Source: https://transition.fcc.gov/ftp/Bureaus/Common_Carrier/Orders/1997/fcc97228.html
Timestamp: 2016-08-25 15:02:05
Document Index: 87235274

Matched Legal Cases: ['art 22', '§ 154', '§ 271', '§ 271', '§ 271', '§ 271', '§\n151', '§ 153', '§ 271', '§ 271', '§ 271', '§ 153', '§ 153', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 272', '§ 271', '§ 271', '§\n153', '§ 2', '§ 271', '§ 271', '§ 271', '§ 271', '§ 153', '§ 153', '§ 2', '§ 2', '§ 271', '§\n271', '§ 271', '§ 271', '§ 153', '§ 271', '§ 252', '§ 271', '§ 271', '§ 271', '§ 271', '§ 271', '§ 252', '§ 252', '§ 252', '§ 271', '§ 271', '§ 154', '§ 271', '§ 271', '§ 271', '§ 1', '§ 271', '§ 271', '§ 271', '§ 271']

FCC 97-228 MEMORANDUM OPINION AND ORDER
[ Text Version | WordPerfect Version | Acrobat Version | NewsRelease ]
FCC 97-228
Application by SBC Communications Inc.,)CC Docket No. 97-121
Pursuant to Section 271 of the)
Communications Act of 1934, as amended,)
To Provide In-Region, InterLATA Services)
In Oklahoma)
Adopted: June 25, 1997
By the Commission: Chairman Hundt issuing a separate statement.
II. STATUTORY FRAMEWORK	3
III. REQUIREMENTS OF SECTION 271(c)(1)(A)	6
A.	Background	6
B.	Positions of the Parties	8
C.	Discussion	13
IV. REQUIREMENTS OF SECTION 271(c)(1)(B)	23
A.	Background	23
B.	Positions of the Parties	24
C.	Discussion	27
1.	Summary	27
2.	Standard for Evaluating "Qualifying Requests"	31
3.	Existence of Qualifying Requests in Oklahoma	60
V. CONCLUSION 66
VI. ORDERING CLAUSES	68
1.	On April 11, 1997, SBC Communications Inc. and its subsidiaries, Southwestern
Bell Telephone Company and Southwestern Bell Communications Services, Inc., d/b/a
Southwestern Bell Long Distance, (collectively, SBC) filed an application for authorization
under section 271 of the Communications Act of 1934, as amended, to provide in-region
interLATA services in the State of Oklahoma.(1) For the reasons set forth below, we conclude
that SBC has not demonstrated on this record that it is providing access and interconnection to
an unaffiliated, facilities-based competing provider of telephone exchange service to residential
and business subscribers, as required by section 271(c)(1)(A) of the statute.(2) We further
conclude that, under the circumstances presented in this application, SBC may not obtain
authorization to provide in-region interLATA services in Oklahoma pursuant to Track B of the
Act at this time because SBC has received, at the very least, several requests for access and
interconnection within the meaning of section 271(c)(1)(B).(3)
2.	Given our findings that SBC has not satisfied section 271(c)(1)(A) on this record,
and may not at this time proceed pursuant to section 271(c)(1)(B), we conclude that SBC has not
satisfied the requirements of subsection 271(c)(1). We therefore deny, pursuant to section
271(d)(3), SBC's application to provide in-region interLATA services in Oklahoma. II. STATUTORY FRAMEWORK
3.	The Telecommunications Act of 1996(4) conditions Bell Operating Company
(BOC)(5) provision of in-region interLATA services on compliance with certain provisions of
section 271. BOCs must apply to the Commission for authorization to provide interLATA
services originating in any in-region state.(6) The Commission must issue a written determination
on each application no later than 90 days after receiving such application.(7) In acting on a BOC's
application for authority to provide in-region interLATA services, the Commission must consult
with the Attorney General and give substantial weight to the Attorney General's evaluation of the
BOC's application.(8) In addition, the Commission must consult with the applicable state
commission to verify that the BOC has either a state- approved interconnection agreement or
statement of generally available terms and conditions that satisfies the "competitive checklist," as
described below.(9) 4.	Section 271 requires the Commission to make several findings before approving
BOC entry. As a preliminary matter, a BOC must show that it satisfies the requirements of
either section 271(c)(1)(A) or 271(c)(1)(B).(10) Those sections provide:
(A) PRESENCE OF A FACILITIES-BASED COMPETITOR.-A Bell operating
company meets the requirements of this subparagraph if it has entered into one or more
binding agreements that have been approved under section 252 specifying the terms and
conditions under which the Bell operating company is providing access and
interconnection to its network facilities for the network facilities of one or more
unaffiliated competing providers of telephone exchange service (as defined in section
3(47)(A), but excluding exchange access) to residential and business subscribers. For the
purpose of this subparagraph, such telephone exchange service may be offered by such
competing providers either exclusively over their own telephone exchange service
facilities or predominantly over their own telephone exchange service facilities in
combination with the resale of the telecommunications services of another carrier. For
the purpose of this subparagraph, services provided pursuant to subpart K of part 22 of
the Commission's regulations (47 C.F.R. 22.901 et seq.) shall not be considered to be
telephone exchange services.
(B) FAILURE TO REQUEST ACCESS.-A Bell operating company meets the
requirements of this subparagraph if, after 10 months after the date of enactment of the
Telecommunications Act of 1996, no such provider has requested the access and
interconnection described in subparagraph (A) before the date which is 3 months before
the date the company makes its application under subsection (d)(1), and a statement of
the terms and conditions that the company generally offers to provide such access and
interconnection has been approved or permitted to take effect by the State commission
under section 252(f). For purposes of this subparagraph, a Bell operating company shall
be considered not to have received any request for access and interconnection if the State
commission of such State certifies that the only provider or providers making such a
request have (i) failed to negotiate in good faith as required by section 252, or (ii)
violated the terms of an agreement approved under section 252 by the provider's failure
to comply, within a reasonable period of time, with the implementation schedule
contained in such agreement.
5.	In order to grant a BOC's application, the Commission must also find that: (1)
the interconnection agreements or statements approved at the state level under section 252
satisfy the competitive checklist contained in section 271(c)(2)(B);(11) (2) the requested
authorization will be carried out in accordance with the requirements of section 272;(12) and (3)
the BOC's entry into the in-region interLATA market is "consistent with the public interest,
convenience, and necessity."(13) III. REQUIREMENTS OF SECTION 271(c)(1)(A)
6.	In order to satisfy section 271(c)(1)(A), a BOC must demonstrate that it "is
providing access and interconnection to its network facilities for the network facilities of one or
more unaffiliated competing providers of telephone exchange service . . . to residential and
business subscribers."(14) According to SBC, its "implemented agreement with Brooks Fiber
satisfies all the requirements of [section 271(c)(1)(A)]."(15) Because SBC relies exclusively on
Brooks Fiber (Brooks) for purposes of satisfying section 271(c)(1)(A), we will focus in this
section only on the record evidence concerning Brooks' activities in Oklahoma. A key issue in
determining whether SBC has satisfied section 271(c)(1)(A) is whether Brooks is a competing
provider of telephone exchange service to both residential and business subscribers. 7.	The following facts regarding Brooks' operations in Oklahoma are undisputed. Brooks, a carrier unaffiliated with SBC, has received authority to "operate as a competitive local
exchange company . . . , providing all types of intrastate switched services, including switched
local exchange (i.e., dial-tone) service" in Oklahoma.(16) Brooks has an effective local exchange
tariff in place for the provision of residential and business services.(17) As of March 11, 1997,
Brooks was serving twenty business customers in Oklahoma.(18) Of these twenty business
customers, one received service via resold SBC ISDN service, while the others received service
either via direct on-net connections to Brooks' fiber optic transmission rings or through leased
SBC dedicated T-1 facilities.(19) In addition, Brooks has test circuits activated to the residences of
four of its Oklahoma employees.(20) These circuits are all provisioned through the resale of SBC's
local exchange service.(21) Brooks is not billing the employees involved in the test of these
circuits.(22) B.	Positions of the Parties(23)
8.	As an initial matter, we note that commenters offer differing views about the
showing that SBC must make in order to demonstrate that Brooks is a competing provider that
satisfies the requirements of section 271(c)(1)(A).(24) Commenters use various terms (e.g.,
"serv[e],"(25) "provi[de],"(26) "offer[ ],"(27) "furnish[ ]"(28)) to describe what Brooks must do to meet the
competing provider requirement of section 271(c)(1)(A), although commenters often do not
define the terms they use.
9.	Various commenters assert that SBC does not satisfy the requirements of section
271(c)(1)(A) because Brooks' test of four circuits to the homes of its employees does not
constitute residential service for purposes of this section.(29) Brooks states that the sole purpose of
its test is to identify and correct any problems in SBC's and Brooks' resale support and ancillary
services systems.(30) According to Brooks, it is not billing the employees involved in the test of
these circuits.(31) Brooks represents that it "is not now offering residential service in Oklahoma,
nor has it ever offered residential service in Oklahoma,"(32) and that it "is not accepting any
request in Oklahoma for residential service."(33) According to the Department of Justice, "[t]he
provision of service on a test basis does not make Brooks a 'competing provider' of service to
residential 'subscribers,' in the absence of any effort on Brooks' part to provide service on a
commercial basis."(34) CompTel asserts that "[i]t does not even appear that Brooks' four
'customer' test is a telecommunications service at all, because it is neither available to the public
nor offered for a fee."(35) SBC responds that the fact that "Brooks' residential customers are
employees served on a 'test' basis . . . is irrelevant to [its] application."(36) According to SBC,
section 271 "makes no distinctions based upon the end user's employment, the label a carrier
attaches to its local service, or the pricing of the service."(37) In discussing Brooks' service
operations generally, SBC also asserts that there is no requirement under section 271(c)(1)(A)
that the competing provider serve any minimum number of customers.(38) 10.	In asserting that Brooks is a competing provider of residential service for
purposes of section 271(c)(1)(A), SBC relies on the fact that Brooks has an effective local
exchange tariff in place for residential and business service.(39) SBC also emphasizes that the
Oklahoma Corporation Commission (Oklahoma Commission) has determined that Brooks is
providing service to both business and residential subscribers.(40) In addition, both SBC and the
Oklahoma Commission suggest that Brooks has certain legal obligations to furnish service to
residential subscribers in Oklahoma,(41) and that Brooks has media advertisements seeking to
attract residential subscribers.(42) In contrast, the Department of Justice contends that "[a]lthough
Brooks plans to offer service to residential subscribers in Oklahoma (and is doing so in other
states), and has a tariff on file in Oklahoma under which it could at some point serve residential
customers, it is not presently a 'competing provider of telephone exchange services . . . to
residential . . . subscribers,' as required by [s]ection 271(c)(1)(A)."(43) 11.	Various commenters also contend that SBC does not meet the requirements of
section 271(c)(1)(A) because Brooks is not providing facilities-based service to both residential
and business subscribers.(44) A number of commenters argue that section 271(c)(1)(A)'s
requirement that competing providers offer telephone exchange service either "exclusively" or
"predominantly" over their own telephone exchange service facilities should apply
independently to both business and residential subscribers.(45) Similarly, CPI asserts that a carrier
that serves residential customers solely through resale does not meet the "predominance" test.(46) In contrast, the Department of Justice states that section 271(c)(1)(A) permits an applicant to
serve one class of subscribers via resale, so long as the competitor's local exchange services as a
whole are provided predominantly over its own facilities.(47) In its reply comments, SBC also
asserts that the statute "does not impose any requirement that the CLEC actually serve both
business and residential customers over its own facilities."(48) 12.	Certain commenters also argue that Brooks does not qualify as a "predominantly"
facilities-based carrier with respect to its business subscribers.(49) Many commenters also offer
differing interpretations of the phrase "predominantly over their own telephone exchange service
facilities," contained in section 271(c)(1)(A).(50) C.	Discussion
13.	As noted above, there is considerable dispute in the record of this proceeding
about whether SBC has shown that Brooks' residential operations meet the requirements of
section 271(c)(1)(A). Consequently, in determining whether SBC has demonstrated compliance
with section 271(c)(1)(A), we focus our discussion on whether Brooks is a competing provider
of telephone exchange service to residential subscribers.(51) We note that the burden is on SBC(52)
to show that Brooks is an "unaffiliated competing provider[ ] of telephone exchange service . . .
to residential . . . subscribers."(53) Given our conclusion below that Brooks is not a competing
provider of telephone exchange service to residential subscribers, we find it unnecessary to reach
the issue of whether Brooks is a competing provider of telephone exchange service to business
subscribers. 14.	As summarized above, commenters offer differing views about the showing SBC
must make with respect to Brooks' residential service operations (i.e., whether Brooks must
serve, provide, offer, or furnish residential service). We need not and do not define the precise
scope of the phrase "competing provider[ ] of telephone exchange service" for purposes of this
Order. Issues concerning the nature and size of the presence of the competing provider require
very fact-specific determinations.(54) We anticipate addressing such issues in upcoming
applications where facts clearly present the issues and warrant a Commission determination. We
do, however, conclude that a "competing provider" cannot mean a carrier such as Brooks that at
present has in place at most paper commitments to furnish service. We find that the use of the
term "competing provider[ ]" in section 271(c)(1)(A) suggests that there must be an actual
commercial alternative to the BOC in order to satisfy section 271(c)(1)(A).(55) Consistent with
this interpretation, we note that the Joint Explanatory Statement states that "[t]he requirement
that the BOC 'is providing access and interconnection' means that the competitor has
implemented the agreement and the competitor is operational."(56) 15.	Although SBC emphasizes that the Oklahoma Commission "concluded that
[SBC] satisfies the requirements of subsection 271(c)(1)(A) because Brooks Fiber serves both
business and residential customers . . . ,"(57) we find that the Oklahoma Commission's
determination on this issue is not dispositive. Section 271 requires us to consult with the
Oklahoma Commission "in order to verify the compliance of [SBC] with the requirements of
[section 271(c)]" before we make any determination on SBC's application under section
271(d).(58) At the same time, as the expert agency charged with implementing section 271, we are
required to make an independent determination of the meaning of statutory terms in section 271.
16.	Moreover, based on the record before us, we find that it is unclear what standard
the Oklahoma Commission applied or what specific facts it relied on in making its determination
about Brooks' activities. In its order in the state's section 271 proceeding, the Oklahoma
Commission concluded "that Brooks Fiber meets the requirement of [s]ection 271(c)(1)(A) of
the Act,"(59) but did not provide any basis for its determination. In its initial comments in this
proceeding, the Oklahoma Commission asserts that "Brooks is currently providing local service
to business customers predominantly over its own facilities and by resale on a test basis to its
employees for their residential service."(60) The Oklahoma Commission contends in its reply
comments in this proceeding that "[w]ith respect to the Track 'A' versus Track 'B' issue, the
[Oklahoma Commission] has determined that Brooks Fiber is providing both business and
residential service . . . ."(61) Given the facts in the record before us, the Oklahoma Commission's
determination that Brooks "is providing" residential service could be based on, either
cumulatively or individually, a range of factors -- e.g., Brooks' provision of circuits to four
employees on a test basis, Brooks' effective state tariff, or service obligations that Brooks has
under Oklahoma law. None of the Oklahoma Commission's statements, either taken together or
individually, specifies whether the Oklahoma Commission has made a finding that Brooks is
actually furnishing residential service, or otherwise qualifies as a competing provider of
residential service. 17.	We conclude that Brooks' provision of local exchange service on a test basis, at
no charge, to the homes of four of its employees does not qualify Brooks as a "competing
provider[ ] of "telephone exchange service . . . to residential . . . subscribers."(62) The term
"subscribers" suggests that persons receiving the service pay a fee.(63) The term "telephone
exchange service" also requires that there be payment of a fee.(64) For the purposes of section
271(c)(1)(A), the competing provider must actually be in the market, and, therefore, beyond the
testing phase.(65) Hence, we agree with the Department of Justice that "[t]he provision of service
on a test basis does not make Brooks a 'competing provider' of service to residential 'subscribers,'
in the absence of any effort on Brooks' part to provide service on a commercial basis."(66) 18.	Nor are we persuaded that Brooks is a competing provider of telephone exchange
service to residential and business subscribers merely because it has an effective tariff in place
for the provision of both business and residential service in Oklahoma.(67) Like the Department of
Justice, we conclude that the existence of an effective local exchange tariff alone is not sufficient
to satisfy section 271(c)(1)(A).(68) Brooks represents that it "is not now offering residential
service in Oklahoma, nor has it ever offered residential service in Oklahoma,"(69) and that it "is
not accepting any request in Oklahoma for residential service."(70) Neither SBC nor any other
commenter has presented evidence to show that Brooks is accepting requests for residential
service. Thus, SBC has not even made a threshold showing that Brooks is a competing provider
that satisfies section 271(c)(1)(A). 19.	Given the record in this proceeding, it is unclear whether Brooks is obligated
under Oklahoma law to provide residential service. We note that Brooks' Oklahoma tariff
provides that "[t]he furnishing of service under this tariff is subject to the availability on a
continuing basis of all the necessary facilities . . . ."(71) Brooks suggests that this language
exempts it from providing service under the current circumstances.(72) SBC claims that,
notwithstanding Brooks' representations in this proceeding, Brooks is obligated under Oklahoma
law to serve residential customers.(73) The Oklahoma Commission states that Brooks' "[Oklahoma
Commission]-approved tariff requires" it to provide service to business and residential
customers, and that the Oklahoma Commission will "object to any attempt by Brooks Fiber to
deviate from providing service to both residential and business customers."(74) The Oklahoma
Commission does not, however, address the specific exemption contained in Brooks' tariff. 20.	We conclude that the determination of whether Brooks is obligated under state
law to provide residential service is not dispositive of the question presented here, because,
irrespective of Brooks' state obligations, the key determination for our purposes is whether
Brooks is a competing provider of residential telephone exchange service under the
Communications Act. We note that notwithstanding all of its claims regarding Brooks' legal
obligations, SBC does not rebut Brooks' statement that it "is not accepting any request in
Oklahoma for residential service."(75) Thus, as a practical matter, competing telephone exchange
service is not available on a commercial basis to any residential subscribers in Oklahoma. Regardless of whatever state obligations a carrier may have, we cannot conclude for purposes of
section 271(c)(1)(A) that a carrier is a competing provider of telephone exchange service to
residential subscribers if it is not even accepting requests for that service. 21.	For similar reasons, we also discount the significance of allegations concerning
Brooks' media advertisements. The fact that Brooks has a web site listing certain services that
SBC suggests "might be attractive to residential customers" does not contradict Brooks'
statement that it currently is not accepting requests for residential service.(76) Similarly, we do not
attach significant evidentiary weight to the Oklahoma Commission's unsubstantiated assertion
that "Brooks has begun media advertisements seeking to attract both business and residential
customers,"(77) without further elaboration on the significance of such advertisements. 22.	As noted above, various commenters have discussed whether section
271(c)(1)(A)'s requirement that competing providers offer telephone exchange service either
"exclusively" or "predominantly" over their own telephone exchange service facilities should
apply independently to both business and residential subscribers.(78) In addition, certain
commenters have raised the issue of how to interpret the "predominantly" requirement of section
271(c)(1)(A). We need not and do not address either of these issues for purposes of SBC's
Oklahoma section 271 application, because, as we have concluded above, Brooks does not
qualify as a "competing provider of telephone exchange service . . . to residential . . .
subscribers" pursuant to section 271(c)(1)(A).
IV. REQUIREMENTS OF SECTION 271(c)(1)(B)
23.	Section 271(c)(1)(B) of the Act allows a BOC to seek entry under Track B if "no
such provider has requested the access and interconnection described in [section 271(c)(1)(A)]"
and the BOC's statement of generally available terms and conditions has been approved or
permitted to take effect by the applicable state regulatory commission.(79) In its motion to
dismiss, ALTS asserts that SBC is precluded from proceeding under Track B because
"interconnection requests" have been filed in Oklahoma.(80) In response to this motion, the
Bureau invited parties to address in detail their legal theories of when a BOC is permitted to file
under section 271(c)(1)(B) and when a BOC is foreclosed from proceeding under section
271(c)(1)(B). The Bureau requested parties to address, among other things, the nature of a
"request" that is referred to in section 271(c)(1)(B), which we hereinafter refer to as a
"qualifying request," and whether and when SBC has received such a request.(81) B.	Positions of the Parties
24.	In its application, SBC contends that it is entitled to proceed under Track B.(82) SBC interprets the phrase "such provider" as used in section 271(c)(1)(B) to refer to an
"exclusively" or "predominantly" facilities-based competing provider of telephone exchange
service to residential and business subscribers, as described in section 271(c)(1)(A).(83) Thus,
under SBC's reading of the statute, a BOC is entitled to proceed under Track B unless: (1) a
competing provider is actually providing telephone exchange service to residential and business
subscribers in accordance with the terms of section 271(c)(1)(A); and (2) that competing
provider has requested access and interconnection more than three months prior to the filing of
an application as required by section 271(c)(1)(B).(84) Under this reading, the fact that a carrier
has requested access and interconnection but has not yet begun to provide competing service
(such as a carrier that is still engaged in negotiations with a BOC) does not foreclose the BOC
from proceeding under Track B. Thus, according to SBC, to foreclose Track B, the requesting
carrier "may not simply anticipate building facilities and seek interconnection in anticipation of
that day. Rather, it must actually be 'such provider' described in [section 271(c)(1)(A)]."(85) 25.	A central element of SBC's argument is that a request for access and
interconnection does not become a qualifying request that forecloses Track B until the carrier
begins providing the type of telephone exchange service to residential and business subscribers
described in section 271(c)(1)(A). Specifically, SBC maintains that a request from a prospective
competitor "may become" a qualifying request that forecloses Track B "once the carrier starts to
provide qualifying, facilities-based service pursuant to its interconnection agreement" with
SBC.(86) Accordingly, SBC seems to take the position that, if it has not satisfied the requirements
of section 271(c)(1)(A), then it must be eligible to proceed under Track B.(87)
26.	In their comments on ALTS' motion and on SBC's application generally, BOCs
and their potential competitors differ sharply on what constitutes a "qualifying request" that will
foreclose Track B. Most potential competitors, trade associations, the Oklahoma Attorney
General, and the States Attorneys General generally agree with ALTS and appear to assert that
any request for access and interconnection is a qualifying request that forecloses Track B.(88) Most BOCs, in contrast, contend that only a request from an already competing facilities-based
provider of telephone exchange service to residential and business subscribers can be a
qualifying request that precludes a BOC from proceeding under Track B.(89) U S West, CompTel,
LCI, and the Department of Justice contend, however, that Track B is available to any BOC that
has not received a request for access and interconnection to provide service that would satisfy
the requirements of section 271(c)(1)(A).(90) We note that the Oklahoma Commission, in a 2-1
decision, found it was unnecessary to determine whether SBC could proceed under section
271(c)(1)(B) in light of its determination that SBC satisfies the requirements of section
271(c)(1)(A).(91) C.	Discussion
27.	All parties appear to agree that, if SBC has received a "qualifying request" for
access and interconnection, the statute bars SBC from proceeding under Track B. We agree with
this analysis and conclude that, in order to decide whether SBC's application may proceed under
Track B, we must determine whether SBC has received a "qualifying request." We conclude
that a "qualifying request" under section 271(c)(1)(B) is a request for negotiation to obtain
access and interconnection that, if implemented, would satisfy the requirements of section
271(c)(1)(A). We further conclude that the request for access and interconnection must be from
an unaffiliated competing provider that seeks to provide the type of telephone exchange service
described in section 271(c)(1)(A). As discussed below, such a request need not be made by an
operational competing provider, as some BOCs suggest. Rather, the qualifying request may be
submitted by a potential provider of telephone exchange service to residential and business
28.	We reach this conclusion for several reasons. As a matter of statutory
interpretation, we find that our reading, by giving full effect to the meaning of the term "request"
in section 271(c)(1)(B), is the one most consistent with the statutory design. In addition, as a
matter of policy, we find that our interpretation will best further Congress' goal of introducing
competition in the local exchange market by giving BOCs an incentive to cooperate with
potential competitors in providing them the facilities they need to fulfill their requests for access
and interconnection. Moreover, we find our interpretation to be particularly sound in contrast to
the extreme positions set forth by SBC and its potential competitors, as described below.
29.	Under SBC's interpretation of section 271(c)(1)(B), only operational facilities-based competing providers may submit qualifying requests that preclude a BOC from
proceeding under Track B.(92) Adoption of this interpretation of a qualifying request would create
an incentive for a BOC to delay the provision of facilities in order to prevent any new entrants
from becoming operational and, thereby, preserve the BOC's ability to seek in-region interLATA
entry under Track B.(93) As the Department of Justice observes, this reading of section
271(c)(1)(B) would effectively "reward the BOC that failed to cooperate in implementing an
agreement for access and interconnection and thereby prevented its competitor from becoming
operational."(94) Opponents of SBC's application offer a radically different -- and, in our view,
equally unreasonable -- interpretation of when a qualifying request has been made. These
parties claim that any request for access and interconnection submitted by a potential new
entrant to a BOC is a qualifying request and precludes the BOC from proceeding under Track B. We conclude, however, that this statutory reading could create an incentive for potential
competitors to "game" the negotiation process by submitting an interconnection request that
would foreclose Track B but, if implemented, would not satisfy the requirements of section
271(c)(1)(A). Such a result would effectively give a BOC's potential competitors in local
telecommunications markets the power to deny the BOC entry into the in-region interLATA
market.(95) 30.	As discussed below, on the basis of the record before us, we find that SBC has
received, at the very least, several qualifying requests for access and interconnection that, if
implemented, will satisfy the requirements of section 271(c)(1)(A). We therefore conclude that
SBC, at this time, may not pursue in-region interLATA entry in Oklahoma under section
271(c)(1)(B).
2.	Standard for Evaluating "Qualifying Requests"
31.	Section 271(c)(1)(B) provides that a BOC meets the "requirements of [section
271(c)(1)(B)] if . . . no such provider has requested the access and interconnection described in
[section 271(c)(1)(A)] . . . ."(96) The threshold question here is whether Congress has tied the
availability of Track B to a request for access and interconnection from a carrier that is already
competing in the local exchange market, as SBC contends, or whether Congress intended to
preclude a BOC from proceeding under Track B upon its receipt of a request for access and
interconnection from a prospective competing provider of the type of telephone exchange
service described in section 271(c)(1)(A).(97) We find the most natural reading of the statute, and
the only interpretation consistent with the statutory goal of facilitating competition in the local
exchange market, is the latter interpretation. 32.	According to SBC, "such provider" refers to an already operational facilities-based provider of telephone service to residential and business subscribers.(98) Thus, although it
has received at least 45 requests for "local interconnection and/or resale" in Oklahoma,(99) SBC
claims that none of these requests, with the exception of the one from Brooks, is a qualifying
request.(100) With respect to Brooks, SBC claims that Brooks' request was not a qualifying request
when it was submitted in March 1996, but rather became a qualifying request on January 15,
1997, because on that date, according to SBC, Brooks became an operational facilities-based
provider of telephone service to residential and business subscribers. Since this event occurred
within three months of the filing of its section 271 application, however, SBC asserts that its
application can proceed under Track B. 33.	We find implausible SBC's assertion that Congress tied the availability of Track
B to a request for access and interconnection from a carrier that was already competing in the
local exchange market. Potential competitors usually request access and interconnection under
section 251 in order to become operational.(101) Even if a competing provider has a fully
redundant network, it would need interconnection from the BOC prior to becoming operational
in order to complete calls to, and receive calls originating from, BOC customers. Indeed, SBC
does not dispute that Brooks requested access and interconnection from SBC in March 1996 in
order to be able to offer local exchange service in competition with SBC. In keeping with its
interpretation of the words "such provider," however, SBC maintains that this request was not
transformed into a qualifying request for purposes of Track B until ten months later, when SBC
began providing access and interconnection to Brooks in January 1997. There is nothing in the
text of the statute, or its legislative history, to suggest that a request for access and
interconnection must be perfected at some unknown future date before it may become a
qualifying request for the purposes of Track B. Nor does SBC provide any support for this
assertion. We therefore find SBC's theory of a "post-dated" request to be without merit. 34.	We conclude that Congress intended to preclude a BOC from proceeding under
Track B when the BOC receives a request for access and interconnection from a prospective
competing provider of telephone exchange service, subject to the exceptions in section
271(c)(1)(B) discussed below.(102) Thus, we interpret the words "such provider" as used in section
271(c)(1)(B) to refer to a potential competing provider of the telephone exchange service
described in section 271(c)(1)(A). We find it reasonable and consistent with the overall scheme
of section 271 to interpret Congress' use of the words "such provider" in section 271(c)(1)(B) to
include a potential competing provider. This interpretation is the more natural reading of the
statute because, unlike SBC's strained interpretation, it retains the meaning of the term "request." By its terms, Track B only applies where "no such provider has requested the access and
interconnection described in [section 271(c)(1)(A)]."(103) Under SBC's reading, however, Track B
is available to a BOC if it is not already providing access and interconnection to competing
carriers, no matter how many requests for access and interconnection the BOC has received. To
give full effect to the term "request," we therefore interpret the words "such provider" to mean
any such potential provider that has requested access and interconnection.
35.	Indeed, we note that the phrase "competing provider" is commonly used to refer
to both potential and actual competing providers. For example, in our Local Competition Order,
we frequently referred to potential competitors of local exchange service as "competing
providers" despite the fact that they were not yet actually offering service in competition with
the incumbent LEC.(104) Similarly, in the instant proceeding, we note that SBC itself consistently
uses the terms "competitors" and "CLECs" when referring to potential providers of local
exchange service. For example, SBC refers to a "CLEC that wishes to provide local services in
Oklahoma," "CLECs' decisions to postpone providing local telephone service," and "competitors
[that] can make a business decision whether to enter the local exchange."(105) 36.	SBC asserts that, if Congress had meant to refer in section 271(c)(1)(B) to any
party seeking to begin negotiations for access and interconnection, it would have used the phrase
"requesting telecommunications carrier" as it did in section 251(c), rather than the term "such
provider."(106) We find, however, that Congress' use of the phrase "requesting telecommunications
carrier" in section 251 provides additional support for our interpretation. A
"telecommunications carrier" is defined in section 3(44) of the Act as a "provider of
telecommunications services . . . ."(107) Thus, read literally, a "requesting telecommunications
carrier" in section 251 is a provider of telecommunications services that requests interconnection
or access to unbundled elements. SBC, however, does not assert that the requesting
telecommunications carrier in section 251 must be an operational provider of
telecommunications services at the time it makes its request. To the contrary, SBC appears to
agree that Congress used the term "requesting telecommunications carrier" to refer to a potential
entrant seeking to begin negotiations for access and interconnection.(108) In the context of section
271, however, SBC inconsistently rejects the very same interpretation of "such provider" that it
has conceded is correct with respect to the term "requesting telecommunications carrier" in the
context of section 251. In our view, Congress used the term "requesting telecommunications
carrier" in section 251 to refer to a potential telecommunications carrier that was requesting
access and interconnection and, in the same fashion, used the term "such provider" in section
271(c)(1)(B) to refer to a potential provider that "has requested the access and interconnection
[described in section 271(c)(1)(A)]." In fact, to have used the adjective "requesting" before the
noun "provider" in section 271(c)(1)(B) would have been superfluous because the sentence
already incorporates the concept of a requesting provider by using the verb "requested."
37.	Similarly, we find that SBC's interpretation of this provision effectively reads the
exceptions in section 271(c)(1)(B) out of the statute. The exceptions provide that the BOC
"shall be considered not to have received any request for access and interconnection" if the
applicable state regulatory commission certifies that the provider making the request fails to
negotiate in good faith or fails to comply, within a reasonable time, with the implementation
schedule set forth in the interconnection agreement.(109) These exceptions ensure that, if, after a
request for access and interconnection, facilities-based competition does not emerge because the
potential competitor fails either to bargain in good faith or to implement its interconnection
agreement according to a negotiated or arbitrated schedule, Track B would become available to
the BOC. Such certifications by a state commission, in effect, would amount to a determination
that the BOC had not received a qualifying request. Under SBC's theory of a "post-dated"
request, a qualifying request that forecloses Track B would occur only after the initial request
has resulted in a negotiated and implemented interconnection agreement with the BOC. Consequently, there would be virtually no need for exceptions that make Track B available in
the event of bad faith negotiations or failure to comply with an implementation schedule. 38.	SBC only identifies two scenarios, neither of which is present here, where the
exceptions in section 271(c)(1)(B) might come into play under its interpretation: (1) where a
competing LEC that is already providing facilities-based telephone exchange service completely
over its own network requests access and interconnection from the BOC; or (2) where a
competing LEC that has obtained an interconnection agreement prior to the 1996 Act makes
such a request.(110) SBC asserts that the exceptions in section 271(c)(1)(B) exist to ensure that a
qualifying carrier (i.e., an already competing provider) "cannot foreclose interLATA entry by
requesting, but then failing to negotiate or implement, an agreement."(111) As described below,
however, we find that these scenarios are extremely rare.(112) It seems implausible that Congress
would have created the exceptions in section 271(c)(1)(B) to apply to circumstances that would
almost never arise. We conclude therefore that adhering to SBC's interpretation would virtually
strip these exceptions of their meaning.
39.	We also find unpersuasive the few passages of legislative history on which SBC
relies in support of its argument that "such provider" in section 271(c)(1)(B) refers to an
operational competing provider. For example, SBC relies on references in the Joint Explanatory
Statement to a "qualifying facilities-based competitor," and a "facilities-based competitor that
meets the criteria set out in [section 271(c)(1)(A) that] has sought to enter the market."(113) Notably, this latter reference to the Joint Explanatory Statement equally supports our
interpretation of "such provider" because it refers to a carrier that "has sought to enter the
market." 40.	In addition, SBC relies on a floor statement indicating that the phrase "such
provider" refers to the facilities-based provider described in the second sentence of section
271(c)(1)(A).(114) SBC also cites a floor statement stating that a BOC may pursue entry under
Track B if it has not received "any request for access and interconnection from a facilities-based
carrier that meets the criteria in section 271(c)(1)(A)."(115) We decline to attach the weight to
these and other citations to the legislative history that SBC assigns because other passages in the
legislative history refer to "would-be" or "potential" competitors. These passages indicate that
Congress assumed carriers would not yet be operational competitors when they requested the
access and interconnection arrangements necessary to enable them to compete.(116) For example,
as discussed below,(117) the Conference Committee emphasized the importance of "potential
competitors" having the benefit of the Commission's rules implementing section 251.(118) In
addition, the House Commerce Committee indicated that Track B would not create an
"unreasonable burden on a would-be competitor" to request access and interconnection under
section 271(c)(1)(A).(119) SBC cites no support for its contention that this language "simply
reflects a belief that [competing LECs] would be full competitors in the local market only after
they implement interconnection agreements under section 251."(120)
41.	Contrary to SBC's claim that its reading of section 271 is supported by legislative
history, we conclude that the legislative history surrounding section 271(c)(1)(A) establishes
that, consistent with its goal of developing competition, Congress intended Track A to be the
primary vehicle for BOC entry in section 271. As discussed below, by tying BOC in-region,
interLATA entry to the development of local competition in this manner, Congress expected that
there would be a "ramp-up" period during which requests from potential competitors would
preclude BOCs from applying under Track B while requesting carriers are in the process of
becoming operational competitors. We find, therefore, that the statutory scheme established by
Congress supports our conclusion that the term "such provider" in section 271(c)(1)(B) refers to
a potential competitor that is seeking access and interconnection in order to enter the local
exchange market.(121)
42.	That Congress intended BOCs to obtain approval to enter their in-region
interLATA markets primarily by satisfying the requirements of section 271(c)(1)(A) is
evidenced not only by the stated purpose of the 1996 Act which was to "open[ ] all
telecommunications markets to competition,"(122) but also by statements in the Report of the
House Commerce Committee.(123) These statements are particularly relevant because the text of
section 271(c)(1) was adopted almost verbatim from the House bill.(124) The House Committee
Report states that the existence of a facilities-based competitor that is providing service to
residential and business subscribers "is the integral requirement of the checklist, in that it is the
tangible affirmation that the local exchange is indeed open to competition."(125) Moreover, that
Report observes that "the Committee expects the Commission to determine that a competitive
alternative is operational and offering a competitive service somewhere in the State prior to
granting a BOC's petition for entry into long distance."(126) Thus, we find that Congress regarded
the presence of one or more operational competitors in a BOC's service area as the most reliable
evidence that the BOC's local markets are, in fact, open to competitive entry.(127)
43.	At the same time, Congress, by intending Track A to be the primary entry
vehicle, understood that there would be some delay between the passage of the 1996 Act and
actual entry by facilities-based carriers into the local market.(128) For example, it expressly
recognized that it would take time for competitors to construct or upgrade networks and then to
extend service offerings to residential and business subscribers.(129) As the Joint Explanatory
Statement observes, "it is unlikely that competitors will have a fully redundant network in place
when they initially offer service, because the investment necessary is so significant."(130) Rather,
as many commenters recognize, because potential competitors must accomplish a number of
things before they may begin to provide telephone exchange service, such as obtaining a
certificate of convenience and necessity from the state commission, negotiating (and arbitrating,
if necessary) an interconnection agreement with the BOC, obtaining state approval of that
agreement, filing and obtaining approval of a tariff for local exchange service, and implementing
their interconnection agreement, it will inevitably take some time before these carriers can
actually begin to provide telephone exchange service.(131) Congress' recognition that this
transformation to operational status would not be an instantaneous one is evidenced by the Joint
Explanatory Statement's observation that, "it is important that the Commission rules to
implement new section 251 be promulgated within 6 months after the date of enactment so that
potential competitors will have the benefit of being informed of the Commission rules in
requesting access and interconnection before the statutory window in new section 271(c)(1)(B)
shuts."(132) 44.	That Congress expected there to be a "ramp-up" period for requesting carriers to
become operational competitors is further evidenced by section 251 itself. In adopting section
251, Congress acknowledged that the development of competition in local exchange markets is
dependent, to a large extent, on the opening of the BOCs' networks.(133) Under section 251,
incumbent LECs, including BOCs, are required to take certain steps to open their networks
including "providing interconnection, offering access to unbundled elements of their networks,
and making their retail services available at wholesale rates so that they can be resold."(134) Our
rules implementing section 251 envisioned that incumbent LECs would need some time to
complete these necessary steps. For example, in the Local Competition Order, we stated that
incumbent LECs must have made modifications to their operational support systems (OSS)
necessary to provide access to OSS functions by January 1, 1997.(135) Moreover, in the Second
Order on Reconsideration, we declared that we would not take enforcement action against
incumbent LECs "making good faith efforts to provide . . . access [to OSS functions]."(136) In
reaching these conclusions, we recognized that some incumbent LECs would require some time
before they would be able to provide potential competitors access to their OSS.
45.	Moreover, we find that the very language of section 271(c)(1)(B) confirms that
Congress envisioned the existence of a "ramp-up" period.(137) The exceptions in section
271(c)(1)(B) are indicative of Congress' recognition that there would be a period during which
good-faith negotiations are taking place, interconnection agreements are being reached, and the
potential competitors are becoming operational by implementing their agreements.(138) By
delineating the circumstances under which Track B becomes available to the BOC, Congress
must have understood that there would often be some time when Track B is unavailable, but the
BOC has not yet satisfied the requirements of section 271(c)(1)(A).(139) This would not be the
case, however, under SBC's theory that only a request for access and interconnection from an
operational facilities-based provider will foreclose Track B.
46.	Further, as a matter of policy, we find that our interpretation of "such provider" is
consistent with the incentives established by Congress in section 271. In order to gain entry
under Track A, a BOC must demonstrate that it has "fully implemented" the competitive
checklist in section 271(c)(2)(B).(140) Thus, by expecting Track A to be the primary means of
BOC entry, Congress created an incentive for BOCs to cooperate with potential competitors in
the provision of access and interconnection and thereby facilitate competition in local exchange
markets. In contrast, Track B, which requires only that a BOC "offer[ ]" the items included in
the competitive checklist, does not contemplate the existence of competitive local entry and,
therefore, does not create such an incentive for cooperation.(141) Rather, as discussed more fully
below, Congress intended Track B to serve as a limited exception to the Track A requirement of
operational competition so that BOCs would not be unfairly penalized in the event that potential
competitors do not come forward to request access and interconnection, or attempt to "game" the
negotiation or implementation process in an effort to deny the BOCs in-region interLATA
entry.(142) 47.	In addition, if we were to find that only a request from an operational competing
facilities-based provider of residential and business service forecloses Track B, this would
guarantee that, after ten months, the BOC either satisfies the requirements of section
271(c)(1)(A) or is eligible for Track B.(143) As the Department of Justice asserts, "[s]uch an
interpretation of [s]ection 271 would radically alter Congress' scheme, [by] expanding Track B
far beyond its purpose and, for all practical purposes, reading the carefully crafted requirement
of Track A out of the statute."(144) For example, under SBC's theory, either a BOC has received a
"qualifying request" from a carrier that already satisfies the requirements of section
271(c)(1)(A), or the BOC may proceed under Track B.(145) SBC advocates an interpretation of the
statute where the circumstances under which a competing provider may make a "qualifying
request" would be so rare that, after December 8, 1996, Track B would be available in any state
that lacks a competing provider of the type of telephone exchange service to residential and
business subscribers described in section 271(c)(1)(A).(146) As WorldCom maintains, this would
lead to the illogical result that BOCs that successfully delay or prevent entry into their local
markets by new entrants that have requested access and interconnection under section 251 would
be rewarded by being granted the right to pursue in-region interLATA entry through Track B.(147) As a consequence, BOC in-region interLATA entry would, in most states, precede the
introduction of local competition.(148) We find it unlikely that Congress intended to eviscerate
Track A in this manner. As the Department of Justice contends, there is "no basis for the
assumption that Congress intended Track A, the only track included in the bill as originally
passed by the Senate, to play such an insignificant role."(149)
48.	In addition to its notion of a "post-dated" request, SBC sets forth two other
hypothetical scenarios in which the BOC could receive a "qualifying request" from an already
operational carrier that forecloses Track B.(150) Although SBC does not argue that either of these
hypothetical situations is present here, we briefly describe them to illustrate their limited
application. Under one scenario, SBC argues that it could receive a request for access and
interconnection from a competing LEC that is already providing facilities-based telephone
exchange service to residential and business customers completely over its own network. Alternatively, SBC maintains it could receive a request for access and interconnection from a
competing LEC that had negotiated an interconnection agreement prior to the 1996 Act.(151) 49.	As an initial matter, we note that SBC appears to set forth a reading of the word
"request" in these hypothetical scenarios that is different from the one it uses in characterizing
Brooks' request for access and interconnection in the instant application. SBC appears to assert
that, for the purposes of the hypothetical scenarios, whether a request for access and
interconnection constitutes a qualifying request is determined at the time the request is made. For the purposes of the case at hand, however, SBC claims that Brooks' request for access and
interconnection was not qualifying at the time it was made, but subsequently became a
qualifying request when Brooks became operational. SBC fails to explain how the meaning of
the statutory term "request" can vary according to the operational status of the requestor.
50.	In addition, we agree with the Department of Justice that it is implausible that
Congress would have adopted Track A solely to deal with situations of such narrowly limited
significance as SBC poses in its hypotheticals.(152) SBC's first scenario assumes the presence of a
carrier, prior to the 1996 Act, with a completely duplicative, ubiquitous network that provided
telephone exchange service to residential and business subscribers in competition with a BOC,
but did not yet have an access and interconnection agreement with the BOC.(153) We know of no
such carrier.(154) Indeed, the legislative history of the Act reflects Congress' recognition that the
existence of such facilities-based competition in local markets in February 1996 was
improbable.(155) Similarly, the second scenario assumes the presence of either a facilities-based
competing LEC that provided telephone exchange service to both residential and business
subscribers under a pre-1996 Act interconnection agreement or a facilities-based competing LEC
with a pre-1996 Act interconnection agreement that would be capable of providing such service
within the statutory window in section 271(c)(1)(B). If there were such interconnection
agreements in place between a BOC and a competing LEC operating within a BOC's service
area, we do not know of them.(156) 51.	Notably, SBC's primary support for the second scenario is the Joint Explanatory
Statement's reference to an interconnection agreement between New York Telephone and
Cablevision in Long Island, NY.(157) We disagree with SBC that this reference demonstrates that
"Congress was aware that, in various markets throughout the country, cable companies and
competitive access providers had negotiated interconnection agreements with incumbent LECs
prior to the 1996 Act."(158) As the Department of Justice observes, a single reference to only one
pre-1996 Act interconnection agreement between an incumbent LEC and a facilities-based
provider does not establish that Congress expected such situations to be common.(159) Indeed, it is
not obvious from this reference in the legislative history whether Cablevision either actually
provided telephone exchange service to both residential and business subscribers on the date of
enactment or intended to do so in the future.(160) Based on its experience with the implementation
of the 1996 Act nationwide, the Department of Justice notes that only a small minority of states
had any local exchange competition before the 1996 Act was passed, and very few providers had
become operational.(161) Moreover, the very passage of the 1996 Act -- which was designed to
remove impediments to local entry -- indicates that Congress believed that the degree of local
telephone competition and interconnection prior to the passage of the 1996 Act was
52.	Even if there were such facilities-based carriers with pre-1996 Act
interconnection agreements, we find that SBC's interpretation would greatly undermine the very
incentives that Congress sought to establish in section 271. As mentioned above, section 271
and, in particular, Track A, was established to provide an incentive for BOCs to cooperate in the
development of local competition. Under SBC's interpretation of the statute, the BOCs' only
incentive would be to cooperate with operational carriers that are already receiving access and
interconnection. We find that the incentive to cooperate established by Track A is not limited to
only those carriers that are already operational, but instead was designed to ensure that BOCs
facilitate the entry of a larger and more significant class of carriers -- potential competitors
requesting access and interconnection. It would be anomalous for Congress to have adopted
Track A solely to provide an incentive to BOCs to cooperate with already competing providers,
which do not require the BOCs' cooperation in order to become operational. 53.	We note that, if such a competing LEC was not already providing the type of
telephone exchange service described in section 271(c)(1)(A) at the time of passage of the 1996
Act and if it chose to obtain a new agreement pursuant to section 252, it would have to engage in
negotiations with the BOC, reach an interconnection agreement, obtain state approval of this
interconnection agreement under section 252(e)(4),(162) and then begin providing the type of
telephone exchange service to residential and business subscribers described in section
271(c)(1)(A) before its request for access and interconnection could be considered qualifying
under SBC's interpretation of section 271(c)(1)(B). As the Department of Justice recognizes, in
order for the BOC to be precluded from filing under Track B, the competing LEC would have to
complete all of this in the first seven months after the date of enactment.(163) Not only is this
unlikely, but this scenario assumes that the BOC would be inclined to cooperate with the
competing LEC, reach a negotiated agreement quickly, and proceed under the more rigorous
Track A standard, rather than attempt to delay the advent of competition by forcing competing
LECs to resort to arbitration until Track B becomes available. Under SBC's interpretation, given
the nine-month arbitration deadlines established in section 252(b)(4)(C), a BOC could virtually
guarantee its eligibility under Track B by placing all carrier negotiations in arbitration.(164) It
seems, therefore, that few, if any, potential competitors would be in a position, under this
interpretation, to make a "qualifying request" for access and interconnection before a BOC
would become eligible to pursue Track B.(165) 54.	Although we reject SBC's interpretation of "qualifying request," we also reject the
interpretation of those parties who argue that any request from a potential competitor forecloses
Track B. As the Department of Justice observes, the term "such provider" in section
271(c)(1)(B) should be interpreted with reference to the type of facilities-based competition that
would satisfy the requirements of section 271(c)(1)(A).(166) Accordingly, we conclude that the
request from a potential competitor must be one that, if implemented, will satisfy section
271(c)(1)(A).(167) That is, we find that a "qualifying request" must be one for access and
interconnection to provide the type of telephone exchange service to residential and business
subscribers described in section 271(c)(1)(A). To find otherwise would not only be contrary to
the explicit terms of section 271(c)(1)(B), which states that only a request for "the access and
interconnection described in [section 271(c)(1)(A]" can foreclose Track B,(168) but would lead to
anomalous results. For example, allowing any type of request for negotiation to foreclose Track
B could lead to a situation where a BOC is foreclosed from pursuing Track B because there has
been a request for negotiation, even though such a request, when implemented, may not satisfy
the requirements of section 271(c)(1)(A). As Ameritech observes, under this interpretation, if a
BOC receives a request for access and interconnection from a would-be facilities-based provider
of telephone exchange service to business, but not residential, subscribers, Track B would be
foreclosed, but the BOC would not be able to satisfy section 271(c)(1)(A) because it would not
be able to show that residential subscribers are served by a competing provider. Such a result
may place a BOC indefinitely in a "no-man's land" where, in effect, neither Track A nor Track B
is available to it.(169) 55.	According to its legislative history, Track B was adopted by Congress to deal
with the possibility that a BOC, through no fault of its own, could find that it is unable to satisfy
Track A.(170) The Joint Explanatory Statement explains that section 271(c)(1)(B) is "intended to
ensure that a BOC is not effectively prevented from seeking entry into the interLATA services
market simply because no facilities-based competitor that meets the criteria set out in new
section 271(c)(1)(A) has sought to enter the market."(171) Similarly, the House Committee Report
elaborates that, to "the extent that a BOC does not receive a request from a competitor that
comports with the criteria [described in section 271(c)(1)(A)], it [should] not [be] penalized in
terms of its ability to obtain long distance relief."(172) In this manner, Track B appropriately
safeguards the BOCs' interests where there is no prospect of local exchange competition that will
satisfy the requirements of section 271(c)(1)(A) or in the event competitors purposefully delay
entry in the local market in an attempt to prevent a BOC from gaining in-region, interLATA
entry.(173) As the Department of Justice observes, however, "Track B does not represent
congressional abandonment of the fundamental principle, carefully set forth in Track A, that a
BOC may not begin providing in-region interLATA services before there are facilities-based
competitors in the local exchange market," provided these competitors are moving toward that
goal in a timely fashion.(174)
56.	Thus, while SBC's interpretation would ensure that after ten months a BOC either
satisfies the requirements of section 271(c)(1)(A) or is eligible to proceed under Track B, the
interpretation of the potential competitors could create a situation where the BOC may not be
able to pursue either statutory avenue for interLATA relief. In essence, while SBC's
interpretation effectively nullifies Track A, the potential competitors' interpretation effectively
nullifies Track B. We are keenly aware that adopting the interpretation urged by the potential
competitors would necessarily foreclose Track B entry in any state in which a potential
competitor has made a request for access and interconnection, regardless whether it is a request
that will ever lead to the type of telephone exchange service described in section 271(c)(1)(A).(175) We find that permitting any request to foreclose Track B would give potential competitors an
incentive to "game" the section 271 process by purposefully requesting interconnection that does
not meet the requirements of section 271(c)(1)(A), but prevents the BOCs from using Track B.(176) Such a result would effectively give competing LECs the power to deny BOC entry into the long
distance market. This is surely not the result that Congress intended in adopting Track B. 57.	We recognize, as several parties point out, that the standard we are adopting will
require the Commission, in some cases, to engage in a difficult predictive judgment to determine
whether a potential competitor's request will lead to the type of telephone exchange service
described in section 271(c)(1)(A).(177) As discussed above, however, we find that this type of
judgment is required by the terms of section 271 and is consistent with the statutory scheme
envisioned by Congress. The standard we adopt in this Order is designed to take into account
both the BOCs' incentive to delay fulfillment of requests for access and interconnection and the
incentive of potential local exchange competitors to delay the BOCs' entry into in-region
interLATA services. Upon receipt of a "qualifying request," as we interpret it, the BOC will
have an incentive to ensure that the potential competitor's request is quickly fulfilled so that the
BOC may pursue entry under Track A.(178) As long as the qualifying request remains unsatisfied,
the requirements of section 271(c)(1)(A) would remain unsatisfied, and Track B would remain
foreclosed to the BOC. 58.	Further, our standard will not allow potential competitors to delay indefinitely
BOC entry by failing to provide the type of telephone exchange service described in Track A. Indeed, in some circumstances, there may be a basis for revisiting our decision that Track B is
foreclosed in a particular state. For example, if following such a determination a BOC refiles its
section 271 application, we may reevaluate whether it is entitled to proceed under Track B in the
event relevant facts demonstrate that none of its potential competitors is taking reasonable steps
toward implementing its request in a fashion that will satisfy section 271(c)(1)(A). In addition,
as discussed above, the exceptions in section 271(c)(1)(B) provide that a BOC will not be
deemed to have received a qualifying request if the applicable state commission certifies that the
requesting carrier has failed to negotiate in good faith or failed to abide by its implementation
schedule. In this manner, these exceptions also provide BOCs a means of protecting themselves
against any feared "gamesmanship" on the part of potential competitors, such as the submission
of sham requests intended solely to preclude BOC entry. We therefore disagree with Bell
Atlantic that our standard will leave the BOCs "hostage to the claims of competitors."(179) Moreover, for the reasons set forth above, we disagree with CPI that concerns about
gamesmanship are misplaced.(180) Finally, we note that the Commission is called upon in many
contexts to make difficult determinations and has the statutory mandate to do so.(181) The fact that
a determination, such as the one we must make here, may be complex does not mean the
Commission may avoid its statutory duty to undertake it. 59.	We also reject NYNEX's argument that Track B is available in any situation
where one or more facilities-based providers, as described in section 271(c)(1)(A), have not
requested interconnection agreements that include all fourteen items of the competitive
checklist.(182) By its terms, Track B is only available in the event the BOC fails to receive a
qualifying request for the access and interconnection "described in [section 271(c)(1)(A)]." As
discussed above, we have determined that a qualifying request is a request from a potential
competitor that, if implemented, will satisfy the requirements of section 271(c)(1)(A). Pursuant
to section 271(c)(1)(B), a BOC shall not be considered to have received a qualifying request if
the requesting carrier fails to negotiate in good faith or does not abide by the implementation
schedule contained in its agreement.(183) We find that section 271(c)(1) and the competitive
checklist in section 271(c)(2)(B) establish independent requirements that must be satisfied by a
BOC applicant. Thus, the fact that a BOC has received a request for access and interconnection
that, if implemented, will satisfy section 271(c)(1)(A), does not mean that the interconnection
agreement, when implemented, will necessarily satisfy the competitive checklist. Similarly, we
find nothing in the terms of section 271(c)(1)(A) or section 271(c)(1)(B) that suggest that a
qualifying request for access and interconnection must be one that contains all fourteen items in
the checklist. In rejecting NYNEX's contention, we do not reach the question of whether a
potential competitor's interconnection agreement must contain all fourteen items of the
competitive checklist in order for a BOC to demonstrate its compliance with the competitive
checklist in section 271(c)(2)(B).
3.	Existence of Qualifying Requests in Oklahoma
60.	Consistent with the requirements set forth by Congress, SBC's ability to proceed
under Track B is not foreclosed unless there has been a timely request for access and
interconnection from a potential provider of the type of telephone exchange service described in
section 271(c)(1)(A). We note that the determination of whether the BOC has received such a
qualifying request will be a highly fact-specific one. At the same time, however, Congress
required the Commission to make determinations on a BOC's section 271 application within 90
days. Given the expedited time in which the Commission must review these applications, it is
the responsibility of the BOC to submit to the Commission a full and complete record upon
which to make determinations on its application.(184) In this regard, we find it of great
significance that, in its application, SBC does not argue that none of the requests it has received
will lead to the type of telephone exchange service described in section 271(c)(1)(A). Instead,
SBC contends that the only relevant determination for the purposes of section 271(c)(1)(B) is
whether it has received a request for access and interconnection from an already competing
provider of such service. Thus, by declining to argue in the alternative, SBC has not addressed
the issue we must resolve here -- whether SBC has received a timely request for access and
interconnection that, if implemented, will lead to the type of telephone exchange service
described in section 271(c)(1)(A). 61.	We expect that if a BOC seeks to proceed under Track B, as SBC does here, it
will submit all relevant information reasonably within its control concerning each request for
access and interconnection that it has received. Such information should include, but not be
limited to, the names of the requesting carriers, the dates the requests were made, the nature of
such requests, and whether the requests have resulted in interconnection agreements. Because
we have not received this type of extensive information in this proceeding concerning the
requests for access and interconnection received by SBC in Oklahoma, we cannot be certain how
many qualifying requests it has received. Nonetheless, based on the record presently before us,
we find that, at the very least, SBC has received several qualifying requests for access and
interconnection that foreclose Track B. 62.	As noted above, SBC represents in its application that, as of April 4, 1997, it had
received 45 requests for "local interconnection and/or resale" in Oklahoma.(185) SBC did not
submit information on many of the 45 requests.(186) Nevertheless, the record indicates that SBC
has received requests from potential competitors for negotiation for access and interconnection
to SBC's network that, if implemented, will satisfy the requirements of section 271(c)(1)(A). Indeed, we note that SBC has reached negotiated interconnection agreements with at least eight
requesting carriers. Seven of these interconnection agreements have been approved by the
Oklahoma Commission, two as recently as June 5, 1997.(187) Further, four of the five state-approved interconnection agreements in the record, SBC's agreements with Brooks, Cox, ICG
Telecom, and USLD, contain statements signifying the desire of these carriers to provide
telephone exchange service to residential and business subscribers "exclusively over their own
telephone exchange service facilities or predominantly over their own telephone exchange
service facilities in combination with the resale of the telecommunications services of another
carrier."(188) For example, the SBC-Cox interconnection agreement states that Cox seeks to
interconnect with SBC in order to provide telephone exchange service to "residential and
business end-users predominantly over [its own] telephone exchange service facilities in
Oklahoma."(189) 63.	SBC does not allege, nor has the Oklahoma Commission certified, that any of
these carriers has negotiated in bad faith or has failed to abide by its implementation schedule, to
the extent one is contained in its agreement.(190) Thus, SBC has not availed itself of either of the
exceptions in section 271(c)(1)(B). Moreover, SBC has not presented any evidence to suggest
that these agreements will not result in the provision of telephone exchange service to residential
and business subscribers described in section 271(c)(1)(A).(191) Indeed, based on the record
before us, it appears that at least two carriers -- Brooks and Cox -- have already taken
affirmative steps to enter the residential and business local exchange markets.(192) For example,
Cox has stated its intention to provide telephone exchange service to residential and business
subscribers in Oklahoma City using its upgraded cable television plant before the end of 1997.(193) In addition, as mentioned above, SBC's interconnection agreement with Brooks has already led
to the provision of telephone exchange service to business subscribers.(194) 64.	We note further that it has been less than seven months since the Cox, ICG
Telecom, and USLD interconnection agreements have been approved, and since Brooks has
become operational. As discussed above, Congress envisioned there would be a "ramp-up"
period during which a competing LEC implements its interconnection agreement.(195) We agree
with NCTA, therefore, that the current absence of competing residential service in Oklahoma
does not, on the record before us, mean that "no such provider has requested the access and
interconnection described in [section 271(c)(1)(A)]."(196) Although SBC maintains that the
Commission cannot base "section 271 determinations on the unverifiable, fluctuating plans of
parties who have an incentive to color their supposed intentions to block [BOC in-region]
interLATA entry,"(197) SBC has provided no evidence to suggest that any of the carriers that have
expressed their intent to provide the telephone exchange service described in section
271(c)(1)(A) will not do so.(198) In fact, except for an unsupported assertion that AT&T, MCI,
and Sprint plan to delay BOC entry by becoming facilities-based carriers at a "painfully slow
pace,"(199) SBC does not maintain that its competitors in Oklahoma are engaging in any "strategic
manipulation of local market entry" or have "intentionally delayed implementation" of their
interconnection agreements in order to prevent SBC from entering the in-region, interLATA
market in Oklahoma.(200) Rather, the record is replete with allegations from competitors such as
Brooks and Cox that their efforts to enter the local exchange market have been frustrated by the
actions of SBC.(201) 65.	Although we find, and SBC has not disputed, that SBC has received several
requests for access and interconnection that, if implemented, would satisfy the requirements of
section 271(c)(1)(A), we do not today decide the meaning of the facilities-based requirement in
section 271(c)(1)(A).(202) Some commenters assert that this requirement applies independently to
both business and residential subscribers.(203) The Department of Justice, in contrast, contends
that this requirement permits a new entrant to serve one class of customers via resale, so long as
the competitor's local exchange services as a whole are provided predominantly over its own
facilities.(204) We need not and do not decide this issue here because we conclude that, under
either interpretation, the facts described above indicate that SBC has received several qualifying
requests for access and interconnection. In reaching this conclusion, we find it unnecessary to
address SBC's compliance with the competitive checklist requirements set forth in section
271(c)(2)(B). Nonetheless, we recognize that, even if SBC had satisfied the requirements of
section 271(c)(1)(A), it would still be required to demonstrate compliance with each and every
item of the competitive checklist, including access to physical collocation, cost-based unbundled
loops, and reliable OSS functions before it may gain entry under Track A. We leave it to future
applications to define the scope of these and other checklist requirements.
V. CONCLUSION 66.	We conclude, based on the record submitted in the instant proceeding, that SBC
has failed to satisfy the requirements of section 271(c)(1), and we therefore deny SBC's
application pursuant to section 271(d)(3). SBC has not demonstrated on this record that it is
providing access and interconnection to an unaffiliated, facilities-based competing provider of
telephone exchange service to residential and business subscribers, as required by section
271(c)(1)(A).(205) We also conclude, under the circumstances presented in this case, that SBC has
not satisfied section 271(c)(1)(B) because it has received several requests for access and
interconnection within the meaning of section 271(c)(1)(A).(206) We note, however, that SBC may
refile its application in the future and demonstrate that circumstances have changed such that it
has satisfied section 271(c)(1)(A) or has become eligible to proceed under section
271(c)(1)(B).(207) 67.	Because we reach the merits of SBC's section 271 application, we dismiss ALTS'
motion to dismiss as moot. Further, given the extensive legal analysis contained herein, we
disagree with ALTS that SBC's application is so frivolous that it warrants the imposition of
sanctions. We therefore deny ALTS' request for sanctions against SBC.
68.	Accordingly, IT IS ORDERED that, pursuant to sections 4(i), 4(j), and 271 of the
Communications Act, as amended, 47 U.S.C. §§ 154(i), 154(j), 271, SBC Communications
Inc.'s application to provide in-region interLATA service in the State of Oklahoma filed on April
11, 1997, IS DENIED.
69.	IT IS FURTHER ORDERED that the motion to dismiss filed by the Association
for Local Telecommunications Services on April 23, 1997, IS DISMISSED as moot.
70.	IT IS FURTHER ORDERED that the request for sanctions filed by the
Association for Local Telecommunications Services on April 23, 1997, IS DENIED.
71.	IT IS FURTHER ORDERED that the Motion to Accept Late Filed Pleading by
the Battle Group, Inc. d/b/a/ TBG Communications IS DENIED.
COMMENTERS ON SBC 271 APPLICATION
1.	Alarm Industry Communications Committee (AICC)
3.	Association for Local Telecommunications Services (ALTS)
4.	AT&T Corp. and AT&T Communications of the Southwest, Inc. (AT&T)
5.	Attorneys General of Delaware, Florida, Iowa, Maryland, Massachusetts, Mississippi,
Missouri, New York, North Dakota, Oklahoma, Utah, West Virginia and Wisconsin
(State Attorneys General)
6.	Bell Atlantic
7.	BellSouth Corporation (BellSouth)
8.	Brooks Fiber Properties, Inc. (Brooks)
9.	Competition Policy Institute (CPI)
10.	Competitive Telecommunications Association (CompTel)
11.	Cox Communications, Inc. (Cox)
12.	Dobson Wireless, Inc. (Dobson)
13.	LCI International Telecom Corp. (LCI)
14.	MCI Telecommunications Corporation (MCI)
15.	National Cable Television Association (NCTA)
16.	NYNEX Telephone Companies (NYNEX)
17.	Oklahoma Attorney General (Oklahoma AG)
18.	Oklahoma Corporation Commission (Oklahoma Commission)
19.	Paging and Narrowband PCS Alliance of the Personal Communications
Industry Association 20.	Southwestern Bell Telephone Company (SBC)
21.	Sprint Communications Company L.P. (Sprint)
22.	Telecommunications Resellers Association (TRA)
23.	Texas Association of Long Distance Telephone Companies 24.	Time Warner Communications Holdings, Inc. (Time Warner)
25.	United States Department of Justice (Department of Justice)
26.	U. S. Long Distance (USLD)
27.	U S WEST, Inc. (U S West)
28.	Valu-Line of Kansas, Inc.
29.	WorldCom, Inc. (WorldCom)
RE:	Application by SBC Communications Inc., Pursuant to Section 271 of the Communications Act of 1934, as Amended, to Provide In-Region, InterLATA Services in
Oklahoma, CC Docket No. 97-121, June 25, 1997
In its application, SBC stresses that "Southwestern Bell can use its brand name,
reputation for providing reliable, high-quality telephone service, and network expertise to inject
competition into interLATA services in Oklahoma, particularly for the business of ordinary
residential callers. . . . Southwestern Bell will be a committed, effective new entrant into the
interLATA business in Oklahoma, and Oklahoma consumers will benefit from this new
competition for all telecommunications services."(208) Although the Department of Justice did not
recommend approval of the SBC application, the Department did note: "InterLATA markets
remain highly concentrated and imperfectly competitive . . . and it is reasonable to conclude that
additional entry, particularly, by firms with the competitive assets of the [Bell Operating
Companies], is likely to provide additional competitive benefits."(209)
I agree strongly that the entry into the long distance market by SBC or a carrier with
similar assets would promote competition and benefit consumers. The Commission has
previously noted concern about evidence with regard to lock-step increases in basic rates among
the three major interexchange carriers that "suggests that there may be tacit price coordination
among AT&T, MCI and Sprint."(210)
As SBC itself emphasizes, SBC's assets -- including its network, customer information,
brand recognition, and financial strength -- would make it a formidable competitor in the market
for long-distance or bundled local-long distance service. The experience of a relatively small
incumbent local exchange carrier, Southern New England Telephone, suggests how effective
individual Bell Companies will be as interexchange competitors when they choose to do what is
necessary to meet the terms of Section 271 of the Communications Act.(211) Both a Bell Company's failure to open its markets in accordance with the
Communications Act, and its combination with its strongest potential competitor, would
frustrate the pro-competitive purposes of the Telecommunications Act of 1996 and deny
consumers that Act's potential benefits. There is a better way to achieve the consumer benefits
of Bell Company entry into long distance, and that is to meet fully the standards Congress set in
The power to enter the long distance market lies in the hands of the Bell Companies -- if
they have the will, the law makes clear the way. In the present application, SBC has plainly
failed to meet the standards set forth in Section 271. For that reason, the application must be
denied. 1. See Comments Requested on Application by SBC Communications, Inc. for Authorization under Section
271 of the Communications Act to Provide In-Region, InterLATA Service in the State of Oklahoma, Public Notice,
DA 97-753 (rel. Apr. 11, 1997). On April 23, 1997, the Association for Local Telecommunications Services
(ALTS) filed a motion asking the Commission to dismiss SBC's application and impose sanctions on SBC (ALTS
Motion). In response to this motion, the Common Carrier Bureau (Bureau) issued a Public Notice seeking
comment from interested third parties. See ALTS's Motion to Dismiss SBC Communications Inc.'s Application for
Section 271 Authorization to Provide In-Region, InterLATA Service in the State of Oklahoma, Public Notice, DA
97-864 (rel. Apr. 23, 1997) (April 23rd Public Notice).
2. 47 U.S.C. § 271(c)(1)(A).
3. Id. § 271(c)(1)(B). As used in this Order, the term "Track B" includes both the requirements in section
271(c)(1)(B) and the other section 271 requirements that a BOC must satisfy if it relies on a statement of generally
available terms and conditions to satisfy section 271, including the requirement that the BOC's statement "offers
all of the items included in the competitive checklist in [section 271(c)(2)(B)]." See Id. § 271(d)(3)(A)(ii). Similarly, the term "Track A" includes the requirement that, "with respect to access and interconnection provided
pursuant to [section 271(c)(1)(A), the BOC] has fully implemented the competitive checklist in [section
271(c)(2)(B)]." See Id. § 271(d)(3)(A)(i). 4. Telecommunications Act of 1996, Pub. L. No. 104-104, 110 Stat. 56 (1996 Act), codified at 47 U.S.C. §§
151 et seq. The 1996 Act amended the Communications Act of 1934. We will refer to the Communications Act
of 1934, as amended, as "the Communications Act" or "the Act."
5. For purposes of this proceeding, we adopt the definition of the term "Bell Operating Company" contained
in 47 U.S.C. § 153(4).
6. 47 U.S.C. § 271(d)(1). The Modification of Final Judgment (MFJ), which ended the government's
antitrust suit against AT&T, and which resulted in the divestiture of the BOCs from AT&T, prohibited the BOCs
from providing interLATA services. See United States v. Western Elec. Co., 552 F. Supp. 131, 226-234 (D.D.C.
1982), aff'd sub nom. Maryland v. United States, 460 U.S. 1001 (1983); see also United States v. Western Elec.
Co., Civil Action No. 82-0192 (D.D.C. Apr. 11, 1996) (vacating the MFJ). For purposes of this proceeding, we
adopt the definition of the term "in-region state" that is contained in 47 U.S.C. § 271(i)(1). We note that section
271(j) provides that a BOC's 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." 47 U.S.C. § 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." 47 U.S.C. § 153(25). LATAs were created as
part of the MFJ's "plan of reorganization." United States v. Western Elec. Co., 569 F. Supp. 1057 (D.D.C. 1983),
aff'd 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 (D.D.C. 1983).
7. 47 U.S.C. § 271(d)(3).
8. Id. § 271(d)(2)(A).
9. Id. § 271(d)(2)(B).
10. Id. § 271(d)(3)(A).
11. Id. § 271(c)(2)(B).
12. 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), on recon., FCC 97-52 (rel.
Feb. 19, 1997), further recon. pending, petition for summary review in part denied and motion for voluntary
remand granted sub nom., Bell Atlantic v. FCC, No. 97-1067 (D.C. Cir. filed Mar. 31, 1997), petition for 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), Second Order on Reconsideration, CC Docket No. 96-149, FCC 97-222 (rel. June 24, 1997); Implementation of the Telecommunications Act of 1996: Accounting Safeguards Under
the Telecommunications Act of 1996, CC Docket No. 96-150, Report and Order, 11 FCC Rcd 17539 (1996).
13. 47 U.S.C. § 271(d)(3)(C).
14. Id. § 271(c)(1)(A) (emphasis added).
15. SBC Brief in Support at 12.
16. Initial Comments of Brooks Fiber Communications of Oklahoma, Inc., and Brooks Fiber
Communications of Tulsa, Inc., Oklahoma Corporation Commission (Oklahoma Commission) Proceeding Cause
No. PUD 970000064, at 1 (filed Mar. 11, 1997) (SBC Application, Appendix - Volume IV, Tab 23) (Initial
Comments of Brooks Before the Oklahoma Commission).
17. Brooks Fiber Communications of Tulsa, Inc. and Brooks Fiber Communications of Oklahoma, Inc,
O.C.C. Tariff No. 2 (SBC Application, Appendix - Volume II, Tab 3). 18. Initial Comments of Brooks Before the Oklahoma Commission at 2; SBC Apr. 28 Comments at 9.
19. Initial Comments of Brooks Before the Oklahoma Commission at 2.
20. Id.; Brooks Apr. 28 Comments at 2; Brooks May 1 Comments at 6; see also SBC Apr. 28 Comments at 3. 21. Brooks Apr. 28 Comments at 2; Brooks May 1 Comments at 6 see also SBC Brief in Support at 11; SBC
Apr. 28 Comments at 3. 22. ALTS Motion, Affidavit of John C. Shapleigh, Executive Vice President -- Regulatory and Corporate
Development, Brooks Fiber Properties, Inc., at 1 (Affidavit of John C. Shapleigh); see also SBC Apr. 28
Comments at 9-10 (asserting that for purposes of section 271 the price charged by the competing provider is
23. Given our 90-day statutory deadline to make determinations on BOC section 271 applications, we will
treat the opposition to SBC's application filed by the Battle Group, Inc. d/b/a TBG Communications as an ex parte
submission, rather than a late-filed pleading. We note that this filing falls within the 20-page limit placed on
written ex parte submissions in our December 6th Public Notice. See Procedures for Bell Operating Company
Applications Under New Section 271 of the Communications Act, Public Notice, 11 FCC Rcd 19708 (December
6th Public Notice). 24. ALTS Motion at 4; TRA Apr. 28 Comments at 11-12; WorldCom Apr. 28 Comments at 4-5; MCI Apr.
28 Comments at 1-2; LCI Apr. 28 Comments at 2-5.
25. WorldCom states that "Section 271(c)(1)(A) requires an applicant to show that competitors are serving
residential (not just business) customers . . . ." WorldCom Apr. 28 Comments at 5 (emphasis added).
26. TRA states that "an unaffiliated facilities-based competitor [must be] engaged in the provision of both
residential and business telephone exchange services . . . ." TRA Apr. 28 Comments at 11 (emphasis added).
27. According to Bell Atlantic, in order to satisfy section 271(c)(1)(A), "the competing provider's local
exchange service must be one that is being 'offered' to residential subscribers . . . ." Bell Atlantic Apr. 28
Comments at 9 n.4 (emphasis added).
28. SBC asserts that "Brooks Fiber not only 'offer[s]' service over its own network -- thereby fulfilling [the
section 271(c)(1)(A)] requirement -- but actually furnishes service to customers exclusively over that network."
SBC Brief in Support at 10 (emphasis in original).
29. Oklahoma AG Apr. 28 Comments 5; ALTS Motion at 3-4; LCI Apr. 28 Comments at 5; NCTA May 1
Comments at 10-11; Sprint Apr. 28 Comments at 2-3; WorldCom Apr. 28 Comments at 4; WorldCom May 1
Comments at 9-10.
30. Brooks Apr. 28 Comments at 2. 31. Brooks May 1 Comments at 6 n.3.
32. ALTS Motion, Affidavit of John C. Shapleigh at 1.
34. Department of Justice Evaluation at 21; see also WorldCom Reply Comments at 13 (citing Department
of Justice Evaluation and stating that "test customers simply do not count under Track A.").
35. CompTel Apr. 28 Comments at 2 (citing definition of "telecommunications service" at 47 U.S.C. §
153(46)).
36. SBC Apr. 28 Comments at 9.
37. Id. at 9-10.
38. SBC Brief in Support at 9-10; SBC Apr. 28 Comments at 9; SBC Reply Comments at 3; but see State
Attorneys General Reply Comments at 6-7 (arguing that, while there is no metric test showing a specific level of
market entry, it is not sufficient for the competing provider to provide service to a handful of subscribers in the
state if the competing provider's operations are so limited that no reliable inferences may be drawn about the
feasibility of full scale competitive entry); AT&T May 1 Comments at 8 (responding to SBC's claims and
asserting that "Congress did not vote down any 'metric' amendments to the facilities-based provider requirement
that became law . . .").
39. SBC Brief in Support at 10 (citing SBC Application, Appendix - Volume II, Tab 3, at §§ 2.1.1 & 4); see
also Bell Atlantic Apr. 28 Comments at 9 n.4. According to Bell Atlantic, "SBC has an approved agreement with
a competitor that is offering service to residential subscribers under an effective tariff (and that is legally obligated
to provide service upon demand), and this should be adequate to apply under Track A." Id.
40. SBC Reply Comments at 2.
41. SBC Apr. 28 Comments at 10-11; Oklahoma Commission Reply Comments at 8-9; but see AT&T Reply
Comments at 26-27 (disputing Oklahoma Commission's finding that section 271(c)(1)(A) is satisfied because
Brooks has committed to provide residential service and because Brooks has entered into an interconnection
agreement anticipating the provision of such service).
42. SBC Reply Comments at 4 n.8 and attached Appendix - Volume I, Tab 19; Oklahoma Commission Reply
Comments at 8.
43. Department of Justice Evaluation at 20.
44. See Oklahoma AG Apr. 28 Comments at 5-6; Brooks Apr. 28 Comments at 4; NCTA May 1 Comments
at 10-11; WorldCom Apr. 28 Comments at 4-5; WorldCom May 1 Comments at 10; see also U S West Apr. 28
Comments at 2-3 (stating that the competing providers must provide "both residence and business service
'predominantly over their own telephone exchange service facilities'"); BellSouth May 1 Comments at 4 (stating
that in order to satisfy section 271(c)(1)(A) a competing provider must provide "service to 'residential and
business' customers 'exclusively' or 'predominantly' over its own facilities").
45. Brooks May 1 Comments at 9; Sprint May 1 Comments at 11-13; CompTel Reply Comments at 9-12;
ALTS Reply Comments at 3-6; AT&T Reply Comments at 25-30.
46. CPI May 1 Comments at 2.
47. Department of Justice May 21 Addendum at 2-4. 48. SBC Reply Comments at 3.
49. See, e.g., Brooks May 1 Comments at 12-16; AT&T May 1 Comments at 7-9.
50. See, e.g., SBC Apr. 28 Comments at 13; Sprint May 1 Comments at 10-11; CPI May 1 Comments at 2-3.
51. Because SBC relies only on one carrier (i.e., Brooks) for demonstrating compliance with section
271(c)(1)(A), we need not determine whether a BOC may rely, for purposes of satisfying section 271(c)(1)(A), on
multiple carriers who together provide telephone exchange service to residential and business subscribers. See
Department of Justice Evaluation at 13 n.18.
52. See 47 U.S.C. § 271(d)(3) (stating that "[t]he Commission shall not approve the authorization requested
in an application . . . unless it finds that . . . the petitioning [BOC] has met the requirements of [ ]section (c)(1)").
53. Id. § 271(c)(1)(A).
54. See SBC Brief in Support at 9-10 (asserting that there is no requirement under section 271(c)(1)(A) that
the competing provider serve any minimum number of customers).
55. See AT&T May 1 Comments at 9. The Webster's Third New International Dictionary defines the verb to
"compete" as "to seek or strive for something (as a position, possession, reward) for which others are also
contending." Webster's Third New International Dictionary (1971 ed.).
56. Joint Statement of Managers, S. Conf. Rep. No. 104-230, 104th Cong., 2d Sess. 148 (1996) (Joint
Explanatory Statement).
57. SBC Reply Comments at 2. As support for this statement, SBC cites to the Oklahoma Commission's
order in its section 271 docket and to the Oklahoma Commission's initial comments filed in this proceeding. Id.;
see also Application of Ernest G. Johnson, Director of the Public Utility Division, Oklahoma Corporation
Commission to Explore the Requirements of Section 271 of the Telecommunications Act of 1996, Final Order,
Cause No. PUD 970000064, Order No. 411817 at 2 (Oklahoma Commission Final Order), in Oklahoma
Commission May 1 Comments, Appendix G at 2 and Oklahoma Commission May 1 Comments at 4-6.
58. 47 U.S.C. § 271(d)(2)(B).
59. Oklahoma Commission Final Order at 2.
60. Oklahoma Commission May 1 Comments at 6.
61. Oklahoma Commission Reply Comments at 8.
62. 47 U.S.C. § 271(c)(1)(A).
63. The Webster's Third New International Dictionary defines the verb to "subscribe" as "to agree to take and
pay for something (as stock) by signing one's name to a formal agreement." A subscriber is defined as "one that
subscribes." Webster's Third New International Dictionary (1971 ed.) (emphasis added).
64. A "telephone exchange service" is a type of "telecommunications service." See Implementation of the
Local Competition Provisions in the Telecommunications Act of 1996, CC Docket No. 96-98, First Report and
Order, 11 FCC Rcd 15499, 15636 (1996) (Local Competition Order) (stating that the "term 'telecommunications service' by definition includes a broader range of services than the terms 'telephone exchange service and
exchange access.'"), motion for stay denied, 11 FCC Rcd 11754 (1996), Order on Reconsideration, 11 FCC Rcd
13042 (1996), Second Order on Reconsideration, 11 FCC Rcd 19738 (1996), further recon. pending, appeal
pending sub nom. Iowa Util. Bd. v. FCC and consolidated cases, No. 96-3321 et al., partial stay granted pending
review, 109 F.3d 418 (8th Cir. 1996), order lifting stay in part (8th Cir. Nov. 1, 1996), motion to vacate stay
denied, 117 S. Ct. 429 (1996). The statutory definition of "telecommunications service" requires the offering of
service "for a fee directly to the public, or to such classes of users as to be effectively available directly to the
public, regardless of the facilities used." 47 U.S.C. § 153(46) (emphasis added). The Commission has previously
stated that the phrase "for a fee" in section 153(46) of the Act "means services rendered in exchange for something
of value or a monetary payment." Federal-State Joint Board on Universal Service, CC Docket No. 96-45, Report
and Order, FCC 97-157, at para. 784 (rel. May 8, 1997), Erratum, CC Docket No. 96-45, FCC 97-157 (rel. June 4,
1997). Similarly, an integral part of the definition of "telephone exchange service" is that the service be covered
by the "exchange service charge." 47 U.S.C. § 153(47).
65. As discussed below in Section IV, the term "such provider" as used in section 271(c)(1)(B) refers to a
potential competing provider, rather than an operational competing provider.
66. Department of Justice Evaluation at 21. See also Brooks May 1 Comments at 8 (asserting that its four
test circuits do not constitute commercial operation of residential service in any recognized business use of that
term); TRA Apr. 28 Comments at 11-12 (stating that "it is beyond dispute that the facilities-based competitor must
actually be engaged in the provision of commercial service to residential and business accounts in order to satisfy"
the standard of section 271(c)(1)(A)).
67. See Oklahoma Commission Reply Comments at 8-9; SBC Brief in Support at 10 (citing SBC
Application, Appendix - Volume II, Tab 3, at §§ 2.1.1 & 4); Bell Atlantic Apr. 28 Comments at 9 n.4.
68. Department of Justice Evaluation at 20.
69. ALTS Motion, Affidavit of John C. Shapleigh at 1.
71. See SBC Application, Appendix - Volume II, Tab 3 at § 2.1.2.2.
72. Brooks May 1 Comments at 11 n.8.
73. SBC contends that "Brooks obtained a certificate of public convenience and necessity to provide local
service in Oklahoma by representing that it would offer service to residential customers in its service areas . . . ." SBC Apr. 28 Comments at 10. SBC also claims that a Brooks witness testified before the Oklahoma Commission
that Brooks intended to offer residential service. Id. at 10-11.
74. Oklahoma Commission Reply Comments at 8-9.
75. ALTS Motion, Affidavit of John C. Shapleigh at 1.
76. SBC Reply Comments at 4 n. 8 and attached Appendix - Volume I, Tab 19.
77. Oklahoma Commission Reply Comments at 8.
78. See supra para. 11.
79. 47 U.S.C. § 271(c)(1)(B).
80. ALTS Motion at 2, 4-5.
81. April 23rd Public Notice at 2.
82. SBC Brief in Support at 12.
83. Id. at 14 (citing 141 Cong. Rec. H8425, H8458 (daily ed. Aug. 4, 1995) (statement of Rep. Tauzin)). See
also SBC Apr. 28 Comments at 14 & n.24 (citing the Joint Explanatory Statement at 148 and 142 Cong. Rec.
H1152 (daily ed. Feb. 1, 1996) (statement of Rep. Hastert)). 84. SBC Brief in Support at 14-15. Pursuant to section 271(c)(1)(B), a BOC may file an application for in-region interLATA entry "if, after 10 months after the date of enactment of the Telecommunications Act of 1996,
no such provider has requested the access and interconnection described in subparagraph (A) before the date
which is 3 months before the date the company makes its application under subsection (d)(1)." 47 U.S.C. §
271(c)(1)(B). SBC argues that, if a BOC "that has an effective statement of terms and conditions also has
implemented a state-approved agreement with a qualifying CLEC [competitive local exchange carrier], but that
CLEC only qualified, or requested access, within the prior three months, then the [BOC] may apply for
interLATA entry under" both Track A and Track B. SBC Brief in Support at 15 n. 15. Because, according to
SBC, Brooks commenced its facilities-based provision of telephone exchange service on January 15, 1997, and
SBC filed its application for in-region long distance with the Commission on April 11, 1997, SBC concludes that
it is therefore eligible to proceed under both Track A and Track B. Id; SBC Apr. 28 Comments at 17-18.
85. SBC Brief in Support at 14.
86. See SBC Apr. 28 Comments at 17.
87. See id. at 9.
88. See, e.g., AT&T May 1 Comments at 16-17; Brooks Apr. 28 Comments at 4; CPI Apr. 28 Comments at
2; CPI Reply Comments at 3-4; MCI May 1 Comments at 16; NCTA May 1 Comments at 8; Oklahoma AG Apr.
28 Comments at 7; Sprint Apr. 28 Comments at 11; State Attorneys General Reply Comments at 7; Time Warner
May 1 Comments at 32; TRA Apr. 28 Comments at 8-9; TRA May 1 Comments at 13-14. 89. Ameritech Apr. 28 Comments at 4; Bell Atlantic Apr. 28 Comments at 4-6; BellSouth Apr. 28 Comments
at 3; SBC Apr. 28 Comments at 17-18. See also NYNEX Apr. 28 Comments at 1-2 (asserting that Track B is
available where one or more facilities-based providers have not requested interconnection agreements which
include all fourteen items of the competitive checklist).
90. See U S West Apr. 28 Comments at 3 (recognizing that the "Track B alternative is available to the BOC
only if it has not received a request . . . that would satisfy Track A"); LCI Apr. 28 Comments at 6 (asserting the
Brooks' request was of the type that, once implemented "would provide [SBC] the basis for seeking approval
under Track A"); Department of Justice Evaluation at 12; CompTel Reply Comments at 7; but see CompTel Apr.
28 at 4 (asserting that, because SBC has received at least "16 requests for access and interconnection," Track B is
foreclosed).
91. Oklahoma Commission May 1 Comments at 6 & Appendix G at 4; see also id., Appendix G at 2,
Dissenting Opinion of Commissioner Bob Anthony (asserting "I too agree with those parties that Track B does not
apply.").
92. We note that when we refer to SBC's position, we are also referring to the positions advanced by
Ameritech, Bell Atlantic, and BellSouth.
93. See AT&T May 1 Comments at 18-19; CompTel at Apr. 28 at 5; NCTA May 1 Comments at 9 (asserting
that, under SBC's reading, BOCs would have no incentive to enter into or faithfully execute meaningful
interconnection agreements with competitors). 94. Department of Justice Evaluation at 17. See also AT&T May 1 Comments at 19.
95. See U S West Apr. 28 Comments at 4, 6-7.
96. 47 U.S.C. § 271(c)(1)(B).
97. In support of its interpretation, SBC cites a floor statement from Congressman Tauzin indicating that the
phrase "such provider" refers to the "exclusively" or "predominantly" facilities-based carrier described in the
second sentence in Track A. SBC Brief in Support at 14; SBC Apr. 28 Comments at 14. See also Ameritech Apr.
28 Comments at 4; Bell Atlantic Apr. 28 Comments at 5; BellSouth Apr. 28 Comments at 3. In contrast, potential
competitors contend that the phrase "such provider" refers to the unaffiliated competing provider described in the
first sentence in section 271(c)(1)(A). Thus, according to potential competitors, the "such provider" need not be
facilities-based at the time it makes a request for access and interconnection. See AT&T May 1 Comments at 18;
CompTel Reply Comments at 6-7; MCI Apr. 28 Comments at 2; Sprint Apr. 28 Comments at 8-9. We find the
issue of whether the phrase "no such provider" refers to the first or the second sentence in section 271(c)(1)(A) to
be immaterial because, as discussed in detail below, the relevant question is whether "such provider" as used in
section 271(c)(1)(B) refers to an already competing provider or a potential competing provider. 98. See SBC Brief in Support at 14. See also Ameritech Apr. 28 Comments at 4; Bell Atlantic May 1
Comments at 9; BellSouth Apr. 28 Comments at 4. 99. SBC Application, Appendix-Volume I, Tab 18 at 7, para. 13.
100. As described above, SBC argues that, if the Commission does not find Brooks to be a qualifying carrier
for purposes of section 271(c)(1)(A), then SBC may proceed under Track B. Even if the Commission does find
Brooks to be a qualifying carrier for purposes of section 271(c)(1)(A), however, SBC asserts it is eligible for both
Track A and Track B because Brooks' request was made within the three month statutory window under section
101. As we noted in the Local Competition Order, to become operational, all new entrants will require
interconnection with a BOC in order to complete calls to BOC customers, and most will need access to unbundled
network elements and other BOC facilities in order to begin offering service. See Local Competition Order, 11
FCC Rcd at 15509-10. See also AT&T Reply Comments at 24; CPI May 1 Comments at 9-10; Oklahoma AG
Apr. 28 Comments at 7; TRA Apr. 28 Comments at 8. As discussed in detail below, SBC does propose
hypothetical scenarios in which carriers would be operational carriers when they requested access and
interconnection from the BOC. SBC does not suggest, however, that one of those scenarios is present in the
instant proceeding.
102. See infra at para. 37.
103. 47 U.S.C. § 271(c)(1)(B) (emphasis added). Indeed, we note that the caption of section 271(c)(1)(B) is
entitled "Failure to Request Access." See Sprint Apr. 28 Comments at 11.
104. See, e.g., Local Competition Order, 11 FCC Rcd at 15608, 15642, 15692, 15710, 15749, 15767, 15774,
16131, 16163.
105. See SBC Brief in Support at 8; SBC Apr. 28 Comments at 18; SBC Reply Comments at 1; see also SBC
Apr. 28 Comments at 17 ("Congress ensured that competitors could not strategically block interLATA entry by
timing their interconnection requests or introduction of their local services."); SBC Brief in Support at 17 ("[SBC]
has satisfied the checklist requirements . . . through its [Oklahoma Commission]-approved agreements with
Brooks and other CLECs.") SBC Reply Comments at 14 ("When accepting competitors' allegations as proof of
supposed misconduct by [SBC], DOJ never even acknowledges responses that the [Oklahoma Commission] found
persuasive . . . ."). 106. SBC Reply Comments at 5 n.10.
107. 47 U.S.C. § 153(44).
108. SBC Reply Comments at 5 n.10.
109. See 47 U.S.C. § 271(c)(1)(B). BOCs are free to negotiate implementation schedules for their
interconnection agreements. In the Local Competition Order, we declined to impose a "bona fide request" process
on requesting carriers. We found that incumbent LECs may not require requesting carriers, as a condition to
begin negotiations, to commit to purchase services or facilities for a specified period of time. Local Competition
Order, 11 FCC Rcd at 15578. We concluded that forcing carriers to make such a commitment before critical
terms, such as price, have been resolved would be likely to impede new entry. We note, however, that nothing in
the Commission's rules precludes incumbent LECs from negotiating, or states from imposing in arbitration,
schedules for the implementation of the terms and conditions by the parties to the agreement. See also 47 U.S.C.
§ 252(c)(3).
110. See SBC Apr. 28 Comments at 16-17.
111. Id. at 15.
112. See infra paras. 48-53.
113. See SBC Apr. 28 Comments at 14 & n.24 (citing Joint Explanatory Statement at 148); see also SBC
Reply Comments at 5 (citing Joint Explanatory Statement at 147).
114. See SBC Brief in Support at 14 (citing 141 Cong. Rec. H8425, H8458 (daily ed. Aug. 4, 1995) (statement
of Rep. Tauzin)).
115. See SBC Apr. 28 Comments at 14 & n.25 (citing 142 Cong. Rec. H1152 (daily ed. Feb. 1, 1996)
(statement of Rep. Hastert)).
116. See Department of Justice Evaluation at 16; AT&T Reply Comments at 24-25.
117. See infra at para. 43.
118. See Joint Explanatory Statement at 148-49 (emphasis added).
119. See H.R. Rep. No. 204, 104th Cong., 1st Sess., pt. 1, at 77-78 (emphasis added) (House Report). 120. SBC Reply Comments at 6 n.11.
121. See TRA Apr. 28 Comments at 8 (contending that Track B's reference to a "provider" describes a
potential facilities-based competitor seeking entry into the local exchange market through network access and
interconnection); TRA May 1 comments at 14-15; WorldCom Apr. 28 Comments at 8-9.
122. Joint Explanatory Statement at 1. 123. See, e.g., ALTS Motion at 6-7; CompTel Apr. 28 Comments at 3-4; NCTA May 1 Comments at 7 n. 12;
Sprint Apr. 28 Comments at 5.
124. The Conference Committee expressly adopted the language contained in section 271(c)(1) from the
House bill. See Joint Explanatory Statement at 147 (stating that the "test that the conference agreement adopts
comes virtually verbatim from the House amendment"). 125. House Report at 76-77.
126. Id. at 77. 127. See CompTel Apr. 28 Comments at 3.
128. See Department of Justice Evaluation at 10; Sprint Apr. 28 Comments at 9; Time Warner May 1
Comments at 10-11. Congress' expectation that section 271 relief may take some time is also evidenced by
section 271(e)(1) which states that the joint marketing restriction applicable to larger interexchange carriers would
expire once a BOC "is authorized . . . to provide interLATA services in an in-region State, or [once] 36 months
have passed since the date of enactment of the Telecommunications Act of 1996, whichever is earlier." See 47
U.S.C. § 271(e)(1) (emphasis added); Sprint Apr. 28 Comments at 10-11 n. 9.
129. See Sprint Apr. 28 Comments at 9-10.
130. Joint Explanatory Statement at 148.
131. Department of Justice Evaluation at 13; CPI Apr. 28 Comments at 8; MCI Reply Comments at 4-5;
WorldCom Apr. 28 Comments at 11.
132. Joint Explanatory Statement at 148-49 (emphasis added). 133. As the Department of Justice observes, a "fundamental premise of the 1996 Act is that the development
of local exchange competition will require opening up the possibilities for access and interconnection to the
BOC's local network." Department of Justice Evaluation at 10.
134. Local Competition Order, 11 FCC Rcd at 15506.
135. Id. at 15767-68.
136. Local Competition Order, Second Order on Reconsideration, CC Docket No. 96-98, FCC 96-476 at para.
11 (rel. Dec. 13, 1996).
137. Dobson Apr. 28 Comments at 3 (asserting that the language of section 271(c)(1)(B) confirms that
Congress envisioned the existence of a hiatus during which pending requests would preclude BOCs from applying
under Track B even though the requesting carriers are not yet operational); WorldCom Apr. 28 Comments at 11-12.
138. See 47 U.S.C. § 271(c)(1)(B). See also Brooks Apr. 28 Comments at 5-6; Dobson Apr. 28 Comments at
3; WorldCom Apr. 28 Comments at 11-12.
139. See Cox May 1 Comments at 7 n. 9 (stating that the exceptions in section 271(c)(1)(B) demonstrate that
Congress understood there would be a lag between requesting interconnection and providing service, and that it
did not intend for normal delays to permit BOCs to jump to Track B).
140. 47 U.S.C. § 271(d)(3)(A)(i).
141. Id. § 271(d)(3)(A)(ii).
142. See infra at para. 55. See also CompTel Apr. 28 Comments at 3; Department of Justice Evaluation at 11;
Sprint Apr. 28 Comments at 10-11; TRA Apr. 28 Comments at 4-5.
143. Or, as SBC alleges in the instant case, a BOC would be eligible to proceed under both Track A and Track
B if the qualifying request was made within the three months prior to the filing of the BOC's section 271
application. We recognize, of course, that in order to be eligible for Track B a BOC must also have a statement of
generally available terms and conditions that has been approved or permitted to take effect by the applicable state
commission. See 47 U.S.C. § 271(c)(1)(B).
144. Department of Justice Evaluation at 13.
145. See MCI Apr. 28 Comments at 3 (claiming that, under SBC's interpretation, Track B would only apply
when no facilities-based provider that already has an access and interconnection agreement requests such an
agreement); NCTA May 1 Comments at 7 (stating that SBC construes the statute so that after ten months Track B
would virtually always apply unless a competitor who already qualifies as a facilities-based competitor to
residential and business subscribers requests access three months before the BOC files).
146. See Cox Reply Comments at 16 (asserting that, if the BOCs really believed Track B became available if
no operational competing provider requested access and interconnection prior to September 8, 1996, they would
have filed their statements of generally available terms by the middle of 1996 and applied for in-region,
interLATA entry on December 8, 1996). 147. WorldCom Apr. 28 Comments at 13-14; WorldCom May 1 Comments at 20-21; Department of Justice
Evaluation at 13 (stating that, if SBC's interpretation of Track B were correct, Track B would no longer be a
limited exception applicable where a BOC would otherwise be foreclosed indefinitely from entry into in-region
interLATA markets). See also AT&T May 1 Comments at 18; NCTA May 1 Comments at 7 (stating that SBC's
interpretation of section 271(c)(1)(B) nullifies Track A agreements as a means of stimulating local competition).
148. WorldCom Reply Comments at 7; TRA Reply Comments at 11-12. 149. Department of Justice Evaluation at 14. See also MCI Reply Comments at 4.
150. SBC Apr. 28 Comments at 16-17. See also BellSouth Apr. 28 Comments at 4-5.
151. SBC Apr. 28 Comments at 16-17 (citing 142 Cong. Rec. S713 (daily ed. Feb. 1, 1996) (statement of Sen.
Breaux)); BellSouth Apr. 28 Comments at 4-5. 152. Department of Justice Evaluation at 14.
153. See Oklahoma AG Apr. 28 Comments at 7. As noted above, such a carrier would presumably require
interconnection with the BOC if its customers completed calls to, or received originating calls from, BOC
customers. See supra at para. 33.
154. Significantly, the Department of Justice asserts that it "is not aware of any provider other than the
[incumbent LECs] that had a significant facilities-based telephone local exchange network of its own in the
United States, sufficiently ubiquitous to dispense with interconnection with the BOCs, before the 1996 Act was
passed." Department of Justice Evaluation at 15 n. 20. See also AT&T Reply Comments at 23. We note that
neither SBC nor any other commenter has provided any examples of such carriers.
155. See Joint Explanatory Statement at 148 ("it is unlikely that competitors will have a fully redundant
network in place when they initially offer local service . . . .").
156. Although in an ex parte statement, SBC cites examples of "facilities-based cable-telephone services
being provided or tested during consideration of the [1996 Act]," it is unclear from SBC's representation whether
these potential competitors were providing, or planning to provide, telephone exchange service in a BOC's service
area pursuant to a pre 1996-Act interconnection agreement or, alternatively, whether the new entrants still had to
negotiate and execute such agreements. See Letter from Dale Robertson, Senior Vice President, SBC, to William
F. Caton, Acting Secretary, FCC at 2 (June 24, 1996) (SBC June 24 Ex Parte).
157. See id. 158. SBC Apr. 28 Comments at 16.
159. Department of Justice Evaluation at 15 n.19. See also WorldCom Reply Comments at 6-7.
160. But see SBC June 24 Ex Parte, Attachment at 1-2 (asserting that by December 1995 "Cablevision had
175 business customers and was preparing to offer residential service on a commercial basis").
161. Department of Justice Evaluation at 15 n.19. According to the Commission's Common Carrier
Competition Report, as of March 21, 1996, competing LECs were operational in only five states. "New
competitors [were] small and [were] still experimenting in the market." Common Carrier Competition, CC Report
No. 96-9, FCC, Common Carrier Bureau, Spring 1996 at 3-4 (Common Carrier Competition Report). See also
TRA Reply Comments at 10-11. SBC itself points to only ten potential competitors in five states, one of which is
Cablevision, that were planning, testing, or providing telephony services on a limited scale prior to the passage of
the 1996 Act. Of these potential competitors, it appears that most of them were merely in the planning or testing
stage when the 1996 Act was passed. See SBC June 24 Ex Parte, Attachment at 1-2.
162. Under this section, the state commission has up to 90 days to approve or reject an interconnection
agreement. See 47 U.S.C. § 252(e)(4).
163. See Department of Justice Evaluation at 14. Pursuant to section 271(c)(1)(B), in order for a BOC to file
an application under Track B as soon as it became available, on December 8, 1996, it must not have received a
qualifying request prior to September 8, 1996. 164. 47 U.S.C. § 252(b)(4)(C). See Sprint Apr. 28 Comments at 11-12 n.10. See also Cox Reply Comments
at 15-16. We also note that, after the parties reach an arbitrated agreement, it must be submitted to the applicable
state commission for approval. Under section 252(e)(4), the state commission has 30 days in which to approve or
deny it. 47 U.S.C. § 252(e)(4).
165. See Department of Justice Evaluation at 14. 166. Id. at 12.
167. See LCI Apr. 28 Comments at 6 (stating that SBC's agreement with Brooks "was of the type that once
implemented, would provide [SBC] with the basis for seeking approval under Track A.").
168. 47 U.S.C. § 271(c)(1)(B).
169. See also Department of Justice Evaluation at 11. This assumes, of course, that the BOC is not able to
show that the requesting provider failed to negotiate in good faith or violated the terms of the interconnection
agreement by failing to comply, within a reasonable period of time, with its implementation schedule. See 47
U.S.C. § 271(c)(1)(B). 170. Department of Justice Evaluation at 12.
171. Joint Explanatory Statement at 148. 172. House Report at 77. 173. Department of Justice Evaluation at 17.
174. Id. at 17-18.
175. We note that Track B would become available if either of the two exceptions in section 271(c)(1)(B)
were applicable. See also BellSouth Apr. 28 Comments at 5 (maintaining that adoption of ALTS's "misreading"
of section 271(c)(1) would nullify Track B entry).
176. Ameritech Apr. 28 Comments at 5 n. 3; Bell Atlantic Apr. 28 Comments at 8 (stating that the approach
advocated by ALTS would place BOCs at the mercy of their competitors); NYNEX Apr. 28 Comments at 6; U S
West Apr. 28 Comments at 5-6.
177. CPI Reply Comments at 3; see also Bell Atlantic Apr. 28 Comments at 7; BellSouth Apr. 28 Comments
at 4; SBC Reply Comments at 6 & Appendix A at 14 n.6.
178. Thus, as the Department of Justice observes, properly construed, "the statute serves Congress'
procompetitive purposes by affording the BOC a strong incentive to cooperate as would-be facilities-based
competitors attempt to negotiate agreements and become operational." Department of Justice Evaluation at 17.
179. See Bell Atlantic Reply Comments at 4.
180. See supra at para. 56; CPI Reply Comments at 4-5 (asserting that the assumption that competitors would
game the regulatory process in order to prevent BOC entry into long distance does not make economic or
marketplace sense).
181. See 47 U.S.C. § 154(i). In different contexts, the United States Supreme Court has recognized that the
Commission must necessarily make difficult predictive judgments in order to implement certain provisions of the
Communications Act. See FCC v. WNCN Listeners Guild, 450 U.S. 582, 594-96 (1981) (recognizing that the
Commission's decisions must sometimes rest on judgment and prediction rather than pure factual determinations)
(citing FCC v. Nat'l Citizens Comm. for Broadcasting, 436 U.S. 775, 813-814 (1978)); NAACP v. FCC, 682 F.2d
993 (D.C. Cir. 1982) ("greater discretion is given administrative bodies when their decisions are based upon
judgmental or predictive conclusions"). See also Pub. Util. Comm'n of State of Cal. v. F.E.R.C., 24 F.3d 275, 281
(D.C. Cir. 1994) (acknowledging that predictions regarding the actions of regulated entities are the type of
judgments that courts routinely leave to administrative agencies). Indeed, we note that determining whether a
BOC's section 271 application meets the requirements of the competitive checklist, the requirements of section
272, and is consistent with the public interest, convenience and necessity will require the Commission to engage
in highly complex, fact-intensive analyses. See 47 U.S.C. § 271(d)(3). 182. NYNEX Apr. 28 Comments at 1-2. The competitive checklist is contained in 47 U.S.C. § 271(c)(2)(B).
183. See 47 U.S.C. § 271(c)(1)(B).
184. BOCs are required under our rules to maintain "the continuing accuracy and completeness of
information" furnished to the Commission. See Application by Ameritech Michigan Pursuant to Section 271 of
the Communications Act of 1934, as amended, to Provide In-Region, InterLATA Services in Michigan, CC Docket
No. 97-1, Order, 12 FCC Rcd 3309, 3323 (1997) (Ameritech Order) (citing 47 C.F.R. § 1.65(a) (stating that it is
essential that our decision on a section 271 application be based on an accurate current record). See December 6th
185. SBC Application, Appendix-Volume I, Tab 18 at 7, para. 13.
186. As CPI observes, SBC did not provide the Commission with the full list of carriers that initiated the 45
requests, nor information about these carriers or the type of access and interconnection they requested. CPI Apr.
28 Comments at 5-6. Further, as is evidenced by Cox's comments, although Cox reached a negotiated agreement
with SBC on April 10, 1997, SBC did not disclose this fact in its section 271 application filed April 11, 1997, or
in its subsequent comment filings. See Cox Apr. 28 Comments, Attachment at para. 3. 187. SBC has state-approved interconnection agreements with the following carriers: Brooks Fiber, approved
on October 22, 1996; USLD, approved on December 23, 1996; ICG Telecom Group, Inc. (ICG Telecom) and
Sprint, approved on April 3, 1997; and American Communications Services, Inc. (ACSI), Cox, Dobson approved
on June 5, 1997. SBC's interconnection agreement with Intermedia Communications has been pending approval
since January 23, 1997. Letter from John W. Gray, Senior Staff Attorney, Oklahoma Corporation Commission, to
William F. Caton, Acting Secretary, FCC (June 5, 1997).
188. 47 U.S.C. § 271(c)(1)(A). See SBC Application, Appendix-Volume III, Tab 2, SBC-Brooks Agreement
at 1; Id. at Tab 4, SBC-ICG Telecom Agreement at 1; Id. at Tab 7, SBC-USLD Agreement at 1; Letter from Laura
H. Phillips, Counsel for Cox, to William F. Caton, Acting Secretary, FCC (May 27, 1997), SBC-Cox
Interconnection Agreement at 1 (SBC-Cox Interconnection Agreement). We also note that six of the carriers with
which SBC has interconnection agreements, ACSI, Brooks, Cox, Dobson, Sprint, and USLD, have filed for and
received certificates of convenience and necessity for the provision of local exchange service and the remaining
two, ICG Telecom and Intermedia, have applications pending for such certificates. SBC Application, Appendix-Volume I, Tab 18, Stafford Affidavit at 6-7.
189. SBC-Cox Interconnection Agreement at 1. 190. See, e.g., AT&T May 1 Comments at 16 n.6; AT&T Reply Comments at 25; LCI Apr. 28 Comments at
7; MCI Apr. 28 Comments at 3; MCI May 1 Comments at 17; Oklahoma AG Apr. 28 Comments at 7; Time
Warner May 1 Comments at 32; WorldCom May 1 Comments at 14.
191. See Cox Apr. 28 Comments at 2 n.3 (asserting that SBC must provide evidence that facilities-based
competition is not emerging before it can follow Track B, otherwise it could evade intent of section 271 by
stonewalling interconnection negotiations and then claiming there are no facilities-based providers).
192. See also Oklahoma Commission Reply Comments at 3 n.2 (asserting that AT&T has made a verbal
commitment to the Oklahoma Commission to be "up and running and providing both residential and business
local exchange service in Oklahoma in October 1997.").
193. See Cox Reply Comments at 5. Cox has facilities that pass 95% of all residential customers in Oklahoma
City and has installed a local switch that is "operational and internally tested." See id. See also Department of
Justice Evaluation at 95. According to Cox, its ability to commence commercial operation in Oklahoma is
dependent upon SBC's "willingness and cooperation in providing timely physical collocation, adequate numbering
resources, interim number portability and necessary OSS functionality." Cox Reply Comments at 5. Cox notes
that it plans to begin providing cable-based telecommunications services to residential and business customers in
Orange County, CA in June 1997. Id. at 5 n.7. See also Cox Apr. 28 Comments at 1-2 (stating that it is actively
engaged in entering the local market in Oklahoma City and expects to provide a significant facilities-based
alternative to SBC for residential customers). 194. See supra at para. 7. Although Brooks asserted in its May 1 comments that it has "no immediate plans"
to commence a general offering of local exchange service in Oklahoma to residential customers, in its reply
comments, Brooks indicates that it is presently exploring opportunities for providing residential service to
multiple dwelling unit locations through direct on-net connections to Brooks' fiber facilities, is examining the use
of wireless systems, and is investing approximately $2.8 million in collocation facilities in Oklahoma, in addition
to its previous investment in fiber optic transmission equipment and digital switching facilities. See Brooks May
1 Comments at 7; Brooks Reply Comments at 4-5 & n.12 ("Brooks will look for opportunities to offer residential
local exchange service through whatever facilities-based alternatives may exist in a particular location at any
time."). See also SBC June 24 Ex Parte at 1-2 (asserting that there is no technical reason why Brooks is incapable
of service multiple dwelling units located along its networks).
195. See supra at paras. 44-45.
196. 47 U.S.C. § 271(c)(1)(A). See NCTA May 1 Comments at 8.
197. SBC Reply Comments at 6.
198. We note that USLD has stated that, although it plans to enter the local exchange market in Oklahoma
initially through reselling SBC's local exchange retail services, over the long term, it plans to construct some of its
own facilities and to integrate those facilities with SBC's network elements. USLD May 1 Comments at 2.
199. SBC Reply Comments at 7.
200. See LCI Apr. 28 Comments at 7; TRA May 1 Comments at 14-15. Indeed, SBC's application provides numerous examples of alternative facilities-based networks in Oklahoma that, according to SBC, "could be, are
being, or will be used to provide competing local exchange service to end user (retail service) customers, or . . . as
alternative sources to [SBC's] wholesale service offerings." SBC Brief in Support, Appendix-Volume I, Tab 20 at
3, para. 5. SBC offers information on the scope of facilities-based service planned by, among others, Brooks,
Cox, Multimedia Cablevision, Indian Nations Fiberoptic, ACSI and Tele-Communications Inc. (TCI). See id. at
Tab 20.
201. See, e.g., Cox May 1 Comments at 21-23; Brooks Reply Comments 8-10.
202. See supra at para. 22.
203. Brooks May 1 Comments at 9; Sprint May 1 Comments at 11-13; CompTel Reply Comments at 9-12;
204. Department of Justice May 21 Addendum at 2-4.
205. 47 U.S.C. § 271(c)(1)(A).
206. We find it unnecessary to address BellSouth's argument concerning the appropriate deference to give the
Department of Justice's interpretation of sections 271(c)(1)(A) and 271(c)(1)(B). See BellSouth Reply Comments
at 5-6. See also SBC Reply Comments at 14-15 (asserting that the Commission should only give substantial
weight to the Department of Justice's views on matters within its antitrust expertise). Although we agree with the
Department of Justice's evaluation on the issues decided herein, our extensive analysis demonstrates that we
arrived at our interpretation of section 271(c)(1) independently. In light of this, we find it unnecessary to consider
the circumstances under which "[t]he Commission shall give substantial weight to the Attorney General's
evaluation." 47 U.S.C. § 271(d)(2)(A). 207. See LCI Apr. 28 Comments at 8 (asserting that there is no statutory bar to the refiling of a BOC section
271 application).
208. SBC Brief in Support of its Application for Provision of In-Region InterLATA Services in Oklahoma, at
iv (filed Apr. 11, 1997).
209. Department of Justice Evaluation at 3-4 (filed May 16, 1997).
210. 3	Motion of AT&T Corp. to be Reclassified as a Non-Dominant Carrier, 11 FCC Rcd 3271, 3314 ¶ 82
211. According to reports, Southern New England Telephone has gained a market share of 35% of the access
lines in Connecticut. Merrill Lynch, Telecom Services -- RBOCs & GTE. Fourth Quarter Review: Defying the
Bears Once Again, Reported Robust EPS Growth; Regulatory Cloud Beginning to Lift, at 8 (Feb. 19, 1997). See
also, Southern New England Tel. Co., SNET First Quarter EPS $0.70 Before Extraordinary Charge, Press
Release (Apr. 23, 1997).