UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF NEW HAMPSHIRE

Verizon New England, Inc.

v. Case No. 05-cv-94-PB

Opinion No. 2006 DNH 094

N.H. Public Utilities Commission,

et al.

MEMORANDUM AND ORDER

Verizon New England, Inc. (“Verizon”) challenges orders of

the New Hampshire Public Utilities Commission (“PUC”) requiring

Verizon to provide its competitors with access to certain 

elements of its network at rates determined by the PUC. The

principal issue before me on cross-motions for summary judgment

is whether the PUC has the power to set the rates that Verizon

seeks to challenge. Because the PUC has failed to offer a

satisfactory response to Verizon’s contention that it lacks the

power to set the rates in question, I grant Verizon’s motion and

deny the PUC’s motion. 

I. BACKGROUND

A. Regulatory framework

Congress passed the Telecommunications Act of 1996 (the

“Act”), Pub. L. No. 104-104, 110 Stat. 56, to promote competition

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1 A carrier is “incumbent” with respect to a service area if

it provided telephone exchange service in that area when the Act

took effect in 1996.

2 Verizon is a successor to New England Telephone and

Telegraph Company (“NET”), which was the local exchange carrier

for most of New Hampshire when the Act became effective in 1996. 

NET was one of the telephone companies that spun off from AT&T

Corporation in 1984. 

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in the telecommunications market and end the former statesanctioned monopolies on local telephone service. AT&T Corp. v.

Iowa Utils. Bd., 525 U.S. 366, 371 (1999). The Act imposes

certain duties on incumbent1 local exchange carriers (“ILECs”)

such as Verizon2 in order to facilitate competitors’ entry into

the market. Id. Among these duties is the obligation to allow

competing carriers, known as competitive local exchange carriers

(“CLECs”), to interconnect with an ILEC’s established

infrastructure. See 47 U.S.C. § 251(c). 

The Act sets forth procedures through which carriers can

enter the local and long-distance telephone markets. Sections

251 and 252 provide processes for CLECs to enter the local market

by accessing portions of an ILEC’s network. Section 271 requires

descendants of the former AT&T monopoly (known as Bell operating

companies or “BOCs”) to obtain the FCC’s approval to provide

long-distance telephone service.

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3 The specific elements at issue here are high-capacity

interoffice transmission facilities (“IOF”), line sharing, dark

fiber channel terminations and dark fiber feeder sub-loops.

4 The FCC’s early attempts to define which network elements

must be unbundled were invalidated by the Supreme Court, see

AT&T, 525 U.S. at 375, 387-92, and the U.S. Court of Appeals for

the D.C. Circuit, United States Telecom Ass’n v. FCC, 290 F.3d

415 (D.C. Cir. 2002) (“USTA I”). The FCC’s current unbundling

requirements are set forth in its Triennial Review Order (“TRO”),

Review of the Section 251 Unbundling Obligations of Incumbent

Local Exchange Carriers, 18 F.C.C.R. 16978 (2003), vacated in

part by USTA II, 359 F. 3d 554, and the Triennial Review Remand

Order (“TRRO”), Unbundled Access to Network Elements, 20 F.C.C.R.

2533 (2005).

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1. Section 251 unbundling requirements

Section 251 of the Act requires ILECs to provide unbundled

access to certain elements of their networks, known as “unbundled

network elements” (“UNEs”). 47 U.S.C. § 251(c)(3); see 47 C.F.R.

§ 51.319 (specific unbundling requirements).3 The FCC alone has

the authority to determine which network elements must be made

available as UNEs.4 United States Telecom Ass’n v. FCC, 359 F.3d

554, 568 (D.C. Cir. 2004) (“USTA II”) (holding that the FCC may

not “delegate to state commissions the authority to determine

whether CLECs are impaired without access to network elements”). 

In determining whether a network element must be provided on an

unbundled basis, the FCC must consider whether an ILEC’s failure

to provide access to a non-proprietary element would “impair” a

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5 The FCC can preempt the state commission’s jurisdiction

and assume responsibility for review of an interconnection

agreement if the state commission fails to carry out its

responsibility. 47 U.S.C. § 252(e)(5). 

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CLEC’s ability to compete, or, if the element is proprietary in

nature, whether access to it is “necessary.” 47 U.S.C. §

251(d)(2); 47 C.F.R. § 51.317. 

Section 252 of the Act sets forth the processes through

which CLECs can connect to an ILEC’s network through

interconnection agreements. If the carriers fail to negotiate an

agreement, either party may ask the state commission to

participate in the negotiation as a mediator or arbitrator. 47

U.S.C. §§ 252(a), (b). The state commission must approve all

interconnection agreements before they are implemented,

regardless of whether they are established through negotiation or

arbitration.5 Id. § 252(e)(1). A negotiated agreement can be

rejected only on the grounds that it “discriminates against a

telecommunications carrier not a party to the agreement” or its

implementation “is not consistent with the public interest,

convenience, and necessity.” Id. § 252(e)(2)(A). An arbitrated

agreement, in contrast, can be rejected if it fails to meet the

FCC’s unbundling requirements or pricing standards. Id. §

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6 The state commission may also review interconnection

agreements for compliance with state law, as long as it does not

have the effect of “prohibiting the ability of any entity to

provide any interstate or intrastate telecommunications service.” 

47 U.S.C. § 253(a); see id. § 252(e)(3).

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252(e)(2)(B).6

Determinations by a state commission of the “just and

reasonable rate” for § 251 UNEs must be based on the cost of

providing the network element, “without reference to a rate-ofreturn or other rate-based proceeding.” Id. § 252(d)(1). The

Act created “a hybrid jurisdictional scheme with the FCC setting

a basic, default methodology for use in setting rates when

carriers fail to agree, but leaving it to state utility

commissions to set the actual rates.” Verizon Communications

Inc. v. FCC, 535 U.S. 467, 489 (2002); see also AT&T Corp., 525

U.S. at 385 (holding that the FCC has jurisdiction under § 201(b)

of the Act to design a pricing methodology for § 251 UNEs). The

FCC has determined that prices for § 251 UNEs must be based on

the “total element long-run incremental cost” (“TELRIC”) of

providing the elements. See 47 C.F.R. § 51.505(b)(1). TELRIC

essentially equates the value of an existing network “with the

cost the [ILEC] would incur today if it built a local network

that could provide all the services its current network provides

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7 ILECs generally disfavor TELRIC pricing because it is a

forward-looking methodology that does not take into account their

actual investments in capital assets. See Verizon, 535 U.S. at

496. For a more complete discussion of historical and forwardlooking pricing methodologies, see Jonathan E. Nuechterlein &

Philip J. Weiser, Digital Crossroads, American Telecommunications

Policy in the Internet Age app. A (2005). 

8 The state commission may also review an SGAT for

compliance with state law, as long as it does not have the effect

of prohibiting the carrier’s ability to provide

telecommunications services. 47 U.S.C. §§ 252(f)(2), 253(a). 

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. . . using the least-cost, most-efficient technology currently

available.”7 TRO, 18 F.C.C.R. at 17391-92, ¶ 669. 

Under section 252(f), BOCs may fulfill their § 251

obligations by filing with the appropriate state commission a

“statement of the terms and conditions that such company

generally offers within that State,” known as a Statement of

Generally Available Terms (“SGAT”). 47 U.S.C. § 252(f)(1). The

state commission must review the SGAT to determine whether it

complies with § 251's unbundling requirements.8 Id. § 252(f)(2). 

However, filing an SGAT does not relieve the BOC of its duty to

negotiate interconnection agreements upon a CLEC’s request. Id.

§ 252(f)(5). The state commission’s authority to review the SGAT

continues after the SGAT has taken effect. Id. § 252(f)(4).

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9 The Act actually refers to interLATA (local access

transport area) services. 47 U.S.C. § 271(a). The terms

“interstate” and “interLATA” may be used interchangeably when

referring to the New Hampshire market because the state has only

one LATA, which is roughly contiguous with the 603 area code.

10 Section 271 approval is also contingent on compliance

with § 272 of the Act, which provides “regulatory ‘safeguards’ to

deter a BOC from leveraging its local market power into longdistance markets.” AT&T Corp. v. FCC, 369 F.3d 554, 557 (D.C.

Cir. 2004).

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2. Section 271 unbundling requirements

Under the Act, ILECs that are former BOCs must apply to the

FCC for approval to offer interstate9 long-distance services. 47

U.S.C. § 271(d)(1). To obtain § 271 approval, a BOC must

demonstrate that it has either an approved interconnection

agreement or an SGAT filed with the state commission. Id. §

271(c)(2)(A). The BOC must also comply with the “competitive

checklist,” which imposes unbundling requirements in addition to

those required under § 251(c)(3).10 Id. § 271(c)(2)(B); see TRO,

18 F.C.C.R. at 17384, ¶ 652 (“BOCs have an independent

obligation, under section 271(c)(2)(B), to provide access to

certain network elements that are no longer subject to unbundling

under section 251, and to do so at just and reasonable rates.”). 

Specifically, BOCs must provide access to “[l]ocal loop

transmission from the central office to the customer’s premises,

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unbundled from local switching or other services,” “[l]ocal

transport from the trunk side of a wireline local exchange

carrier switch unbundled from switching or other services” and

“[l]ocal switching unbundled from transport, local loop

transmission, or other services.” 47 U.S.C. §§ 271(c)(2)(B)(iv)-

(vi). 

State commissions have only a limited role in the § 271

application process. The FCC consults with the state commission

to verify that a BOC has an approved interconnection agreement or

SGAT that comports with the competitive checklist’s requirements. 

Id. § 271(d)(2)(B). Although a state commission may recommend §

271 approval, the FCC ultimately has the authority to approve or

reject a BOC’s application. Id. § 271(d)(3). The FCC also has

the authority to enforce the competitive checklist’s requirements

after a § 271 application is approved. Id. § 271(d)(6)(A); see

BellSouth Telecomms., Inc. v. Miss. PSC, 368 F. Supp. 2d 557, 566

(S.D. Miss. 2005) (noting that “it is the prerogative of the FCC

. . . to address any alleged failure by [a BOC] to satisfy any

statutorily imposed conditions to its continued provision of long

distance service”). If the FCC determines that a BOC no longer

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11 The FCC has noted that the conditions for § 271 approval

may change over time, consistent with changes in the law. TRO,

18 F.C.C.R. at 17390, ¶ 665. 

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meets § 271's requirements,11 it may order the company to correct

any deficiencies, impose a penalty, or suspend or revoke the

BOC’s § 271 approval. 47 U.S.C. § 271(d)(6)(A).

The FCC has determined that TELRIC pricing is not required

for § 271 UNEs. TRO, 18 F.C.C.R. at 17386, ¶ 656 (“TELRIC

pricing for checklist network elements that have been removed

from the list of section 251 UNEs is neither mandated by statute

nor necessary to protect the public interest.”); see also USTA

II, 359 F.3d at 589. Instead, prices must be based on the “just,

reasonable, and nondiscriminatory rate standard . . . that has

historically been applied under most federal and state statutes,”

as codified in §§ 201 and 202 of the Act. TRO, 18 F.C.C.R. at

17389, ¶ 663. Whether a particular rate satisfies this standard

is a “fact-specific inquiry that the [FCC] will undertake in the

context of a BOC’s application . . . or in an enforcement

proceeding brought pursuant to section 271(d)(6).” Id. at 17389,

¶ 664. One way a BOC might satisfy this standard with regard to

a particular CLEC is by demonstrating that “it has entered into 

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12 Although the cover page of the SGAT stated that it was

filed “under sections 251, 252 and 271 of the Telecommunications

Act of 1996,” see R. at 11, the PUC determined that the SGAT must

be reviewed independently of § 271's requirements. The PUC noted

that although the existence of an approved SGAT or

interconnection agreement is a prerequisite to consideration of a

§ 271 application, “approval of an SGAT neither requires nor

demonstrates proof that the SGAT functions in conformance with

the § 271 competitive checklist.” Pl.’s Mem. of Law in Supp. of

Mot. Summ. J. Ex. 2 (PUC Order No. 23,738, dated July 6, 2001).

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arms-length agreements with other, similarly situated purchasing

carriers to provide the element at that rate.” Id.

B. PUC Proceedings and Orders

Verizon’s predecessor filed an SGAT with the PUC in 1997,

which was approved in part in 2001.12 Bell Atlantic, Order No.

23,738, 86 N.H. PUC 419, 2001 WL 1002726 (July 6, 2001). The

SGAT provided unbundled access to, among other elements,

interoffice transmission facilities at DS1, DS3, STS-1, OC-3 and

OC-12 speeds; the high-frequency portion of existing copper loops

through line sharing arrangements; and dark fiber loops at

existing spare facilities. NH SGAT §§ 5.3, 5.14, 5.16. The

PUC’s review of the SGAT included numerous hearings concerning

the appropriate pricing for the offered UNEs. See Verizon New

England Inc., 17 F.C.C.R. 18660, 18674-78 (2002) (“NH § 271

Order”). 

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In July 2001, Verizon began the process of obtaining § 271

approval by formally asking the PUC to review its compliance with

the Act’s requirements. Id. at 18663. The PUC conditioned its

recommendation for § 271 approval in part on Verizon’s agreement

to convert its SGAT into a wholesale tariff. Id. at 18663, ¶ 6;

R. at 7. The tariff would allow CLECs to “directly order

anything contained in the SGAT, without the need to negotiate an

interconnection agreement.” R. at 7. In a letter to the PUC

dated June 5, 2002, Verizon agreed to “convert its Statement of

Generally Available Terms (SGAT) to a tariff by year-end 2002 and

incorporate the interconnection, UNE, and resale provisions of

the SGAT into Tariff No. 84.” Id. at 1. Verizon also agreed to

“promptly file modifications to its SGAT and tariff to reflect

changes in the services and network elements required by the Act,

as determined by the FCC or the courts.” Id. at 2. 

The FCC, relying in part on the PUC’s recommendation,

approved Verizon’s § 271 application in September 2002. NH § 271

Order at 18661-62, ¶¶ 1, 3. In reviewing Verizon’s compliance

with its § 251 unbundling obligations, the FCC found that despite

“serious concerns as to whether the [PUC] applied the proper

interpretation of the TELRIC methodology in its SGAT proceeding,”

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Verizon’s subsequent UNE rate reductions fell “within the range

that a reasonable TELRIC-based rate proceeding would produce.”

Id. at 18683-84, ¶ 37. In a section entitled “Section 271(d)(6)

Enforcement Authority,” the FCC stated that it had “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.” Id. at 18756-57, ¶ 172. It further stated that

“cooperative state and federal oversight and enforcement can

address any backsliding that may arise with respect to Verizon’s

entry into the New Hampshire” long-distance market. Id. at

18757, ¶ 174. 

On December 19, 2002, Verizon filed an “illustrative”

wholesale tariff that reflected the rates, terms and conditions

of the SGAT. Am. Compl. ¶ 33. The tariff included a provision

that allowed Verizon to discontinue, upon thirty days written

notice, “the provision of any . . . service, facility,

arrangement or benefit” to the extent permitted by “any judicial,

regulatory or other governmental authority with jurisdiction over

the subject matter.” PUC Tariff No. 84, Part A, § 1.4.3. 

1. TRO amendments 

While Verizon’s tariff was pending, the FCC issued the TRO,

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13 Dedicated IOF are “facilities dedicated to a particular

competitive carrier that the carrier uses for transmission

between or among [ILEC] central offices and tandem offices, and

to connect its local network to the [ILEC]'s network.” TRRO, 20

F.C.C.R. at 2576, ¶ 67. In the TRO, the FCC excluded entrance

facilities, which connect ILEC and CLEC locations, from its

definition of dedicated transport. See TRO, 18 F.C.C.R. at

17203, ¶ 366 (defining dedicated transport to include only

“transmission facilities between incumbent LEC switches.”) The

USTA II court found that this ruling appeared to violate the

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which revised the prior unbundling rules that the FCC had set

forth in its “UNE Remand Order,” Implementation of the Local

Competition Provisions of the Telecommunications Act of 1996, 15

F.C.C.R. 3696 (1999). The FCC determined in the TRO that the §

251 impairment standard is met when “lack of access to an [ILEC]

network element poses a barrier or barriers to entry, including

operational and economic barriers, that are likely to make entry

into a market uneconomic.” TRO, 18 F.C.C.R. at 17035, ¶ 84. 

Accordingly, in making its unbundling determinations, the FCC

considered “whether all potential revenues from entering a market

exceed the costs of entry, taking into consideration any

countervailing advantages that a new entrant may have.” Id.

The FCC made multiple impairment findings with respect to

dedicated interoffice transmission facilities (“IOF” or

“dedicated transport”) based upon their capacity level or

speed.13 See USTA II, 359 F.3d at 573. The FCC found that on a

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statutory definition of “network element” and remanded the matter

to the FCC for further consideration. USTA II, 359 F.3d at 586.

14 Dark fiber is “fiber optic cable that has been deployed

by a carrier but has not yet been activated through connections

to optronics that ‘light’ it, and thereby render it capable of

carrying communications. Once activated, dark fiber transport is

used by carriers for the same purposes as lit dedicated

transport.” TRRO, 20 F.C.C.R. at 2607, ¶ 133 (footnote omitted). 

15 This delegation of authority to the states was reversed

by USTA II, 359 F.3d at 574.

16 Line sharing allows CLECs to provide digital subscriber

line (“DSL”) service over the high frequency portion of a copper

loop while the ILEC uses the low frequency portion of the loop to

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national level, CLECs are not impaired without unbundled access

to high-capacity optical carrier level (“OCn”) transport

facilities. TRO, 18 F.C.C.R. at 17200, ¶ 359. With respect to

DS1, DS3 and dark fiber transport,14 the FCC found that CLECs are

impaired without access to these facilities on a national level,

despite the availability of alternatives in some locations. Id.

at 17226, ¶ 398. Because the record before the FCC did not

identify the locations of alternative facilities, the FCC

delegated to the state commissions “a fact-finding role to

determine on a route-specific basis where alternatives to the

[ILEC’s] networks exist such that competing carriers are no

longer impaired.”15 Id. 

The FCC also eliminated line sharing16 as a UNE based upon

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provide voice (telephone) service. TRO, 18 F.C.C.R. at 17132, ¶

255.

17 Existing OC3, OC12 and STS1 IOF would be discontinued on

December 16, 2003, except as otherwise required under existing

interconnection agreements. R. at 25.

18 Existing line sharing arrangements would be grandfathered

at existing rates for carriers that began providing DSL service

to an end-user customer prior to October 2, 2003, and only for so

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the availability of the entire copper loop as an unbundled

element and the difficulty in allocating costs between portions

of the loop. Id. at 17135-36, ¶¶ 260-63. In order to avoid

disruption of DSL service to existing customers, the FCC

temporarily grandfathered all existing line sharing arrangements

as long as the CLEC continued to provide DSL service to the same

end-user customer. Id. at 17137-38, ¶ 264. For new line sharing

arrangements, the FCC established a three-year transition plan

that allowed CLECs to access the high frequency portion of the

loop at a gradually increasing percentage of established

recurring rates “for stand-alone copper loops for that particular

location.” Id. at 17138, ¶ 265. 

Verizon subsequently filed amendments to its SGAT

eliminating the following elements as UNEs: (1) new orders for

OC3, OC12 or STS1 interoffice transmission facilities (“IOF”);17

(2) new line sharing arrangements;18 and (3) new orders for dark

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long as the carrier continues to provide DSL service to that

customer at the same location. R. at 27.

19 Existing dark fiber channel termination and dark fiber

feeder sub-loop arrangements would be discontinued on December

16, 2003, except as otherwise required under an effective

interconnection agreement. R. at 28.

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fiber between the CLEC’s collocation arrangement and its central

office or point of presence (“dark fiber channel terminations,” a

form of entrance facilities) and between the CLEC’s collocation

arrangement and outside plant remote terminal locations (“dark

fiber feeder sub-loop”).19 R. at 24-36. The New Hampshire

Office of the Consumer Advocate and several CLECs objected to the

SGAT amendments. See R. at 105 (NHISPA), 106 (BayRing), 111

(Revolution Networks), 149 (Great Works Internet), 150 (segTEL),

162 (Covad Communications), 188 (MCI), 204 (Conversent).

In January 2004, the PUC preliminarily approved Verizon’s

request to cease offering the IOF and dark fiber UNEs to new

customers pending the outcome of the PUC’s review of the revised

SGAT. Id. at 270. The PUC denied Verizon’s request to eliminate

new line sharing arrangements and directed Verizon to continue

accepting new orders for line sharing without requiring CLECs to

negotiate separate agreements. Id. at 271. Verizon subsequently 

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20 The PUC actually approved two tariffs: Tariff No. 84 is a

“wholesale tariff of UNEs, interconnection and collocation

available to CLECs;” Tariff No. 86 is a “resale tariff of retail

products available at discount to CLECs.” R. at 398.

21 The PUC combined the dockets for Verizon’s line sharing

amendments with segTEL’s petition for an order directing Verizon

to continue accepting new line sharing orders. R. at 340. 

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filed revised SGAT pages that reflected the PUC’s order. Id. at

393. 

On June 18, 2004, the PUC approved the terms of the

wholesale tariff20 that Verizon had filed in December 2002, which

did not incorporate the TRO amendments. Id. at 16-20 (PUC Order

No. 24,337). On January 28, 2005, Verizon filed revisions to the

wholesale tariff to eliminate new orders for line sharing as of

October 1, 2004.21 Id. at 337-38. Orders placed between October

2, 2003 and October 1, 2004 would be priced in accordance with

the TRO’s transition rules and would be discontinued as of

October 1, 2006. Id. at 338-39. 

2. TRRO amendments

In February 2005, the FCC released the TRRO, which further

refined the § 251 unbundling requirements for mass market

switching, dedicated transport and high capacity loops. TRRO, 20

F.C.C.R. at 2536-37, ¶ 5. The FCC imposed “no section 251

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22 CLECs typically use local circuit switching in

combination with ILEC loops and shared transport in an

arrangement known as the unbundled network element platform

(“UNE-P”). TRRO, 20 F.C.C.R. at 2642, ¶ 200. CLECs were thus

required to transition their UNE-P customers to alternative

arrangements within twelve months. Id. at 2641, ¶ 199. 

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unbundling requirement for mass market local circuit switching

nationwide” based upon a finding that CLECs had “deployed a

significant, growing number of their own switches . . . to serve

the mass market in many areas.” Id. at 2641, ¶ 199. The FCC

adopted a transition plan that required CLECs to convert their

local circuit switching customers to alternative arrangements

within twelve months.22 Id. The FCC also adopted transitional

pricing set at “TELRIC plus one dollar.” Id.

With respect to dedicated IOF, the FCC found that CLECs are

not impaired without unbundled access to (1) DS1 transport on

routes connecting a pair of wire centers, each of which contains

at least four fiber-based collocators or at least 38,000 business

lines, and (2) DS3 and dark fiber transport on routes connecting

a pair of wire centers, each of which contains at least three

fiber-based collocators or at least 24,000 business lines. Id.

at 2575-76, ¶ 66. The FCC also found that CLECs are not impaired

on a national level with respect to entrance facilities. Id. at

2610, ¶ 138. 

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With respect to high capacity loops, the FCC found that

CLECs are not impaired without unbundled access to (1) DS1-

capacity loops at any location within the service area of an ILEC

wire center containing at least 60,000 business lines and at

least four fiber-based collocators and (2) DS3-capacity loops at

any location within the service area of a wire center containing

at least 38,000 business lines and at least four fiber-based

collocators. Id. at 2614, ¶ 146. The FCC also found that CLECs

“are not impaired without access to unbundled dark fiber loops in

any instance.” Id.

The FCC adopted a twelve-month transition period for

existing customers of DS1 and DS3 transport and loops and an

eighteen-month transition period for dark fiber transport and

loops. Id. at 2612, ¶ 142; 2639, ¶ 195. The FCC also imposed

moderate price increases during the transition period that would

help mitigate “the rate shock that could be suffered by [CLECs]

if TELRIC pricing were immediately eliminated for these network

elements.” Id. at 2614, ¶ 145. 

Verizon subsequently filed further tariff revisions to

implement the TRRO unbundling rules, which took effect on March

11, 2005. R. at 552-79. The revisions eliminated access to mass

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23 Verizon contested the PUC’s authority to interpret or

enforce § 271 requirements throughout the proceedings at issue

here. See, e.g., R. at 123-24, 226-29, 342-58.

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market local circuit switching, dark fiber loops, certain DS1 and

DS3 loops, and certain DS1, DS3 and dark fiber dedicated

transport as of the effective date of the TRRO. Id. at 552-55. 

Existing customers would be able to continue leasing the elements

under the FCC’s mandated transition periods and rates. Id. at

554.

3. PUC’s § 271 unbundling orders

On March 11, 2005, the PUC issued an order denying Verizon’s

proposed TRO revisions to its SGAT and tariff. Id. at 390-443. 

After reviewing the TRO, TRRO and the NH § 271 order, the PUC

determined that “Verizon remains obligated to have a wholesale

tariff on file with our agency and an FCC decision to remove a

UNE as a section 251 requirement does not automatically eliminate

it as an unbundled element that Verizon must offer in its

wholesale tariff.” Id. at 431. The PUC concluded that it had

“the authority to determine whether Verizon’s wholesale tariff,

including any changes proposed by Verizon, remains in compliance

with the obligations Verizon voluntarily undertook in exchange

for” § 271 approval.23 Id. at 432. Although the PUC did not

Case 1:05-cv-00094-PB Document 19 Filed 08/22/06 Page 21 of 30
24 47 U.S.C. § 271(c)(2)(B)(iv).

25 47 U.S.C. § 271(c)(2)(B)(v).

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purport to “assert independent authority to define the scope of

Verizon’s section 271 obligations,” it viewed itself as “the

initial arbiter of disputes over whether Verizon continues to

meet the specific commitments previously made to this

Commission.” Id. at 433. 

The PUC then examined each of Verizon’s proposed tariff

revisions “in the context of the section 271 checklist, to

determine whether Verizon remains obliged to offer them in its

wholesale tariff.” Id. The PUC found that checklist item

four,24 which requires BOCs to provide unbundled access to local

loop transmission, encompasses all functionalities of the loop,

including dark fiber feeder subloop and access to the high

frequency portion of the loop through line sharing. Id. at 435-

36. Likewise, the PUC found that checklist item five,25 which

requires BOCs to provide unbundled access to local transport,

encompasses OCn and STS transport and dark fiber channel

terminations. Id. at 438. 

The PUC concluded that “Verizon must continue to provide

line sharing, dark fiber feeder subloop, dark fiber channel

Case 1:05-cv-00094-PB Document 19 Filed 08/22/06 Page 22 of 30
26 The PUC also vacated its January 2004 decision that had

allowed Verizon to cease offering the IOF and dark fiber UNEs on

a temporary basis. R. at 441. 

27 The PUC issued a subsequent order on April 22, 2005,

approving Verizon’s tariff revisions with respect to mass market

local circuit switching and denying its amendments pertaining to

dark fiber loops. R. at 808-09. On March 10, 2006, the PUC

issued an order addressing wire centers at which Verizon is no

longer required to provision DS1 and DS3 loops and dedicated dark

fiber transport. NH PUC Order No. 24,598, at 45. Verizon

challenges that order to the extent that it is required to

continue offering de-listed elements through its wholesale tariff

at the FCC-prescribed transition rate of “TELRIC plus 15%.” See

id. at 46. I refer collectively to the March 11, 2005, April 22,

2005, and March 10, 2006 orders as the “§ 271 unbundling orders.” 

-23-

terminations and IOF as part of its wholesale tariff,” and, “if

and when Verizon files changes to rates under its wholesale

tariff, [the PUC] will review such proposed changes in the normal

course.”26 Id. at 439, 441. Until then, “Verizon shall offer

these section 271 elements at existing Tariff 84 rates.”27 Id.

at 441. 

II. STANDARD OF REVIEW

Summary judgment is appropriate “if the pleadings,

depositions, answers to interrogatories, and admissions on file,

together with the affidavits, if any, show that there is no

genuine issue as to any material fact and that the moving party

is entitled to a judgment as a matter of law.” Fed. R. Civ. P.

Case 1:05-cv-00094-PB Document 19 Filed 08/22/06 Page 23 of 30
28 The PUC claimed in its § 271 unbundling orders that the

FCC’s order approving Verizon’s § 271 application delegated to

the PUC the power to determine whether Verizon remains in

compliance with its § 271 obligations. R. at 431-33. Contrary

to the PUC’s argument, the FCC’s order does not delegate any

oversight authority to the PUC, nor does it alter the PUC’s

limited consultative role under § 271. NH § 271 Order, 17

F.C.C.R. at 18757, ¶ 174. In any event, the PUC made only a

passing reference to the FCC’s order in its brief, see PUC’s Br.

-24-

56(c). “Cross-motions for summary judgment do not alter the

basic Rule 56 standard, but rather simply require [the court] to

determine whether either of the parties deserves judgment as a

matter of law on facts that are not disputed.” Adria Int’l

Group, Inc. v. Ferre Dev., Inc., 241 F.3d 103, 107 (1st Cir. 2001).

III. ANALYSIS

Verizon argues that the PUC’s § 271 unbundling orders are

invalid to the extent that they require Verizon to submit its §

271 UNE rates to the PUC for approval. According to Verizon, the

PUC lacks the power to set its § 271 UNE rates because Verizon’s 

obligation to offer the UNEs stems exclusively from § 271, which

grants primary oversight responsibility for § 271 UNE rates to

the FCC rather than the PUC. 

The PUC does not claim that federal law authorizes it to set

§ 271 UNE rates.28 Nor has it made a developed argument that its

Case 1:05-cv-00094-PB Document 19 Filed 08/22/06 Page 24 of 30
at 19, and did not claim during oral argument on the summary

judgment motions that the FCC delegated its § 271 rate-setting

responsibility to the PUC. Accordingly, the PUC has waived any

argument that it might have made that the PUC was acting pursuant

to a delegation of power by the FCC. 

29 Judge Carter recently concluded in a similar case that

Maine law gives that state’s PUC the power to set § 271 UNE

rates. Verizon New Eng., Inc. v. Me. PUC, Civil No. 05-53-B-C,

2006 WL 2007655, at *2 (D. Me. July 18, 2006). Unlike the Maine

PUC, however, the New Hampshire PUC did not claim when it issued

the § 271 unbundling orders that it was acting pursuant to state

law. R. at 439 n.13. Nor did it argue in its summary judgment

brief that it was empowered by state law to set § 271 UNE rates. 

PUC’s Br. at 16-19. During oral argument on the summary judgment

motions, the PUC’s representative suggested for the first time

that the PUC’s plenary authority under state law to regulate

intrastate network elements extends to § 271 UNEs. Tr. at 57-62. 

He did not explain his position, however, except to state in a

conclusory way that there is “a return of some state law

authority under Section 271 that may have been taken away from

[the PUC by] Section 251.” Id. at 61. When I asked him for

textual support for his position, he responded that “my only

comeback to that would be that unfortunately this is a very

complicated regulatory regime that has been created through the

clash of competing policy imperatives and political forces, and

so some of this is less logical and coherent than either the

Court or the PUC would like it to be.” Id. at 62. The PUC’s

argument is difficult to understand because it presumes that

Congress conferred greater power on local PUCs to set § 271 UNE

rates than it did to set § 251 UNE rates, even though § 251

assigns express rate-setting responsibilities to local PUCs but §

271 does not. In any event, I decline to consider this novel

argument because it has not been properly briefed.

-25-

rate setting power is derived from state law.29 Instead, it

argues only that Verizon is estopped from challenging its

authority to set § 271 UNE rates because Verizon allegedly agreed 

Case 1:05-cv-00094-PB Document 19 Filed 08/22/06 Page 25 of 30
30 The PUC also argues that Verizon is collaterally estopped

from obtaining a judgment in this case because it unsuccessfully

litigated the same issues against the Maine PUC. I reject this

argument. Collateral estoppel applies only where the issues to

be determined in both cases are identical. Gonzalez-Pina v.

Rodriguez, 407 F.3d 425, 430 (1st Cir. 2005). In the Maine case,

Judge Carter based his decision on a determination that Maine law

gave that state’s PUC the power to set § 271 UNE rates. Verizon

New Eng., 2006 WL 2007655, at *2. Obviously, Judge Carter’s

ruling has no bearing on this case, which turns on other issues. 

-26-

to submit its § 271 UNE rates to the PUC for approval in exchange

for the PUC’s support of its § 271 application before the FCC.30

I reject this argument because the undisputed evidence

demonstrates that Verizon agreed to submit only its § 251 UNE

rates for approval by the PUC. Because the UNEs in question are

required under § 271 rather than § 251, Verizon’s agreement does

not grant the PUC the power it claims. 

The only documents in the record that bear directly on this

issue are Verizon’s June 5, 2002 letter to the PUC and the PUC’s

June 14, 2002 response. Verizon’s letter provides in pertinent

part that 

Verizon NH will convert its Statement of

Generally Available Terms (“SGAT”) to a

tariff by year-end 2002 and incorporate the

interconnection, UNE, and resale provisions

of the SGAT into Tariff No. 84. While the

significant reorganization and reformatting

effort is underway, Verizon NH will treat the

existing SGAT like a tariff, making it

available to all CLECs without the need to

Case 1:05-cv-00094-PB Document 19 Filed 08/22/06 Page 26 of 30
31 Verizon also stated in the letter that it “reserves all

rights to request modifications to its SGAT or the tariff . . . ,

such as seeking to cease providing or modifying new UNE-P

combinations, as a result of a court or FCC decision that new

combinations, or any individual UNE that the combination

comprises, no longer are subject to the unbundling requirement.” 

R. at 2-3.

-27-

enter [into] a specific agreement. Verizon

NH will promptly file modifications to its

SGAT and tariff to reflect changes in the

services and network elements required by the

Act, as determined by the FCC or the courts. 

Verizon NH also will continue to negotiate

interconnection agreements with requesting

carriers, in accordance with the Act.

R. at 1-2.31 The PUC’s response notes its decision to recommend

approval of Verizon’s § 271 application by the FCC and describes

Verizon’s agreement “to explicitly convert the existing SGAT into

a CLEC tariff from which competitors may directly order anything

contained in the SGAT, without the need to negotiate an

interconnection agreement.” Id. at 7.

What these documents describe is merely an agreement by

Verizon to include rates in Tariff No. 84 for those UNEs that it

is obligated to make available to its competitors pursuant to §

251. We know this to be true because the only elements that

Verizon agreed to include in the tariff were the elements

identified in the SGAT. An SGAT contains “the terms and

conditions that [a BOC] generally offers within that State to

Case 1:05-cv-00094-PB Document 19 Filed 08/22/06 Page 27 of 30
32 The PUC points to the SGAT’s cover page, which states

that the document sets forth the “terms and conditions for . . .

access to unbundled network elements . . . under sections 251,

252 and 271 of the Telecommunications Act of 1996.” R. at 11

(emphasis added). This notation, which Verizon contends was made

in error, is not sufficient to give rise to a triable issue as to

-28-

comply with the requirements of section 251.” 47 U.S.C. 252(f). 

An SGAT does not include elements that must be made available on

an unbundled basis only pursuant to § 271. Moreover, as

Verizon’s June 5, 2002 letter to the PUC demonstrates, Verizon

agreed to convert the SGAT into a tariff so that CLECs could

“directly order anything contained in the SGAT, without the need

to negotiate an interconnection agreement.” R. at 7; see id. at

2. The tariff itself makes no reference to § 271 and instead

states that it “sets forth the terms, conditions, and pricing

under which . . . [Verizon] will provide access to unbundled

network elements . . . consistent with Section 251 of the Act.” 

Tariff No. 84, § 1.4.1(A) (emphasis added). Thus, the record in

this case clearly demonstrates that Verizon agreed to include UNE

rates in the tariff only to the extent that they were required

under § 251. 

Viewing the record as a whole, the PUC has failed to

identify any persuasive evidence that supports its position that

Verizon agreed to include § 271 UNEs in its wholesale tariff.32

Case 1:05-cv-00094-PB Document 19 Filed 08/22/06 Page 28 of 30
whether Verizon later agreed to tariff its § 271 unbundling

obligations. 

33 The PUC’s § 271 unbundling orders are invalid even if the

PUC has the power to set § 271 UNE rates because it has used its

purported power in a way that conflicts with federal law. State

actions are preempted by federal law “either when compliance with

both state and federal regulations is impossible or when state

law interposes an obstacle to the achievement of Congress’s

discernible objectives.” Grant’s Dairy-Maine, LLC v. Comm’r of

Me. Dep’t of Agric., Food & Rural Res., 232 F.3d 8, 15 (1st Cir.

2000); see also Global NAPs, Inc. v. Verizon New England, Inc.,

444 F.3d 59, 71 (1st Cir. 2006) (recognizing that federal agency

actions may preempt conflicting state regulation). Here, the

PUC’s § 271 unbundling orders, which require Verizon to make §

271 UNEs available to competitors at TELRIC rates, are in direct

conflict with the FCC’s determination that TELRIC pricing is not

appropriate for § 271 UNEs. See TRO, 18 F.C.C.R. at 17386, ¶

656; id. at 17387, ¶ 659; UNE Remand Order, 15 F.C.C.R. at 3906,

¶ 473. It is not an answer to this conflict preemption problem

to argue, as the PUC does, that its orders do not conflict with

federal law because they merely require the use of TELRIC rates

on an interim basis. PUC’s Br. at 20-21. The FCC established

transition rates for de-listed UNEs in the TRO and the TRRO and

the PUC’s § 271 unbundling orders are in direct conflict with

these orders. Thus, the orders cannot stand even if the PUC has

the limited authority to set § 271 UNE rates. 

-29-

Because the PUC has failed to identify an alternative source for

its power to set § 271 UNE rates, I agree with Verizon that the

PUC lacks the power to set those rates.33

IV. CONCLUSION

Verizon’s motion for summary judgment (Doc. No. 11) is

granted and the PUC’s motion for summary judgment (Doc. No. 12)

Case 1:05-cv-00094-PB Document 19 Filed 08/22/06 Page 29 of 30
-30-

is denied. The PUC is enjoined from enforcing its March 11,

2005, April 22, 2005, and March 10, 2006 Orders to the extent

that they require Verizon to continue offering unbundled access

to de-listed network elements through its wholesale tariff. The

clerk is instructed to enter judgment accordingly.

SO ORDERED.

/s/Paul Barbadoro 

Paul Barbadoro

United States District Judge

August 22, 2006

cc: Thomas J. Donovan, Esq.

Daniel J. Mullen, Esq.

Case 1:05-cv-00094-PB Document 19 Filed 08/22/06 Page 30 of 30