications,  Inc.  v.  FCC,  138  F.  3d  at  416. 
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 as  developed  in  the  FCCs  local  competition  rules  and  orders  in  effect  at  the  time  the  application  was  filed.  Despite  the  comprehensiveness  of  these  rules,  there  will  inevitably  be,  in  any  section 
 271  proceeding,  disputes  over  an  incumbent  LECs  precise  obligations  to  its  competitors  that  FCC  rules  have  not  addressed  and  that  do  not  involve  per  se  violations  of  self-  executing 
 requirements  of  the  Act.  As  explained  in  prior  orders,  the  section  271  process  simply  could  not  function  as  Congress  intended  if  the  Commission  were  required  to  resolve  all  such  disputes  as  a 
 precondition  to  granting  a  section  271  application.  13  In  the  context  of  section  271s  adjudicatory  framework,  the  Commission  has  established  certain  procedural  rules  governing  BOC  section  271 
 applications.  14  The  Commission  has  explained  in  prior  orders  the  procedural  rules  it  has  developed  to  facilitate  the  review  process.  15  Here  we  describe  how  the  Commission  considers 
 the  evidence  of  compliance  that  the  BOC  presents  in  its  application. 
 5.  As  part  of  the  determination  that  a  BOC  has  satisfied  the  requirements  of  section  271,  the  Commission  considers  whether  the  BOC  has  fully  implemented  the  competitive 


 checklist  in  subsection  (c)(  2)(  B).  The  BOC  at  all  times  bears  the  burden  of  proof  of  compliance  with  section  271,  even  if  no  party  challenges  its  compliance  with  a  particular  requirement.  16  In 
 demonstrating  its  compliance,  a  BOC  must  show  that  it  has  a  concrete  and  specific  legal  obligation  to  furnish  the  item  upon  request  pursuant  to  state-  approved  interconnection 
 agreements  that  set  forth  prices  and  other  terms  and  conditions  for  each  checklist  item,  and  that  it  is  currently  furnishing,  or  is  ready  to  furnish,  the  checklist  items  in  quantities  that  competitors 
 may  reasonably  demand  and  at  an  acceptable  level  of  quality.  17  In  particular,  the  BOC  must  demonstrate  that  it  is  offering  interconnection  and  access  to  network  elements  on  a 
 nondiscriminatory  basis.  18  Previous  Commission  orders  addressing  section  271  applications 


 13  See  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6246,  para.  19;  see  also  American  Tel.  &  Tel.  Co.  v.  FCC, 
 220  F.  3d  607,  631  (D.  C.  Cir.  2000). 
 14  See  Procedures  for  Bell  Operating  Company  Applications  Under  New  Section  271  of  the  Communications  Act, 
 Public  Notice,  11  FCC  Rcd  19708,  19711  (1996);  Revised  Comment  Schedule  For  Ameritech  Michigan  Application,  as  amended,  for  Authorization  Under  Section  271  of  the  Communications  Act  to  Provide  In-  Region,  InterLATA 


 Services  in  the  State  of  Michigan,  Public  Notice,  DA  97-  127  (rel.  Jan.  17,  1997);  Revised  Procedures  for  Bell  Operating  Company  Applications  Under  Section  271  of  the  Communications  Act,  Public  Notice,  13  FCC  Rcd  17457 
 (1997);  Updated  Filing  Requirements  for  Bell  Operating  Company  Applications  Under  Section  271  of  the  Communications  Act,  Public  Notice,  DA  99-  1994  (rel.  Sept.  28,  1999);  Updated  Filing  Requirements  for  Bell 
 Operating  Company  Applications  Under  Section  271  of  the  Communications  Act,  Public  Notice,  DA  01-  734  (CCB  rel.  Mar.  23,  2001)  (collectively  271  Procedural  Public  Notices). 


 15  See,  e.  g.,  SWBT  Kansas/  Oklahoma  Order  16  FCC  Rcd  at  6247-  50,  paras.  21-  27;  SWBT  Texas  Order,  15  FCC 
 Rcd  at  18370-  73,  paras.  34-  42;  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3968-  71,  paras.  32-  42. 
 16  See  SWBT  Texas  Order,  15  FCC  Rcd  at  18374,  para.  46;  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3972, 
 para.  46. 
 17  See  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3973-  74,  para.  52. 


 18  See  47  U.  S.  C.    271(  c)(  2)(  B)(  i),  (ii). 
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 have  elaborated  on  this  statutory  standard.  19  First,  for  those  functions  the  BOC  provides  to  competing  carriers  that  are  analogous  to  the  functions  a  BOC  provides  to  itself  in  connection 
 with  its  own  retail  service  offerings,  the  BOC  must  provide  access  to  competing  carriers  in  substantially  the  same  time  and  manner  as  it  provides  to  itself.  20  Thus,  where  a  retail  analogue 
 exists,  a  BOC  must  provide  access  that  is  equal  to  (i.  e.,  substantially  the  same  as)  the  level  of  access  that  the  BOC  provides  itself,  its  customers,  or  its  affiliates,  in  terms  of  quality,  accuracy, 
 and  timeliness.  21  For  those  functions  that  have  no  retail  analogue,  the  BOC  must  demonstrate  that  the  access  it  provides  to  competing  carriers  would  offer  an  efficient  carrier  a  meaningful 
 opportunity  to  compete.  22 
 6.  The  determination  of  whether  the  statutory  standard  is  met  is  ultimately  a  judgment  the  Commission  must  make  based  on  its  expertise  in  promoting  competition  in  local 


 markets  and  in  telecommunications  regulation  generally.  23  The  Commission  has  not  established,  nor  does  it  believe  it  appropriate  to  establish,  specific  objective  criteria  for  what  constitutes 
 substantially  the  same  time  and  manner  or  a  meaningful  opportunity  to  compete.  24  Whether  this  legal  standard  is  met  can  only  be  decided  based  on  an  analysis  of  specific  facts  and 
 circumstances.  Therefore,  the  Commission  looks  at  each  application  on  a  case-  by-  case  basis  and  considers  the  totality  of  the  circumstances,  including  the  origin  and  quality  of  the  information  in 
 the  record,  to  determine  whether  the  nondiscrimination  requirements  of  the  Act  are  met. 
 A.  Performance  Data 
 7.  As  established  in  prior  section  271  orders,  the  Commission  has  found  that  performance  measurements  provide  valuable  evidence  regarding  a  BOCs  compliance  or 


 noncompliance  with  individual  checklist  items.  The  Commission  expects  that,  in  its  prima  facie  case  in  the  initial  application,  a  BOC  relying  on  performance  data  will: 


 a)  provide  sufficient  performance  data  to  support  its  contention  that  the  statutory  requirements  are  satisfied; 
 b)  identify  the  facial  disparities  between  the  applicants  performance  for  itself  and  its  performance  for  competitors; 
 19  See  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6250-  51,  paras.  28-  29;  Bell  Atlantic  New  York  Order,  15 
 FCC  Rcd  at  3971-  72,  paras.  44-  46. 
 20  SWBT  Texas  Order,  15  FCC  Rcd  at  18373,  para.  44;  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3971,  para. 
 44. 
 21  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3971,  para.  44;  Ameritech  Michigan  Order,  12  FCC  Rcd  at 
 20618-  19. 
 22  Id. 


 23  SWBT  Texas  Order,  15  FCC  Rcd  at  18374,  para.  46;  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3972,  para. 
 46. 
 24  Id. 
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 c)  explain  why  those  facial  disparities  are  anomalous,  caused  by  forces  beyond  the  applicants  control  (e.  g.,  competing  carrier-  caused  errors),  or  have  no  meaningful  adverse  impact  on  a 
 competing  carriers  ability  to  obtain  and  serve  customers;  and 
 d)  provide  the  underlying  data,  analysis,  and  methodologies  necessary  to  enable  the  Commission  and  commenters  meaningfully  to  evaluate  and  contest  the  validity  of  the 


 applicants  explanations  for  performance  disparities,  including,  for  example,  carrier  specific  carrier-  to-  carrier  performance  data. 


 8.  The  Commission  has  explained  in  prior  orders  that  parity  and  benchmark  standards  established  by  state  commissions  do  not  represent  absolute  maximum  or  minimum 
 levels  of  performance  necessary  to  satisfy  the  competitive  checklist.  Rather,  where  these  standards  are  developed  through  open  proceedings  with  input  from  both  the  incumbent  and 
 competing  carriers,  these  standards  can  represent  informed  and  reliable  attempts  to  objectively  approximate  whether  competing  carriers  are  being  served  by  the  incumbent  in  substantially  the 
 same  time  and  manner,  or  in  a  way  that  provides  them  a  meaningful  opportunity  to  compete.  25  Thus,  to  the  extent  there  is  no  statistically  significant  difference  between  a  BOCs  provision  of 
 service  to  competing  carriers  and  its  own  retail  customers,  the  Commission  generally  need  not  look  any  further.  Likewise,  if  a  BOCs  provision  of  service  to  competing  carriers  satisfies  the 
 performance  benchmark,  the  analysis  is  usually  done.  Otherwise,  the  Commission  will  examine  the  evidence  further  to  make  a  determination  whether  the  statutory  nondiscrimination 
 requirements  are  met.  26  Thus,  the  Commission  will  examine  the  explanations  that  a  BOC  and  others  provide  about  whether  these  data  accurately  depict  the  quality  of  the  BOCs  performance. 
 The  Commission  also  may  examine  how  many  months  a  variation  in  performance  has  existed  and  what  the  recent  trend  has  been.  The  Commission  may  find  that  statistically  significant 
 differences  exist,  but  conclude  that  such  differences  have  little  or  no  competitive  significance  in  the  marketplace.  In  such  cases,  the  Commission  may  conclude  that  the  differences  are  not 
 meaningful  in  terms  of  statutory  compliance.  Ultimately,  the  determination  of  whether  a  BOCs  performance  meets  the  statutory  requirements  necessarily  is  a  contextual  decision  based  on  the 
 totality  of  the  circumstances  and  information  before  the  Commission. 
 9.  Where  there  are  multiple  performance  measures  associated  with  a  particular  checklist  item,  the  Commission  would  consider  the  performance  demonstrated  by  all  the 


 measurements  as  a  whole.  Accordingly,  a  disparity  in  performance  for  one  measure,  by  itself,  may  not  provide  a  basis  for  finding  noncompliance  with  the  checklist.  The  Commission  may 
 also  find  that  the  reported  performance  data  are  affected  by  factors  beyond  a  BOCs  control,  a  finding  that  would  make  it  less  likely  to  hold  the  BOC  wholly  accountable  for  the  disparity.  This 
 is  not  to  say,  however,  that  performance  discrepancies  on  a  single  performance  metric  are  unimportant.  Indeed,  under  certain  circumstances,  disparity  with  respect  to  one  performance 
 measurement  may  support  a  finding  of  statutory  noncompliance,  particularly  if  the  disparity  is 


 25  See  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6252,  para.  31;  SWBT  Texas  Order,  15  FCC  Rcd  at  18377, 
 para.  55  &  n.  102. 
 26  See  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3970,  para.  59. 
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 substantial  or  has  endured  for  a  long  time,  or  if  it  is  accompanied  by  other  evidence  of  discriminatory  conduct  or  evidence  that  competing  carriers  have  been  denied  a  meaningful 
 opportunity  to  compete. 
 10.  In  sum,  the  Commission  does  not  use  performance  measurements  as  a  substitute  for  the  14-  point  competitive  checklist.  Rather,  it  uses  performance  measurements  as  valuable 


 evidence  with  which  to  inform  the  judgment  as  to  whether  a  BOC  has  complied  with  the  checklist  requirements.  Although  performance  measurements  add  necessary  objectivity  and 
 predictability  to  the  review,  they  cannot  wholly  replace  the  Commissions  own  judgment  as  to  whether  a  BOC  has  complied  with  the  competitive  checklist. 


 B.  Relevance  of  Previous  Section  271  Approvals 
 11.  In  some  section  271  applications,  the  volumes  of  the  BOCs  commercial  orders  may  be  significantly  lower  than  they  were  in  prior  proceedings.  In  certain  instances,  volumes 


 may  be  so  low  as  to  render  the  performance  data  inconsistent  and  inconclusive.  27  Performance  data  based  on  low  volumes  of  orders  or  other  transactions  are  not  as  reliable  an  indicator  of 
 checklist  compliance  as  performance  based  on  larger  numbers  of  observations.  Indeed,  where  performance  data  are  based  on  a  low  number  of  observations,  small  variations  in  performance 
 may  produce  wide  swings  in  the  reported  performance  data.  It  is  thus  not  possible  to  place  the  same  evidentiary  weight  upon    and  to  draw  the  same  types  of  conclusions  from    performance 
 data  where  volumes  are  low,  as  for  data  based  on  more  robust  activity. 
 12.  In  such  cases,  findings  in  prior,  related  section  271  proceedings  may  be  a  relevant  factor  in  the  Commissions  analysis.  Where  a  BOC  provides  evidence  that  a  particular  system 


 reviewed  and  approved  in  a  prior  section  271  proceeding  is  also  used  in  the  proceeding  at  hand,  the  Commissions  review  of  the  same  system  in  the  current  proceeding  will  be  informed  by  the 
 findings  in  the  prior  one.  Indeed,  to  the  extent  that  issues  have  already  been  briefed,  reviewed  and  resolved  in  a  prior  section  271  proceeding,  and  absent  new  evidence  or  changed 
 circumstances,  an  application  for  a  related  state  should  not  be  a  forum  for  re-  litigating  and  reconsidering  those  issues.  Appropriately  employed,  such  a  practice  can  give  us  a  fuller  picture 
 of  the  BOCs  compliance  with  the  section  271  requirements  while  avoiding,  for  all  parties  involved  in  the  section  271  process,  the  delay  and  expense  associated  with  redundant  and 
 unnecessary  proceedings  and  submissions. 
 13.  However,  the  statute  requires  the  Commission  to  make  a  separate  determination  of  checklist  compliance  for  each  state  and,  accordingly,  we  do  not  consider  any  finding  from 


 previous  section  271  orders  to  be  dispositive  of  checklist  compliance  in  current  proceedings.  While  the  Commissions  review  may  be  informed  by  prior  findings,  the  Commission  will 


 27  The  Commission  has  never  required,  however,  an  applicant  to  demonstrate  that  it  processes  and  provisions  a 
 substantial  commercial  volume  of  orders,  or  has  achieved  a  specific  market  share  in  its  service  area,  as  a  prerequisite  for  satisfying  the  competitive  checklist.  See  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20585,  para. 


 77  (explaining  that  Congress  had  considered  and  rejected  language  that  would  have  imposed  a  market  share  requirement  in  section  271(  c)(  1)(  A)). 
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 consider  all  relevant  evidence  in  the  record,  including  state-  specific  factors  identified  by  commenting  parties,  the  states,  the  Department  of  Justice.  However,  the  Commission  has  always 
 held  that  an  applicants  performance  towards  competing  carriers  in  an  actual  commercial  environment  is  the  best  evidence  of  nondiscriminatory  access  to  OSS  and  other  network 
 elements.  28  Thus,  the  BOCs  actual  performance  in  the  applicant  state  may  be  relevant  to  the  analysis  and  determinations  with  respect  to  the  14  checklist  items.  Evidence  of  satisfactory 
 performance  in  another  state  cannot  trump  convincing  evidence  that  an  applicant  fails  to  provide  nondiscriminatory  access  to  a  network  element  in  the  applicant  state. 


 14.  Moreover,  because  the  Commissions  review  of  a  section  271  application  must  be  based  on  a  snapshot  of  a  BOCs  recent  performance  at  the  time  an  application  is  filed,  the 
 Commission  cannot  simply  rely  on  findings  relating  to  an  applicants  performance  in  an  anchor  state  at  the  time  it  issued  the  determination  for  that  state.  The  performance  in  that  state  could 
 change  due  to  a  multitude  of  factors,  such  as  increased  order  volumes  or  shifts  in  the  mix  of  the  types  of  services  or  UNEs  requested  by  competing  carriers.  Thus,  even  when  the  applicant 
 makes  a  convincing  showing  of  the  relevance  of  anchor  state  data,  the  Commission  must  examine  how  recent  performance  in  that  state  compares  to  performance  at  the  time  it  approved 
 that  states  section  271  application,  in  order  to  determine  if  the  systems  and  processes  continue  to  perform  at  acceptable  levels. 


 III.  COMPLIANCE  WITH  ENTRY  REQUIREMENTS    SECTIONS  271(  c)(  1)(  A)  &  271(  c)(  1)(  B) 
 15.  As  noted  above,  in  order  for  the  Commission  to  approve  a  BOCs  application  to  provide  in-  region,  interLATA  services,  a  BOC  must  first  demonstrate  that  it  satisfies  the 
 requirements  of  either  section  271(  c)(  1)(  A)  (Track  A)  or  271(  c)(  1)(  B)  (Track  B).  29  To  qualify  for  Track  A,  a  BOC  must  have  interconnection  agreements  with  one  or  more  competing 
 providers  of  telephone  exchange  service  .  .  .  to  residential  and  business  subscribers.  30  The  Act  states  that  such  telephone  service  may  be  offered  .  .  .  either  exclusively  over  [the  competitors] 
 own  telephone  exchange  service  facilities  or  predominantly  over  [the  competitors]  own  telephone  exchange  facilities  in  combination  with  the  resale  of  the  telecommunications  services 
 of  another  carrier.  31  The  Commission  concluded  in  the  Ameritech  Michigan  Order  that  section  271(  c)(  1)(  A)  is  satisfied  if  one  or  more  competing  providers  collectively  serve  residential  and 
 business  subscribers.  32 


 28  See  SWBT  Texas  Order,  15  FCC  Rcd  at  18376,  para.  53;  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3974, 
 para.  53. 
 29  See  47  U.  S.  C.    271(  d)(  3)(  A). 


 30  Id. 
 31  Id. 
 32  See  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20589,  para.  85;  see  also  Second  BellSouth  Louisiana  Order, 
 13  FCC  Rcd  at  20633-  35,  paras.  46-  48. 
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 16.  As  an  alternative  to  Track  A,  Section  271(  c)(  1)(  B)  permits  BOCs  to  obtain  authority  to  provide  in-  region,  interLATA  services  if,  after  10  months  from  the  date  of 
 enactment,  no  facilities-  based  provider,  as  described  in  subparagraph  (A),  has  requested  the  access  and  interconnection  arrangements  described  therein  (referencing  one  or  more  binding 
 agreements  approved  under  Section  252),  but  the  state  has  approved  an  SGAT  that  satisfies  the  competitive  checklist  of  subsection  (c)(  2)(  B).  Under  section  271(  d)(  3)(  A)(  ii),  the  Commission 
 shall  not  approve  such  a  request  for  in-  region,  interLATA  service  unless  the  BOC  demonstrates  that,  with  respect  to  access  and  interconnection  generally  offered  pursuant  to  [an  SGAT],  such 
 statement  offers  all  of  the  items  included  in  the  competitive  checklist.  33  Track  B,  however,  is  not  available  to  a  BOC  if  it  has  already  received  a  request  for  access  and  interconnection  from  a 
 prospective  competing  provider  of  telephone  exchange  service.  34 
 IV.  COMPLIANCE  WITH  THE  COMPETITIVE  CHECKLIST    SECTION  271(  c)(  2)(  B) 


 A.  Checklist  Item  1  Interconnection 
 17.  Section  271(  c)(  2)(  B)(  i)  of  the  Act  requires  a  section  271  applicant  to  provide  [  i]  nterconnection  in  accordance  with  the  requirements  of  sections  251(  c)(  2)  and  252(  d)(  1).  35 


 Section  251(  c)(  2)  imposes  a  duty  on  incumbent  LECs  to  provide,  for  the  facilities  and  equipment  of  any  requesting  telecommunications  carrier,  interconnection  with  the  local 
 exchange  carriers  network  .  .  .  for  the  transmission  and  routing  of  telephone  exchange  service  and  exchange  access.  36  In  the  Local  Competition  First  Report  and  Order,  the  Commission 
 concluded  that  interconnection  referred  only  to  the  physical  linking  of  two  networks  for  the  mutual  exchange  of  traffic.  37  Section  251  contains  three  requirements  for  the  provision  of 
 interconnection.  First,  an  incumbent  LEC  must  provide  interconnection  at  any  technically  feasible  point  within  the  carriers  network.  38  Second,  an  incumbent  LEC  must  provide 
 interconnection  that  is  at  least  equal  in  quality  to  that  provided  by  the  local  exchange  carrier  to 
 33  47  U.  S.  C.    271(  d)(  3)(  A)(  ii). 
 34  See  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20561-  62,  para.  34.  Nevertheless,  the  above-  mentioned 
 foreclosure  of  Track  B  as  an  option  is  subject  to  limited  exceptions.  See  47  U.  S.  C.    271(  c)(  1)(  B);  see  also  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20563-  64,  paras.  37-  38. 


 35  47  U.  S.  C.    271(  c)(  2)(  B)(  i);  see  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3977-  78,  para.  63;  Second 
 BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20640,  para.  61;  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20662,  para.  222. 


 36  47  U.  S.  C.    251(  c)(  2)(  A). 
 37  Implementation  of  the  Local  Competition  Provisions  in  the  Telecommunications  Act  of  1996,  First  Report  and 
 Order,  11  FCC  Rcd  15499,  15590,  para.  176  (1996)  (Local  Competition  First  Report  and  Order).  Transport  and  termination  of  traffic  are  therefore  excluded  from  the  Commissions  definition  of  interconnection.  See  id. 


 38  47  U.  S.  C.    251(  c)(  2)(  B).  In  the  Local  Competition  First  Report  and  Order,  the  Commission  identified  a 
 minimum  set  of  technically  feasible  points  of  interconnection.  See  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  15607-  09,  paras.  204-  11. 
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 itself.  39  Finally,  the  incumbent  LEC  must  provide  interconnection  on  rates,  terms,  and  conditions  that  are  just,  reasonable,  and  nondiscriminatory,  in  accordance  with  the  terms  of  the 
 agreement  and  the  requirements  of  [section  251]  and  section  252.  40 
 18.  To  implement  the  equal-  in-  quality  requirement  in  section  251,  the  Commissions  rules  require  an  incumbent  LEC  to  design  and  operate  its  interconnection  facilities  to  meet  the 


 same  technical  criteria  and  service  standards  that  are  used  for  the  interoffice  trunks  within  the  incumbent  LECs  network.  41  In  the  Local  Competition  First  Report  and  Order,  the  Commission 
 identified  trunk  group  blockage  and  transmission  standards  as  indicators  of  an  incumbent  LECs  technical  criteria  and  service  standards.  42  In  prior  section  271  applications,  the  Commission 
 concluded  that  disparities  in  trunk  group  blockage  indicated  a  failure  to  provide  interconnection  to  competing  carriers  equal-  in-  quality  to  the  interconnection  the  BOC  provided  to  its  own  retail 
 operations.  43 
 19.  In  the  Local  Competition  First  Report  and  Order,  the  Commission  concluded  that  the  requirement  to  provide  interconnection  on  terms  and  conditions  that  are  just,  reasonable, 


 and  nondiscriminatory  means  that  an  incumbent  LEC  must  provide  interconnection  to  a  competitor  in  a  manner  no  less  efficient  than  the  way  in  which  the  incumbent  LEC  provides  the 
 comparable  function  to  its  own  retail  operations.  44  The  Commissions  rules  interpret  this  obligation  to  include,  among  other  things,  the  incumbent  LECs  installation  time  for 
 interconnection  service  45  and  its  provisioning  of  two-  way  trunking  arrangements.  46  Similarly,  repair  time  for  troubles  affecting  interconnection  trunks  is  useful  for  determining  whether  a  BOC 


 39  47  U.  S.  C.    251(  c)(  2)(  C). 
 40  Id.    251(  c)(  2)(  D). 
 41  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  15613-  15,  paras.  221-  225;  see  Bell  Atlantic  New 
 York  Order,  15  FCC  Rcd  at  3978,  para.  64;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20641-  42,  paras.  63-  64. 


 42  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  15614-  15,  paras.  224-  25. 
 43  See  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3978,  para.  64;  Second  BellSouth  Louisiana  Order,  13  FCC 
 Rcd  at  20648-  50,  paras.  74-  77;  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20671-  74,  paras.  240-  45.  The  Commission  has  relied  on  trunk  blockage  data  to  evaluate  a  BOCs  interconnection  performance.  Trunk  group 


 blockage  indicates  that  end  users  are  experiencing  difficulty  completing  or  receiving  calls,  which  may  have  a  direct  impact  on  the  customers  perception  of  a  competitive  LECs  service  quality. 


 44  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  15612,  para.  218;  see  also  Bell  Atlantic  New  York 
 Order,  15  FCC  Rcd  at  3978,  para.  65;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20642,  para.  65. 
 45  47  C.  F.  R.    51.305(  a)(  5). 


 46  The  Commissions  rules  require  an  incumbent  LEC  to  provide  two-  way  trunking  upon  request,  wherever  two-way 
 trunking  arrangements  are  technically  feasible.  47  C.  F.  R.    51.305(  f);  see  also  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3978-  79,  para.  65;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20642,  para.  65;  Local 


 Competition  First  Report  and  Order,  11  FCC  Rcd  15612-  13,  paras.  219-  20. 
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 provides  interconnection  service  under  terms  and  conditions  that  are  no  less  favorable  than  the  terms  and  conditions  the  BOC  provides  to  its  own  retail  operations.  47 
 20.  Competing  carriers  may  choose  any  method  of  technically  feasible  interconnection  at  a  particular  point  on  the  incumbent  LECs  network.  48  Incumbent  LEC 
 provision  of  interconnection  trunking  is  one  common  means  of  interconnection.  Technically  feasible  methods  also  include,  but  are  not  limited  to,  physical  and  virtual  collocation  and  meet 
 point  arrangements.  49  The  provision  of  collocation  is  an  essential  prerequisite  to  demonstrating  compliance  with  item  1  of  the  competitive  checklist.  50  In  the  Advanced  Services  First  Report 
 and  Order,  the  Commission  revised  its  collocation  rules  to  require  incumbent  LECs  to  include  shared  cage  and  cageless  collocation  arrangements  as  part  of  their  physical  collocation 
 offerings.  51  In  response  to  a  remand  from  the  D.  C.  Circuit,  the  Commission  adopted  the  Collocation  Remand  Order,  establishing  revised  criteria  for  equipment  for  which  incumbent 
 LECs  must  permit  collocation,  requiring  incumbent  LECs  to  provide  cross-  connects  between  collocated  carriers,  and  establishing  principles  for  physical  collocation  space  and  configuration.  52 
 To  show  compliance  with  its  collocation  obligations,  a  BOC  must  have  processes  and  procedures  in  place  to  ensure  that  all  applicable  collocation  arrangements  are  available  on  terms 
 and  conditions  that  are  just,  reasonable,  and  nondiscriminatory  in  accordance  with  section  251(  c)(  6)  and  the  FCCs  implementing  rules.  53  Data  showing  the  quality  of  procedures  for 
 processing  applications  for  collocation  space,  as  well  as  the  timeliness  and  efficiency  of  provisioning  collocation  space,  help  the  Commission  evaluate  a  BOCs  compliance  with  its 
 collocation  obligations.  54 


 47  47  C.  F.  R.    51.305(  a)(  5). 
 48  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  15779,  paras.  549-  50;  see  Bell  Atlantic  New  York 
 Order,  15  FCC  Rcd  at  3979,  para.  66;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20640-  41,  para.  61. 
 49  47  C.  F.  R.    51.321(  b);  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  15779-  82,  paras.  549-  50;  see 
 also  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3979,  para.  66;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20640-  41,  para.  62. 


 50  47  U.  S.  C.    251(  c)(  6)  (requiring  incumbent  LECs  to  provide  physical  collocation);  Bell  Atlantic  New  York 
 Order,  15  FCC  Rcd  at  3979,  para.  66;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20640-  41,  paras.  61-  62. 
 51  Deployment  of  Wireline  Services  offering  Advanced  Telecommunications  Capability,  First  Report  and  Order 
 and  Further  Notice  of  Proposed  Rulemaking,  14  FCC  Rcd  4761,  4784-  86,  paras.  41-  43  (1999),  affd  in  part  and  vacated  and  remanded  in  part  sub  nom.  GTE  Service  Corp.  v.  FCC,  205  F.  3d  416  (D.  C.  Cir.  2000),  on  recon., 


 Collocation  Reconsideration  Order,  15  FCC  Rcd  17806  (2000);  on  remand,  Deployment  of  Wireline  Services  Offering  Advanced  Telecommunications  Capability,  Fourth  Report  and  Order,  16  FCC  Rcd  15435  (2001) 
 (Collocation  Remand  Order),  petition  for  recon.  pending. 
 52  See  Collocation  Remand  Order,  16  FCC  Rcd  at  15441-  42,  para.  12. 


 53  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3979,  para.  66;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd 
 at  20643,  para.  66;  BellSouth  Carolina  Order,  13  FCC  Rcd  at  649-  51,  para.  62. 
 54  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3979,  para.  66;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd 
 at  20640-  41,  paras.  61-  62. 
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 21.  As  stated  above,  checklist  item  1  requires  a  BOC  to  provide  interconnection  in  accordance  with  the  requirements  of  sections  251(  c)(  2)  and  252(  d)(  1).  55  Section  252(  d)(  1) 
 requires  state  determinations  regarding  the  rates,  terms,  and  conditions  of  interconnection  to  be  based  on  cost  and  to  be  nondiscriminatory,  and  allows  the  rates  to  include  a  reasonable  profit.  56 
 The  Commissions  pricing  rules  require,  among  other  things,  that  in  order  to  comply  with  its  collocation  obligations,  an  incumbent  LEC  provide  collocation  based  on  TELRIC.  57 


 22.  To  the  extent  pricing  disputes  arise,  the  Commission  will  not  duplicate  the  work  of  the  state  commissions.  As  noted  in  the  SWBT  Texas  Order,  the  Act  authorizes  the  state 
 commissions  to  resolve  specific  carrier-  to-  carrier  disputes  arising  under  the  local  competition  provisions,  and  it  authorizes  the  federal  district  courts  to  ensure  that  the  results  of  the  state 
 arbitration  process  are  consistent  with  federal  law.  58  Although  the  Commission  has  an  independent  statutory  obligation  to  ensure  compliance  with  the  checklist,  section  271  does  not 
 compel  us  to  preempt  the  orderly  disposition  of  intercarrier  disputes  by  the  state  commissions,  particularly  now  that  the  Supreme  Court  has  restored  the  Commissions  pricing  jurisdiction  and 
 has  thereby  directed  the  state  commissions  to  follow  FCC  pricing  rules  in  their  disposition  of  those  disputes.  59 


 23.  Consistent  with  the  Commissions  precedent,  the  mere  presence  of  interim  rates  will  not  generally  threaten  a  section  271  application  so  long  as:  (1)  an  interim  solution  to  a 
 particular  rate  dispute  is  reasonable  under  the  circumstances;  (2)  the  state  commission  has  demonstrated  its  commitment  to  the  Commissions  pricing  rules;  and  (3)  provision  is  made  for 
 refunds  or  true-  ups  once  permanent  rates  are  set.  60  In  addition,  the  Commission  has  determined  that  rates  contained  within  an  approved  section  271  application,  including  those  that  are  interim, 
 are  reasonable  starting  points  for  interim  rates  for  the  same  carrier  in  an  adjoining  state.  61 
 24.  Although  the  Commission  has  been  willing  to  grant  a  section  271  application  with  a  limited  number  of  interim  rates  where  the  above-  mentioned  three-  part  test  is  met,  it  is  clearly 


 preferable  to  analyze  a  section  271  application  on  the  basis  of  rates  derived  from  a  permanent  rate  proceeding.  62  At  some  point,  states  will  have  had  sufficient  time  to  complete  these 


 55  47  U.  S.  C.    271(  c)(  2)(  B)(  i)  (emphasis  added). 
 56  Id.    252(  d)(  1). 
 57  See  47  C.  F.  R.    51.501-  07,  51.509(  g);  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  15812-  16, 
 15844-  61,  15874-  76,  15912,  paras.  618-  29,  674-  712,  743-  51,  826. 
 58  See  SWBT  Texas  Order,  15  FCC  Rcd  at  18394,  para.  88;  see  also  47  U.  S.  C.    252(  c),  (e)(  6);  American  Tel.  & 
 Tel  Co.  v.  Iowa  Utils.  Bd.,  525  U.  S.  366  (1999)  (AT&  T  v.  Iowa  Utils.  Bd.). 
 59  SWBT  Texas  Order,  15  FCC  Rcd  at  18394,  para.  88;  AT&  T  Corp.  v.  Iowa  Utils.  Bd.,  525  U.  S.  at  377-  86. 


 60  SWBT  Texas  Order,  15  FCC  Rcd  at  18394,  para.  88;  see  also  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at 
 4091,  para.  258  (explaining  the  Commissions  case-  by-  case  review  of  interim  prices). 
 61  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6359-  60,  para.  239. 


 62  See  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4091,  para.  260. 
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 proceedings.  The  Commission  will,  therefore,  become  more  reluctant  to  continue  approving  section  271  applications  containing  interim  rates.  It  would  not  be  sound  policy  for  interim  rates 
 to  become  a  substitute  for  completing  these  significant  proceedings. 
 B.  Checklist  Item  2    Unbundled  Network  Elements 
 1.  Access  to  Operations  Support  Systems 
 25.  Incumbent  LECs  use  a  variety  of  systems,  databases,  and  personnel  (collectively  referred  to  as  OSS)  to  provide  service  to  their  customers.  63  The  Commission  consistently  has 


 found  that  nondiscriminatory  access  to  OSS  is  a  prerequisite  to  the  development  of  meaningful  local  competition.  64  For  example,  new  entrants  must  have  access  to  the  functions  performed  by 
 the  incumbents  OSS  in  order  to  formulate  and  place  orders  for  network  elements  or  resale  services,  to  install  service  to  their  customers,  to  maintain  and  repair  network  facilities,  and  to  bill 
 customers.  65  The  Commission  has  determined  that  without  nondiscriminatory  access  to  the  BOCs  OSS,  a  competing  carrier  will  be  severely  disadvantaged,  if  not  precluded  altogether, 
 from  fairly  competing  in  the  local  exchange  market.  66 
 26.  Section  271  requires  the  Commission  to  determine  whether  a  BOC  offers  nondiscriminatory  access  to  OSS  functions.  Section  271(  c)(  2)(  B)(  ii)  requires  a  BOC  to  provide 


 nondiscriminatory  access  to  network  elements  in  accordance  with  the  requirements  of  sections  251(  c)(  3)  and  252(  d)(  1).  67  The  Commission  has  determined  that  access  to  OSS  functions  falls 
 squarely  within  an  incumbent  LECs  duty  under  section  251(  c)(  3)  to  provide  unbundled  network  elements  (UNEs)  under  terms  and  conditions  that  are  nondiscriminatory  and  just  and  reasonable, 
 and  its  duty  under  section  251(  c)(  4)  to  offer  resale  services  without  imposing  any  limitations  or  conditions  that  are  discriminatory  or  unreasonable.  68  The  Commission  must  therefore  examine  a 
 BOCs  OSS  performance  to  evaluate  compliance  with  section  271(  c)(  2)(  B)(  ii)  and  (xiv).  69  In  addition,  the  Commission  has  also  concluded  that  the  duty  to  provide  nondiscriminatory  access 
 to  OSS  functions  is  embodied  in  other  terms  of  the  competitive  checklist  as  well.  70  Consistent 


 63  Id.  at  3989-  90,  para.  83;  BellSouth  South  Carolina  Order,  13  FCC  Rcd  at  585. 
 64  See  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3990,  para.  83;  BellSouth  South  Carolina  Order,  13  FCC 
 Rcd  at  547-  48,  585;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20653. 
 65  See  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3990,  para.  83. 


 66  Id. 
 67  47  U.  S.  C.    271(  c)(  2)(  B)(  ii). 
 68  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3990,  para.  84. 
 69  Id. 
 70  Id.  As  part  of  a  BOCs  demonstration  that  it  is  providing  a  checklist  item  (e.  g.,  unbundled  loops,  unbundled 
 local  switching,  resale  services),  it  must  demonstrate  that  it  is  providing  nondiscriminatory  access  to  the  systems,  information,  and  personnel  that  support  that  element  or  service.  An  examination  of  a  BOCs  OSS  performance  is 


 (continued.) 
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 with  prior  orders,  the  Commission  examines  a  BOCs  OSS  performance  directly  under  checklist  items  2  and  14,  as  well  as  other  checklist  terms.  71 
 27.  As  part  of  its  statutory  obligation  to  provide  nondiscriminatory  access  to  OSS  functions,  a  BOC  must  provide  access  that  sufficiently  supports  each  of  the  three  modes  of 
 competitive  entry  envisioned  by  the  1996  Act    competitor-  owned  facilities,  UNEs,  and  resale.  72  For  OSS  functions  that  are  analogous  to  those  that  a  BOC  provides  to  itself,  its  customers  or  its 
 affiliates,  the  nondiscrimination  standard  requires  the  BOC  to  offer  requesting  carriers  access  that  is  equivalent  in  terms  of  quality,  accuracy,  and  timeliness.  73  The  BOC  must  provide  access 
 that  permits  competing  carriers  to  perform  these  functions  in  substantially  the  same  time  and  manner  as  the  BOC.  74  The  Commission  has  recognized  in  prior  orders  that  there  may  be 
 situations  in  which  a  BOC  contends  that,  although  equivalent  access  has  not  been  achieved  for  an  analogous  function,  the  access  that  it  provides  is  nonetheless  nondiscriminatory  within  the 
 meaning  of  the  statute.  75 
 28.  For  OSS  functions  that  have  no  retail  analogue,  the  BOC  must  offer  access  sufficient  to  allow  an  efficient  competitor  a  meaningful  opportunity  to  compete.  76  In  assessing 


 whether  the  quality  of  access  affords  an  efficient  competitor  a  meaningful  opportunity  to  compete,  the  Commission  will  examine,  in  the  first  instance,  whether  specific  performance 
 standards  exist  for  those  functions.  77  In  particular,  the  Commission  will  consider  whether  appropriate  standards  for  measuring  OSS  performance  have  been  adopted  by  the  relevant  state 
 commission  or  agreed  upon  by  the  BOC  in  an  interconnection  agreement  or  during  the  implementation  of  such  an  agreement.  78  If  such  performance  standards  exist,  the  Commission 


 (Continued  from  previous  page)  therefore  integral  to  the  determination  of  whether  a  BOC  is  offering  all  of  the  items  contained  in  the  competitive 
 checklist.  Id. 
 71  Id.  at  3990-  91,  para.  84. 


 72  Id.  at  3991,  para.  85. 
 73  Id. 
 74  Id.  For  example,  the  Commission  would  not  deem  an  incumbent  LEC  to  be  providing  nondiscriminatory  access 
 to  OSS  if  limitations  on  the  processing  of  information  between  the  interface  and  the  back  office  systems  prevented  a  competitor  from  performing  a  specific  function  in  substantially  the  same  time  and  manner  as  the  incumbent 


 performs  that  function  for  itself. 
 75  See  id. 


 76  Id.  at  3991,  para.  86. 
 77  Id. 
 78  Id.  As  a  general  proposition,  specific  performance  standards  adopted  by  a  state  commission  in  an  arbitration 
 decision  would  be  more  persuasive  evidence  of  commercial  reasonableness  than  a  standard  unilaterally  adopted  by  the  BOC  outside  of  its  interconnection  agreement.  Id.  at  20619-  20. 
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 will  evaluate  whether  the  BOCs  performance  is  sufficient  to  allow  an  efficient  competitor  a  meaningful  opportunity  to  compete.  79 
 29.  The  Commission  analyzes  whether  a  BOC  has  met  the  nondiscrimination  standard  for  each  OSS  function  using  a  two-  step  approach.  First,  the  Commission  determines 
 whether  the  BOC  has  deployed  the  necessary  systems  and  personnel  to  provide  sufficient  access  to  each  of  the  necessary  OSS  functions  and  whether  the  BOC  is  adequately  assisting 
 competing  carriers  to  understand  how  to  implement  and  use  all  of  the  OSS  functions  available  to  them.  80  The  Commission  next  assesses  whether  the  OSS  functions  that  the  BOC  has  deployed 
 are  operationally  ready,  as  a  practical  matter.  81 
 30.  Under  the  first  inquiry,  a  BOC  must  demonstrate  that  it  has  developed  sufficient  electronic  (for  functions  that  the  BOC  accesses  electronically)  and  manual  interfaces  to  allow 


 competing  carriers  equivalent  access  to  all  of  the  necessary  OSS  functions.  82  For  example,  a  BOC  must  provide  competing  carriers  with  the  specifications  necessary  for  carriers  to  design  or 
 modify  their  systems  in  a  manner  that  will  enable  them  to  communicate  with  the  BOCs  systems  and  any  relevant  interfaces.  83  In  addition,  a  BOC  must  disclose  to  competing  carriers  any 
 internal  business  rules  84  and  other  formatting  information  necessary  to  ensure  that  a  carriers  requests  and  orders  are  processed  efficiently.  85  Finally,  a  BOC  must  demonstrate  that  its  OSS  is 
 designed  to  accommodate  both  current  demand  and  projected  demand  for  competing  carriers 


 79  See  id.  at  3991-  92,  para.  86. 
 80  Id.  at  3992,  para.  87;  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20616;  see  also  Second  BellSouth  Louisiana 
 Order,  13  FCC  Rcd  at  20654;  BellSouth  South  Carolina  Order,  13  FCC  Rcd  at  592-  93.  In  making  this  determination,  the  Commission  consider[  s]  all  of  the  automated  and  manual  processes  a  BOC  has  undertaken  to 


 provide  access  to  OSS  functions,  including  the  interface  (or  gateway)  that  connects  the  competing  carriers  own  operations  support  systems  to  the  BOC;  any  electronic  or  manual  processing  link  between  that  interface  and  the 
 BOCs  OSS  (including  all  necessary  back  office  systems  and  personnel);  and  all  of  the  OSS  that  a  BOC  uses  in  providing  network  elements  and  resale  services  to  a  competing  carrier.  Ameritech  Michigan  Order,  12  FCC  Rcd  at 
 20615;  see  also  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20654  n.  241. 
 81  See  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3992,  para.  88. 


 82  Id.  at  3992,  para.  87;  see  also  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20616,  para.  136  (The  Commission 
 determines  whether  the  BOC  has  deployed  the  necessary  systems  and  personnel  to  provide  sufficient  access  to  each  of  the  necessary  OSS  functions  and  whether  the  BOC  is  adequately  assisting  competing  carriers  to  understand 


 how  to  implement  and  use  all  of  the  OSS  functions  available  to  them.).  For  example,  a  BOC  must  provide  competing  carriers  the  specifications  necessary  to  design  their  systems  interfaces  and  business  rules  necessary  to 
 format  orders,  and  demonstrate  that  systems  are  scalable  to  handle  current  and  projected  demand.  Id. 
 83  Id. 


 84  Business  rules  refer  to  the  protocols  that  a  BOC  uses  to  ensure  uniformity  in  the  format  of  orders  and  include 
 information  concerning  ordering  codes  such  as  universal  service  ordering  codes  (USOCs)  and  field  identifiers  (FIDs).  Id.;  see  also  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20617  n.  335. 


 85  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3992,  para.  88. 
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 access  to  OSS  functions.  86  Although  not  a  prerequisite,  the  Commission  continues  to  encourage  the  use  of  industry  standards  as  an  appropriate  means  of  meeting  the  needs  of  a  competitive  local 
 exchange  market.  87 
 31.  Under  the  second  inquiry,  the  Commission  examines  performance  measurements  and  other  evidence  of  commercial  readiness  to  ascertain  whether  the  BOCs  OSS  is  handling 


 current  demand  and  will  be  able  to  handle  reasonably  foreseeable  future  volumes.  88  The  most  probative  evidence  that  OSS  functions  are  operationally  ready  is  actual  commercial  usage.  89 
 Absent  sufficient  and  reliable  data  on  commercial  usage,  the  Commission  will  consider  the  results  of  carrier-  to-  carrier  testing,  independent  third-  party  testing,  and  internal  testing  in 
 assessing  the  commercial  readiness  of  a  BOCs  OSS.  90  Although  the  Commission  does  not  require  OSS  testing,  a  persuasive  test  will  provide  us  with  an  objective  means  by  which  to 
 evaluate  a  BOCs  OSS  readiness  where  there  is  little  to  no  evidence  of  commercial  usage,  or  may  otherwise  strengthen  an  application  where  the  BOCs  evidence  of  actual  commercial  usage 
 is  weak  or  is  otherwise  challenged  by  competitors.  The  persuasiveness  of  a  third-  party  review,  however,  is  dependent  upon  the  qualifications,  experience  and  independence  of  the  third  party 
 and  the  conditions  and  scope  of  the  review  itself.  91  If  the  review  is  limited  in  scope  or  depth  or  is  not  independent  and  blind,  the  Commission  will  give  it  minimal  weight.  As  noted  above,  to  the 
 extent  the  Commission  reviews  performance  data,  it  looks  at  the  totality  of  the  circumstances  and  generally  does  not  view  individual  performance  disparities,  particularly  if  they  are  isolated  and 
 slight,  as  dispositive  of  whether  a  BOC  has  satisfied  its  checklist  obligations.  92  Individual  performance  disparities  may,  nevertheless,  result  in  a  finding  of  checklist  noncompliance, 
 particularly  if  the  disparity  is  substantial  or  has  endured  for  a  long  time,  or  if  it  is  accompanied  by  other  evidence  of  discriminatory  conduct  or  evidence  that  competing  carriers  have  been 
 denied  a  meaningful  opportunity  to  compete. 
 a.  Relevance  of  a  BOCs  Prior  Section  271  Orders 
 32.  The  SWBT  Kansas/  Oklahoma  Order  specifically  outlined  a  non-  exhaustive  evidentiary  showing  that  must  be  made  in  the  initial  application  when  a  BOC  seeks  to  rely  on 


 evidence  presented  in  another  application.  93  First,  a  BOCs  application  must  explain  the  extent 
 86  Id. 


 87  See  id. 
 88  Id.  at  3993,  para.  89. 
 89  Id. 
 90  Id. 
 91  See  id.;  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20659  (emphasizing  that  a  third-  party  review  should 
 encompass  the  entire  obligation  of  the  incumbent  LEC  to  provide  nondiscriminatory  access,  and,  where  applicable,  should  consider  the  ability  of  actual  competing  carriers  in  the  market  to  operate  using  the  incumbents  OSS  access). 


 92  See  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6301-  02,  para.  138. 
 93  See  id.  at  6286-  91,  paras.  107-  18 
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 to  which  the  OSS  are  the  same    that  is,  whether  it  employs  the  shared  use  of  a  single  OSS,  or  the  use  of  systems  that  are  identical,  but  separate.  94  To  satisfy  this  inquiry,  the  Commission 
 looks  to  whether  the  relevant  states  utilize  a  common  set  of  processes,  business  rules,  interfaces,  systems  and,  in  many  instances,  even  personnel.  95  The  Commission  will  also  carefully  examine 
 third  party  reports  that  demonstrate  that  the  BOCs  OSS  are  the  same  in  each  of  the  relevant  states.  96  Finally,  where  a  BOC  has  discernibly  separate  OSS,  it  must  demonstrate  that  its  OSS 
 reasonably  can  be  expected  to  behave  in  the  same  manner.  97  Second,  unless  an  applicant  seeks  to  establish  only  that  certain  discrete  components  of  its  OSS  are  the  same,  an  applicant  must  submit 
 evidence  relating  to  all  aspects  of  its  OSS,  including  those  OSS  functions  performed  by  BOC  personnel. 


 b.  Pre-  Ordering 
 33.  A  BOC  must  demonstrate  that:  (i)  it  offers  nondiscriminatory  access  to  OSS  pre-ordering  functions  associated  with  determining  whether  a  loop  is  capable  of  supporting  xDSL 


 advanced  technologies;  (ii)  competing  carriers  successfully  have  built  and  are  using  application-to-  application  interfaces  to  perform  pre-  ordering  functions  and  are  able  to  integrate  pre-  ordering 
 and  ordering  interfaces;  98  and  (iii)  its  pre-  ordering  systems  provide  reasonably  prompt  response  times  and  are  consistently  available  in  a  manner  that  affords  competitors  a  meaningful 
 opportunity  to  compete.  99 
 34.  The  pre-  ordering  phase  of  OSS  generally  includes  those  activities  that  a  carrier  undertakes  to  gather  and  verify  the  information  necessary  to  place  an  order.  100  Given  that  pre- 


 94  See  id.  at  6288,  para.  111. 
 95  The  Commission  has  consistently  held  that  a  BOCs  OSS  includes  both  mechanized  systems  and  manual 
 processes,  and  thus  the  OSS  functions  performed  by  BOC  personnel  have  been  part  of  the  FCCs  OSS  functionality  and  commercial  readiness  reviews. 


 96  See  SWBT  Kansas/  Oklahoma  Order,  id.  at  6287,  para.  108. 
 97  See  id.  at  6288,  para.  111. 
 98  In  prior  orders,  the  Commission  has  emphasized  that  providing  pre-  ordering  functionality  through  an 
 application-  to-  application  interface  is  essential  in  enabling  carriers  to  conduct  real-  time  processing  and  to  integrate  pre-  ordering  and  ordering  functions  in  the  same  manner  as  the  BOC.  SWBT  Texas  Order,  15  FCC  Rcd  at  18426, 


 para.  148. 
 99  The  Commission  has  held  previously  that  an  interface  that  provides  responses  in  a  prompt  timeframe  and  is 
 stable  and  reliable,  is  necessary  for  competing  carriers  to  market  their  services  and  serve  their  customers  as  efficiently  and  at  the  same  level  of  quality  as  a  BOC  serves  its  own  customers.  See  Bell  Atlantic  New  York  Order, 


 15  FCC  Rcd  at  4025  and  4029,  paras.  145  and  154. 
 100  See  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4014,  para.  129;  see  also  Second  BellSouth  Louisiana  Order, 
 13  FCC  Rcd  at  20660,  para.  94  (referring  to  pre-  ordering  and  ordering  collectively  as  the  exchange  of  information  between  telecommunications  carriers  about  current  or  proposed  customer  products  and  services  or 


 unbundled  network  elements  or  some  combination  thereof).  In  prior  orders,  the  Commission  has  identified  the  following  five  pre-  order  functions:  (1)  customer  service  record  (CSR)  information;  (2)  address  validation; 
 (3)  telephone  number  information;  (4)  due  date  information;  (5)  services  and  feature  information.  See  Bell  Atlantic  (continued.) 
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 ordering  represents  the  first  exposure  that  a  prospective  customer  has  to  a  competing  carrier,  it  is  critical  that  a  competing  carrier  is  able  to  accomplish  pre-  ordering  activities  in  a  manner  no  less 
 efficient  and  responsive  than  the  incumbent.  101  Most  of  the  pre-  ordering  activities  that  must  be  undertaken  by  a  competing  carrier  to  order  resale  services  and  UNEs  from  the  incumbent  are 
 analogous  to  the  activities  a  BOC  must  accomplish  to  furnish  service  to  its  own  customers.  For  these  pre-  ordering  functions,  a  BOC  must  demonstrate  that  it  provides  requesting  carriers  access 
 that  enables  them  to  perform  pre-  ordering  functions  in  substantially  the  same  time  and  manner  as  its  retail  operations.  102  For  those  pre-  ordering  functions  that  lack  a  retail  analogue,  a  BOC  must 
 provide  access  that  affords  an  efficient  competitor  a  meaningful  opportunity  to  compete.  103  In  prior  orders,  the  Commission  has  emphasized  that  providing  pre-  ordering  functionality  through 
 an  application-  to-  application  interface  is  essential  in  enabling  carriers  to  conduct  real-  time  processing  and  to  integrate  pre-  ordering  and  ordering  functions  in  the  same  manner  as  the 
 BOC.  104 
 (i)  Access  to  Loop  Qualification  Information 
 35.  In  accordance  with  the  UNE  Remand  Order,  105  the  Commission  requires  incumbent  carriers  to  provide  competitors  with  access  to  all  of  the  same  detailed  information 


 about  the  loop  that  is  available  to  the  incumbents,  106  and  in  the  same  time  frame,  so  that  a  competing  carrier  can  make  an  independent  judgment  at  the  pre-  ordering  stage  about  whether  an 
 end  user  loop  is  capable  of  supporting  the  advanced  services  equipment  the  competing  carrier  intends  to  install.  107  Under  the  UNE  Remand  Order,  the  relevant  inquiry  is  not  whether  a  BOCs 
 (Continued  from  previous  page)  New  York  Order,  15  FCC  Rcd  at  4015,  para.  132;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20660,  para. 
 94;  BellSouth  South  Carolina  Order,  13  FCC  Rcd  at  619,  para.  147. 
 101  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4014,  para.  129. 


 102  Id.;  see  also  BellSouth  South  Carolina  Order,  13  FCC  Rcd  at  623-  29  (concluding  that  failure  to  deploy  an 
 application-  to-  application  interface  denies  competing  carriers  equivalent  access  to  pre-  ordering  OSS  functions). 
 103  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4014,  para.  129. 


 104  See  id.  at  4014,  para.  130;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20661-  67,  para.  105. 
 105  UNE  Remand  Order,  15  FCC  Rcd  at  3885,  para.  426  (determining  that  the  pre-  ordering  function  includes 
 access  to  loop  qualification  information). 
 106  See  id.  At  a  minimum,  a  BOC  must  provide  (1)  the  composition  of  the  loop  material,  including  both  fiber  and 
 copper;  (2)  the  existence,  location  and  type  of  any  electronic  or  other  equipment  on  the  loop,  including  but  not  limited  to,  digital  loop  carrier  or  other  remote  concentration  devices,  feeder/  distribution  interfaces,  bridge  taps,  load 


 coils,  pair-  gain  devices,  disturbers  in  the  same  or  adjacent  binder  groups;  (3)  the  loop  length,  including  the  length  and  location  of  each  type  of  transmission  media;  (4)  the  wire  gauge(  s)  of  the  loop;  and  (5)  the  electrical  parameters 
 of  the  loop,  which  may  determine  the  suitability  of  the  loop  for  various  technologies.  Id. 
 107  As  the  Commission  has  explained  in  prior  proceedings,  because  characteristics  of  a  loop,  such  as  its  length  and 
 the  presence  of  various  impediments  to  digital  transmission,  can  hinder  certain  advanced  services  technologies,  carriers  often  seek  to  pre-  qualify  a  loop  by  accessing  basic  loop  makeup  information  that  will  assist  carriers  in 


 ascertaining  whether  the  loop,  either  with  or  without  the  removal  of  the  impediments,  can  support  a  particular  advanced  service.  See  id.,  15  FCC  Rcd  at  4021,  para.  140. 
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 retail  arm  accesses  such  underlying  information  but  whether  such  information  exists  anywhere  in  a  BOCs  back  office  and  can  be  accessed  by  any  of  a  BOCs  personnel.  108  Moreover,  a  BOC 
 may  not  filter  or  digest  the  underlying  information  and  may  not  provide  only  information  that  is  useful  in  provisioning  of  a  particular  type  of  xDSL  that  a  BOC  offers.  109  A  BOC  must  also 
 provide  loop  qualification  information  based,  for  example,  on  an  individual  address  or  zip  code  of  the  end  users  in  a  particular  wire  center,  NXX  code  or  on  any  other  basis  that  the  BOC 
 provides  such  information  to  itself.  Moreover,  a  BOC  must  also  provide  access  for  competing  carriers  to  the  loop  qualifying  information  that  the  BOC  can  itself  access  manually  or 
 electronically.  Finally,  a  BOC  must  provide  access  to  loop  qualification  information  to  competitors  within  the  same  time  intervals  it  is  provided  to  the  BOCs  retail  operations  or  its 
 advanced  services  affiliate.  110  As  the  Commission  determined  in  the  UNE  Remand  Order,  however,  to  the  extent  such  information  is  not  normally  provided  to  the  incumbents  retail 
 personnel,  but  can  be  obtained  by  contacting  back  office  personnel,  it  must  be  provided  to  requesting  carriers  within  the  same  time  frame  that  any  incumbent  personnel  are  able  to  obtain 
 such  information.  111 
 c.  Ordering 
 36.  Consistent  with  section  271(  c)(  2)(  B)(  ii),  a  BOC  must  demonstrate  its  ability  to  provide  competing  carriers  with  access  to  the  OSS  functions  necessary  for  placing  wholesale 


 orders.  For  those  functions  of  the  ordering  systems  for  which  there  is  a  retail  analogue,  a  BOC  must  demonstrate,  with  performance  data  and  other  evidence,  that  it  provides  competing  carriers 
 with  access  to  its  OSS  in  substantially  the  same  time  and  manner  as  it  provides  to  its  retail  operations.  For  those  ordering  functions  that  lack  a  direct  retail  analogue,  a  BOC  must 
 demonstrate  that  its  systems  and  performance  allow  an  efficient  carrier  a  meaningful  opportunity  to  compete.  As  in  prior  section  271  orders,  the  Commission  looks  primarily  at  the  applicants 
 ability  to  return  order  confirmation  notices,  order  reject  notices,  order  completion  notices  and  jeopardies,  and  at  its  order  flow-  through  rate.  112 


 d.  Provisioning 


 108  UNE  Remand  Order,  15  FCC  Rcd  at  3885-  3887,  paras.  427-  431  (noting  that  to  the  extent  such  information  is 
 not  normally  provided  to  the  incumbents  retail  personnel,  but  can  be  obtained  by  contacting  back  office  personnel,  it  must  be  provided  to  requesting  carriers  within  the  same  time  frame  that  any  incumbent  personnel  are  able  to 


 obtain  such  information.). 
 109  See  SWBT  Kansas  Oklahoma  Order,  16  FCC  Rcd  at  6292-  93,  para.  121. 


 110  Id. 
 111  UNE  Remand  Order,  15  FCC  Rcd  at  3885-  3887,  paras.  427-  31. 
 112  See  SWBT  Texas  Order,  15  FCC  Rcd  at  18438,  para.  170;  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4035- 
 39,  paras.  163-  66.  The  Commission  examines  (i)  order  flow-  through  rates,  (ii)  jeopardy  notices  and  (iii)  order  completion  notices  using  the  same  time  and  manner  standard.  The  Commission  examines  order  confirmation 


 notices  and  order  rejection  notices  using  the  meaningful  opportunity  to  compete  standard. 
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 37.  A  BOC  must  provision  competing  carriers  orders  for  resale  and  UNE-  P  services  in  substantially  the  same  time  and  manner  as  it  provisions  orders  for  its  own  retail  customers.  113 
 Consistent  with  the  approach  in  prior  section  271  orders,  the  Commission  examines  a  BOCs  provisioning  processes,  as  well  as  its  performance  with  respect  to  provisioning  timeliness  (i.  e., 
 missed  due  dates  and  average  installation  intervals)  and  provisioning  quality  (i.  e.,  service  problems  experienced  at  the  provisioning  stage).  114 


 e.  Maintenance  and  Repair 
 38.  A  competing  carrier  that  provides  service  through  resale  or  UNEs  remains  dependent  upon  the  incumbent  LEC  for  maintenance  and  repair.  Thus,  as  part  of  its  obligation  to 


 provide  nondiscriminatory  access  to  OSS  functions,  a  BOC  must  provide  requesting  carriers  with  nondiscriminatory  access  to  its  maintenance  and  repair  systems.  115  To  the  extent  a  BOC 
 performs  analogous  maintenance  and  repair  functions  for  its  retail  operations,  it  must  provide  competing  carriers  access  that  enables  them  to  perform  maintenance  and  repair  functions  in 
 substantially  the  same  time  and  manner  as  a  BOC  provides  its  retail  customers.  116  Equivalent  access  ensures  that  competing  carriers  can  assist  customers  experiencing  service  disruptions 
 using  the  same  network  information  and  diagnostic  tools  that  are  available  to  BOC  personnel.  117  Without  equivalent  access,  a  competing  carrier  would  be  placed  at  a  significant  competitive 
 disadvantage,  as  its  customer  would  perceive  a  problem  with  a  BOCs  network  as  a  problem  with  the  competing  carriers  own  network.  118 


 f.  Billing 
 39.  A  BOC  must  provide  nondiscriminatory  access  to  its  billing  functions,  which  is  necessary  to  enable  competing  carriers  to  provide  accurate  and  timely  bills  to  their  customers.  119 


 In  making  this  determination,  the  Commission  assesses  a  BOCs  billing  processes  and  systems,  and  its  performance  data.  Consistent  with  prior  section  271  orders,  a  BOC  must  demonstrate  that 
 it  provides  competing  carriers  with  complete  and  accurate  reports  on  the  service  usage  of  competing  carriers  customers  in  substantially  the  same  time  and  manner  that  a  BOC  provides 


 113  See  Bell  Atlantic  New  York,  15  FCC  Rcd  at  4058,  para.  196.  For  provisioning  timeliness,  the  Commission 
 looks  to  missed  due  dates  and  average  installation  intervals;  for  provisioning  quality,  the  Commission  looks  to  service  problems  experienced  at  the  provisioning  stage. 


 114  Id. 
 115  Id.  at  4067,  para.  212;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20692;  Ameritech  Michigan  Order, 
 12  FCC  Rcd  at  20613,  20660-  61. 
 116  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4058,  para.  196;  see  also  Second  BellSouth  Louisiana  Order,  13 
 FCC  Rcd  at  20692-  93. 
 117  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4058,  para.  196. 


 118  Id. 
 119  See  SWBT  Texas  Order,  15  FCC  Rcd  at  18461,  para.  210. 
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 such  information  to  itself,  and  with  wholesale  bills  in  a  manner  that  gives  competing  carriers  a  meaningful  opportunity  to  compete.  120 
 g.  Change  Management  Process 
 40.  Competing  carriers  need  information  about,  and  specifications  for,  an  incumbents  systems  and  interfaces  to  develop  and  modify  their  systems  and  procedures  to 


 access  the  incumbents  OSS  functions.  121  Thus,  in  order  to  demonstrate  that  it  is  providing  nondiscriminatory  access  to  its  OSS,  a  BOC  must  first  demonstrate  that  it  has  deployed  the 
 necessary  systems  and  personnel  to  provide  sufficient  access  to  each  of  the  necessary  OSS  functions  and  .  .  .  is  adequately  assisting  competing  carriers  to  understand  how  to  implement  and 
 use  all  of  the  OSS  functions  available  to  them.  122  By  showing  that  it  adequately  assists  competing  carriers  to  use  available  OSS  functions,  a  BOC  provides  evidence  that  it  offers  an 
 efficient  competitor  a  meaningful  opportunity  to  compete.  123  As  part  of  this  demonstration,  the  Commission  will  give  substantial  consideration  to  the  existence  of  an  adequate  change 
 management  process  and  evidence  that  the  BOC  has  adhered  to  this  process  over  time.  124 
 41.  The  change  management  process  refers  to  the  methods  and  procedures  that  the  BOC  employs  to  communicate  with  competing  carriers  regarding  the  performance  of,  and 


 changes  in,  the  BOCs  OSS.  125  Such  changes  may  include  updates  to  existing  functions  that  impact  competing  carrier  interface(  s)  upon  a  BOCs  release  of  new  interface  software; 
 technology  changes  that  require  competing  carriers  to  meet  new  technical  requirements  upon  a  BOCs  software  release  date;  additional  functionality  changes  that  may  be  used  at  the  competing 
 carriers  option,  on  or  after  a  BOCs  release  date  for  new  interface  software;  and  changes  that  may  be  mandated  by  regulatory  authorities.  126  Without  a  change  management  process  in  place,  a 
 BOC  can  impose  substantial  costs  on  competing  carriers  simply  by  making  changes  to  its  systems  and  interfaces  without  providing  adequate  testing  opportunities  and  accurate  and  timely 
 notice  and  documentation  of  the  changes.  127  Change  management  problems  can  impair  a 


 120  See  id.;  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6316-  17,  at  para.  163. 
 121  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3999-  4000,  para.  102;  First  BellSouth  Louisiana  Order,  13  FCC 
 Rcd  at  6279  n.  197;  BellSouth  South  Carolina  Order,  13  FCC  Rcd  at  625  n.  467;  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20617  n.  334;  Local  Competition  Second  Report  and  Order,  11  FCC  Rcd  at  19742. 


 122  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  3999,  para.  102. 
 123  Id.  at  3999-  4000,  para.  102 
 124  Id.  at  4000,  para.  102. 
 125  Id.  at  4000,  para.  103. 
 126  Id. 
 127  Id.  at  4000,  para.  103. 
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 competing  carriers  ability  to  obtain  nondiscriminatory  access  to  UNEs,  and  hence  a  BOCs  compliance  with  section  271(  2)(  B)(  ii).  128 
 42.  In  evaluating  whether  a  BOCs  change  management  plan  affords  an  efficient  competitor  a  meaningful  opportunity  to  compete,  the  Commission  first  assesses  whether  the  plan 
 is  adequate.  In  making  this  determination,  it  assesses  whether  the  evidence  demonstrates:  (1)  that  information  relating  to  the  change  management  process  is  clearly  organized  and  readily 
 accessible  to  competing  carriers;  129  (2)  that  competing  carriers  had  substantial  input  in  the  design  and  continued  operation  of  the  change  management  process;  130  (3)  that  the  change  management 
 plan  defines  a  procedure  for  the  timely  resolution  of  change  management  disputes;  131  (4)  the  availability  of  a  stable  testing  environment  that  mirrors  production;  132  and  (5)  the  efficacy  of  the 
 documentation  the  BOC  makes  available  for  the  purpose  of  building  an  electronic  gateway.  133  After  determining  whether  the  BOCs  change  management  plan  is  adequate,  the  Commission 
 evaluates  whether  the  BOC  has  demonstrated  a  pattern  of  compliance  with  this  plan.  134 
 2.  UNE  Combinations 
 43.  In  order  to  comply  with  the  requirements  of  checklist  item  2,  a  BOC  must  show  that  it  is  offering  [  n]  ondiscriminatory  access  to  network  elements  in  accordance  with  the 


 requirements  of  section  251(  c)(  3).  135  Section  251(  c)(  3)  requires  an  incumbent  LEC  to  provide,  to  any  requesting  telecommunications  carrier  .  .  .  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.  136  Section  251(  c)(  3)  of  the  Act  also  requires  incumbent 
 LECs  to  provide  UNEs  in  a  manner  that  allows  requesting  carriers  to  combine  such  elements  in  order  to  provide  a  telecommunications  service.  137 


 128  Id. 
 129  Id.  at  4002,  para.  107. 
 130  Id.  at  4000,  para.  104. 
 131  Id.  at  4002,  para.  108. 
 132  Id.  at  4002-  03,  paras.  109-  10. 
 133  Id.  at  4003-  04,  para.  110.  In  the  Bell  Atlantic  New  York  Order,  the  Commission  used  these  factors  in 
 determining  whether  Bell  Atlantic  had  an  adequate  change  management  process  in  place.  See  id.  at  4004,  para.  111.  The  Commission  left  open  the  possibility,  however,  that  a  change  management  plan  different  from  the  one 


 implemented  by  Bell  Atlantic  may  be  sufficient  to  demonstrate  compliance  with  the  requirements  of  section  271.  Id. 


 134  Id.  at  3999,  para.  101,  4004-  05,  para.  112. 
 135  47  U.  S.  C.    271(  c)(  2)(  B)(  ii). 
 136  Id.    251(  c)(  3). 
 137  Id. 
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 44.  In  the  Ameritech  Michigan  Order,  the  Commission  emphasized  that  the  ability  of  requesting  carriers  to  use  UNEs,  as  well  as  combinations  of  UNEs,  is  integral  to  achieving 
 Congress  objective  of  promoting  competition  in  local  telecommunications  markets.  138  Using  combinations  of  UNEs  provides  a  competitor  with  the  incentive  and  ability  to  package  and 
 market  services  in  ways  that  differ  from  the  BOCs  existing  service  offerings  in  order  to  compete  in  the  local  telecommunications  market.  139  Moreover,  combining  the  incumbents  UNEs  with 
 their  own  facilities  encourages  facilities-  based  competition  and  allows  competing  providers  to  provide  a  wide  array  of  competitive  choices.  140  Because  the  use  of  combinations  of  UNEs  is  an 
 important  strategy  for  entry  into  the  local  telecommunications  market,  as  well  as  an  obligation  under  the  requirements  of  section  271,  the  Commission  examines  section  271  applications  to 
 determine  whether  competitive  carriers  are  able  to  combine  network  elements  as  required  by  the  Act  and  the  Commissions  regulations.  141 


 3.  Pricing  of  Network  Elements 
 45.  Checklist  item  2  of  section  271  states  that  a  BOC  must  provide  nondiscriminatory  access  to  network  elements  in  accordance  with  sections  251(  c)(  3)  and 


 252(  d)(  1)  of  the  Act.  142  Section  251(  c)(  3)  requires  incumbent  LECs  to  provide  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.  143  Section  252(  d)(  1)  requires  that  a  state  commissions  determination  of  the  just  and  reasonable  rates  for 
 network  elements  shall  be  based  on  the  cost  of  providing  the  network  elements,  shall  be  nondiscriminatory,  and  may  include  a  reasonable  profit.  144  Pursuant  to  this  statutory  mandate, 
 the  Commission  has  determined  that  prices  for  UNEs  must  be  based  on  the  total  element  long  run  incremental  cost  (TELRIC)  of  providing  those  elements.  145  The  Commission  also 
 promulgated  rule  51.315(  b),  which  prohibits  incumbent  LECs  from  separating  already  combined 


 138  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20718-  19;  BellSouth  South  Carolina  Order,  13  FCC  Rcd  at  646. 
 139  BellSouth  South  Carolina  Order,  13  FCC  Rcd  at  646;  see  also  Local  Competition  First  Report  and  Order,  11 
 FCC  Rcd  at  15666-  68. 
 140  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4077-  78,  para.  230. 


 141  Id. 
 142  47  U.  S.  C.    271(  c)(  2)(  B)(  ii). 
 143  Id.    251(  c)(  3). 
 144  47  U.  S.  C.    252(  d)(  1). 
 145  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  15844-  46,  paras.  674-  79;  47  C.  F.  R.    51.501  et 
 seq.;  see  also  Deployment  of  Wireline  Services  Offering  Advanced  Telecommunications  Capability,  CC  Docket  No.  98-  147,  and  Implementation  of  the  Local  Competition  Provisions  of  the  Telecommunications  Act  of  1996,  CC 


 Docket  No.  96-  98,  Third  Report  and  Order  and  Fourth  Report  and  Order,  14  FCC  Rcd  20912,  20974,  para.  135  (Line  Sharing  Order)  (concluding  that  states  should  set  the  prices  for  line  sharing  as  a  new  network  element  in  the 
 same  manner  as  the  state  sets  prices  for  other  UNEs). 
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 elements  before  providing  them  to  competing  carriers,  except  on  request.  146  The  Commission  has  previously  held  that  it  will  not  conduct  a  de  novo  review  of  a  states  pricing  determinations  and 
 will  reject  an  application  only  if  basic  TELRIC  principles  are  violated  or  the  state  commission  makes  clear  errors  in  factual  findings  on  matters  so  substantial  that  the  end  result  falls  outside  the 
 range  that  the  reasonable  application  of  TELRIC  principles  would  produce.  147 
 46.  Although  the  U.  S.  Court  of  Appeals  for  the  Eighth  Circuit  stayed  the  Commissions  pricing  rules  in  1996,  148  the  Supreme  Court  restored  the  Commissions  pricing 


 authority  on  January  25,  1999,  and  remanded  to  the  Eighth  Circuit  for  consideration  of  the  merits  of  the  challenged  rules.  149  On  remand  from  the  Supreme  Court,  the  Eighth  Circuit  concluded  that 
 while  TELRIC  is  an  acceptable  method  for  determining  costs,  certain  specific  requirements  contained  within  the  Commissions  pricing  rules  were  contrary  to  Congressional  intent.  150  The 
 Eighth  Circuit  has  stayed  the  issuance  of  its  mandate  pending  review  by  the  Supreme  Court.  151  Accordingly,  the  Commissions  pricing  rules  remain  in  effect. 


 C.  Checklist  Item  3    Poles,  Ducts,  Conduits  and  Rights  of  Way 
 47.  Section  271(  c)(  2)(  B)(  iii)  requires  BOCs  to  provide  [  n]  ondiscriminatory  access  to  the  poles,  ducts,  conduits,  and  rights-  of-  way  owned  or  controlled  by  the  [BOC]  at  just  and 


 reasonable  rates  in  accordance  with  the  requirements  of  section  224.  152  Section  224(  f)(  1)  states  that  [  a]  utility  shall  provide  a  cable  television  system  or  any  telecommunications  carrier  with 


 146  See  47  C.  F.  R.    51.315(  b). 
 147  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4084,  para.  244;  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at 
 6266,  para.  59. 
 148  Iowa  Utils.  Bd.  v.  FCC,  120  F.  3d  753,  800,  804,  805-  06  (8  th  Cir.  1997). 


 149  AT&  T  Corp.  v.  Iowa  Utils.  Bd.,  525  U.  S.  366  (1999).  In  reaching  its  decision,  the  Court  acknowledged  that 
 section  201(  b)  explicitly  grants  the  FCC  jurisdiction  to  make  rules  governing  matters  to  which  the  1996  Act  applies.  Id.  at  380.  Furthermore,  the  Court  determined  that  section  251(  d)  also  provides  evidence  of  an  express 


 jurisdictional  grant  by  requiring  that  the  Commission  [shall]  complete  all  actions  necessary  to  establish  regulations  to  implement  the  requirements  of  this  section.  Id.  at  382.  The  Court  also  held  that  the  pricing  provisions 
 implemented  under  the  Commissions  rulemaking  authority  do  not  inhibit  the  establishment  of  rates  by  the  states.  The  Court  concluded  that  the  Commission  has  jurisdiction  to  design  a  pricing  methodology  to  facilitate  local 
 competition  under  the  1996  Act,  including  pricing  for  interconnection  and  unbundled  access,  as  it  is  the  States  that  will  apply  those  standards  and  implement  that  methodology,  determining  the  concrete  result.  Id. 


 150  Iowa  Utils.  Bd.  v.  FCC,  219  F.  3d  744  (8  th  Cir.  2000),  petition  for  cert.  granted  sub  nom.  Verizon 
 Communications  v.  FCC,  121  S.  Ct.  877  (2001). 
 151  Iowa  Utils.  Bd.  v.  FCC,  No.  96-  3321  et  al.  (8  th  Cir.  Sept.  25,  2000). 


 152  47  U.  S.  C.    271(  c)(  2)(  B)(  iii).  As  originally  enacted,  section  224  was  intended  to  address  obstacles  that  cable 
 operators  encountered  in  obtaining  access  to  poles,  ducts,  conduits,  or  rights-  of-  way  owned  or  controlled  by  utilities.  The  1996  Act  amended  section  224  in  several  important  respects  to  ensure  that  telecommunications  carriers 


 as  well  as  cable  operators  have  access  to  poles,  ducts,  conduits,  or  rights-  of-  way  owned  or  controlled  by  utility  companies,  including  LECs.  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20706,  n.  574. 
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 nondiscriminatory  access  to  any  pole,  duct,  conduit,  or  right-  of-  way  owned  or  controlled  by  it.  153  Notwithstanding  this  requirement,  section  224(  f)(  2)  permits  a  utility  providing  electric 
 service  to  deny  access  to  its  poles,  ducts,  conduits,  and  rights-  of-  way,  on  a  nondiscriminatory  basis,  where  there  is  insufficient  capacity  and  for  reasons  of  safety,  reliability  and  generally 
 applicable  engineering  purposes.  154  Section  224  also  contains  two  separate  provisions  governing  the  maximum  rates  that  a  utility  may  charge  for  pole  attachments.  155  Section 
 224(  b)(  1)  states  that  the  Commission  shall  regulate  the  rates,  terms,  and  conditions  governing  pole  attachments  to  ensure  that  they  are  just  and  reasonable.  156  Notwithstanding  this  general 
 grant  of  authority,  section  224(  c)(  1)  states  that  [  n]  othing  in  [section  224]  shall  be  construed  to  apply  to,  or  to  give  the  Commission  jurisdiction  with  respect  to  the  rates,  terms,  and  conditions, 
 or  access  to  poles,  ducts,  conduits  and  rights-  of-  way  as  provided  in  [section  224(  f)],  for  pole  attachments  in  any  case  where  such  matters  are  regulated  by  a  State.  157  As  of  1992,  nineteen 
 states,  including  Connecticut,  had  certified  to  the  Commission  that  they  regulated  the  rates,  terms,  and  conditions  for  pole  attachments.  158 


 D.  Checklist  Item  4    Unbundled  Local  Loops 
 48.  Section  271(  c)(  2)(  B)(  iv)  of  the  Act,  item  4  of  the  competitive  checklist,  requires  that  a  BOC  provide  [  l]  ocal  loop  transmission  from  the  central  office  to  the  customers  premises, 


 unbundled  from  local  switching  or  other  services.  159  The  Commission  has  defined  the  loop  as  a 


 153  47  U.  S.  C.    224(  f)(  1).  Section  224(  a)(  1)  defines  utility  to  include  any  entity,  including  a  LEC,  that  controls 
 poles,  ducts,  conduits,  or  rights-  of-  way  used,  in  whole  or  in  part,  for  any  wire  communications.  47  U.  S.  C.    224(  a)(  1). 


 154  47  U.  S.  C.    224(  f)(  2).  In  the  Local  Competition  First  Report  and  Order,  the  Commission  concluded  that, 
 although  the  statutory  exception  enunciated  in  section  224(  f)(  2)  appears  to  be  limited  to  utilities  providing  electrical  service,  LECs  should  also  be  permitted  to  deny  access  to  their  poles,  ducts,  conduits,  and  rights-  of-  way  because  of 


 insufficient  capacity  and  for  reasons  of  safety,  reliability  and  generally  applicable  engineering  purposes,  provided  the  assessment  of  such  factors  is  done  in  a  nondiscriminatory  manner.  Local  Competition  First  Report  and  Order, 
 11  FCC  Rcd  at  16080-  81,  paras.  1175-  77. 
 155  Section  224(  a)(  4)  defines  pole  attachment  as  any  attachment  by  a  cable  television  system  or  provider  of 
 telecommunications  service  to  a  pole,  duct,  conduit,  or  right-  of-  way  owned  or  controlled  by  a  utility.  47  U.  S.  C.    224(  a)(  4). 


 156  47  U.  S.  C.    224(  b)(  1). 
 157  Id.    224(  c)(  1).  The  1996  Act  extended  the  Commissions  authority  to  include  not  just  rates,  terms,  and 
 conditions,  but  also  the  authority  to  regulate  nondiscriminatory  access  to  poles,  ducts,  conduits,  and  rights-  of-  way.  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  16104,  para.  1232;  47  U.  S.  C.    224(  f).  Absent  state 


 regulation  of  terms  and  conditions  of  nondiscriminatory  attachment  access,  the  Commission  retains  jurisdiction.  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  16104,  para.  1232;  47  U.  S.  C.    224(  c)(  1);  see  also  Bell 
 Atlantic  New  York  Order,  15  FCC  Rcd  at  4093,  para.  264. 
 158  See  States  That  Have  Certified  That  They  Regulate  Pole  Attachments,  Public  Notice,  7  FCC  Rcd  1498  (1992); 
 47  U.  S.  C.    224(  f). 
 159  47  U.  S.  C.    271(  c)(  2)(  B)(  iv). 
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 transmission  facility  between  a  distribution  frame,  or  its  equivalent,  in  an  incumbent  LEC  central  office,  and  the  demarcation  point  at  the  customer  premises.  This  definition  includes  different 
 types  of  loops,  including  two-  wire  and  four-  wire  analog  voice-  grade  loops,  and  two-  wire  and  four-  wire  loops  that  are  conditioned  to  transmit  the  digital  signals  needed  to  provide  service  such 
 as  ISDN,  ADSL,  HDSL,  and  DS1-  level  signals.  160 
 49.  In  order  to  establish  that  it  is  providing  unbundled  local  loops  in  compliance  with  checklist  item  4,  a  BOC  must  demonstrate  that  it  has  a  concrete  and  specific  legal 


 obligation  to  furnish  loops  and  that  it  is  currently  doing  so  in  the  quantities  that  competitors  demand  and  at  an  acceptable  level  of  quality.  A  BOC  must  also  demonstrate  that  it  provides 
 nondiscriminatory  access  to  unbundled  loops.  161  Specifically,  the  BOC  must  provide  access  to  any  functionality  of  the  loop  requested  by  a  competing  carrier  unless  it  is  not  technically  feasible 
 to  condition  the  loop  facility  to  support  the  particular  functionality  requested.  In  order  to  provide  the  requested  loop  functionality,  such  as  the  ability  to  deliver  xDSL  services,  the  BOC 
 may  be  required  to  take  affirmative  steps  to  condition  existing  loop  facilities  to  enable  competing  carriers  to  provide  services  not  currently  provided  over  the  facilities.  The  BOC  must  provide 
 competitors  with  access  to  unbundled  loops  regardless  of  whether  the  BOC  uses  digital  loop  carrier  (DLC)  technology  or  similar  remote  concentration  devices  for  the  particular  loops  sought 
 by  the  competitor. 
 50.  On  December  9,  1999,  the  Commission  released  the  Line  Sharing  Order,  which  introduced  new  rules  requiring  BOCs  to  offer  requesting  carriers  unbundled  access  to  the  high-frequency 


 portion  of  local  loops  (HFPL).  162  HFPL  is  defined  as  the  frequency  above  the  voiceband  on  a  copper  loop  facility  that  is  being  used  to  carry  traditional  POTS  analog  circuit-switched 
 voiceband  transmissions.  This  definition  applies  whether  a  BOCs  voice  customers  are  served  by  cooper  or  by  digital  loop  carrier  equipment.  Competing  carriers  should  have 
 access  to  the  HFPL  at  either  a  central  office  or  at  a  remote  terminal.  However,  the  HFPL  network  element  is  only  available  on  a  copper  loop  facility.  163 


 51.  To  determine  whether  a  BOC  makes  line  sharing  available  consistent  with  Commission  rules  set  out  in  the  Line  Sharing  Order,  the  Commission  examines  categories  of 
 performance  measurements  identified  in  the  Bell  Atlantic  New  York  and  SWBT  Texas  Orders. 
 160  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  15691,  para.  380;  UNE  Remand  Order,  15  FCC  Rcd 
 at  3772-  73,  paras.  166-  67,  n.  301  (retaining  definition  of  the  local  loop  from  the  Local  Competition  First  Report  and  Order,  but  replacing  the  phrase  network  interconnection  device  with  demarcation  point,  and  making  explicit 


 that  dark  fiber  and  loop  conditioning  are  among  the  features,  functions  and  capabilities  of  the  loop). 
 161  SWBT  Texas  Order,  15  FCC  Rcd  at  18481-  81,  para.  248;  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4095, 
 para.  269;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20637,  para.  185. 
 162  See  Line  Sharing  Order,  14  FCC  Rcd  at  20924-  27,  paras.  20-  27. 


 163  See  Deployment  of  Wireline  Services  offering  Advanced  Telecommunications  Capability  and  Implementation  of 
 the  Local  Competition  Provisions  of  the  Telecommunications  Act  of  1996,  Third  Report  and  Order  on  Reconsideration  in  CC  Docket  No.  98-  147,  Fourth  Report  and  Order  on  Reconsideration  in  CC  Docket  No.  96-  98, 


 16  FCC  Rcd  2101,  2106-  07,  para.  10  (2001). 
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 Specifically,  a  successful  BOC  applicant  could  provide  evidence  of  BOC-  caused  missed  installation  due  dates,  average  installation  intervals,  trouble  reports  within  30  days  of 
 installation,  mean  time  to  repair,  trouble  report  rates,  and  repeat  trouble  report  rates.  In  addition,  a  successful  BOC  applicant  should  provide  evidence  that  its  central  offices  are  operationally 
 ready  to  handle  commercial  volumes  of  line  sharing  and  that  it  provides  competing  carriers  with  nondiscriminatory  access  to  the  pre-  ordering  and  ordering  OSS  functions  associated  with  the 
 provision  of  line  shared  loops,  including  access  to  loop  qualification  information  and  databases. 
 52.  Section  271(  c)(  2)(  B)(  iv)  also  requires  that  a  BOC  demonstrate  that  it  makes  line  splitting  available  to  competing  carriers  so  that  competing  carriers  may  provide  voice  and  data 


 service  over  a  single  loop.  164  In  addition,  a  BOC  must  demonstrate  that  a  competing  carrier,  either  alone  or  in  conjunction  with  another  carrier,  is  able  to  replace  an  existing  UNE-  P 
 configuration  used  to  provide  voice  service  with  an  arrangement  that  enables  it  to  provide  voice  and  data  service  to  a  customer.  To  make  such  a  showing,  a  BOC  must  show  that  it  has  a  legal 
 obligation  to  provide  line  splitting  through  rates,  terms,  and  conditions  in  interconnection  agreements  and  that  it  offers  competing  carriers  the  ability  to  order  an  unbundled  xDSL-  capable 
 loop  terminated  to  a  collocated  splitter  and  DSLAM  equipment,  and  combine  it  with  unbundled  switching  and  shared  transport.  165 


 E.  Checklist  Item  5    Unbundled  Local  Transport 
 53.  Section  271(  c)(  2)(  B)(  v)  of  the  competitive  checklist  requires  a  BOC  to  provide  [  l]  ocal  transport  from  the  trunk  side  of  a  wireline  local  exchange  carrier  switch  unbundled  from 


 switching  or  other  services.  166  The  Commission  has  required  that  BOCs  provide  both  dedicated  and  shared  transport  to  requesting  carriers.  167  Dedicated  transport  consists  of  BOC  transmission 
 facilities  dedicated  to  a  particular  customer  or  carrier  that  provide  telecommunications  between  wire  centers  owned  by  BOCs  or  requesting  telecommunications  carriers,  or  between  switches 
 owned  by  BOCs  or  requesting  telecommunications  carriers.  168  Shared  transport  consists  of 


 164  See  generally  SWBT  Texas  Order,  15  FCC  Rcd  at  18515-  17,  paras.  323-  329  (describing  line  splitting);  47 
 C.  F.  R.    51.703(  c)  (requiring  that  incumbent  LECs  provide  competing  carriers  with  access  to  unbundled  loops  in  a  manner  that  allows  competing  carriers  to  provide  any  telecommunications  service  that  can  be  offered  by  means  of 


 that  network  element). 
 165  See  SWBT  Kansas/  Oklahoma  Order,  16  FCC  Rcd  at  6348,  para.  220. 


 166  47  U.  S.  C.    271(  c)(  2)(  B)(  v). 
 167  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20719,  para.  201. 
 168  Id.  A  BOC  has  the  following  obligations  with  respect  to  dedicated  transport:  (a)  provide  unbundled  access  to 
 dedicated  transmission  facilities  between  BOC  central  offices  or  between  such  offices  and  serving  wire  centers  (SWCs);  between  SWCs  and  interexchange  carriers  points  of  presence  (POPs);  between  tandem  switches  and 


 SWCs,  end  offices  or  tandems  of  the  BOC,  and  the  wire  centers  of  BOCs  and  requesting  carriers;  (b)  provide  all  technically  feasible  transmission  capabilities  such  as  DS1,  DS3,  and  Optical  Carrier  levels  that  the  competing  carrier 
 could  use  to  provide  telecommunications;  (c)  not  limit  the  facilities  to  which  dedicated  interoffice  transport  facilities  are  connected,  provided  such  interconnections  are  technically  feasible,  or  restrict  the  use  of  unbundled  transport 
 facilities;  and  (d)  to  the  extent  technically  feasible,  provide  requesting  carriers  with  access  to  digital  cross-  connect  (continued.) 
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 transmission  facilities  shared  by  more  than  one  carrier,  including  the  BOC,  between  end  office  switches,  between  end  office  switches  and  tandem  switches,  and  between  tandem  switches,  in 
 the  BOCs  network.  169 
 F.  Checklist  Item  6    Unbundled  Local  Switching 
 54.  Section  271(  c)(  2)(  B)(  vi)  of  the  1996  Act  requires  a  BOC  to  provide  [  l]  ocal  switching  unbundled  from  transport,  local  loop  transmission,  or  other  services.  170  In  the  Second 


 BellSouth  Louisiana  Order,  the  Commission  required  BellSouth  to  provide  unbundled  local  switching  that  included  line-  side  and  trunk-  side  facilities,  plus  the  features,  functions,  and 
 capabilities  of  the  switch.  171  The  features,  functions,  and  capabilities  of  the  switch  include  the  basic  switching  function  as  well  as  the  same  basic  capabilities  that  are  available  to  the  incumbent 
 LECs  customers.  172  Additionally,  local  switching  includes  all  vertical  features  that  the  switch  is  capable  of  providing,  as  well  as  any  technically  feasible  customized  routing  functions.  173 


 55.  Moreover,  in  the  Second  BellSouth  Louisiana  Order,  the  Commission  required  BellSouth  to  permit  competing  carriers  to  purchase  UNEs,  including  unbundled  switching,  in  a 
 manner  that  permits  a  competing  carrier  to  offer,  and  bill  for,  exchange  access  and  the  termination  of  local  traffic.  174  The  Commission  also  stated  that  measuring  daily  customer  usage 
 for  billing  purposes  requires  essentially  the  same  OSS  functions  for  both  competing  carriers  and  incumbent  LECs,  and  that  a  BOC  must  demonstrate  that  it  is  providing  equivalent  access  to 
 billing  information.  175  Therefore,  the  ability  of  a  BOC  to  provide  billing  information  necessary  (Continued  from  previous  page) 
 system  functionality  in  the  same  manner  that  the  BOC  offers  such  capabilities  to  interexchange  carriers  that  purchase  transport  services.  Id.  at  20719. 


 169  Id.  at  20719,  n.  650.  The  Commission  also  found  that  a  BOC  has  the  following  obligations  with  respect  to 
 shared  transport:  (a)  provide  shared  transport  in  a  way  that  enables  the  traffic  of  requesting  carriers  to  be  carried  on  the  same  transport  facilities  that  a  BOC  uses  for  its  own  traffic;  (b)  provide  shared  transport  transmission  facilities 


 between  end  office  switches,  between  its  end  office  and  tandem  switches,  and  between  tandem  switches  in  its  network;  (c)  permit  requesting  carriers  that  purchase  unbundled  shared  transport  and  unbundled  switching  to  use  the 
 same  routing  table  that  is  resident  in  the  BOCs  switch;  and  (d)  permit  requesting  carriers  to  use  shared  (or  dedicated)  transport  as  an  unbundled  element  to  carry  originating  access  traffic  from,  and  terminating  traffic  to, 
 customers  to  whom  the  requesting  carrier  is  also  providing  local  exchange  service.  Id.  at  20720,  n.  652. 
 170  47  U.  S.  C.    271(  c)(  2)(  B)(  vi);  see  also  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20722.  A  switch 
 connects  end  user  lines  to  other  end  user  lines,  and  connects  end  user  lines  to  trunks  used  for  transporting  a  call  to  another  central  office  or  to  a  long-  distance  carrier.  Switches  can  also  provide  end  users  with  vertical  features  such 


 as  call  waiting,  call  forwarding,  and  caller  ID,  and  can  direct  a  call  to  a  specific  trunk,  such  as  to  a  competing  carriers  operator  services. 


 171  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20722,  para.  207. 
 172  Id. 
 173  Id.  at  20722-  23,  para.  207. 
 174  Id.  at  20723,  para.  208. 
 175  Id.  at  20723,  para.  208  (citing  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20619,  para.  140). 
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 for  a  competitive  LEC  to  bill  for  exchange  access  and  termination  of  local  traffic  is  an  aspect  of  unbundled  local  switching.  176  Thus,  there  is  an  overlap  between  the  provision  of  unbundled  local 
 switching  and  the  provision  of  the  OSS  billing  function.  177 
 56.  To  comply  with  the  requirements  of  unbundled  local  switching,  a  BOC  must  also  make  available  trunk  ports  on  a  shared  basis  and  routing  tables  resident  in  the  BOCs  switch,  as 


 necessary  to  provide  access  to  shared  transport  functionality.  178  In  addition,  a  BOC  may  not  limit  the  ability  of  competitors  to  use  unbundled  local  switching  to  provide  exchange  access  by 
 requiring  competing  carriers  to  purchase  a  dedicated  trunk  from  an  interexchange  carriers  point  of  presence  to  a  dedicated  trunk  port  on  the  local  switch.  179 


 G.  Checklist  Item  7    911/  E911  Access  and  Directory  Assistance/  Operator  Services 
 57.  Section  271(  c)(  2)(  B)(  vii)  of  the  Act  requires  a  BOC  to  provide  [  n]  ondiscriminatory  access  to    (I)  911  and  E911  services.  180  In  the  Ameritech  Michigan 
 Order,  the  Commission  found  that  section  271  requires  a  BOC  to  provide  competitors  access  to  its  911  and  E911  services  in  the  same  manner  that  a  BOC  obtains  such  access,  i.  e.,  at  parity.  181 
 Specifically,  the  Commission  found  that  a  BOC  must  maintain  the  911  database  entries  for  competing  LECs  with  the  same  accuracy  and  reliability  that  it  maintains  the  database  entries  for 
 its  own  customers.  182  For  facilities-  based  carriers,  the  BOC  must  provide  unbundled  access  to  [its]  911  database  and  911  interconnection,  including  the  provision  of  dedicated  trunks  from  the 
 requesting  carriers  switching  facilities  to  the  911  control  office  at  parity  with  what  [the  BOC]  provides  to  itself.  183  Section  271(  c)(  2)(  B)(  vii)(  II)  and  section  271(  c)(  2)(  B)(  vii)(  III)  require  a 
 BOC  to  provide  nondiscriminatory  access  to  directory  assistance  services  to  allow  the  other  carriers  customers  to  obtain  telephone  numbers  and  operator  call  completion  services, 
 respectively.  184  Section  251(  b)(  3)  of  the  Act  imposes  on  each  LEC  the  duty  to  permit  all 


 176  Id. 
 177  Id. 
 178  Id.  at  20723,  para.  209  (citing  the  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20705,  para.  306). 
 179  Id.  (citing  the  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20714-  15,  paras.  324-  25). 
 180  47  U.  S.  C.    271(  c)(  2)(  B)(  vii).  911  and  E911  services  transmit  calls  from  end  users  to  emergency  personnel.  It 
 is  critical  that  a  BOC  provide  competing  carriers  with  accurate  and  nondiscriminatory  access  to  911/  E911  services  so  that  these  carriers  customers  are  able  to  reach  emergency  assistance.  Customers  use  directory  assistance  and 


 operator  services  to  obtain  customer  listing  information  and  other  call  completion  services. 
 181  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20679,  para.  256. 


 182  Id. 
 183  Id. 
 184  47  U.  S.  C.    271(  c)(  2)(  B)(  vii)(  II),  (III). 
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 [competing  providers  of  telephone  exchange  service  and  telephone  toll  service]  to  have  nondiscriminatory  access  to  .  .  .  operator  services,  directory  assistance,  and  directory  listing,  with 
 no  unreasonable  dialing  delays.  185  The  Commission  concluded  in  the  Second  BellSouth  Louisiana  Order  that  a  BOC  must  be  in  compliance  with  the  regulations  implementing  section 
 251(  b)(  3)  to  satisfy  the  requirements  of  sections  271(  c)(  2)(  B)(  vii)(  II)  and  271(  c)(  2)(  B)(  vii)(  III).  186  In  the  Local  Competition  Second  Report  and  Order,  the  Commission 
 held  that  the  phrase  nondiscriminatory  access  to  directory  assistance  and  directory  listings  means  that  the  customers  of  all  telecommunications  service  providers  should  be  able  to  access 
 each  LECs  directory  assistance  service  and  obtain  a  directory  listing  on  a  nondiscriminatory  basis,  notwithstanding:  (1)  the  identity  of  a  requesting  customers  local  telephone  service 
 provider;  or  (2)  the  identity  of  the  telephone  service  provider  for  a  customer  whose  directory  listing  is  requested.  187  The  Commission  concluded  that  nondiscriminatory  access  to  the  dialing 


 185  Id.    251(  b)(  3).  The  Commission  implemented  section  251(  b)(  3)  in  the  Local  Competition  Second  Report  and 
 Order.  47  C.  F.  R.    51.217;  Implementation  of  the  Local  Competition  Provisions  of  the  Telecommunications  Act  of  1996,  Second  Report  and  Order  and  Memorandum  Opinion  and  Order,  11  FCC  Rcd  19392  (1996)  (Local 


 Competition  Second  Report  and  Order)  vacated  in  part  sub  nom.  People  of  the  State  of  California  v.  FCC,  124  F.  3d  934  (8th  Cir.  1997),  overruled  in  part,  AT&  T  Corp.  v.  Iowa  Utils.  Bd.,  525  U.  S.  366  (1999);  see  also 
 Implementation  of  the  Telecommunications  Act  of  1996:  Provision  of  Directory  Listings  Information  under  the  Telecommunications  Act  of  1934,  Notice  of  Proposed  Rulemaking,  14  FCC  Rcd  15550  (1999)  (Directory  Listings 
 Information  NPRM). 
 186  While  both  sections  251(  b)(  3)  and  271(  c)(  2)(  B)(  vii)(  II)  refer  to  nondiscriminatory  access  to  directory 
 assistance,  section  251(  b)(  3)  refers  to  nondiscriminatory  access  to  operator  services,  while  section  271(  c)(  2)(  B)(  vii)(  III)  refers  to  nondiscriminatory  access  to  operator  call  completion  services.  47  U.  S.  C. 


   251(  b)(  3),  271(  c)(  2)(  B)(  vii)(  III).  The  term  operator  call  completion  services  is  not  defined  in  the  Act,  nor  has  the  Commission  previously  defined  the  term.  However,  for  section  251(  b)(  3)  purposes,  the  term  operator  services 
 was  defined  as  meaning  any  automatic  or  live  assistance  to  a  consumer  to  arrange  for  billing  or  completion,  or  both,  of  a  telephone  call.  Local  Competition  Second  Report  and  Order,  11  FCC  Rcd  at  19448,  para.  110.  In  the 
 same  order  the  Commission  concluded  that  busy  line  verification,  emergency  interrupt,  and  operator-  assisted  directory  assistance  are  forms  of  operator  services,  because  they  assist  customers  in  arranging  for  the  billing  or 
 completion  (or  both)  of  a  telephone  call.  Id.  at  19449,  para.  111.  All  of  these  services  may  be  needed  or  used  to  place  a  call.  For  example,  if  a  customer  tries  to  direct  dial  a  telephone  number  and  constantly  receives  a  busy 
 signal,  the  customer  may  contact  the  operator  to  attempt  to  complete  the  call.  Since  billing  is  a  necessary  part  of  call  completion,  and  busy  line  verification,  emergency  interrupt,  and  operator-  assisted  directory  assistance  can  all  be 
 used  when  an  operator  completes  a  call,  the  Commission  concluded  in  the  Second  BellSouth  Louisiana  Order  that  for  checklist  compliance  purposes,  operator  call  completion  services  is  a  subset  of  or  equivalent  to  operator 
 service.  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20740,  n.  763.  As  a  result,  the  Commission  uses  the  nondiscriminatory  standards  established  for  operator  services  to  determine  whether  nondiscriminatory  access  is 
 provided. 
 187  47  C.  F.  R.    51.217(  c)(  3);  Local  Competition  Second  Report  and  Order,  11  FCC  Rcd  at  19456-  58,  paras.  130- 
 35.  The  Local  Competition  Second  Report  and  Orders  interpretation  of  section  251(  b)(  3)  is  limited  to  access  to  each  LECs  directory  assistance  service.  Id.  at  19456,  para.  135.  However,  section  271(  c)(  2)(  B)(  vii)  is  not  limited 


 to  the  LECs  systems  but  requires  nondiscriminatory  access  to  .  .  .  directory  assistance  to  allow  the  other  carriers  customers  to  obtain  telephone  numbers.  47  U.  S.  C.    271(  c)(  2)(  B)(  vii).  Combined  with  the  Commissions 
 conclusion  that  incumbent  LECs  must  unbundle  the  facilities  and  functionalities  providing  operator  services  and  directory  assistance  from  resold  services  and  other  unbundled  network  elements  to  the  extent  technically  feasible, 
 Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  15772-  73,  paras.  535-  37,  section  271(  c)(  2)(  B)(  vii)  s  requirement  should  be  understood  to  require  the  BOCs  to  provide  nondiscriminatory  access  to  the  directory 
 (continued.) 
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 patterns  of  4-  1-  1  and  5-  5-  5-  1-  2-  1-  2  to  access  directory  assistance  were  technically  feasible,  and  would  continue.  188  The  Commission  specifically  held  that  the  phrase  nondiscriminatory  access 
 to  operator  services  means  that  a  telephone  service  customer,  regardless  of  the  identity  of  his  or  her  local  telephone  service  provider,  must  be  able  to  connect  to  a  local  operator  by  dialing  0,   
 or  0  plus  the  desired  telephone  number.  189 
 58.  Competing  carriers  may  provide  operator  services  and  directory  assistance  by  reselling  the  BOCs  services,  outsourcing  service  provision  to  a  third-  party  provider,  or  using 


 their  own  personnel  and  facilities.  The  Commissions  rules  require  BOCs  to  permit  competitive  LECs  wishing  to  resell  the  BOCs  operator  services  and  directory  assistance  to  request  the  BOC 
 to  brand  their  calls.  190  Competing  carriers  wishing  to  provide  operator  services  or  directory  assistance  using  their  own  or  a  third  party  providers  facilities  and  personnel  must  be  able  to 
 obtain  directory  listings  either  by  obtaining  directory  information  on  a  read  only  or  per  dip  basis  from  the  BOCs  directory  assistance  database,  or  by  creating  their  own  directory  assistance 
 database  by  obtaining  the  subscriber  listing  information  in  the  BOCs  database.  191  Although  the  Commission  originally  concluded  that  BOCs  must  provide  directory  assistance  and  operator 
 services  on  an  unbundled  basis  pursuant  to  sections  251  and  252,  the  Commission  removed  directory  assistance  and  operator  services  from  the  list  of  required  UNEs  in  the  UNE  Remand 
 Order.  192  Checklist  item  obligations  that  do  not  fall  within  a  BOCs  obligations  under  section  251(  c)(  3)  are  not  subject  to  the  requirements  of  sections  251  and  252  that  rates  be  based  on 
 forward-  looking  economic  costs.  193  Checklist  item  obligations  that  do  not  fall  within  a  BOCs  (Continued  from  previous  page) 
 assistance  service  provider  selected  by  the  customers  local  service  provider,  regardless  of  whether  the  competitor;  provides  such  services  itself;  selects  the  BOC  to  provide  such  services;  or  chooses  a  third  party  to  provide  such 
 services.  See  Directory  Listings  Information  NPRM. 
 188  Local  Competition  Second  Report  and  Order,  11  FCC  Rcd  at  19464,  para.  151. 


 189  Id.  at  19464,  para.  151. 
 190  47  C.  F.  R.    51.217(  d);  Local  Competition  Second  Report  and  Order,  11  FCC  Rcd  at  19463,  para.  148.  For 
 example,  when  customers  call  the  operator  or  calls  for  directory  assistance,  they  typically  hear  a  message,  such  as  thank  you  for  using  XYZ  Telephone  Company.  Competing  carriers  may  use  the  BOCs  brand,  request  the  BOC 


 to  brand  the  call  with  the  competitive  carriers  name  or  request  that  the  BOC  not  brand  the  call  at  all.  47  C.  F.  R.    51.217(  d). 


 191  47  C.  F.  R.    51.217(  C)(  3)(  ii);  Local  Competition  Second  Report  and  Order,  11  FCC  Rcd  at  19460-  61,  paras. 
 141-  44;  Implementation  of  the  Telecommunications  Act  of  1996:  Telecommunications  Carriers  Use  of  Customer  Proprietary  Network  Information  and  Other  Customer  Information,  Implementation  of  the  Local  Competition 


 Provisions  of  the  Telecommunications  Act  of  1996,  Provision  of  Directory  Listing  Information  Under  the  Communications  Act  of  1934,  as  amended,  Third  Report  and  Order,  Second  Order  on  Reconsideration,  and  Notice 
 of  Proposed  Rulemaking,  14  FCC  Rcd  15550,  15630-  31,  paras.  152-  54  (1999);  Provision  of  Directory  Listing  Information  Under  the  Communications  Act  of  1934,  as  amended,  First  Report  and  Order,  16  FCC  Rcd  2736,  2743- 
 51  (2001). 
 192  UNE  Remand  Order,  15  FCC  Rcd  at  3891-  92,  paras.  441-  42. 


 193  UNE  Remand  Order,  15  FCC  Rcd  at  3905,  para.  470;  see  generally  47  U.  S.  C.    251-  52;  see  also  47  U.  S.  C.   
 252(  d)(  1)(  A)(  i)  (requiring  UNE  rates  to  be  based  on  the  cost  (determined  without  reference  to  a  rate-  of-  return  or  other  rate-  based  proceeding)  of  providing  the    network  element). 
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 UNE  obligations,  however,  still  must  be  provided  in  accordance  with  sections  201(  b)  and  202(  a),  which  require  that  rates  and  conditions  be  just  and  reasonable,  and  not  unreasonably 
 discriminatory.  194 
 H.  Checklist  Item  8    White  Pages  Directory  Listings 
 59.  Section  271(  c)(  2)(  B)(  viii)  of  the  1996  Act  requires  a  BOC  to  provide  [  w]  hite  pages  directory  listings  for  customers  of  the  other  carriers  telephone  exchange  service.  195 


 Section  251(  b)(  3)  of  the  1996  Act  obligates  all  LECs  to  permit  competitive  providers  of  telephone  exchange  service  and  telephone  toll  service  to  have  nondiscriminatory  access  to 
 directory  listing.  196 
 60.  In  the  Second  BellSouth  Louisiana  Order,  the  Commission  concluded  that,  consistent  with  the  Commissions  interpretation  of  directory  listing  as  used  in  section 


 251(  b)(  3),  the  term  white  pages  in  section  271(  c)(  2)(  B)(  viii)  refers  to  the  local  alphabetical  directory  that  includes  the  residential  and  business  listings  of  the  customers  of  the  local 
 exchange  provider.  197  The  Commission  further  concluded,  the  term  directory  listing,    as  used  in  this  section,  includes,  at  a  minimum,  the  subscribers  name,  address,  telephone  number,  or  any 
 combination  thereof.  198  The  Commissions  Second  BellSouth  Louisiana  Order  also  held  that  a  BOC  satisfies  the  requirements  of  checklist  item  8  by  demonstrating  that  it:  (1)  provided 
 nondiscriminatory  appearance  and  integration  of  white  page  directory  listings  to  competitive  LECs  customers;  and  (2)  provided  white  page  listings  for  competitors  customers  with  the  same 
 accuracy  and  reliability  that  it  provides  its  own  customers.  199 
 I.  Checklist  Item  9    Numbering  Administration 
 61.  Section  271(  c)(  2)(  B)(  ix)  of  the  1996  Act  requires  a  BOC  to  provide  nondiscriminatory  access  to  telephone  numbers  for  assignment  to  the  other  carriers  telephone 


 194  UNE  Remand  Order,  15  FCC  Rcd  at  3905-  06,  paras.  470-  73;  see  also  47  U.  S.  C.    201(  b),  202(  a). 
 195  47  U.  S.  C.    271(  c)(  2)(  B)(  viii). 
 196  Id.    251(  b)(  3). 
 197  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20748,  para.  255. 
 198  Id.  In  the  Second  BellSouth  Louisiana  Order,  the  Commission  stated  that  the  definition  of  directory  listing 
 was  synonymous  with  the  definition  of  subscriber  list  information.  Id.  at  20747  (citing  the  Local  Competition  Second  Report  and  Order,  11  FCC  Rcd  at  19458-  59).  However,  the  Commissions  decision  in  a  later  proceeding 


 obviates  this  comparison,  and  supports  the  definition  of  directory  listing  delineated  above.  See  Implementation  of  the  Telecommunications  Carriers  Use  of  Customer  Proprietary  Network  Information  and  Other  Customer 
 Information,  CC  Docket  No.  96-  115,  Third  Report  and  Order;  Implementation  of  the  Local  Competition  Provisions  of  the  Telecommunications  Act  of  1996,  CC  Docket  No.  96-  98,  Second  Order  on  Reconsideration;  Provision  of 
 Directory  Listing  Information  under  the  Telecommunications  Act  of  1934,  As  Amended,  CC  Docket  No.  99-  273,  FCC  99-  227,  Notice  of  Proposed  Rulemaking,  para.  160  (rel.  Sept.  9,  1999). 


 199  Id. 
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 exchange  service  customers,  until  the  date  by  which  telecommunications  numbering  administration,  guidelines,  plan,  or  rules  are  established.  200  The  checklist  mandates  compliance 
 with  such  guidelines,  plan,  or  rules  after  they  have  been  established.  201  A  BOC  must  demonstrate  that  it  adheres  to  industry  numbering  administration  guidelines  and  Commission 
 rules.  202 
 J.  Checklist  Item  10    Databases  and  Associated  Signaling 
 62.  Section  271(  c)(  2)(  B)(  x)  of  the  1996  Act  requires  a  BOC  to  provide  nondiscriminatory  access  to  databases  and  associated  signaling  necessary  for  call  routing  and 


 completion.  203  In  the  Second  BellSouth  Louisiana  Order,  the  Commission  required  BellSouth  to  demonstrate  that  it  provided  requesting  carriers  with  nondiscriminatory  access  to:  (  1)  signaling 
 networks,  including  signaling  links  and  signaling  transfer  points;  (2)  certain  call-  related  databases  necessary  for  call  routing  and  completion,  or  in  the  alternative,  a  means  of  physical 
 access  to  the  signaling  transfer  point  linked  to  the  unbundled  database;  and  (3)  Service  Management  Systems  (SMS).  204  The  Commission  also  required  BellSouth  to  design,  create, 
 test,  and  deploy  Advanced  Intelligent  Network  (AIN)  based  services  at  the  SMS  through  a  Service  Creation  Environment  (SCE).  205  In  the  Local  Competition  First  Report  and  Order,  the 
 Commission  defined  call-  related  databases  as  databases,  other  than  operations  support  systems,  that  are  used  in  signaling  networks  for  billing  and  collection  or  the  transmission,  routing,  or 
 other  provision  of  telecommunications  service.  206  At  that  time  the  Commission  required  incumbent  LECs  to  provide  unbundled  access  to  their  call-  related  databases,  including  but  not 
 limited  to:  the  Line  Information  Database  (LIDB),  the  Toll  Free  Calling  database,  the  Local  Number  Portability  database,  and  Advanced  Intelligent  Network  databases.  207  In  the  UNE 
 Remand  Order,  the  Commission  clarified  that  the  definition  of  call-  related  databases  includes, 


 200  47  U.  S.  C.    271(  c)(  2)(  B)(  ix). 
 201  Id. 
 202  See  Second  Bell  South  Louisiana  Order,  13  FCC  Rcd  at  20752;  see  also  Numbering  Resource  Optimization, 
 Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  15  FCC  Rcd  7574  (2000);  Numbering  Resource  Optimization,  Second  Report  and  Order,  Order  on  Reconsideration  in  CC  Docket  No.  99-  200  and  Second  Further 


 Notice  of  Proposed  Rulemaking  in  CC  Docket  No.  99-  200,  CC  Docket  Nos.  96-  98;  99-  200  (rel.  Dec.  29,  2000);  Numbering  Resource  Optimization,  Third  Report  and  Order  and  Second  Order  on  Reconsideration  in  CC  Docket 
 No.  96-  98  and  CC  Docket  No.  99-  200  (rel.  Dec.  28,  2001). 
 203  47  U.  S.  C.    271(  c)(  2)(  B)(  x). 


 204  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20753,  para.  267. 
 205  Id.  at  20755-  56,  para.  272. 
 206  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  15741,  n.  1126;  UNE  Remand  Order,  15  FCC  Rcd  at 
 3875,  para.  403. 
 207  Id.  at  15741-  42,  para.  484. 
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 but  is  not  limited  to,  the  calling  name  (CNAM)  database,  as  well  as  the  911  and  E911  databases.  208 
 K.  Checklist  Item  11    Number  Portability 
 63.  Section  271(  c)(  2)(  B)  of  the  1996  Act  requires  a  BOC  to  comply  with  the  number  portability  regulations  adopted  by  the  Commission  pursuant  to  section  251.  209  Section  251(  b)(  2) 


 requires  all  LECs  to  provide,  to  the  extent  technically  feasible,  number  portability  in  accordance  with  requirements  prescribed  by  the  Commission.  210  The  1996  Act  defines  number 
 portability  as  the  ability  of  users  of  telecommunications  services  to  retain,  at  the  same  location,  existing  telecommunications  numbers  without  impairment  of  quality,  reliability,  or  convenience 
 when  switching  from  one  telecommunications  carrier  to  another.  211  In  order  to  prevent  the  cost  of  number  portability  from  thwarting  local  competition,  Congress  enacted  section  251(  e)(  2), 
 which  requires  that  [  t]  he  cost  of  establishing  telecommunications  numbering  administration  arrangements  and  number  portability  shall  be  borne  by  all  telecommunications  carriers  on  a 
 competitively  neutral  basis  as  determined  by  the  Commission.  212  Pursuant  to  these  statutory  provisions,  the  Commission  requires  LECs  to  offer  interim  number  portability  to  the  extent 
 technically  feasible.  213  The  Commission  also  requires  LECs  to  gradually  replace  interim  number  portability  with  permanent  number  portability.  214  The  Commission  has  established 
 guidelines  for  states  to  follow  in  mandating  a  competitively  neutral  cost-  recovery  mechanism  for 


 208  UNE  Remand  Order,  15  FCC  Rcd  at  3875,  para.  403. 
 209  47  U.  S.  C.    271(  c)(  2)(  B)(  xii). 
 210  Id.  at    251(  b)(  2). 
 211  Id.  at    153(  30). 
 212  Id.  at    251(  e)(  2);  see  also  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20757,  para.  274;  In  the  Matter 
 of  Telephone  Number  Portability,  Third  Report  and  Order,  13  FCC  Rcd  11701,  11702-  04  (1998)  (Third  Number  Portability  Order);  In  the  Matter  of  Telephone  Number  Portability,  Fourth  Memorandum  Opinion  and  Order  on 


 Reconsideration,  15  FCC  Rcd  16459,  16460,  16462-  65,  paras.  1,  6-  9  (1999)  (Fourth  Number  Portability  Order). 
 213  Fourth  Number  Portability  Order,  15  FCC  Rcd  at  16465,  para.  10;  Telephone  Number  Portability,  First  Report 
 and  Order  and  Further  Notice  of  Proposed  Rulemaking,  11  FCC  Rcd  8352,  8409-  12,  paras.  110-  16  (1996)  (First  Number  Portability  Order);  see  also  47  U.  S.  C.    251(  b)(  2). 


 214  See  47  C.  F.  R.    52.3(  b)-(  f);  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20758,  para.  275;  First 
 Number  Portability  Order,  11  FCC  Rcd  at  8355,  8399-  8404,  paras.  3,  91;  Third  Number  Portability  Order,  13  FCC  Rcd  at  11708-  12,  paras.  12-  16. 
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 interim  number  portability,  215  and  created  a  competitively  neural  cost-  recovery  mechanism  for  long-  term  number  portability.  216 
 L.  Checklist  Item  12    Local  Dialing  Parity 
 64.  Section  271(  c)(  2)(  B)(  xii)  requires  a  BOC  to  provide  [  n]  ondiscriminatory  access  to  such  services  or  information  as  are  necessary  to  allow  the  requesting  carrier  to  implement 


 local  dialing  parity  in  accordance  with  the  requirements  of  section  251(  b)(  3).  217  Section  251(  b)(  3)  imposes  upon  all  LECs  [  t]  he  duty  to  provide  dialing  parity  to  competing  providers  of 
 telephone  exchange  service  and  telephone  toll  service  with  no  unreasonable  dialing  delays.  218  Section  153(  15)  of  the  Act  defines  dialing  parity  as  follows: 


 [A]  person  that  is  not  an  affiliate  of  a  local  exchange  carrier  is  able  to  provide  telecommunications  services  in  such  a  manner  that 
 customers  have  the  ability  to  route  automatically,  without  the  use  of  any  access  code,  their  telecommunications  to  the 
 telecommunications  services  provider  of  the  customers  designation.  219 


 65.  The  rules  implementing  section  251(  b)(  3)  provide  that  customers  of  competing  carriers  must  be  able  to  dial  the  same  number  of  digits  the  BOCs  customers  dial  to  complete  a 
 local  telephone  call.  220  Moreover,  customers  of  competing  carriers  must  not  otherwise  suffer  inferior  quality  service,  such  as  unreasonable  dialing  delays,  compared  to  the  BOCs 
 customers.  221 
 M.  Checklist  Item  13    Reciprocal  Compensation 
 215  See  47  C.  F.  R.    52.29;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20758,  para.  275;  First  Number 
 Portability  Order,  11  FCC  Rcd  at  8417-  24,  paras.  127-  40. 
 216  See  47  C.  F.  R.    52.32,  52.33;  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20758,  para.  275;  Third 
 Number  Portability  Order,  13  FCC  Rcd  at  11706-  07,  para.  8;  Fourth  Number  Portability  Order  at  16464-  65,  para.  9. 


 217  Based  on  the  Commissions  view  that  section  251(  b)(  3)  does  not  limit  the  duty  to  provide  dialing  parity  to  any 
 particular  form  of  dialing  parity  (i.  e.,  international,  interstate,  intrastate,  or  local),  the  Commission  adopted  rules  in  August  1996  to  implement  broad  guidelines  and  minimum  nationwide  standards  for  dialing  parity.  Local 


 Competition  Second  Report  and  Order,  11  FCC  Rcd  at  19407;  Interconnection  Between  Local  Exchange  Carriers  and  Commercial  Mobile  Radio  Service  Providers,  CC  Docket  No.  95-  185,  Further  Order  On  Reconsideration,  FCC 
 99-  170  (rel.  July  19,  1999). 
 218  47  U.  S.  C.    251(  b)(  3). 


 219  Id.    153(  15). 
 220  47  C.  F.  R    51.205,  51.207. 
 221  See  47  C.  F.  R.    51.207  (requiring  same  number  of  digits  to  be  dialed);  Local  Competition  Second  Report  and 
 Order,  11  FCC  Rcd  at  19400,  19403. 
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 66.  Section  271(  c)(  2)(  B)(  xiii)  of  the  Act  requires  that  a  BOC  enter  into  [  r]  eciprocal  compensation  arrangements  in  accordance  with  the  requirements  of  section  252(  d)(  2).  222  In 
 turn,  pursuant  to  section  252(  d)(  2)(  A),  a  state  commission  shall  not  consider  the  terms  and  conditions  for  reciprocal  compensation  to  be  just  and  reasonable  unless  (i)  such  terms  and 
 conditions  provide  for  the  mutual  and  reciprocal  recovery  by  each  carrier  of  costs  associated  with  the  transport  and  termination  on  each  carriers  network  facilities  of  calls  that  originate  on 
 the  network  facilities  of  the  other  carrier;  and  (ii)  such  terms  and  conditions  determine  such  costs  on  the  basis  of  a  reasonable  approximation  of  the  additional  costs  of  terminating  such  calls.  223 


 N.  Checklist  Item  14    Resale 
 67.  Section  271(  c)(  2)(  B)(  xiv)  of  the  Act  requires  a  BOC  to  make  telecommunications  services  .  .  .  available  for  resale  in  accordance  with  the  requirements  of 


 sections  251(  c)(  4)  and  252(  d)(  3).  224  Section  251(  c)(  4)(  A)  requires  incumbent  LECs  to  offer  for  resale  at  wholesale  rates  any  telecommunications  service  that  the  carrier  provides  at  retail  to 
 subscribers  who  are  not  telecommunications  carriers.  225  Section  252(  d)(  3)  requires  state  commissions  to  determine  wholesale  rates  on  the  basis  of  retail  rates  charged  to  subscribers  for 
 the  telecommunications  service  requested,  excluding  the  portion  thereof  attributable  to  any  marketing,  billing,  collection,  and  other  costs  that  will  be  avoided  by  the  local  exchange 
 carrier.  226  Section  251(  c)(  4)(  B)  prohibits  unreasonable  or  discriminatory  conditions  or  limitations  on  service  resold  under  section  251(  c)(  4)(  A).  227  Consequently,  the  Commission 
 concluded  in  the  Local  Competition  First  Report  and  Order  that  resale  restrictions  are  presumed  to  be  unreasonable  unless  the  LEC  proves  to  the  state  commission  that  the  restriction  is 
 reasonable  and  nondiscriminatory.  228  If  an  incumbent  LEC  makes  a  service  available  only  to  a  specific  category  of  retail  subscribers,  however,  a  state  commission  may  prohibit  a  carrier  that 
 obtains  the  service  pursuant  to  section  251(  c)(  4)(  A)  from  offering  the  service  to  a  different  category  of  subscribers.  229  If  a  state  creates  such  a  limitation,  it  must  do  so  consistent  with 


 222  47  U.  S.  C.    271(  c)(  2)(  B)(  xiii). 
 223  Id.    252(  d)(  2)(  A). 
 224  Id.    271(  c)(  2)(  B)(  xiv). 
 225  Id.    251(  c)(  4)(  A). 
 226  Id.    252(  d)(  3). 
 227  Id.    251(  c)(  4)(  B). 
 228  Local  Competition  First  Report  and  Order,  11  FCC  Rcd  at  15966,  para.  939;  47  C.  F.  R.    51.613(  b).  The 
 Eighth  Circuit  acknowledged  the  Commissions  authority  to  promulgate  such  rules,  and  specifically  upheld  the  sections  of  the  Commissions  rules  concerning  resale  of  promotions  and  discounts  in  Iowa  Utilities  Board.  Iowa 


 Utils.  Bd.  v.  FCC,  120  F.  3d  at  818-  19,  affd  in  part  and  remanded  on  other  grounds,  AT&  T  v.  Iowa  Utils.  Bd.,  525  U.  S.  366  (1999).  See  also  47  C.  F.  R.    51.613-  51.617. 


 229  47  U.  S.  C.    251(  c)(  4)(  B). 
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 requirements  established  by  the  Federal  Communications  Commission.  230  In  accordance  with  sections  271(  c)(  2)(  B)(  ii)  and  271(  c)(  2)(  B)(  xiv),  a  BOC  must  also  demonstrate  that  it  provides 
 nondiscriminatory  access  to  operations  support  systems  for  the  resale  of  its  retail  telecommunications  services.  231  The  obligations  of  section  251(  c)(  4)  apply  to  the  retail 
 telecommunications  services  offered  by  a  BOCs  advanced  services  affiliate.  232 
 V.  COMPLIANCE  WITH  SEPARATE  AFFILIATE  REQUIREMENTS    SECTION  272 


 68.  Section  271(  d)(  3)(  B)  requires  that  the  Commission  shall  not  approve  a  BOCs  application  to  provide  interLATA  services  unless  the  BOC  demonstrates  that  the  requested 
 authorization  will  be  carried  out  in  accordance  with  the  requirements  of  section  272.  233  The  Commission  set  standards  for  compliance  with  section  272  in  the  Accounting  Safeguards  Order 
 and  the  Non-  Accounting  Safeguards  Order.  234  Together,  these  safeguards  discourage  and  facilitate  the  detection  of  improper  cost  allocation  and  cross-  subsidization  between  the  BOC  and 
 its  section  272  affiliate.  235  In  addition,  these  safeguards  ensure  that  BOCs  do  not  discriminate  in  favor  of  their  section  272  affiliates.  236 


 69.  As  the  Commission  stated  in  the  Ameritech  Michigan  Order,  compliance  with  section  272  is  of  crucial  importance  because  the  structural,  transactional,  and 
 nondiscrimination  safeguards  of  section  272  seek  to  ensure  that  BOCs  compete  on  a  level 


 230  Id. 
 231  See,  e.  g.,  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4046-  48,  paras.  178-  81  (Bell  Atlantic  provides 
 nondiscriminatory  access  to  its  OSS  ordering  functions  for  resale  services  and  therefore  provides  efficient  competitors  a  meaningful  opportunity  to  compete). 


 232  See  Verizon  Connecticut  Order,  16  FCC  Rcd  14147,  14160-  63,  paras.  27-  33  (2001);  Association  of 
 Communications  Enterprises  v.  FCC,  235  F.  3d  662  (D.  C.  Cir.  2001). 
 233  47  U.  S.  C.    271(  d)(  3)(  B). 


 234  See  Implementation  of  the  Accounting  Safeguards  Under  the  Telecommunications  Act  of  1996,  CC  Docket  No. 
 96-  150,  Report  and  Order,  11  FCC  Rcd  17539  (1996)  (Accounting  Safeguards  Order),  Second  Order  On  Reconsideration,  FCC  00-  9  (rel.  Jan.  18,  2000);  Implementation  of  the  Non-  Accounting  Safeguards  of  Sections  271 


 and  272  of  the  Communications  Act  of  1934,  as  amended,  CC  Docket  No.  96-  149,  First  Report  and  Order  and  Further  Notice  of  Proposed  Rulemaking,  11  FCC  Rcd  21905  (1996)  (Non-  Accounting  Safeguards  Order),  petition 
 for  review  pending  sub  nom.  SBC  Communications  v.  FCC,  No.  97-  1118  (filed  D.  C.  Cir.  Mar.  6,  1997)  (held  in  abeyance  May  7,  1997),  First  Order  on  Reconsideration,  12  FCC  Rcd  2297  (1997)  (First  Order  on 
 Reconsideration),  Second  Order  on  Reconsideration,  12  FCC  Rcd  8653  (1997)  (Second  Order  on  Reconsideration),  affd  sub  nom.  Bell  Atlantic  Telephone  Companies  v.  FCC,  131  F.  3d  1044  (D.  C.  Cir.  1997),  Third  Order  on 
 Reconsideration,  FCC  99-  242  (rel.  Oct.  4,  1999)  (Third  Order  on  Reconsideration). 
 235  Non-  Accounting  Safeguards  Order,  11  FCC  Rcd  at  21914;  Accounting  Safeguards  Order,  11  FCC  Rcd  at 
 17550;  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20725. 
 236  Non-  Accounting  Safeguards  Order,  11  FCC  Rcd  at  21914,  paras.  15-  16;  Ameritech  Michigan  Order,  12  FCC 
 Rcd  at  20725,  para.  346. 
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 playing  field.  237  The  Commissions  findings  regarding  section  272  compliance  constitute  independent  grounds  for  denying  an  application.  238  Past  and  present  behavior  of  the  BOC 
 applicant  provides  the  best  indicator  of  whether  [the  applicant]  will  carry  out  the  requested  authorization  in  compliance  with  section  272.  239 


 VI.  COMPLIANCE  WITH  THE  PUBLIC  INTEREST    SECTION  271(  D)(  3)(  C) 
 70.  In  addition  to  determining  whether  a  BOC  satisfies  the  competitive  checklist  and  will  comply  with  section  272,  Congress  directed  the  Commission  to  assess  whether  the  requested 


 authorization  would  be  consistent  with  the  public  interest,  convenience,  and  necessity.  240  Compliance  with  the  competitive  checklist  is  itself  a  strong  indicator  that  long  distance  entry  is 
 consistent  with  the  public  interest.  This  approach  reflects  the  Commissions  many  years  of  experience  with  the  consumer  benefits  that  flow  from  competition  in  telecommunications 
 markets. 
 71.  Nonetheless,  the  public  interest  analysis  is  an  independent  element  of  the  statutory  checklist  and,  under  normal  canons  of  statutory  construction,  requires  an  independent 


 determination.  241  Thus,  the  Commission  views  the  public  interest  requirement  as  an  opportunity  to  review  the  circumstances  presented  by  the  application  to  ensure  that  no  other  relevant  factors 
 exist  that  would  frustrate  the  congressional  intent  that  markets  be  open,  as  required  by  the  competitive  checklist,  and  that  entry  will  therefore  serve  the  public  interest  as  Congress 
 expected.  Among  other  things,  the  Commission  may  review  the  local  and  long  distance  markets  to  ensure  that  there  are  not  unusual  circumstances  that  would  make  entry  contrary  to  the  public 
 interest  under  the  particular  circumstances  of  the  application  at  issue.  242  Another  factor  that  could  be  relevant  to  the  analysis  is  whether  the  Commission  has  sufficient  assurance  that  markets 
 will  remain  open  after  grant  of  the  application.  While  no  one  factor  is  dispositive  in  this  analysis,  the  overriding  goal  is  to  ensure  that  nothing  undermines  the  conclusion,  based  on  the 
 Commissions  analysis  of  checklist  compliance,  that  markets  are  open  to  competition. 


 237  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20725,  para.  346;  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at 
 4153,  para.  402. 
 238  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20785-  86,  para.  322;  Bell  Atlantic  New  York  Order,  15  FCC 
 Rcd  at  4153,  para.  402. 
 239  Bell  Atlantic  New  York  Order,  15  FCC  Rcd  at  4153,  para.  402. 


 240  47  U.  S.  C.    271(  d)(  3)(  C). 
 241  In  addition,  Congress  specifically  rejected  an  amendment  that  would  have  stipulated  that  full  implementation  of 
 the  checklist  necessarily  satisfies  the  public  interest  criterion.  See  Ameritech  Michigan  Order,  12  FCC  Rcd  at  20747  at  para.  360-  66;  see  also  141  Cong.  Rec.  S7971,  S8043  (June.  8,  1995). 


 242  See  Second  BellSouth  Louisiana  Order,  13  FCC  Rcd  at  20805-  06,  para.  360  (the  public  interest  analysis  may 
 include  consideration  of  whether  approval  .  .  .  will  foster  competition  in  all  relevant  telecommunications  markets). 
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 Federal  Communications  Commission  FCC  02-  63 
 Separate  Statement  of  Commissioner  Michael  J.  Copps, 
 Concurring 


 Re:  Application  by  Verizon  New  England,  Inc.,  Bell  Atlantic  Communications,  Inc.  (d/  b/  a  Verizon  Long  Distance),  NYNEX  Long  Distance  Company  (d/  b/  a  Verizon  Enterprise 
 Solutions),  Verizon  Global  Networks,  Inc.,  and  Verizon  Select  Services  Inc.,  for  Authorization  to  Provide  In-  Region  InterLATA  Services  in  Rhode  Island  (CC  Docket  No. 
 01-  324) 
 I  write  separately  to  explain  the  reasons  that  I  concur  in  this  Order  granting  Verizons  application  to  provide  long-  distance  services  in  Rhode  Island.  One  of  the  principal  objectives  of 
 the  Telecommunications  Act  of  1996  is  to  promote  competition  in  all  telecommunications  markets.  At  the  core  of  this  effort  is  section  271,  pursuant  to  which  Bell  companies  could  enter 
 the  long-  distance  market,  but  only  after  they  have  opened  their  local  markets  to  competition.  In  my  evaluation  of  section  271  applications,  I  have  voted  to  grant  certain  applications  and  to  deny 
 others,  ever  mindful  of  Congress  directive  that  a  Bell  company  must  meet  all  the  checklist  items,  and  that  the  grant  of  an  application  must  serve  the  public  interest. 


 Verizon  has  done  a  great  deal  to  open  its  local  markets  to  competition  in  Rhode  Island.  I  also  commend  the  Rhode  Island  Commission  for  its  significant  efforts  to  ensure  competition  in 
 its  local  markets.  Indeed,  several  problems  at  issue  in  prior  applications  were  not  raised  by  commenters  here.  The  major  issue  in  this  proceeding  has  been  the  pricing  of  network  elements. 
 Parties  raised  serious  concerns  about  both  the  original  rates  adopted  in  Rhode  Island  and  reduced  rates  implemented  in  November  prior  to  the  filing  of  this  application.  As  the  Order  indicates,  the 
 Commission  strongly  question[  s]  whether  the  original  rates  complied  with  the  statutory  requirements. 


 This  Order,  however,  grants  Verizon  a  waiver  of  our  rules  and  accepts  new  rate  reductions  filed  by  Verizon  on  day  80  of  the  90-  day  statutory  period.  The  Order  permits  Verizon 
 to  prove  compliance  with  the  checklist  by  comparing  these  reduced  rates  to  those  adopted  by  the  New  York  Commission  on  January  28.  I  am  pleased  that  Verizon  reduced  its  prices  to  levels  in 
 line  with  the  corrected  New  York  rates.  I  further  support  the  clear  statement  in  this  Order  that  it  would  be  inappropriate  to  evaluate  Verizons  Rhode  Island  rates  based  on  a  benchmark 
 comparison  to  superseded  New  York  rates.  As  I  indicated  in  my  dissent  to  the  Verizon  Pennsylvania  Order,  I  do  not  believe  that  this  Commission  should  evaluate  rates  in  one  state 
 based  on  prices  in  another  state    in  that  instance  as  well,  New  York  --  that  had  been  called  into  question  by  an  Administrative  Law  Judge  and  that  the  state  commission  was  in  the  process  of 
 revising.  Nonetheless,  I  only  concur  in  this  decision,  because  these  last-  minute  rate  changes  might  not  have  been  necessary  had  the  Commission  not  previously  indicated  its  willingness  to 
 allow  comparisons  to  such  outdated  rates. 
 I  am  further  troubled  by  the  waiver  of  our  procedural  rules  barring  late-  filed  information.  Since  the  first  application,  this  Commission  has  stated,  and  reiterated  numerous  times,  that  an 
 application  must  be  complete  on  the  date  it  is  filed.  This  rule  is  critical  to  a  fair  and  orderly 
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 Federal  Communications  Commission  FCC  02-  63 
 2 
 process.  Reaching  a  decision  within  90  days  in  a  proceeding  that  involves  an  enormous  record  and  numerous  complex  issues  would  be  difficult,  if  not  impossible,  if  we  are  faced  with  a 
 moving  target.  Such  late-  filed  evidence  prejudices  the  ability  of  other  parties,  the  Department  of  Justice,  and  the  relevant  State  commission  to  evaluate  an  application.  Yet,  time  and  again,  this 
 Commission  waives  this  procedural  rule. 
 Although  I  am  troubled  by  the  extent  to  which  we  accept  late-  filed  information,  in  this  instance,  I  concur  due  to  the  unique  circumstances  present  here.  Verizon  lowered  its  rates  in 
 response  to  a  decision  in  a  neighboring  state  that  occurred  during  the  pendency  of  the  application.  Thus,  as  the  Order  indicates,  Verizon  could  not  have  known  the  timing  of  the  New 
 York  decision  nor  the  exact  rates  that  would  be  adopted.  This  is  different  than  the  situation  in  which  a  party  withholds  evidence  to  game  the  process. 


 Due  to  these  extenuating  circumstances,  I  concur  in  the  extraordinary  step  of  granting  a  waiver.  Notwithstanding  our  limited  decision  here,  I  believe  the  Commission  should  state  firmly 
 that  the  strong  presumption  is  that  late-  filed  information  will  not  be  accepted  and  that  the  bar  for  a  waiver  will  be  set  high.  The  section  271  process  is  central  to  Congress  statutory  framework. 
 Allowing  companies  to  violate  our  procedural  rules  without  penalty  is  tantamount  to  shirking  our  responsibility  to  implement  the  law  Congress  gave  us. 
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 Federal  Communications  Commission  FCC  02-  63 
 STATEMENT  OF  COMMISSIONER  KEVIN  J  .  MARTIN,  APPROVING  IN  PART  AND  CONCURRING 
 IN  PART 
 Re:  Application  by  Verizon  New  England  Inc.,  Bell  Atlantic  Communications,  Inc.  (d/  b/  a  Verizon  Long  Distance),  NYNEX  Long  Distance  Company  (d/  b/  a  Verizon  Enterprise 
 Solutions),  Verizon  Global  Networks  Inc.,  and  Verizon  Select  Services  Inc.,  for  Authorization  To  Provide  In-  Region,  InterLATA  Services  in  Rhode  Island,  Memorandum 
 Opinion  and  Order,  CC  Docket  No.  01-  324 
 Today  we  grant  Verizon  authority  to  provide  in-  region,  interLATA  service  originating  in  the  State  of  Rhode  Island.  I  am  pleased  to  support  this  Order  and  commend  the  Rhode  Island 
 Public  Utilities  Commission,  Verizon,  and  this  Commissions  staff  for  their  hard  work. 
 Nevertheless,  I  concur  in  this  Order  because  of  concerns  I  have  with  two  issues:  application  of  our  complete-  as-  filed  requirement  and  observations  concerning  the  validity  of 
 superseded  rates  that  are  no  longer  at  issue  in  this  proceeding. 
 The  complete-  as-  filed  requirement  provides  that  when  an  applicant  files  new  information  after  the  comment  date,  the  Commission  reserves  the  right  to  start  the  90-  day  review 
 period  again  or  to  accord  such  information  no  weight.  Joint  Application  by  SBC  Communications  Inc.,  Southwestern  Bell  Tel.  Co.,  and  Southwestern  Bell  Communications 
 Services,  Inc.,  d/  b/  a  Southwestern  Bell  Long  Distance  for  Provision  of  In-  Region,  InterLATA  Services  in  Kansas  and  Oklahoma,  Memorandum  Opinion  and  Order,  16  FCC  Rcd  6237,  6247   
 21  (2001),  affd  in  part,  remanded  in  part  sub  nom.  Sprint  Communications  Co.  v.  FCC,  274  F.  3d  549  (D.  C.  Cir.  2001).  Here,  based  on  truly  unique  circumstances,  we  waive  the  complete-as- 
 filed  requirement  and  rely  on  data  filed  by  the  applicant  well  after  the  comment  date. 
 The  unique  circumstances  at  issue  arise  because  a  core  element  of  Verizons  evidence  in  support  of  its  section  271  application  changed  outside  of  its  control.  When  Verizon  filed  its 
 application,  it  relied  on  UNE  rates  in  Rhode  Island    described  in  the  Order  as  the  April  11  rates    that  Verizon  supported  based  on  a  benchmark  with  rates  then  in  effect  in  New  York.  On 
 day  63  of  our  review,  however,  the  New  York  Public  Service  Commission  altered  Verizons  rates,  among  other  things  lowering  Verizons  New  York  switching  rate  by  approximately  50 
 percent.  Commenters  urged  Verizon  to  use  the  new  New  York  switching  rate  as  a  benchmark,  and  Verizon  submitted  new  Rhode  Island  rates  that  did  so.  Commenters  were  then  given  an 
 opportunity    albeit  a  brief  one    to  comment  on  Verizons  limited  rate  changes,  which  were  consistent  with  what  many  of  them  had  advocated. 


 I  wish  to  emphasize  that,  absent  the  kind  of  extremely  unique  circumstances  at  issue  here,  the  Commission  should  avoid  relying  on  late-  filed  information.  We  have  begun  to  take  such 
 information  into  account  with  more  frequency,  and  I  fear  that  we  may  be  moving  in  the  wrong  direction.  In  particular,  I  am  concerned  that  relying  on  this  information  may  burden  commenters 
   particularly  those  opposing  an  application.  Commenters  need  adequate  time  to  evaluate  and  analyze  new  information,  especially  if  it  affects  significant  aspects  of  an  application.  When  we 
 accept  late-  filed  information,  we  create  additional  burdens  for  them. 
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 Federal  Communications  Commission  FCC  02-  63 
 2 
 In  my  view,  we  would  be  better  served  by  emphasizing  the  importance  of  having  all  of  an  applicants  supporting  information  in  the  record  when  the  application  is  filed  rather  than  granting 
 the  waivers  that  have  become  more  frequent  recently.  While  I  acknowledge  that  any  rule  will  probably  necessitate  some  exceptions,  we  can  and  should  make  significant  improvements  in  this 
 area. 
 Also  troubling  to  me  are  this  Orders  observations  concerning  Verizons  superseded  April  11  rates.  As  explained  above,  the  Order  grants  Verizons  271  application  based  on  new 
 rates,  which  we  find  valid  under  a  benchmark  comparison  with  the  rates  recently  established  by  the  New  York  Public  Service  Commission.  Although  this  analysis  definitively  resolves  the  issue 
 of  the  validity  of  Verizons  rates,  the  Order  also  makes  several  observations  about  the  validity  of  the  superseded  April  11  rates,  suggesting  that  several  of  them  were  questionable. 


 In  my  view,  this  dicta  is  unnecessary.  Once  the  Commission  concludes  that  a  section  271  application  meets  the  statutory  requirements,  the  Commission  should  not  offer  dicta  on  a 
 different  set  of  rates  no  longer  before  it.  I  believe  that  such  observations  extend  the  Commission  beyond  a  proper  adjudicatory  role  and  suggest  limitations  on  states  conducting  their  own  rate 
 proceedings.  States  should  have  the  opportunity  to  have  their  rate  decisions  judged  on  a  clean  slate,  without  the  burden  of  such  disapproving  dicta. 


 For  these  reasons,  I  concur  in  this  Order. 
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